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[Phillyfanfrombirth]

Maybe I missed it but he apparently left out the fact that as corporations and even some smaller businesses shrink their workforces through natural attritrion, mergers and lay-offs there are less people doing more work in some instances. That naturally leads to increased 'productivity'. If history is a guide, the newly raised minimum wage, when it kicks in, will probably shrink the lower paid end of the workforce a bit (although, some low-end employees receiving the new minimum wage will be promoted to more responsible positions to justify their mandated increased pay) and further increase productivity as employers will let some minimum wage employees go.Then, fewer workers will be required to do more work for a tiny (if any) raise in pay

While I don't pretend to be an expert on economics

Ahhhh.... very nice. You get it.

An increase in the minimum wage will ultimately result in less employment at the minimum wage level as employers will cut underperforming, and newly cost inefficient employees...

While those opposed to a hike in the minimum wage say that it will lead to rampant inflation... they are wrong because of the competition from the big box stores which already pay well above the Federal minimum wage. These stores will not have to change their practices, but rather the "mom and pop" stores will be forced to eat the impact on margins, or risk being non-competitive with their better capitalized and more efficient competition.

Those who are in favor of minimum wage hikes are generally wrong because while they try to use the dynamics of higher wages, they fail to recognize that a U-Scan doesn't get a paycheck... They also fail to recognize that wages are not the only form of compensation. If you mandate a rise in the wage, the employer can just as easily take the difference out of benefits (if you ever worked in a restaurant, think about the "employee meal" that you took for granted... if that is a $5 meal, and it is taken away, you've effectively lost 63 cents per hour of compensation for an 8 hour shift).

More for less... you produce more goods with less man hours. Productivity gains are often at their best as the economy takes a downturn and through its early recovery, and layoffs and low capacity utilization allow for investments in efficiency to take hold and newly found synergies as a result of acquisitions and mergers and other consolidations cut through the bureaucratic redundancies, which allow for better margins and better return on capital...

As the economy/industry recover... the new highly productive firm expands their production capacity through overtime, outsourcing, adding shift work, and maximizing shift work...

This is done using existing machinery on existing floorspace... it is only after all of these are exhausted, does the company resort to expansion plans of increased floorspace and increased machinery.

This is extremely important to our business cycle and has become increasingly evident as to its effects. This is exactly why employment figures are a lagging indicator, and why the "jobless recovery" that we kept hearing about in 2003 and early 2004 turned into 4.6% employment that the Fed WAS worried might spawn future inflation.

As productivity increases... as logistics continue to improve... as world trade continues to prosper, expect this not to be the anomaly, but the rule.

[DeltaMustang65]

HAHA! As if the Burger King wasn't creepy enough already.

[Mr 5 0]

Originally Posted by Phillyfanfrombirth

Ahhhh.... very nice. You get it.

Thanks, although, as I made clear, economics is not my forte. However, some aspects of economics are simply common sense. As 'labor' (wages and benefits) are usually the largest part of any businesses operating expenses, it's not hard to understand that, while some 'entry-level' jobs pay the federal (or state) minimum wage, those workers that only qualify to be paid the lowest amount possible, by law (the 'minimum wage') will be cut from the payroll if their mandated hourly wage exceeds their productivity and subsequent value to the business. This should be evident to the politicians who propose and vote for these minimum wage raises almost every year, but grandstanding and 'buying' votes from the uninformed is too great a temptation, I guess.

Although it's been a part of American economic life for almost 70 years now (since 1938), I never really liked the concept of a federally-mandated 'minimum wage'. We don't live in some Dickensonian version of 1840's London whwre 'Scrooge' is the average employer. To me, a job is worth what it's worth. I guess I'm just a 'free-market' guy. I do not believe that government bureaucrats and politicians, few of whom 'live' in the 'real' world , where we all have to compete for jobs and/or business, should be allowed to set wages for private employers, minimum or otherwise. These folks, well-meaning or not, haven't a clue as to what a mandated 'minimum wage' does to the working poor, and they apparently don't care, much, either. A mandated minimum wage doesn't make the poor more affluent or better able to 'keep up with inflation', as some like to claim. It takes away their jobs, in some cases and also insures they can't get a raise because the 'government' already gave them one, thus, stifling incentive, in some cases. I know, in the past, some of the more hardcore left-wing politicians have talked about capping maximum income, but those communist/socialist types have no real constituency, thank goodness.

More for less... you produce more goods with less man hours. Productivity gains are often at their best as the economy takes a downturn and through its early recovery, and layoffs and low capacity utilization allow for investments in efficiency to take hold and newly found synergies as a result of acquisitions and mergers and other consolidations cut through the bureaucratic redundancies, which allow for better margins and better return on capital.

I believe that's been happening for some time, now, as businesses have been investing heavily in high-tech equipment and in the process, shedding some unnecessary workers. Mergers and acquisitions - which always cost (redundant) jobs - have also been quite noticable. Outsourcing , once a 'hot-button issue', is a very minor part of the workforce. I think it's around 2%. However, with high-tech and (as you mentioned) an expanding, global economy, come more new jobs. 128,000 new jobs in August '06, according to the U.S. Commerce department. Not too shabby.

Despite the doom-and-gloom we always hear from some anti-Bush (and likely anti-capitalist) voices in the media, the nation's ridiculously but wonderfully low 4.7% unemployment rate for August, 2006 - compared to twice that in most of socialist europe - and the average U.S. worker's pay now over $16. per-hour, demonstrate that it's hardly been a 'jobless recovery', as a few leftist politicians have tried to claim. The bulk of the newly created jobs are not burger-flipper positions for low pay but interesting jobs that pay quite well. Of course, if you are a high-school drop-out you may not get those kinds of jobs, but most people realize that and half the population goes to college today, although not as many actually earn a degree. That is a very foolish choice. However, even an Associates degree beats none at all. Technology skills are also a big asset in today's job market, often exceeding that of simply having a four-year college degree in say, Fine Art Appreciation or, a heavy favorite: 'Communications'.

It frustrates me that, probably because of high gas prices (now dropping), a lot of Americans tell pollsters that they think the U.S. economy is 'bad'. That is just nuts. Apparently, the negative stories and some economist's 'warnings' that the economy could 'crash' any day now have done their job of confusing if not fooling the average person who doesn't look past the headlines for economic news. Well, guess what? Saying that a robust economy like ours 'could' crash 'in the future' is like telling an 80 year old man that he 'could' die soon and pretending that is somehow prescient. Hardly. While it's inevitable that our economy may have some dips and slowdowns at some point in the future, that has little bearing on what it is, today....which is strong and expanding. Home prices got a bit out of hand for awhile but the market is correcting and the downward adjustment was expected and does not indicate an economic 'crash', as some predict.

I think inflation is a bogyman that is over-rated and will occur to some extent no matter what the Federal Reserve Bank does. However, as I made clear, I'm not an expert on economics so, of course, I could be wrong.

Nah!