Forum Post: Who thinks that if business could make more money by deregulation it would mean more jobs?
Posted 13 years ago on Oct. 24, 2011, 10:57 p.m. EST by MarkDuwe
(127)
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I think deregulation will only benefit stockholders and CEO's. Some of the regulations they want to eliminate are the minimum wage and the time-and-a-half over 40 hrs/wk mandate. 80 million Americans work for $26,000 a year or less while taking no help from the federal government.
I remember during the 80's Reagan would always say we are moving from a manufacturing based economy to a service based economy. I thought, "Cool, I can make pizzas for $50,000 a year to start!"
What if minimum wage was raised so much the 80 million got their wages doubled? A: They could all buy houses, new cars, etc. It would cost the about 20% of the upper income brackets a little inflation, but I think the economic health of the country would be much better.
I think what we need to bear in mind here is that you can't have a manufacturing-based economy, or service-based economy, or finance-based economy, and expect it to work very well everybody.
You need finance to serve the needs of the manufacturing, & service portions of the economy. Finance does this by providing capital, as loans, for those portions to expand - it makes a profit by the interest on those loans, of course. Manufacturing expands, creating products that will need to be SERVICED, and paying employees who will pay pay for SERVICES. They all work together, as soon as you start talking about an economy that emphasizes a "service" or "manufacturing", or any other sector, you're starting to talk about a degenerate, wealth concentrating, nonfunctional system.
Couldn't have said it better. Manufacturing supports service. Service jobs will follow manufacturing.
Great summation.
good points
Deregulation will not create jobs. We just have to look in Wikipedia under Deregulation and Robber Barons (poorly written). Regulations were put there to deal with scandals, safety problems, provide utilities in poor unprofitable area, deal with the depression, and deal with abusive employment situations.
I posted that Mitt Romney's tax return proves that the rich don't create jobs when we cut taxes. Businesses are their to maximize profit and that could mean buying computers and robots. But take a look at deregulation in Europe and how banks (globalists) are going after whole countries JUST FOR PROFITS and FOR KICKS.
http://www.zerohedge.com/article/first-greece-now-spain-moore-capital-brevan-howard-paulson-well-jpm-and-goldman-implicated-s
Besides banks do not create jobs. Banks are investors or they make money on fees. Big Banks just suck the money from everyone else because they are good at playing the investment game. Anyway everyone can see that investors like Romney not there to create job, just there to suck up the money. Banks don't manufacture or produce anything. Here is a great video by G Edward Griffin talking about the Federal Reserve and how the Big banksters planned out how to
1) Eliminate competition, 2) Increase Earning for Big New York Banks (which already had a bad reputation - they were call the Money Trust), 3) They had to create the FED under secrecy since everyone was already on to them. 4) We really have a banking Cartel in New York City. 5) The FED System tends to increase war and defense industry spending
http://www.youtube.com/watch?v=lu_VqX6J93k
http://www.drsenator.com/thecreaturefromjekyllislanda.html
http://en.wikipedia.org/wiki/Deregulation#Deregulation_1970-2000
http://en.wikipedia.org/wiki/Robber_baron_(industrialist)
http://occupywallst.org/forum/romney-makes-a-case-against-trickle-down-economics/
I'm not automatically against raising minimum wage,but the main cause of wage stagnation,(or decline), in my view is the dilution and distortion of the labor market due to outsourcing. The effect of free trade, (no protective tariffs) is a huge surplus of labor with direct competition with people working for slave wages. These people have no ability to organize to improve wages or working conditions.
Stephen Crockett For BuzzFlash did an excellent job of summarizing how economies work (http://blog.buzzflash.com/contributors/3562). He also points out that deregulation only benefits the 1%.As a consultant to the Fortune 500, I can validate Stephen's remarks. Moreover, PBS did a show pointing out how "banana republicanism" is costing us 10 times as much for internet access tan it costs in Europe, where Europe has real competition compared to our government sanctioned monopolies.
OF COURSE it would mean more jobs. The CEO would need another pilot, another gardener, a few more bimbo secretaries. Oh, and probably a few thousand more jobs in wherever-has-the-lowest-wage-this-week - all to be paid for by dumping American workers, of course. In the corporation I work in, the only thing they understand is cutting. If they had a profit margin of 90%, they would want to know why it isn't 95%. Of course, anyone with a brain knows where that business model ends.
Minimum wage is really meaningless just keeps people from getting hired and makes employers that pay minimum wage -Gas Stations, Pizza Hut, Dollar General, etc - try to hire as little as possible . There is another issue with your logic as well - doubling minimum wage would increase the amount of money on your check, yes, although everything would go up in price and your buying power would stay the same. So you still wouldn't be able to buy a house or new car, etc. This ideal that everyone should own a home or new car just because they are living is crazy.
That also reminds me when manufacturing was leaving Long Island, the governor said we would convert to a "tourism based economy". I could see NYC but Long Island? I really never saw all those people flying in for a tropical vacation. The only thing I did see was the Hamptons building up with the 1%.
I agree deregulation only benefits the stockholders as been evidenced of late. But the current state of the union wouldn't support your wage plan because of the continued progression of technological advances. Coupled with cheap human resources abroad the value added would be too costly and employers will find ways to remain competitive. Think of it, Walmart cashiers earning wages so high in America would just justify an investment in a developing a sensor machine that rings up your whole cart when you walk through a canopy. The sensor machines will be made in China. And you will have to check your own receipts too! Human resources that are ready and willing abroad will just continue draining our jobs; customer service and professional services including consulting and high end positions. Multinationals are continuing to set up shop abroad as the tax incentives are great and the labor market is willing and able.
Why not raise the minimum wage to $30 an hour. More is better right?
No,...it is not better, you only want to push it up just short of what some jobs pay that could be shipped overseas. Most manufacturing jobs pay well over $20 an hour, they would not be effected.
Also, the MW should be like Social Security in one way,...it should be tied to inflation. My mother worked for JC Penny for 20 years and never made more than MW. The only time she got a raise was when the MW went up. If several years go by without a raise in the MW people will be making less every year. But, each year that goes by without a raise in the MW businesses make more money.
Do you think someone whose job it is to stock shelves and/or get carts from a parking lot or a server in a resturant should be making $20 an hour? Are you willing to pay $10 for a gallon of milk and $50 for a burger to cover that labor cost?
There is no direct link between labor costs and price. But don't take my word for it. http://www.newyorkfed.org/research/current_issues/ci3-11.pdf
If they don't raise prices then people will lose their jobs.
I work in the service industry and you bet your bottom dollar that wages affect what I charge for my service.
I guess you didn't go to the link. Maybe you automatically raise prices but overall, statistically, it doesn't follow.
I did go to the link and read it. Sorry not a big fan of stuff put out by a Federal Reserve bank.
OK,show some documentation for your point of view. Indecently the stats came from the dept. of labor.not the bank.
Google Cost-Push Inflation and take your pick
Yes, prices can be affected by cost-push, or demand-pull. If your labor costs DON'T go up, and the market value of your service goes up as a result of demand-pull, it just means you make greater profits, unless of course you just voluntarily decide to hand it to your employees. Demand sets price. Labor is a factor in cost, but not necessarily the largest. It may be very significant in your business, but less in others.
When I worked at McDonalds I made $1.25 an hour. The people who work there now make about 6 times that amount, so it's not out of the question.
I would like to see the MW go up a dollar a year for the next 4 or 5 years. Even the least of us should be able to feed ourselves and put a warm roof over our heads by working 40 hours a week.
The sad truth to our story is this anything we do will not have a direct effect on how to live better by government means. The system has been in effect to long and it has dried up any chance of resurrecting the free reign of economic solidarity. We have to beat to a different drum we need to all join together and work towards building our own labor force and commerce. I'm not saying this can happen tomorrow but for the time being just being heard and merging together are the building blocks.
Not I. Rather, I think deregulation is nothing more than the next item on the 1%'s wish list. They have a cult following who will buy their job creation BS without question but I would guess that for most people it doesn't pass the proverbial "sniff test".
agreed
Not me! First of all it would probably mean that even more jobs would go abroad to where ever labor is the cheapest and secondly, most of the jobs would be boring jobs that I wouldn't want anyway. Where's the MEANINGFUL, INTERESTING work? Not in corporate America, that's for sure!
You could join the Army, that would be exciting and interesting.
I'm a pacifist. I guess you're another one of those angry hate people that have nothing better to do than come make mean comments to people. Good luck in life, it's short you know, even if you don't go and get your head blown off.
Well, I am 56 years old,..and I don't appoligize for that. I missed the draft for Vietnam by 11 days, then joined 2 weeks later. My dad drove an ambulance in South Korea during that conflict. hate is no reason to defend the country.
I never said hate was a reason for going to war. But it seems hateful to reply to my post for meaningful work with "you could join the army", I really don't believe that that was a sincere or well intended comment. Good luck in life, Won't be responding to you again.
If that deregulation would allow a firm to grow and expand, then yes, jobs would be created. The service based economy is what is bringing this nation down. we now have more people working for the government than in manufacturing here. The government produces nothing to generate a profit and only exists through funds taken from producers. The current model is unsustainable and will be our downfall if we do not find ways to keep businesses and jobs here. Taxes need to be revamped and redundant regulations need to be revoked. That's not to say that laws protecting the environment should be abolished, but if you look at the amount of paperwork and scrutiny that exists for a smaller business, you would wonder why anyone in this nation would even bother trying to start a business. Add that to the fact that the government will not allow large businesses to fail when they deserve to and you then stifle growth by ensuring that the smaller business cannot get ahead in this nation. Our government has been picking the winners and losers for so long that there no longer is an incentive to even try harder and until that incentive returns, you will continue to see the US go into this downward spiral that started decades ago.
Much of the deregulation businesses are talking about are enviromental regulations. They want to NOT have to spend so much money to keep pollutants out of the air and water supply. I really don't think this would make more jobs, it might make fewer jobs.
The basis of the problem is the laws that have enabled and perpetuated the problem. The laws and the associated regulations create the environment but the question is how and why.
If you look at the fall of the exchange in 1929, its cause and the reaction by the government you will find most of the problem. In 1929 only ~10% of all businesses were public and the remainder was private. ~2% of the population were involved in trading stocks and most of the individuals we very heavily leveraged (They bought on credit).
Next the market dropped, individuals lost their ability to pay off their margin accounts and wiped out the capital overnight in the banking system, Couple that with the hysteria of the people running on the banks to get there gold out and you have a recipe for disaster.
For most they were not initially affected by the falls of the exchange in 1929 but when banks failed they felt it. Businesses lost credit to operate, accounts were wiped out and small private business failed. No fault of their own but the fault of the overzealous banks. Individuals found there savings wiped out alongside the private businesses and the world plunged into the abyss.
The reaction to this was FDR and the 1933 securities act and the 1934 securities and exchange act. What these two pieces of legislation did was strip the ability of the small private business (who did not cause the market collapse) to raise capital in a traditional form, Bonds. Direct investment was for many years the mainstay of the entrepreneur. It put the restrictions on who could invest (Qualified institutional investor) and how the investments could be sold. It stripped the ability of the individual to invest and make the high returns they became accustomed to and placed all of it into the hands of the very few 1%.
Today if you are a business owner there is a glass ceiling of about $3 million dollars where a business could potentially get debt to expand, retool, or modernize. The Wall Street and Banks prefer an Equity offering. How often do small business owners sell the majority share of the company they own under a public offering or private sale (sale to high net worth’s) to raise the capital they need. The horror stories of this arrangement are very clear. They give up control, get voted out of the company and the new share holders shut them down move the product manufacture to China to maximize the return to the High Net Worth investor (new owner).
The laws perpetuate the problem. Now remove the Glass-Steagall Act and it becomes a high net worth orgy.
Focus, access the laws, and fix the system that perpetuates the behavior.
The only thing you do by raising minimum wage is remove the value associated in the manufacture of a product or the service provided. Higher wages for certain tasks will drive up the price of the item purchased and inturn will reduce the value of the item. This will affect everything so you will not be able to buy a home because the buying power of the dollar will be the same. This is the basis of inflation.