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Thread: Federal minimum wage rate.

  1. #301
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    Re: Federal minimum wage rate.

    Quote Originally Posted by Oozlefinch View Post
    We see the same thing in oil.

    People seem to fail to comprehend that it is a publicly traded commodity. And not only that, but traded internationally. The oil companies do not set the price, nor do the gas stations for the final product. The International Commodity sets it, in the form of "futures". And that is not even for oil that is being bought right now, it is for oil that will be actually delivered in the future. Mostly 30 day, but sometimes 60 and 90 day futures.
    Not only that, but only about 11 of the 153 oil refineries in the US are owned by "oil companies."

    Where are the oil fields for Valero, Tesoro, Goodway, Hunt, Nustar, WRB, PDV, Frontier, Motiva and the dozens of other refinery operators?

    They don't explore for oils.

    They don't own the rights to oils.

    They don't own a single oil field.

    They don't own or operate a single oil well or oil rig anywhere on this Earth.

    All those companies do is buy oils on the global market and refine them.

    Most Americans don't understand that oils are like wine....they're all different.

    The US has mostly heavy oils that only yield 9-11 gallons of gasoline per barrel of oil.

    The US does have a lot of intermediate grade oil which yields 12-19 gallons of gasoline per barrel (Illinois Intermediate produces 13 gallons of gasoline but West Texas Intermediate yields 19 gallons of gasoline per barrel).

    The Middle East and North Africa are blessed with lots of light oils, which provide 20-28 gallons of gasoline per barrel.

    Your refinery capacity in the US is fixed, which means your gasoline supply is flat. Since it takes 15-17 years to build a new oil refinery and the cost is enormous, not to mention the legal battles with the Not-in-my-Backyard People, it's unlikely another refinery will be built any time soon.

    So, how do you increase the supply of gasoline without building new refineries?

    Simple...you import light oils from the Middle East.

    And most Americans are morons. OPEC does not set prices and never has. The two bench-mark oils are West Texas Intermediate and Brent Blend -- a blend of seven light oils from seven different oil fields in the North Sea.

    So Canadian Tar Sands, which is crap oil and only produces about 9 gallons of gasoline per barrel is benchmark priced against West Texas Intermediate and so it usually sells for 30% to 50% less than a barrel of West Texas Intermediate.

  2. #302
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    Re: Federal minimum wage rate.

    Quote Originally Posted by bluesmoke View Post
    When you know that the employer can pay as little as possible, regardless of productivity or merit, then you understand, without the need of Econ 101, that is true.
    Actually without Econ 101 you are merely an liberal economics illiterate, and in your case adding insult to injury by bragging about being an illiterate.
    We all want to imagine we just know things don't we? That way we don't have to work hard and and think hard to know things.


    Once again under saintly Republican capitalism if you pay as little as possible all the competition has to do is pay more to hire away your best workers and drive you into bankruptcy. Do you understand now??

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    Re: Federal minimum wage rate.

    Quote Originally Posted by bluesmoke View Post
    When you know the employee has the right to collective bargaining to raise wages and benefits, then you understand, without the need of Econ 101, that is true.
    if employees have the right to collective bargaining they drive wages up too much and the jobs go to China. What planet have you been on?? Did you notice all the union jobs when to China?? See why we say liberalism is based in pure ignorance??

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    Re: Federal minimum wage rate.

    Quote Originally Posted by bluesmoke View Post
    You just happen to believe that the employer should have the advantage and that unions and employee right thus be subverted.
    I don't just happen to believe it by chance or serendipity as you imagine but rather because workers are obviously better off with their jobs here rather than in China. Is that simple enough for you now???

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    Re: Federal minimum wage rate.

    Quote Originally Posted by bluesmoke View Post
    Economist have differing positions in this matter, though they have presumably taken Econ 101.
    they do???? show a serious one with a rationale that makes a tiny but of sense or admit you are BS'ing us

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    Re: Federal minimum wage rate.

    Quote Originally Posted by bluesmoke View Post
    When you know that the employer can pay as little as possible, regardless of productivity or merit, then you understand, without the need of Econ 101, that is true.
    The problem with that view is that you're looking at just one side of the story. Managers acquire labor only on a voluntary basis, so their offers are subject to your acquiescence which in turn depends on your outside options. The behavior of other employers is something that limits their capacity to modulate wages and benefits as they please.

    Quote Originally Posted by bluesmoke View Post
    When you know the employee has the right to collective bargaining to raise wages and benefits, then you understand, without the need of Econ 101, that is true. You just happen to believe that the employer should have the advantage and that unions and employee right thus be subverted. It's been that way since the mid-'70s. Economists have differing positions in this matter, though they have presumably taken Econ 101.
    There are many different ways that are used to model the labor market, none of which is completely satisfactory for addressing all questions. What most people have in mind is a supply and demand model, and a shallow understanding of it at that. The demand for labor issued by firms is always derived from profit maximization and depending on what you think is important, it can look very different. In rather sophisticated models, we have a stylized representation of firms using and producing intermediate goods, an entire spectrum of different labor types, an entire spectrum of goods, monopolistic competition in both the labor market and the goods markets, as well as nominal rigidities (some mechanism is included so that firms cannot freely adjust prices every quarter). Capital (buildings, equipment, etc.) can be used at varying intensity, investment adjustments are costlier when large and two types of technological changes affect the long term growth of production, as well as yet another one which influences the technology used to install new capital. Some people even add the need for the firm to finance some of its activities to account for the importance of financial intermediation in business cycles. That's starting to be a rather realistic picture. In that world, you get pretty credible behavior for variables like the real wage and hours worked. However, that says labor productivity is linked to real wages -- just in a very, very complicated manner. It also says that price dispersion in goods and wages, as well as the firm networking phenomena, influences the demand for labor.

    If you prefer another rather interesting model, you can drop the idea of supply and demand altogether. Instead, assume that people and businesses incur costs to find a match in the labor market. In that world, wages do not balance supply and demand; they are the outcome of Nash bargaining over the added value of production. You can make this very complicated as well: people can lose value by staying unemployed too long, you can introduce just about any kind of weird unemployment policy you want, you can have multiple skillsets, good workers quitting to find better jobs, etc. In that world, however, the value of a worker is still thought about in a similar way: to a business, you're worth the income you can generate. They pay you more when you can produce more.

    Someone might think: oh, maybe the difference between then and now is just negotiating power for workers. The problem with that view, however, is that the realism of the dynamics produced by these search and matching models is sensitive to the bargaining power parameter. The model tends to generate responses in real wages that dampen the response of hours worked to productivity shocks and giving more power to firms is one way to correct the problem. That makes hours worked more volatile, so the bargaining power drop seems problematic because it would produce the least volatile labor market movements in the 1945-1975 period when it was much higher. It would need nontrivial changes to the basic search and matching model to make that intuition work -- and I have no idea what that would look like.


    Of course, my expertise is not labor economics, so I might not be aware of more recent work. My impression so far is that the best we have to offer in defense of things like a minimum wage are arguments based on some empirical work, though certainly not all of it and that empirical work concerns mostly mild hikes in the minimum wage. Moreover, I am not aware of a good theoretical argument (i.e., an explicit model that you can solve and simulate to compare with the data) that backs it up. If you have names and papers, I would be interested.

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    Re: Federal minimum wage rate.

    Quote Originally Posted by TheEconomist View Post
    If you have names and papers, I would be interested.
    I'm sure he does!! He's sitting around looking at economics papers all the time like any PH.D would! Who are you kidding with your pedantic BS? Do you really think he's going to feel ashamed of his ignorance and withdraw his opinion?

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    Re: Federal minimum wage rate.

    Quote Originally Posted by Mircea View Post
    And most Americans are morons. OPEC does not set prices and never has. The two bench-mark oils are West Texas Intermediate and Brent Blend -- a blend of seven light oils from seven different oil fields in the North Sea.
    Very true. This is especially seen in how people talk about the "Petrodollar".

    Almost nobody seems to have a single concept of what that is, or how it works. They have some kind of fantasy involving the Illuminati, and other conspiracy groups. Believing that all oil is bought and sold in US dollars. When in reality, it is far from true.

    The Petrodollar is simply a convenient middle-man when 2 different countries are trying to exchange currency for a product. Currencies rise and fall, some farther and faster than others. And prior to 1974 companies and countries would use this to manipulate the price they paid for oil. Inflate (or pick a currency about to inflate), then buy oil (or some other product). Then by the time the money has to be sent you are actually getting a discount.

    The US Dollar was picked because historically it is the most stable currency on the planet. Unlike say the Japanese Yen (which is artificially propped in relation to the US Dollar), or the EU's Euro (which has had spectacular jumps and falls), the US Dollar is amazingly stable, with few major changes in value over the decades. So all exchanges are made with the US Dollar as a "Middle Man".

    This does not mean that the Dollar is actually used however. France agrees to buy oil from Saudi Arabia. The price on that day in Saudi Riyal is converted to the Dollar on the close price the day before, and that is the price told to France. France then converts their Franc to the Dollar the day before, and that is the amount they will then send in.

    Notice, nobody actually converts their currency to the Dollar either way. In this way, any increase or decrease in the currency of a buyer or seller is adjusted, and will not have an impact on the sale.

    And yes, some countries are asking for it to change, like to the Euro. But the problem is that has not been a very stable currency. At this time, the exchange is $1.10 US to 1 Euro. But over the last 20 years, it has bounced form a low of $0.83 cents per Euro, all the way up to $1.58 per Euro. And those fluctuations in value were not on the US side, they were on the side of the Euro.

    Not a currency you want to use when it is supposed to be the moderator in International trade.
    War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse. - John Stuart Mill

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    Re: Federal minimum wage rate.

    Quote Originally Posted by James972 View Post
    Actually without Econ 101 you are merely an liberal economics illiterate, and in your case adding insult to injury by bragging about being an illiterate.
    We all want to imagine we just know things don't we? That way we don't have to work hard and and think hard to know things.


    Once again under saintly Republican capitalism if you pay as little as possible all the competition has to do is pay more to hire away your best workers and drive you into bankruptcy. Do you understand now??


    You simply don't have the data, the facts, to back up what you say. That's where your economic illiteracy shows. You can only back up what you claim with insult.

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    Re: Federal minimum wage rate.

    Quote Originally Posted by James972 View Post
    if employees have the right to collective bargaining they drive wages up too much and the jobs go to China. What planet have you been on?? Did you notice all the union jobs when to China?? See why we say liberalism is based in pure ignorance??


    So what is your answer? Lower wages to match China's? We've had rising employment for 12 straight yrs. Do you believe higher wages are bad? Should they be lower? Most workers want higher wages. Are they wrong? Trump just gave away over a trillion dollars to the rich and large corps, for them doing nothing, through a tax plan, without getting anything in return, that further widens the wealth gap. Do you think that is the way to go? You say nothing. No suggestions, no ideas of what should be. Just criticism and insult. No solution. Or, maybe you see no problem.

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