Our country is rapidly becoming less a capitalist society and more a feudal society.
Economic Inequality of any degree doesn't make for a feudal society. A Feudal society involves political control over other people, not just some being rich and some being poor. The peasants can't leave the land, the baron owes service the the Duke who owes service to the King etc. Not because of ongoing voluntary transactions but because of hereditary political power and privilege.
Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts.
I don't know whether Ford really believed that, or he was just saying it for good PR. Either way the idea that the company could benefit by a raise causing more of its employees to buy the product, thus increasing sales more than the increase is cost, is nonsense on stilts.
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Message 27092445
If we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression
Destroy food when people are hungry, outlaw discounting or customer selection of which chicken they want to buy, impose high tax rates during a depression, put upward pressure on wages when there is massive unemployment...
Most of you probably think that the $15 minimum wage in Seattle is an insane departure from rational policy that puts our economy at great risk.
Foolish, but not insane. Seattle already has high income and a high cost structure. $15 only takes out the bottom, not much of the economy. $15/hour minimum in rural Mississippi would be insane.
The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage?
Highest minimum wages are going to be in wealthy cities that can afford them to a greater degree. They can sustain the harm caused by the higher minimum wage, or if they are sufficiently wealthy it can even be above the market clearing wage for entry level labor and thus have little effect either positive or negative.
Fifteen dollars isn't a risky untried policy for us.
Yes it is (if not quite as risky as some might believe, and not nearly as risky as it would be elsewhere), its a 61% increase in the minimum that represents the policy they have already tried (and been harmed by, but been able to sustain the modest harm considering their generally strong economy).
It makes perfect sense if you think about it: If a worker earns $7.25 an hour, which is now the national minimum wage, what proportion of that person’s income do you think ends up in the cash registers of local small businesses? Hardly any. That person is paying rent, ideally going out to get subsistence groceries at Safeway, and, if really lucky, has a bus pass. But she’s not going out to eat at restaurants. Not browsing for new clothes. Not buying flowers on Mother’s Day.
Business selling less expensive products will lose more by a large increase in their wages, then they will gain in employee purchases. That doesn't just apply to an increase in one company like Ford's $5/day (although its stronger and more obvious in such situations). OTOH in one company situations, where wages are raised higher then competitors, there are also more potential from gain, less turnover and you get to out compete your competitors for the better employees if you pay more. If everyone has to pay more then the company doesn't become more competitive at getting and keeping employees. |
