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Politics : Formerly About Advanced Micro Devices
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To: i-node who wrote (464532)3/18/2009 11:04:45 AM
From: TimF  Read Replies (1) of 1575706
 
For example, Henry Ford believed it and voluntarily doubled, then further increased, his employee's wages on the belief that spreading wealth around would trigger economic growth.

Its hard to determine how much that is the real reason since he had a practical reason to want to give his employees higher wages, it allowed him to hire and retain better workers, and also some of the higher wages may have been a premium for working on an assembly line which is more efficient but more boring. Your doing the same thing again and again, rather than moving around the vehicle your assembling doing different jobs.

But real or not its obviously a false idea. Even if 100% of the extra wages go to buying your products you still increase your costs more than your revenue when you raise wages. It only makes sense if raising wages is necessary do to competition from other employers, or results in you being able to higher a better class or workers, or perhaps if it motivates the workers to work harder and be more loyal, and that harder work and greater loyalty is in your specific situation a benefit greater than the cost of the extra wages.

What we DO know is that Hoover's tax increases -- including massive increases in the death tax and gift taxes -- were an unmitigated disaster, as was the protectionism.

The protectionism was mostly increases in tariffs so its a tax increase as well.
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