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Archive for May 28th, 2013

Why should the federal minimum wage be raised? Because it can be.

Demand for goods and services is weak. Can businesses afford an increase of the minimum wage to, say, $10 an hour? The answer is yes! Especially since corporate profits have been hitting record highs during a period of weak demand, quarter after quarter and year after year! Not only that, but US corporations are sitting on trillions of dollars, which are called “retained earnings,” which are also at the highest levels in history, and they’re growing.

In other words, an increase in the minimum wage can come straight out of retained earnings. That money will go into the hands of people that will spend it, which will stimulate demand, which will increase economic activity, and lead to job growth.

In addition, more recent studies on the effect of raising minimum wages show either a neutral or a positive economic impact.

One other thing should be mentioned. How can corporate profits and retained earnings be at historic highs during this period of weak demand? Shouldn’t competition have narrowed those profit margins, especially with such weak demand? The answer, of course, is found in another question; what competition? A series of economic oligarchies control most markets and government, as well. They set their prices based on what the markets will bear, not on competition with each other.

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The answer to the question above is simple. The reason corporate tax rates are at a sixty year low is because corporate political power and government corruption is at a eighty-three year high. It doesn’t matter what major political party we’re talking about, corporate money has swamped them both and made our government a weapon solely of the rich to be used against us.

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