Timmy elsewhereDecember 3, 2015 Tim WorstallTimmy Elsewhere21 CommentsThis Isn’t Walmart Threatening, This Is Walmart Explaining Basic Economics To People That Gravity $70,000 Minimum Wage Story Could Be Straight Out Of Henry Ford’s $5 A Day Book previousScum sucking tax leechnextSo here’s an interesting job, Viagra tester 21 thoughts on “Timmy elsewhere” Rob December 3, 2015 at 11:59 am The Forbes website is a cunt to read on a mobile. About every fifteen seconds it pops up the AppStore and tries to get you to install an app. It randomly forwards to advertising sites just because you touched the page to scroll down. Sometimes it crashes Safari, just for a bit of variety. In short, I’m not going near it again. Theophrastus December 3, 2015 at 12:23 pm http://www.telegraph.co.uk/news/bbc/12030859/Alan-Yentob-steps-down-as-BBC-executive.html OT, sorry. But Botney has resigned. Not before time, though. monoi December 3, 2015 at 1:43 pm Where does a city get the right to pass a minimum wage ordinance? Andrew M December 3, 2015 at 3:04 pm The USA’s 50 different states and thousands of cities make for some interesting economic experiments. For example, might Walmart open a site just outside the city limits in order to avoid the minimum wage? Ironically it would still be the same city’s workers who end up working there. Hugh December 3, 2015 at 3:53 pm “gross sales of $500 million or more”; i.e. it’s aimed at keeping Walmart out. They’ve pulled it anyway. Dennis the Peasant December 3, 2015 at 4:50 pm Bloomberg is now reporting that the $70K wage at Gravity might have more to do with owners fighting amongst themselves than owners fighting income inequality. When I first heard the story, with its background of pending legal actions by ownership interests against Gravity’s CEO, I simply assumed that there was another angle involved. It now appears I was correct: By all appearances he’s attempting to drive down the valuation of the company to avoid paying a fair valuation to the other owners. So much for social justice. Tim Worstall December 3, 2015 at 4:55 pm That’s what my piece is about, that Bloomberg finding, and linking it to Ford and the Dodge v Ford lawsuit. DBC Reed December 3, 2015 at 5:18 pm Perish the thought that firms should provide enough wages to pay for all the goods and services produced by an economy.That would be pure capitalism and that would never work.Better to augment aggregate demand with spending by the State as in for instance tax credits then people on this site could moan that it’s all too left wing or Statist (the preferred term of abuse for laissez faire throwbacks) Dennis the Peasant December 3, 2015 at 5:25 pm That’s what my piece is about, that Bloomberg finding, and linking it to Ford and the Dodge v Ford lawsuit. You want me to first read what I’m commenting on? That would take the fun out of commenting. john77 December 3, 2015 at 6:29 pm @ DBC Reed ER? A single firm should pay for all the goods and services provided by an economy? When i was in short trousers learning long division I was taught “seven into three won’t go”. Why weren’t you? Dennis the Peasant December 3, 2015 at 6:55 pm Perish the thought that firms should provide enough wages to pay for all the goods and services produced by an economy. Wow. That’s a whole lot of stupid packed into a single sentence. You seem to be channeling Ritchie, so cutting back on the hallucinogens is probably in order at this time. Anyway, it is not the job of firms to ensure that individuals earn a solid, middle-class income for the work they do. That, dearest reader, is the job of the individual… You know, to work at acquiring a skill set that allows the individual to command a solid, middle-class income in the marketplace based on the benefit provided to the firm that employs them. I have an interest in a small firm in the construction industry, and for the longest time all I (and the other owner) would get was whining about how everyone needed/wanted a raise. Usually because they’d been working for us for a certain length of time and felt they entitled them to more money. The first question I’d ask is this: “What new skill have you acquired that has made you more productive? When did you acquire it? And why, if you’ve acquired and used it, haven’t the owners noticed a increase in your productivity?” After about a year of this it dawned on the boys that instead of whining about getting a raise, the correct course of action was to ask this: “What do I have to do to get a raise?” Several have found that asking that question, and acting on the answer, has lead to an increase in wages. Funny how that works. Emil December 3, 2015 at 6:55 pm Tax credits (as in paying less tax to the state) is now state spending? jgh December 3, 2015 at 6:58 pm “the guy running Gravity said that he wanted his employees to be happy, so they should all earn that sum and so they would” be paid, not earn. You earn more by doing more and/or more valuable work. What he’s talking about is *paying* his staff more, regardless of how much they earn. Jeanne December 3, 2015 at 7:14 pm re: For example, might Walmart open a site just outside the city limits in order to avoid the minimum wage? And the city would just annex the land (assuming that it wasn’t already in another city). Lotus 51 December 3, 2015 at 7:52 pm @DBC Reed So the janitors at the Ferrari factory should be paid an adequate wage to buy a La Ferrari. DBC Reed December 3, 2015 at 8:16 pm Various people on here are making clear that the sum total of private firms in this country are not able, or willing, to provide the spending power through wages to buy the sum total of all the goods and services they produce. Rather makes the case for, variously, Karl Marx, Major Douglas and Henry George, the latter pointing out that people’s spending in the shops was reduced by their payments for the land underneath their housing, land’s value not being a product of labour. Bloke in North Dorset December 3, 2015 at 9:33 pm Andrew M, “The USA’s 50 different states and thousands of cities make for some interesting economic experiments.” Those excellent people at Planet Money looked at an interstingmnmum wage case: The Westfield Valley Fair Mall straddles two cities. One side of the mall is in Santa Clara, but walk a few feet down the mall, and you’re in San Jose. In 2012, San Jose voters agreed to raise the city’s minimum wage from $8 to $10 an hour. Philip Sandigo manages a shoe store on the $8-an-hour side. When San Jose raised the minimum wage, he lost about half his staff. The boundary line between the city of San Jose and the city of Santa Clara runs through the Westfield Valley Fair Mall. i The boundary line between the city of San Jose and the city of Santa Clara runs through the Westfield Valley Fair Mall. Steve Henn/NPR They went to the stores on the side of the mall that paid $2 an hour more. Sandigo asked the owners of the shoe store if he could raise wages, but they said no. Almost two years later, it’s still a struggle to hire new employees. “We get the bottom of the barrel here,” Sandigo says. “Not really focused. … One guy came in high the other day.” On the $10-an-hour side of the mall, stores like Wetzel’s Pretzels have different problems. Suddenly, the shop had to pay the lowest-wage workers more — 25 percent more. That was great for the employees, but a challenge for the owner, Yvonne Ryzak. Ryzak had a few options. One was to sell more pretzels. She did the math and it came out to selling 250 or 300 more every two weeks. But she didn’t start selling more pretzels just because the minimum wage went up in San Jose …. http://www.npr.org/sections/money/2014/08/28/343430393/a-mall-with-two-minimum-wages It well worth a listen. john77 December 3, 2015 at 10:39 pm @ DBC Reed Firstly, once again, try reading with an “a” in the word. I pointed out that no one firmn could finance the country single-handed. If you meant *all* firms, why didn’t you say so? Or is the lefty standard of writing as poor as its standard of arithmetic. The total of private firms and self-employed individuals DO produce all material goods and pay for everything in the country. Secondly – how stupid can you get? “the sum total of private firms in this country are not able, or willing, to provide the spending power through wages to buy the sum total of all the goods and services they produce.” – that is because they purchase materials (and pay rent and business rates, purchase capital equipment, in some cases pay interest on borrowings, tax if they make profits, NI on the wages).Wages are part NOT THE WHOLE of the cost of the goods and services. ” Rather makes the case for, variously,” teaching you that raw materials cost money, that we import food and need to export goods and serrvices to pay for it, that there is such a thing a Employers’ National Insurance contributions, that someone has to pay for the NHS, Schools, Courts, the Police, the Armed Forces … Jack C December 4, 2015 at 12:11 am DBCR, The key flaw in your argument is that wages do in fact pay for all the goods and services, blah blah. State spending comes from wages, either directly through income tax, or through VAT, NI, Corporation Tax, etc. It is true that there is currently a gap, and this is being made up through government borrowing. However, this borrowing is on behalf of the nation’s wage earners, and it is they who will be paying it back. So, I don’t quite get your point. One of my own responsibilities is to find new ways of increasing productivity, which often results in simplifying the work, which means lower rates of pay are required at the unskilled end. So, the unskilled produce more (though through no effort on their part), and get paid less. Now, before you denounce me as a blood-sucking vampire, consider this: 1) There are far fewer people at the unskilled end. 2) Skilled jobs are created (due to the more advanced systems) 3) There is a boost to economic activity through offering a more efficient service Overall, living standards go up, while menial jobs decline (and good riddance). Giving the lowest paid an additional, unearned small amount just adds to cost. I can see two advantages in the NMW. 1) It outlaws “proper” exploitation, even if it doesn’t get rid of it. 2) To some extent it will push firms to be more efficient, necessity being the Mother of Invention and all that. Of course, the flipside to 2) might be and sometimes is just fewer jobs. I think you may be confusing money and value. Again. Rob W December 4, 2015 at 8:16 am ‘..sum total of private firms in this country are not able, or willing, to provide the spending power through wages to buy the sum total of all the goods and services they produce’ First of all it’s not about what they produce, its about what they consume. The UK produces way too few goods, hence is a net importer of goods for consumption. Wages are therefore more than enough to pay for those. Services however creates an equally large surplus, so those get exported for consumption. (Yes I know, I’ve left out capital earnings, foreigners buying our assets etc). Or else the currency devalues pronto and we all consume less until it all gets back into balance. Like in 2008. (Yes, I know some countries operate a fixed rate system, and there is plenty of evidence how that impacts on getting the balance of payments back in balance.) The equivalent tosspottery in science is that human populations will expand and outstrip food supply. The idiots never remember their O-level biology that taught populations are constrained by food supply. Same here, If wages weren’t enough to consumer the goods and services why the fuck would anyone produce them? The Stigler December 4, 2015 at 10:03 am Andrew M, “The USA’s 50 different states and thousands of cities make for some interesting economic experiments. For example, might Walmart open a site just outside the city limits in order to avoid the minimum wage? Ironically it would still be the same city’s workers who end up working there.” Restaurant job growth has stalled in Seattle since their minimum wage announcement, but is still growing rather nicely just outside. And that’s basically: a restaurant owner isn’t opening a new restaurant just inside the city when he can be just outside and subject to less costs. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.