Archive for July 18th, 2012
Posted in corruption, culture, Economics, Economics, recession, income redistribution, Politics, Recessions, the Rigged Game, wealth redistribution, tagged Free trade, Income, income redistribution, minimum wage, redistribution, wealth on Jam7000000amWed, 18 Jul 2012 09:19:01 +000012 10, 2010 | Leave a Comment »
Jacking up the federal minimum wage will increase the demand for goods and services because people will have more money to purchase stuff. On the other hand, keeping the federal minimum wage where it is will not create any more jobs, but will likely destroy some. Here’s why this is true.
Corporate profits are at or near record highs. The 1 percent has stolen this money via their control of federal legislation. 93 percent of all US income growth during the last two years has gone to the 1 percent. When jobs are shipped overseas, the difference between the old higher US wages and the new lower foreign wages goes into the pockets of the rich via higher corporate earnings, increased dividends and rising share prices. That leaves the 99 percent with less money to spend, and so the demand for goods and services shrinks, even as the money the 1 percent steals goes toward eliminating more US jobs, or pushing US wages down.
In the same way, reducing the minimum wage will give the 1 percent more money, but the 99 percent will have less income to spend, and this will debase the economy by lessening the demand for goods and services. Keeping the minimum wage the same will have the same negative effect.
That’s because inflation erodes the value of the unchanged minimum wage; as inflation rumbles through the economy year after year, a stagnant wage means the 99 percent can purchase less and less goods and services, and this dilutes the demand for goods and services, which accelerates the economy into a stagnant or downward spiral.
If wages, salaries, and or benefits are static, inflation results in massive transfers of income from the 99 to the 1 percent. As corporations jack up their prices, which is done to ensure they meet the expectations of financial market analysts, the process raises their earnings and results in higher dividends and share prices for the 1 percent; but this occurs at the expense of the 99 percent.
That means an increase in the federal minimum wage will provide the 99 percent with more money to spend, which will create jobs and a more robust economy. This action also means lower corporate profits, dividends and potentially lower share prices for the 1 percent, which is a good thing because it means these parasites will have less money to purchase legislation that sucks the 99 percent financially dryer.
The economy is weak because the parasite has grown too large for the 99 percent “host” to support the 1 percent “parasite.” Click on the links below for more information.