Daily Digest

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Daily Digest 12/23 - Everything You Need To Know About Keystone XL, Would A Minimum Wage Increase Create Jobs?

Monday, December 23, 2013, 11:30 AM

Economy

Research raises concerns about global crop yield projections (Chip)

They studied past yield trends in countries with greatest cereal production and provide evidence against a projected scenario of continued linear crop yield increase. Their data suggest that the rate of yield gain has recently decreased or stopped for one or more of the major cereals in many of the most intensively cropped areas of the world, including eastern Asia, Europe and the United States.

Feds admit start of NSA surveillance, still say it’s too secretive for court (jdargis)

"The government seems to be trying to reset the clock to before June 2013 or even December 2005," said Electronic Frontier Foundation (EFF) Legal Director Cindy Cohn in a statement. "But the American people know that their communications are being swept up by the government under various NSA programs. The government's attempt to block true judicial review of its mass, untargeted collection of content and metadata by pretending that the basic facts about how the spying affects the American people are still secret is both outrageous and disappointing."

On Jammed Jets, Sardines Turn on One Another (jdargis)

Southwest, the nation’s largest domestic carrier, is installing seats with less cushion and thinner materials — a svelte model known in the business as “slim-line.” It also is reducing the maximum recline to two inches from three. These new seats allow Southwest to add another row, or six seats, to every flight — and add $200 million a year in newfound revenue.

Midsize Cities in Poland Develop as Service Hubs for Outsourcing Industry (jdargis)

In midsize cities like Wroclaw and Gdansk, Poles are doing back-office work not only for Indian outsourcing companies like Infosys, Wipro and Tata Consulting Services, but also for major corporations like IBM and banks including Citigroup and Bank of New York Mellon.

Tale of Two Polish Mines Shows Biggest EU Producer’s Woes (jdargis)

Bogdanka employs about 5,000 and analysts expect net income of 313.5 million zloty ($103 million) for 2013, making it the most profitable of seven Polish coal producers. Kompania Weglowa has 56,000 miners, the biggest employer after the postal service and railroad. It lost about $100 million after nine months with the coal price below the cost to mine it.

Would Increasing the Minimum Wage Create Jobs? (jdargis)

Let's translate that into the real world for a moment. If you give a McDonald's franchise owner an extra dollar, they might save it. But if you give a McDonald's cashier an extra dollar, they're almost certainly going to spend it quickly, like the next time they go to buy groceries. Since the U.S. is fueled by consumer spending, we're all better off it that money gets used to purchase some milk and eggs than if it gets stuffed in a bank account.

Everything You Need To Know About Keystone XL (jdargis)

The State Department's final environmental assessment of the Keystone pipeline from the Canadian tar sands to the U.S. Gulf Coast is coming soon. What happens if the pipeline is approved or rejected? Bloomberg's Megan Hughes takes a closer look at the impact on jobs, oil prices and the railroad business.

Clean Energy Presents “Perfect Storm” for Utilities (James B.)

A new report from UBS finds that renewable energy and energy storage are together presenting a “perfect storm” for big utilities. The declining cost of solar, energy efficiency, and electric vehicle technologies threaten to upend centralized electricity generation, putting the utility business model in jeopardy. Grid parity has already been achieved in certain parts of the world where conventional electricity rates are high and renewable resources are plentiful.

Gold & Silver

Click to read the PM Daily Market Commentary: 7/25/13

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

4 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4149
TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 420
Minimum Wage increases

"But if you give a McDonald's cashier an extra dollar, they're almost certainly going to spend it quickly, like the next time they go to buy groceries."

It doesn't work that way. since the store owners raise the prices to pay for the increased wages. The store workers end up buying the same amount of stuff because of the higher prices. Minimum wage increases only increase inflation and decrease employee as the higher prices cause consumers to purchase fewer items. Business owners are more likely to cut employees if they can't pass on higher costs. The biggest losers are students looking for part-time employment as business owners will not hire the to do a job that has a negative return on investment. Students usually lack the skills and are not as productive as experienced workers. The business is likely to choose experience over inexperienced workers, which effectively prices them out of a job. The end result is a negative impact on the economy.

Instead of addressing the symptoms of Inflation, perhaps the gov't should avoid policies that cause inflation in the first place! 

 

Quercus bicolor's picture
Quercus bicolor
Status: Gold Member (Offline)
Joined: Mar 19 2008
Posts: 470
TechGuy wrote: "But if you
TechGuy wrote:

"But if you give a McDonald's cashier an extra dollar, they're almost certainly going to spend it quickly, like the next time they go to buy groceries."

It doesn't work that way. since the store owners raise the prices to pay for the increased wages. The store workers end up buying the same amount of stuff because of the higher prices. Minimum wage increases only increase inflation and decrease employee as the higher prices cause consumers to purchase fewer items. Business owners are more likely to cut employees if they can't pass on higher costs. The biggest losers are students looking for part-time employment as business owners will not hire the to do a job that has a negative return on investment. Students usually lack the skills and are not as productive as experienced workers. The business is likely to choose experience over inexperienced workers, which effectively prices them out of a job. The end result is a negative impact on the economy.

Instead of addressing the symptoms of Inflation, perhaps the gov't should avoid policies that cause inflation in the first place! 

 

Minimum wage (and near-minimum wage) payroll represents only a portion of the total cost of products (larger portions of some and smaller of others).  This combined with limits on what people are willing to pay will result in a price increase that is proportionally smaller than the minimum wage increase.  The net result will be that those with low wage jobs will see an increase in purchasing power that is somewhat smaller than their wage increase.  Compensation for higher costs could come from hiring fewer lower wage workers, but it could also come from decreases in corporate profits and executive compensation.  In any case, the main result of an increase is likely to be a redistribution of income to those who work low wage jobs. 

I think we need to find some way to eliminate the effective subsidy provided by welfare, medicaid and SNAP to businesses that hire lots of low wage workers.  I'm not sure about the best way to do this.

kookaburra's picture
kookaburra
Status: Member (Offline)
Joined: Dec 12 2013
Posts: 2
no moral basis for wage restrictions

one thing i find conspicuously absent in the minimum wage discussion is, who has the right to tell two people engaged in a free exchange of labor for currency, that they may only make the exchange at a certain rate or higher?

not everyone is equally talented, and equally hard-working. if someone can produce $6 per hr worth of goods or services, and an employer is willing to pay that person up to $5 per hr, does a government bureaucrat really have the right to step in and say, no, this is below "minimum wage", you may not engage in this voluntary exchange? such interference takes income away from both employee and employer, and harms society as a whole; we become poorer and less free as a result.

we are not sheep, not livestock owned by the government, we are free to make our own decisions.

central planning has never worked, the basket-case of today's venezuela is a prime example.

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