A business owner's perspective by r/Intaxerror Edit: added bold for my comments
I'm already judging. No shame.
I don't buy, I don't believe, and I never will, that increasing minimum wage is the solution to the problem,
This tells me you've never seriosuly considered our argument, and you will never listen and try to understand in the future.
and believe me, I am with you guys, there is a problem that needs an immediate solution.
Yup, that people cannot survive off their wages. Just stating what I think you're implying.
Consider that wage is an arbitrary number, no different than price, it's malleable and it often inappropriately assigns the incorrect value to a commodity.
Ok, so what I'm getting from this is you believe a wage is just a number that isn't always the value of someone's work. It can be more or less, but you believe there is an “absolute value” (if you will) of someone's work that is not connected in any way to the money they make for that work.
If work has a value disconnected from what someone's wage is, what would that be? How would we calculate it?
For me, the value of my labor is priceless. That is time I am never getting back, time that I could be spending doing what I love to do, such as spending time with my family, being creative, or relaxing.
Cost and Margins are real variables that define value, and I don't mean cost as a price, I mean cost as a real cost, expenditure of energy and the tradeoff of value.
You believe that the cost of something is equal to the energy someone puts into a product (for example) combined with… whatever you mean by a “tradeoff of value.” (Clarification here would be nice.)
So if my labor is priceless yet someone says they'll pay me $7.25 an hour for my labor and I accept (for whatever reason), that becomes the cost of my labor for the business, despite my evaluation of it.
There isn't a subcontractor, or contractor, or supplier that hasn't sent me a letter saying that the cost of business is going up, and therefore, the prices are going up.
So, none of the businesses have given a reason as to why they are increasing prices.
It simply gets “passed on”, the numbers, digits, and accounting all changes, but the value equation (The cost and margins) never do. That's why is gets passed on, passed on in this context also means, ignored and meaningless.
You're saying that the representations of value (the dollar amounts attributed to products or services) are changing, but that they are meaningless because the actual value of the product or service has not changed.
Ok, so my labor is valued as priceless, so, according to your logic, that the dollar amount attributed to anything is meaningless, why can't I change that dollar amount? What if I say I want $13 an hour for my labor? It's still a great discount to the business because the value of my labor is priceless.
Minimum wage is meaningless. What we need, is a value minimum.
You're saying that because a wage isn't and never is equal to the actual value of a product or service, it would be pointless to force one onto it. You think we must legislate a fixed number onto what the value of something is worth.
Honestly I don't see the difference between setting a minimum wage and legislating a set value for labor. That's exactly what a minimum wage is. It is telling companies that their employees' time and effort is worth AT LEAST the dollar amount decided upon.
Right now, on the federal level, that is $7.25/hr, or 15k/yr if they work full-time. Anyone getting paid that is living in poverty in America. If you say there should be no minimum wage, you are saying that businesses should let their employees live in poverty.
In the economic structure we have created, profit (not in dollars), but in margin, is how value is defined. We can change the numbers all we want; it can't affect the value of something. 30 cents on a dollar, or 300 on 1,000 is still 30%, the value of those two examples remains the same.
You're saying because we can express 30% margins as 30 dollars for every 100 or 3 cents for every 100 or however else we would like to put it in numbers, that margins are the “real” immutable measures of value.
If I make 30 cents for every dollar I spend, and I make 100 dollars in gross profit, that means my net profit is 30 dollars. The profit margin, then, is 30%. Profit and margins are two different ways to represent the same figures.
The price we attach to the value is just quick economic data produced by the market for reference (a function of quantity of goods versus quantity of money), it doesn't change the value in the long term.
You believe that prices are just a snapshot of the supply and demand in the moment, but that a product's value does not change in the grand scheme of things.
If there is a lot of something, it is less valuable. That is why its price decreases. Milk does not hold some inherent “value” that is independent of supply and demand.
You can't alter the value of labor by arbitrarily changing the price by compelled legislation. It's as ridiculous of an argument as saying “We'll just pass a law that says Milk must cost 1 dollar a gallon”
Did that law reduce the actual value of Milk by 80%? The answer is certainly, no.
Forget about profit, it's just a number. On the flip side of the equation, you have Margins, that are a far more accurate representation of the value that business owners are extracting from their business.
You believe profit and margins are different values.
As explained above, they are in fact two ways to represent the same thing.
No matter what happens to the minimum wage, no matter what compelled labor price laws are enacted, the margin will remain the same, the economic data gets passed onto the consumer.
Economic data (prices) go up in order to ensure the margin, representative of the cost of doing business, remains the same.
You believe that margins and value are the same thing, therefore, if the cost of running a business goes up because the minimum wage is raised by legislation, the margin, wanting to remain the same, magically makes prices goes up simultaneously, since the value of the product or service is the same as it was.
It's amazing how close you got and still missed the mark. We want businesses so make less profit. We want the margins to get smaller. That is how you can pay people more and not raise prices for the consumer. Don't pay your CEO billions of dollars. Don't MAKE billions of dollars. Make millions instead. Stop being greedy with your fucking money. That's the point.
I think a better solution, is to look at ways to refine and distribute the margin side of the equation. Let businesses chase profits to the extreme but have a value sharing equation that distributes margins back to the employees. “Profit sharing” would not even work,
So you want to distribute the margins back to the employees, but not the profit.
As said before, profit and margins are not 2 different things. You are in fact saying that you want the money made by employers to be shared with employees. That is profit sharing.
because Ofcourse, profit is like minimum wage, just the other side of the equation and can be just as easily manipulated, you have to close the accounting loopholes that businesses would immediately use to increase cost and reduce profit, which they would do to maintain the value margins.
So profit is something that can be manipulated to be higher or lower depending on what the business's costs are. To keep the margins the same with increased costs would mean less profit.
Exactly. That's what we want.
The value margin can always be calculated after all the accounting tricks are done.
OfCourse, the other primary factor to be used is to increase the value of labor by reducing the supply. Organized labor is the solution here.
So to increase the value of labor is to have less workers, and they need to be organized.
Well having less workers isn't an option, so organizing sounds like a good plan, and what would we ask for once organized?
A fucking minimum wage.
Just some thoughts. TL;DR – Minimum wage won't help.
TL;DR I really hope you're a troll, because this entire thing melted my brain with its stupidity.