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Quote: GenoDRPh

From the article you won't read:

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Workers Get Disproportionately Blamed For High Prices

Typical inflation dogma is that consumer demand and labor costs drive inflation. Like Larry Summers would say, blaming business for it is “bad economics.” These orthodoxies are not supported by the math. Corporate profits as a share of the national income are at historic highs, while workers’ share is lower than before the pandemic. And labor shortages get a lot of media attention. Retail labor costs increased as food workers demanded better pay and benefits after getting stressed out, sick and even dying at work during the pandemic. But even if retail labor costs went up 50% across the board, this would result in price increases of just 5-10% at grocery stores, hardly justifying the price hikes in steaks, yogurt or hash browns.

While workers get disproportionately blamed for high prices, Wall Street profit rates are the highest since World War II and stock buybacks are at record highs. Walmart’sWalmart 0.0%WMT +0.5% Walton family has a combined net worth of over $238 billion, increasing by $8.8 billion from 2020 to 2022. The Mars family added $21 billion to their fortune from 2020-2021. Food and agriculture billionaires added $400 billion to their wealth from 2020-2021, with Covid-19-related food inflation creating over 60 new food billionaires. Sellers’ inflation is Robin Hood in reverse: massive wealth concentration bankrolled by consumer spending on necessities.

Stop blaming the lowest income workers for your prices being high. I am completely okay with paying a little more for my boneless chicken, sweet potatoes, canned pears and diet soda if it means workers make at least enough to put a roof over their heads, meat and potatoes on the table and keep the lights and the heat on at home. And if that interferes with the "free market", I'll take that all day long.

I also note that the only people who want to get rid of the minimum wage are the same people who argue for paying workers LESS.

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Labor is almost always the highest cost component to a business.

Oh well. Cost of doing business. If the business model is dependent in part on paying people less, I'm not sure that's a business worth having.

Your statement isn't supported by the above article.

Quote: GenoDRPh

Oh well. Cost of doing business. If the business model is dependent in part on paying people less, I'm not sure that's a business worth having.

Your statement isn't supported by the above article.

If the article does not realize that labor is the highest cost of a business AND that raising the cost of labor raises all costs then the article is useless.

Not worth having? You do not understand business. Entry-level labor is notorious for being low productivity. But that is where you get your start. Where you cut your teeth. You work for a lower pay at McDonald's but learn work skills. Those skills get you a higher level job.

Bottom line is you get paid on your productivity, not your "needs."

Between 1978-2021, CEO pay has increased 1,460.2% while worker pay has increased 15.3%.

Anybody that truly doesn't think this is an issue is fooling themselves because they sure as hell aren't fooling anybody else.

https://www.epi.org/publication/ceo-pay-in-2021/

Quote: AZDuffman

If the article does not realize that labor is the highest cost of a business AND that raising the cost of labor raises all costs then the article is useless.

Not worth having? You do not understand business. Entry-level labor is notorious for being low productivity. But that is where you get your start. Where you cut your teeth. You work for a lower pay at McDonald's but learn work skills. Those skills get you a higher level job.

Bottom line is you get paid on your productivity, not your "needs."

The article is saying that increased labor costs only marginally increase retail food costs. Prove me wrong. I dare you to cite data that prove the article wrong.

People who want to eliminate the minimum wage want workers to earn entry-level wages forever.

I stand by my statement that jobs with wages insufficient to support the worker are not jobs that contribute to an economy, and are jobs not worth having.

Quote: GenoDRPh

The article is saying that increased labor costs only marginally increase retail food costs. Prove me wrong. I dare you to cite data that prove the article wrong.

Labor will be 30-40% of costs in a fast food place. So any labor increase to them increases prices. But that is just part of it. The labor at their suppliers increases supply prices, indirectly causing a labor price increase. People who think increased labor costs do not drive inflation are economic illiterates.

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People who want to eliminate the minimum wage want workers to earn entry-level wages forever.

Nonsense. In case you have not noticed, nobody is getting paid minimum wage, the market has raised it. Additionally, whatever minimum wage is will ALWAYS be "entry level wages." You get a raise by getting skills, not by raising minimum wage.

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I stand by my statement that jobs with wages insufficient to support the worker are not jobs that contribute to an economy, and are jobs not worth having.

Spoken like a white-bread person who has neither owned a business not needed a side-job. That is faculty-lounge talk.

Quote: Tripdufan

Between 1978-2021, CEO pay has increased 1,460.2% while worker pay has increased 15.3%.

Anybody that truly doesn't think this is an issue is fooling themselves because they sure as hell aren't fooling anybody else.

https://www.epi.org/publication/ceo-pay-in-2021/

One has nothing to do with the other. If a worker wants to make CEO pay then they should become a CEO.

Without quoting everyone’s posts….. You must be kidding if you don’t think FORCED higher wages do not put a strain in small businesses. You obviously don’t know anyone who ever owned a McDonalds or similar.
And I don’t care what that article says…. the ARTIFICIALLY high minimum wages seep up so that the worker who was making $16 an hour when minimum wage was $10 now somehow magically thinks he’s worth $20!

I worked for minimum wage as a teenager. $2.65 an hour. If there was no minimum wage law might it have been $2.50? $2.09? Who knows? But I’d have had a choice…. take what’s offered or don’t take what’s offered. But I knew it was a start. Not a finish.

Quote: SOOPOO

Without quoting everyone’s posts….. You must be kidding if you don’t think FORCED higher wages do not put a strain in small businesses. You obviously don’t know anyone who ever owned a McDonalds or similar.
And I don’t care what that article says…. the ARTIFICIALLY high minimum wages seep up so that the worker who was making $16 an hour when minimum wage was $10 now somehow magically thinks he’s worth $20!

I worked for minimum wage as a teenager. $2.65 an hour. If there was no minimum wage law might it have been $2.50? $2.09? Who knows? But I’d have had a choice…. take what’s offered or don’t take what’s offered. But I knew it was a start. Not a finish.

I would advise more collective bargaining for any group that wants more money on the lower end. It's unfortunate when it has to come to that.

Quote: GenoDRPh

...But even if retail labor costs went up 50% across the board, this would result in price increases of just 5-10% at grocery stores, hardly justifying the price hikes in steaks, yogurt or hash browns.

The writer should have concentrated on sector net margins, instead of profits temporarily enjoyed by a few companies.

The article mentions the profits a few companies made in 2021 and 2022. It does not mention that Hershey's EPS are now down 55% YOY , or that Kraft-Heinz EPS are now down 92% YOY, and Tyson Foods EPS are down 146% YOY.

What companies charge for their products is determined by input costs and consumer demand. When either of those increase, prices generally go up.

The price of a barrel of oil has nearly doubled in the past four years. That means higher input costs.

A better indicator than profit, which can increase due to divestitures, favorable foreign currency exchange and increased sales volume, is Net Margin, which is the percentage of profit a company generates from revenue.

Food prices increased 23% over the four years, but net margins in that sector remain very low.

The net margin for grocery and food is only 1.18%

Apparel, Auto, Drugs, Food Wholesalers, pharmaceutical drugs and Household Products have similarly low net margins. No price gouging there either.

Walmart works on a 1% net margin. Their earnings per share are down 42% YOY.

Margins by Sector:

S&P 500 REPORTING LOWEST NET PROFIT MARGIN IN MORE THAN 3 YEARS FOR Q4