Sunday, April 16, 2017

Some Models I Have(Desmos)

Pricing -> Customer Relationship

One of them works on the assumption that for every dollar increase the amount of customers lost is constant.
Model

The other works on the assumption that for every dollar increase, a percentage of customers is lost. Model


Bracket Taxes 


I'll put this up as soon as I figure out a better way to make it easier to adjust the variables and add new brackets.


Thursday, April 13, 2017

The State(Hypothetical)

I was having a debate with a libertarian from the United Kingdom, and it got me thinking, what exactly is the state to begin with.

After thinking about this, I realized what I think can best describe a state in it's essence, a state is simply a "corporation" and it can either be owned by the people(democracy), or a king/queen(monarchy). It owns the land it holds sovereignty over, and it then either sells access and rights to the land, for people to do shit with(capitalism) or orchestrates total control over it, and guides all economic activity on it(state-planned economy). Rights, are simply what the corporation agrees to protect, over it's subjects. Voting in a democracy is either direct, like an Athenian democracy, or like those dual partnerships that are owned by like 2 people. Or they end up taking the form of republics, or like modern corporations, with their board of directors and shit. 

Now of course I think government and the state are way more complicated and not really like what I was trying to outline above, I guess idk tbh.

Sunday, April 9, 2017

The Minimum Wage(again)

Well, yesterday in a fairly ugly piece I tried to argue against some talking points about the minimum wage, by going over some BLS data and shit. But now I want to focus my attention on more abstract thinking about the minimum wage.

Argument #1: A High Minimum Wage Will Lead To Businesses Raising Prices

This, while on the surface a seemingly logical assertion when thought about harder falls apart entirely. A businesses job is to generate a profit, to do this they must minimize costs, and maximize revenue. To determine revenue(black striped), simply multiply the price(blue) times the number of customers(green), Now, price and customers are pretty obviously inversely related, the higher the price the fewer the people willing to pay to but the thing/service you're selling. For this model, I'm assuming that it is a perfectly inverse graph, even though in reality the situation is more complicated.
Black Striped : Revenue
Blue Solid : Price
Green Solid : Customers
This is just the graph of the relationship I was outline above. Notice how revenue spikes in the "middle", and begins to fall when price is either too high, or too low. This same exact mechanic is why everything doesn't cause $50 million dollars. And similarly is the reason that an increase in the minimum wage will not cause any drastic increase in prices. If labor costs go up, there's no reason I would decide to reduce my revenue too.

Secondly, this assumption also assumes that, oh my, businesses already pay their employees so much it would hurt them so much to make them spend a little more. Well, again pricing for labor has absolutely nothing to do with how much revenue they generate. If, I could hire let's say 100 people to work for me at the very most for this scheme to work, and I made $100 per man hour, and this jobs requires unskilled labor, which is very abundant on the market place, so much so that other people are paying employees $7.5 per hour. Now, how much do you think I am going to pay my employees, if you answered $7.5 or maybe $8 to reduce turnover. This is the case in real markets to, businesses are dependent on the labor being cheap, it's just that it's so abundant that they can keep wages low.

Argument #2: A Higher Minimum Wage Will Lead To Higher Unemployment

I have heard to general premises that this argument follows, either that businesses will go broke, and that they will magically automate every affected job or a lot of them. 

Firstly, most businesses will not go broke, because of the reason I mentioned above which is that most businesses aren't just skimming the margin, and if they are then I would like to then start talking about the economic effects of giving low wage workers more money, which is more demand for consumer goods, and generally more spending in the economy. You see, unlike richer people, the poor generally don't have enough to satisfy most of their demands, hence when you raise their wages, the money will actually go into the local economy, rather than flow into offshore bank accounts. This spending then generates more economic activity, both for the people who have to service the servicers, and the effect that now more of these workers have a higher wage and hence, more money to spend.

Secondly, I would like to discuss this idea that a higher wage will lead to a massive amount of automation. While, this also makes sense in theory, consider the example a lot of people use, fast food workers. Well we could just replace them with iPads, while I do see the argument, I also have been to places like McDonald's and Tacobell and I don't see Robo Rob taking my order. And why would businesses have any less incentive to automate them at the current minimum wage of $7.25 a hour, which roughly translates to about $15,121.43 for a year if we assume they work 8 hours a day, 5 days a week no holidays. Now if you instead spend around $30,000 for labor, there's a larger incentive to automate the job. However, an iPad costs what $400? and imagine if you're buying them in bulk, like a corporation like McDonalds would, how much do you think it would cost then like $300 or $200, and unlike humans, your iPad won't decide that it has finals and can't make a shift, and will last longer in the job too, it won't demand a raise,benefits or worker's rights.

Friday, April 7, 2017

The Minimum Wage

Well I'm bored, so I guess I'm writing about the minimum wage. So let me just throw it out there, I am in favor of a $15 per hour minimum wage. And I know there are a lot of concerns about the minimum wage so let me try to justify this shit or whatever.

So, one of the biggest things I hear about the minimum wage is that it's going to cause massive price inflation which ends up negating the whole wage bump. And the thinking goes, well labor costs increase, so corporations will compensate by raising prices to get back to the same profit levels as before. And while this sounds like a compelling argument at face-value, you have to remember that increasing prices leads to fewer customers, which leads to lesser profit if the price is high enough. I guess, the reason for this rationale is that a lot of people believe that businesses are paying their employees the maximum that they can, this is simply WRONG! This ignores reality entirely and the operation of the market and labor market in particular.

Consider this, pretend I had a business, where I could hold a maximal number of employees at like 100. And from each labor-hour they put in I generate $1000 in revenue. This job by the way requires little skill, just human skills and shit(basically low-skill service jobs). Now everyone else is paying their employees with the exact same qualifications I need $7.25 an hour. Why the fuck would I pay them anything more, especially if it's low-skill and a lot of people are looking for jobs(which they always are. A similar thing happens with other minimum wage jobs too, just because they're simple doesn't mean they don't generate a lot of value for the employer, for example McDonald's in 2013 made about 2.5 million dollars per restaurant. And the amount of employees in a fast food restaurant is about 15. So they make about $166,666.67 per employee asking for a raise from $7.25 to $15 or about $16,000 a year doesn't sound that bad does it?

And while, that's a specific example, the Hospitality Department at Purdue did a study on this and would raise fast-food prices by about 4.3%. So that literally four cents about on every dollar and in return the most struggling among us getting a nicer live. Isn't that a nice deal, but NOO! conservatives would rather blow that money on making America "stronger" cause you know we don't spend enough already.

Or maybe, Purdue isn't convincing enough and you would like a specific example, well how about Seattle where they have been incrementing it up to the $15 an hour an they don't have massive price inflation or unemployment. All they have is slightly richer, poor workers who spend the money back into the local economy generating jobs, vs the richest Americans taking that too and sending it off-seas.

Don't believe him, well I crunched the numbers between Seattle and the total of Washington, in regards to unemployment.
The source for the following numbers is the Bureau of Labor Statistics is this page on the BLS site.
The Series ID's:
Seattle Employment : LAUCT536300000000005
Seattle Labor Force : LAUCT536300000000006
Washington Employment : LAUST530000000000005
Washington Labor Force : LAUST530000000000006

All the graphs attached below are from Jan 2014 to Jan 2017.

t1= Jan 2014
t2= Jan 2017


Seattle Employment
Seattle Labor Force
Washington Employment
Washington Labor Force
So how much worse is the employment rate of Seattle vs Washington, considering Washington isn't doing the raise to $15 while Seattle is. 

Seattle:

The amount of employed people in Seattle in 
t1: 386,382 
t2: 421,374

The labor force, or total in 
t1: 404,193
t2: 436,137 

Based on these numbers we can calculate how many people were employed out of the total, or what I will be referring to as the employment rate.

t1: 95.70% 
t2: 96.62%
Change: +0.91%

Washington(as a whole):

The amount of employed people in the state in 
 t1: 3,203,473  
 t2: 3,465,814.
 
The labor force
t1: 3,445,693
t2: 3,676,071

The employment rate by period of time is, 
t1: 92.97%
t2: 94.28%
Change: +1.31%

So overall, Washington did end up with slightly and by slightly I mean like 0.28% or in decimal form 0.0028. So it barely moved, I decided to read a bit more into the numbers, and calculated the difference between Seattle and Washington per time period

t1: +2.62%
t2: + 2.34%
Change In Range: -0.28%

Spreadsheet: link

So basically, Seattle didn't gain as many jobs as a percent than Washington as a whole, however the difference is so small it barely means any thing and in my opinion the costs of this are minimal compared to the upside of the poorest of workers having more money.

Thursday, April 6, 2017

Who's Ready For Iraq 2.0

http://www.cnbc.com/2017/04/06/us-military-has-launched-more-50-than-missiles-aimed-at-syria-nbc-news.html

YAY! We're bombing Syrian government buildings, y'all know what this is right, an act of war. So now that we might just be at war with Syria, who's ready for more civilian deaths because Assad is a "bad guy". I mean, I'm not denying that he's not a bad guy, but you know I think I would much rather have a socialist secular dictator running Syria, over an Jihadist dictator. Which do you prefer, "Shut up, stop opposing me"(both of them) or would like an add on of, "You woman is HALAL *proceeds to rape and behead her*". This whole fucking situation is fucking absurd, pull out stop bombing and spend those resources back home, maybe on you know our crumbling domestic infrastructure. The even stupider part is that once again the Democrats were on the wrong fucking side of the issue, Trump is Putin's little bitch dog, Trump is Putin's little bitch dog with no evidence, and here we have it potential WW3.