Quote (PlasmaSnake101 @ 7 Apr 2021 12:14)
The Amazon/Walmart scenario already happened in an environment where wage growth is stagnant. Wages are only a portion of costs and increasing them, even dramatically, doesn't impact overall costs as much as one would think. I think the largest company that spends a ton on workers is the USPS, nearly 80% of revenue goes to wages and benefits (however this may be due to the forward funding of retirement). Let's say a company spends 50% on wages. If you increase wages by 10%, you don't increase costs by 10%, you increase the 50% by 10%. While you say small businesses have razor thin margins, I don't particularly care for employers who can't provide adequate wages to employees.
We can discuss methods of increasing the value of labor (punishing corporations that ship jobs overseas, employ illegal immigrants labor, exploit visa programs. There are plenty of ways to increase value to labor. Paying higher wages in 1960 relative to 1940 didn't destroy small business. Why would paying higher wages in 2020 relative to 1970 do so. Wages haven't increased in fifty years. That's a fact. Don't let that Chamber of Commerce propaganda fool you.
Mean household income in the US in 1970 was $9780. Mean household income in the US in 2020 was $94,700. Not only have wages gone up, they've gone way up. Now, to temper that slightly, the GDP in 1970 was just over $1 Trillion. In 2020 it was just shy of $21 trillion. You strongest argument for "double the wage" would be the GDP argument, not making false claims that wages haven't gone up. When I got my first "real" job, Federal Minimum wage was $5.15, and in the state where I was in, it was $5.50. Today federal minimum is $7.25 and that same state is (as of July 2021, the next hike) $12.75 except in the metro, where it's $14. Said state sets it's minimum wage based on the Consumer Price Index, and is intended to allow for basic "livable" wage levels. To be honest, in rural counties, the minimum is too high, and in the metro, it's too low. But the wage increase is annual, relatively minimal, and already impacts prices. Just not enough to notice.
And USPS is not a "company". USPS is a federal agency of the Executive Branch of government, and records a net loss of billions per year. If they were a "company" they would be out of business, and would have been a long time ago. Tax dollars prop them up and keep them propped up. Likewise, you have no idea what the differences in overhead cost to businesses, especially service-based businesses, where labor is the vast majority. But when small businesses, such as the ma and pa store, are operating on a 2% profit margin, and their gross revenue is only $1,000,000/year, that means their profits are only $20K/year. Now assume for a minute there are 10 employees who you're now being forced to pay an additional $5/hour to and your store is open 24/7/52. Let's even assume there's only 1 employee working at any given time on any given day. That now adds 24*7*52*5=$43,680 in overhead, and that's not even including the extra FICA match and Unemployment insurance the business needs to pay. How do you pay for it, do you think?
You haven't really thought through what you're trying to convey. You're on the right path with corporations outsourcing labor and actual production, and the heavy impact that has when they're competing vs local small businesses. The conclusion is where you're wrong. If you attempt to enforce a high enough wage point that it's simply too expensive to run a local or small business, then all that's left are the Amazons and Walmarts and Targets and such, who're going to be outsourcing a lot of their production needs anyway. That ends up going right up the chain, negatively impacting every US product producer who still employs Americans to build/make their product. Eventually, you get to a point where all that's left is basic retail, chain-style service, and corporate office/managerial level labor in the US, along with your government workers, and medical workers, and we are no longer producing anything of value at home. We're just 100% consumers. Tell me, if at the same time we're doing that, we're reducing other sources of income such as fossil fuels, at what point can we no longer afford the products that we're no longer making?
The incentivization for corporations to outsource labor and production is incredibly clear. What you have not made clear in any way is how you're going to incentivize small businesses not to simply sell to the corporations while the selling's good, rather than going bankrupt when you force them to increase their labor costs without being able to increase the value of their goods?
Edit: Fixed a math issue. Should be relatively accurate for the example now.
This post was edited by InsaneBobb on Apr 7 2021 02:03pm