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“You can create all the demand you want, but if people don’t have excess capital to spend…”
Exactly, JTEM. Tell me how anyone would have excess capital if a 30 dollar/pound minimum wage was enforced. It would not magically strengthen the “middle class” into prosperity, it would fuck shit up. Who the hell is going to hire more unskilled labour at the kind of cost, before they could hope to break even?
Nobody said anything about a 30 dollar/pound minimum wage. It’s not even worthy of a serious answer as wages are DROPPING in this country — income/spending power is DROPPING. While we’re just trying to get things back to a previous level, a better level when the people and nation were better off, you’re throwing around imaginary numbers.
That’s hardly conducive to a reasonable debate on the issues.
What makes great sense for a business on a micro scale — big cut in labor costs — is disastrous on the macro scale. It costs jobs.
As I pointed out, America lost 100 thousand jobs in car dealerships alone, all from a reduction in sales (because fewer people can afford to buy cars) and increased “productivity.” Well all those unemployed people weren’t buying houses, taking vacations or even running out to restaurants. All those unemployed people used to be the customers for other businesses, and they no longer are. So jobs dry up in those other businesses… and so on and so on. High unemployment means greater competition for jobs — an increase in the supply of labor.
What does an increase in supply do to prices? It places downward pressure on prices! So all this snowballing is placing downward pressure on the price of labor, on wages. At the same time inflation is eating away at buying power…
Like it or not, a business’ customers are somebody else’s employees. If you want to sell them Buicks they have to earn enough money to buy Buicks. If you want to sell them vacations to Europe then they have to earn enough money to buy your vacation to Europe. Cut their wages and luxuries are the very first thing to go. No more jobs producing those luxuries… continuing the spiral…
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