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Politics : The Trump Presidency -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (16435)	4/27/2017 3:45:30 PM
From: Dracin72	Read Replies (2) \| Respond to of 365141

Since you guys are talking taxes maybe one of you can answer this which I don't have the answer to. What is the largest state economy in the US? How are the taxes in that state? What is the level of welfare in that state compared to other states? What states receive more from the federal government then they actually put in?

To: combjelly who wrote (16435)	4/27/2017 3:54:30 PM
From: TimF	Read Replies (1) \| Respond to of 365141

It has been proven repeatedly that in a consumer driven economy, consumers need money to spend. Which isn't the issue under discussion. The issue is specifically if an employer can reasonably expect to have greater demand from its employees, as a result of a pay increase, to increase profits more than the cost of the pay increase decreases them. Its hard to create even an artificial pretend situation where that would happen. In the real world it just doesn't happen. Which isn't to say that paying employees more might not increase profits, its just that when it is profitable, its a matter of getting better workers, or more motivated workers, or better retention of workers, not a matter of extra employee demand. It also meant they were more likely to buy his products. Which reduced his costs due to volume. No. He doubled compensation (mostly though bonuses that were tied to controlling employees lives, but that's not specifically relevant here). The employees didn't buy enough cars to make up for those extra costs, not even in total, let alone an increase of that much, not even close. Even if every employee bought a new Ford, every year, and all of that demand was because of the increase (meaning they would buy zero Fords without the increase), it would still be a money loser for Ford if the only benefit was more demand from employees. ----- Car production in the year before the pay rise was 170,000, in the year of it 202,000. As we can see above the total labour establishment was only 14,000 anyway. Even if all of his workers bought a car every year it wasn't going to make any but a marginal difference to the sales of the firm. We can go further too. As we've seen the rise in the daily wage was from $2.25 to $5 (including the bonuses etc). Say 240 working days in the year and 14,000 workers and we get a rise in the pay bill of $9 1/4 million over the year. A Model T cost between $550 and $450 (depends on which year we're talking about). 14,000 cars sold at that price gives us $7 3/4 million to $6 1/4 million in income to the company. It should be obvious that paying the workforce an extra $9 million so that they can then buy $7 million's worth of company production just isn't a way to increase your profits. It's a great way to increase your losses though. forbes.com --- And that's using a wildly over optimistic estimate of the additional demand. More realistically the increased demand would be a small, probably tiny, fraction of $7mil.