I'm reading the paper this fine Saturday morning, and I start to read a front page story about unemployment.
As I read, I recall all of the other news stories about how America is suffering because the minimum wage is too low. I know that the Congress voted to increase the minimum wage an American businessman has to pay his employees. It makes me think of how these do-gooders (both Democrat and Republican alike) are selling out this country's long term prospects of recovery and success in favor of short term, knee jerk economic band aids.
Do they not think that we, as thinking Americans, can do the math on this.
1. When you force employers to pay more for workers, you increase the overhead of the business and the cost of producing the good or service. Therefore, the employer can afford fewer workers or he must increase prices, or both (as they seem to usually do).
Then I recall all of the talk about how America should fund health insurance for all Americans whether or not they or their parents are employed. To accomplish that, you have two choices, create a centralized government medical pool (socialized medicine like Great Britain or Canada) where all medical services are controlled by the government, or you can use tax dollars to pay insurance premiums to greedy insurance companies to cover people who cannot pay for themselves (as in communism).
2. When you increase the amount of taxes businesses have to pay, you increase their overhead, and you get the same result as in 1, above.
3. When the government artificially increases overhead, the businessman must increase the price of his goods or services to compensate or rely on less expensive ways to produce, such as (a) fewer workers doing more work, (b) outsourcing to a foreign country with cheaper labor costs, or (c) mechanisation.
The consumer, albeit rich guy or poor guy, has to pay the higher price or figure out how to manage without that particular good or service. If it is a luxury item, it is generally easy to cut out of a budget. If it is a necessity, the hardship on the lower earners is increased, I think, exponentially, or in other words, the lower income people are harmed by the price increase more than they are helped by the preceding wage or benefit increase. Those with incomes pay more, and more people become unemployed.
As I read, I recall all of the other news stories about how America is suffering because the minimum wage is too low. I know that the Congress voted to increase the minimum wage an American businessman has to pay his employees. It makes me think of how these do-gooders (both Democrat and Republican alike) are selling out this country's long term prospects of recovery and success in favor of short term, knee jerk economic band aids.
Do they not think that we, as thinking Americans, can do the math on this.
1. When you force employers to pay more for workers, you increase the overhead of the business and the cost of producing the good or service. Therefore, the employer can afford fewer workers or he must increase prices, or both (as they seem to usually do).
Then I recall all of the talk about how America should fund health insurance for all Americans whether or not they or their parents are employed. To accomplish that, you have two choices, create a centralized government medical pool (socialized medicine like Great Britain or Canada) where all medical services are controlled by the government, or you can use tax dollars to pay insurance premiums to greedy insurance companies to cover people who cannot pay for themselves (as in communism).
2. When you increase the amount of taxes businesses have to pay, you increase their overhead, and you get the same result as in 1, above.
3. When the government artificially increases overhead, the businessman must increase the price of his goods or services to compensate or rely on less expensive ways to produce, such as (a) fewer workers doing more work, (b) outsourcing to a foreign country with cheaper labor costs, or (c) mechanisation.
The consumer, albeit rich guy or poor guy, has to pay the higher price or figure out how to manage without that particular good or service. If it is a luxury item, it is generally easy to cut out of a budget. If it is a necessity, the hardship on the lower earners is increased, I think, exponentially, or in other words, the lower income people are harmed by the price increase more than they are helped by the preceding wage or benefit increase. Those with incomes pay more, and more people become unemployed.
Then the press heaps their curses on American businesses that search for cheaper ways to produce, such as, outsourcing to other countries, mechanising the production line, or simply firing some people so those remaining have to work harder or produce more.
Why in the world do we put up with lawmakers that don't have the foggiest idea about economic theory and practice; yet they continually and continuously monkey around with the mechanism?
This is not subjective material. It is very mathematical, scientific, and logical. One thing will always lead to another. For every action, there is an equal and opposite reaction. The market has to work.
Why in the world do we put up with lawmakers that don't have the foggiest idea about economic theory and practice; yet they continually and continuously monkey around with the mechanism?
This is not subjective material. It is very mathematical, scientific, and logical. One thing will always lead to another. For every action, there is an equal and opposite reaction. The market has to work.
There is one caveat, consumers need to be willing to forego anything that is too expensive. It appears that consumer America has gotten into the dependence mindset to the point where we will pay any price for some things, such as gasoline. The market needs to find its equitable center. If buyers pay the price the seller asks, the seller has no motivation to reduce the price to a more comfortable level.
By the way, do you know why gas prices are soaring? Other countries are now competing with us for the middle eastern oil. Russia and China are outbidding the U.S. on the price of a barrel of oil, and we have to constantly bid against them. My question is; Why are we in this bidding war? Why are we not relying on our own resources until we figure out better ways to power our nation?
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