Tag: Basic Economics

Thomas Sowell is a gem

A very good interview with American Economist, Mr. Thomas Sowell. He’s born in the 1930’s and he’s well in his 80’s today. Still a very intelligent and a wonderful individual. This is one of many interviews I have seen of Mr. Thomas Sowell. He is truly a gem for this period, among others of course.

He has argued that it is a propaganda tactic akin to those used by Joseph Goebbels because it comes with an attitude that it must be “repeated long enough and loud enough” till it is believed and people “cave in” to it (Wikipedia).

https://en.wikipedia.org/wiki/Thomas_Sowell

Is increasing minimum wage beneficial or hurtful? I believe it is hurtful.

  1. A lot of people will lose their jobs or have their hours reduced.
  2. Businesses will close and the jobs they created will disappear.
    1. This will affect small businesses heavily.
  3. Young people will lose that “entry-level” job opportunity.
    1. Having a entry-level position usually teaches an individual – new to the work force – basic responsibilities (e.g. showing up on time, working together with others, knowing how to follow instructions, providing customer service, etc.)
    2. No one can get the better job until they have their FIRST job.
  4. The cost of ALL workers will have to go UP.
    1. Increase in labor cost to workers – will lessen the profit of that business
    2. If there’s less profits – the unintended consequence is that the business will cut the hours (as referred above), hire less people, and not expand their business.
  5. Fewer people will open businesses.
    1. A company that does not exist never employs anyone.
  6. Prices for everything will go up

Another perspective on increase in minimum wages.

At the 1:10 minute mark.

The unintended consequences has resulted because of the increase in minimum wages in Seattle, WA.

The minimum wage has ever been an ongoing discussion for many years – this interview was done in 2013.

Tax Rates – The Laffer Curve

Pay attention to the Romer & Romer Study.

He does make a valid point.

It doesn’t matter what kind of business you operate or if you’re just an employee for a company… Under the progressive tax system, the more money that you make, the higher tax bracket you’ll be put in and more taxes you’ll pay out of your own pocket.

Obviously, the higher tax bracket you start being into, you find ways to lower your taxes or you just work less.

This adds on to what one of John Stossel’s videos mentioned, the higher the taxes there is imposed – the wealthy or big businesses making big bucks find ways to lessen their taxable income (e.g. work less hours) or move their business outside were they can utilize favorable tax incentives, etc.

America’s Progressive Income Tax overview

Simple example of the Progressive Income Tax

Concept of basic Economics of “Cause and effect.”