July Jobs Report

#101
#101
I am not an economist like BPV but I do come into contact with many small business owners who have businesses ranging from 1 million to 25 million receivables annually and all of them complain much more about the wage cost than the taxes. Taxes are an issue here but the wage rate and overall red tape that keeps getting layered on is handcuffing many businesses. People do not understand how much 7.25 to 9.00 per hour impacts a small business that is not dealing with large amounts of cash.


Take the pizza shop owner. He has a two cooks, a prep guy, and a customer guy at the counter taking orders. Lets say each are making minimum wage and is average pizza cost 7.25. This means he has to sell 5 pizzas per hour just to make payroll due to payroll tax. He hasnt even made rent yet or utilities or food cost. TThat's five per hour which means he must sell triple during peak hours to make up for slow hours.

Now assume minimum wage was 4.25 and he had 4 teenagers working all doing the same job. He now must sell roughly 3 pizzas to break even and the fourth is pure income to use towards expenses. To break this down further factoring in 80 hour work week the extra income is 580 per week. That alone would pay for rent and utilities in many places.
This wage change just added $30,160 annually to the owner and we are only talking about 4 minimum wager workers. If the guy had a staff of 12 we are talking roughly a 100K per year.

So now the owner has two options. Increase the workload of employees and take a job that should be for 3 people and make it now for two or keep the work flow normal and reduce income in his pocket.

These are the issues being dealt with everyday.

Oh and heres the last option...the one that most likely will happen... the owner will slowly raise prices over time and as he does so others in the area will watch and if it goes well they will follow. And the cost of living (in the pizza world atleast) just went up in the area.
 
#102
#102
NEOCON said:
Dollar tanking is helping wages here because it is lessening the positive effects of offshoring.

The USD to PHP (just one example) was 52 to 1 during Bush. This made offshoring very lucratic. It is now barely 40 to 1. That is a huge swing.

The wage rate for a blue collar worker with no skillset here is just too damn high. Sorry but it is. That is a problem.

I personally wish the USD would get stronger so it would make my position better.
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The positive effects of the dollar tanking in respect to off-shoring pale in comparison to the cumulative negative effects of a weakening dollar.
 
#105
#105
PKT_VOL said:
The positive effects of the dollar tanking in respect to off-shoring pale in comparison to the cumulative negative effects of a weakening dollar.
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Most businesses that have the ability to offshore would not view the dollar tanking as a postivie thing. I personally dont.

I am simply stating that tax (which you mentioned) mean far less to the average business owner than wages. Most small businesses are closed corps and pass almost all income through and do not keep large reserves like public corporations therefore the double tax does not impact them. I personally only keep 50K in reserves at all times simply to cover weekly expenses and will pass this through at the end of the year to myself and then loan the business back the fifty k as a personal loan with interest. Due to this I never get hit with corporate tax because we damn near net zero the thing out each year. Most closed businesses due the same or close to this so the corp tax does not come into play. I'm obviously talking on the federal level here though as each state is different and depending on the franchise tax etc it can get out of hand. Example CA.


Wages though....wages are a kick in the ass.

Now if we are talking payroll tax when we are talking overall corp taxes then we have an issue as this is unavoidable and due to the laws this tax is getting insane.
 
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#106
#106
govols09 said:
The distinct difference between your views and mine are that you want to punish success. Every argument boils down to that key principle we differ on
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That's such bull crap -- "punish success." Absolute party line hogwash. No one wants to "punish success" - there's no value to that. Come on, let's have a real conversation and drop the mantras.
 
#107
#107
PKT_VOL said:
Why can't everyone pay the same rate?



How is he going to increase the tax burden on the middle class? I have seen you say this before without explaining yourself or providing facts.
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Re your first sentence, I agree that there should not be a different rate on capital gains as compared to ordinary labor-based income.

Re your second, that was conclusion last week of an independent tax group.
 
#108
#108
lawgator1 said:
That's such bull crap -- "punish success." Absolute party line hogwash. No one wants to "punish success" - there's no value to that. Come on, let's have a real conversation and drop the mantras.
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speaking of mantras, when are you going to drop your "tax the rich more" mantra?
 
#110
#110
lawgator1 said:
That's such bull crap -- "punish success." Absolute party line hogwash. No one wants to "punish success" - there's no value to that. Come on, let's have a real conversation and drop the mantras.
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Can you please explain to me why you want the "rich" to pay more of a percentage of their income in taxes? This is not party line mantra. I think "W" was perhaps the worst thing to happen to this country in a generation not only for his policies but because of how he is a perceived conservative. I am a registered independent and student of economics. I have read books by Hayek, Marx, Keines, and Friedman.

I understand your argument about raising capital gains (I don't agree) but I am talking about why you insist on making the rich pay "their fair share" when they already shoulder a huge amount of the tax load. We are at a time in history where the poor are paying less in income taxes than ever before. Let me ask a question. What tax rate on earned income would be acceptable to you and make you feel as though they were paying "enough."
 
#113
#113
lawgator1 said:
Because it is their moral responsibility to.
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This could be the stupidest thing ever.

If you go with the "moral" criteria on laws and application, then people have the same footing to be against gay marriage because marriage between a man and woman is "moral".
 
#114
#114
govols09 said:
Can you answer the question, "How much should the rich pay as a percentage of their earned income to fulfill this moral responsibility?"
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If the rate for someone making a million dollars by physical labor is x, then that is the rate that should be paid by someone making a million by investing.
 
#115
#115
Volst53 said:
This could be the stupidest thing ever.

If you go with the "moral" criteria on laws and application, then people have the same footing to be against gay marriage because marriage between a man and woman is "moral".
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Your 10th grade understanding of the word "moral" tells me all I need to know.
 
#116
#116
lawgator1 said:
Your 10th grade understanding of the word "moral" tells me all I need to know.
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Not eating meat is moral to the environment and reduces the effect of green house gases.

Having a healthy BMI is moral because it reduces the cost of health care to the rest of society


When do we start taxing meat and get penalties for being over weight? Since that would be the moral thing to do and be a benefit to Soceity.


I understand the world moral, but I don't need to hide behind it to push an agenda.
 
#117
#117
lawgator1 said:
If the rate for someone making a million dollars by physical labor is x, then that is the rate that should be paid by someone making a million by investing.
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That's not what I asked. I said I can at least understand that argument (it's wrong). I asked what tax rate would be acceptable to you where the rich would be paying enough of their earned income in taxes.
 
#118
#118
NEOCON said:
Most businesses that have the ability to offshore would not view the dollar tanking as a postivie thing. I personally dont.

I am simply stating that tax (which you mentioned) mean far less to the average business owner than wages. Most small businesses are closed corps and pass almost all income through and do not keep large reserves like public corporations therefore the double tax does not impact them. I personally only keep 50K in reserves at all times simply to cover weekly expenses and will pass this through at the end of the year to myself and then loan the business back the fifty k as a personal loan with interest. Due to this I never get hit with corporate tax because we damn near net zero the thing out each year. Most closed businesses due the same or close to this so the corp tax does not come into play. I'm obviously talking on the federal level here though as each state is different and depending on the franchise tax etc it can get out of hand. Example CA.


Wages though....wages are a kick in the ass.

Now if we are talking payroll tax when we are talking overall corp taxes then we have an issue as this is unavoidable and due to the laws this tax is getting insane.
Click to expand...

You missed my point. My post was in reference to the overall economy, not a specific business. The tanking dollar, as your post indicates, decreases the incentive to outsource. This is a net positive on the whole economy. However, the rest of the effects of a tanking dollar are negative on an overall economy. This would include the need for wages to go up to compete with inflation which hurts your profit margin.
 
#119
#119
lawgator1 said:
Re your first sentence, I agree that there should not be a different rate on capital gains as compared to ordinary labor-based income.
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Why should labor-based income be taxed differently (in a progressive way vs a flat rate)?

lawgator1 said:
Re your second, that was conclusion last week of an independent tax group.
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That's weak. However, we do know Obamacare is indeed a substantial tax increase on the middle class.
 
#120
#120
PKT_VOL said:
You missed my point. My post was in reference to the overall economy, not a specific business. The tanking dollar, as your post indicates, decreases the incentive to outsource. This is a net positive on the whole economy. However, the rest of the effects of a tanking dollar are negative on an overall economy. This would include the need for wages to go up to compete with inflation which hurts your profit margin.
Click to expand...

I didn't miss your point but we are coming at this from different sides I think. The tanking dollar places a huge part in the economy but small businesses have much more of an impact on the economy than many realize. Most businesses that yo will drive by that hire the nonskilled working class are small businesses, not large corps. The Mcdonalds you drive by is probably a franchise with a guy who owns maybe one or two others and while his name is Mcdonalds and he is playing under the global name he is running his business on a much smaller cash flow.

The cost of labor directly impacts him severly and his prices are set by Mcdonalds.

Wages are killing this country. Plain and simple. Anyone who doesnt realize that either does not own a small business or does not known anyone on a close level who does.

Lastly, the wages cannot keep up with the tanking dollar that is the problem and the myth. Our dollar is 42 times stronger than the PHP and they're wages are 25% what ours are. When you increase the rate of wage to try to offset inflation you cannot ever keep up. Sometimes there must be a poor class for the rest of the economy to survive. We have lost that realization and it is why we are going in debt.
 
#121
#121
NEOCON said:
I didn't miss your point but we are coming at this from different sides I think. The tanking dollar places a huge part in the economy but small businesses have much more of an impact on the economy than many realize. Most businesses that yo will drive by that hire the nonskilled working class are small businesses, not large corps. The Mcdonalds you drive by is probably a franchise with a guy who owns maybe one or two others and while his name is Mcdonalds and he is playing under the global name he is running his business on a much smaller cash flow.

The cost of labor directly impacts him severly and his prices are set by Mcdonalds.

Wages are killing this country. Plain and simple. Anyone who doesnt realize that either does not own a small business or does not known anyone on a close level who does.

Lastly, the wages cannot keep up with the tanking dollar that is the problem and the myth. Our dollar is 42 times stronger than the PHP and they're wages are 25% what ours are. When you increase the rate of wage to try to offset inflation you cannot ever keep up. Sometimes there must be a poor class for the rest of the economy to survive. We have lost that realization and it is why we are going in debt.
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I don't dispute that wages are a big problem in this country. I am in favor of not having a minimum wage. I think one of the most telling statistics out there is the unemployment/outsourcing vs investment in right to work states vs close shop states. Unions have murdered the middle class. Sad thing is, most who have been victimized by the unions don't even realize that their participation in a union is the chief factor why they are out of a job.

A tanking dollar is only going to have upward pressure on wages. However, I would not say wages are the biggest thing weighing down businesses. The only time that is true is when you have a business which needs cheap, unskilled labor and is not local service provider. If such a a business falls under that criteria (like yours; telemarketing), you simply cannot compete in the United States.
 
#122
#122
I agree it will put pressure to raise wages or raise the welfare benefits. That is the problem this society has gotten itself in.
 
#123
#123
Nearly every business I walk into has a help wanted sign posted, but the people I know who are out of work say that $15/hour is their break point as that is what they get on unemployment. I also know families with teen age kids who won't apply because their kids are on medical disability and would lose it if they work. We have certainly taken away a bunch of incentives to work in our country.
 
#124
#124
YorkVol said:
Nearly every business I walk into has a help wanted sign posted, but the people I know who are out of work say that $15/hour is their break point as that is what they get on unemployment. I also know families with teen age kids who won't apply because their kids are on medical disability and would lose it if they work. We have certainly taken away a bunch of incentives to work in our country.
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It sure seems so.
 
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