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David G
04-14-2015, 12:04 PM
And is there a point where more income offers diminishing returns - in terms of happiness?

I've mentioned this work before, but it won't hurt to revisit it from a different perspective... one of a business owner who's putting the findings into practice. It'll be interesting to see how it works out for his company --

http://www.slate.com/blogs/moneybox/2015/04/14/money_and_happiness_when_does_an_extra_dollar_stop _making_us_more_content.html?wpsrc=fol_fb

David G
04-14-2015, 04:05 PM
$70 grand. That seems to be the current level.

Rum_Pirate
04-14-2015, 08:38 PM
Something a number of people don't think about:


If one has an income of (say) $1,000 and has fixed expenses (rent food etc) of $800.00, then one has a 'disposable' income of $200.00.

An increase of $50.00 is 5% of one's gross income, but it is a 25% increase in ones disposable income.


Higher income has a bigger impact than most consider, especially for the lower income earners.

Jim Bow
04-14-2015, 08:41 PM
http://forum.woodenboat.com/showthread.php?190887-Putting-his-money-where-his-mouth-is-Income-inequality

Memphis Mike
04-14-2015, 08:47 PM
https://fbcdn-sphotos-g-a.akamaihd.net/hphotos-ak-xtp1/v/t1.0-9/11139775_960850013949480_8974193231059585452_n.jpg ?oh=9ed69779a939a863f064b1f5f3e5d211&oe=55DCE26F&__gda__=1440593241_0a27f25d28026d07b1e7d5eb599550b 5

Peter Malcolm Jardine
04-14-2015, 08:49 PM
Something a number of people don't think about:


If one has an income of (say) $1,000 and has fixed expenses (rent food etc) of $800.00, then one has a 'disposable' income of $200.00.

An increase of $50.00 is 5% of one's gross income, but it is a 25% increase in ones disposable income.


Higher income has a bigger impact than most consider, especially for the lower income earners.


Exactly right. The effect of raising salaries in the bottom 25% of working people is enormous. If you increased a CEO's salary from 1.2 million to 1.22, it wouldn't make any impact on the economy for the most part..... Now, raise someone from 25000 a year to 45000..... BOOM, you have created a consumer where essentially there wasn't one. HUGE IMPACT. Sadly, capitalism has been more about individual greed, than bettering society as a whole. Too bad.

PeterSibley
04-14-2015, 09:13 PM
Exactly right. The effect of raising salaries in the bottom 25% of working people is enormous. If you increased a CEO's salary from 1.2 million to 1.22, it wouldn't make any impact on the economy for the most part..... Now, raise someone from 25000 a year to 45000..... BOOM, you have created a consumer where essentially there wasn't one. HUGE IMPACT. Sadly, capitalism has been more about individual greed, than bettering society as a whole. Too bad.

Yep, attempting to help everyone is "evil socialism" and thus BAD. It would be a great business plan though.

Peter Malcolm Jardine
04-14-2015, 09:17 PM
The really stupid part of the opposition is exactly what Peter said: It is a great business plan. It is a repeat of what happened in post war America and elsewhere. Manufacturing hugely increased, wages increased dramatically among the working class, and a economic juggernaut was underway. Now we seem to thing that defending the immensely wealth and their tax havens is the right move. Ridiculous.

Rum_Pirate
04-14-2015, 09:26 PM
Yep, attempting to help everyone is "evil socialism" and thus BAD. It would be a great business plan though.
Only if one's current profit margin could withstand the blow of the higher costs.
If a company had to raise its prices to fulfill that plan it could very well price it's self out of the market place and into bankruptcy.
It might not be a 'great a business plan' for many companies, or their employes who would find themselves out of work if the company failed because it raised its wage bill.

Not every (very few actually) company or business could afford to raise their average wage bill to $70Kpa.
Imagine how much a car wash by hand would cost? Would you pay it?
How much would a burger rise to if all staff had their wages/salaries raised to $70Kpa?
How much would a restaurant meal cost in Seattle? Could you afford to eat in them?
The Mom and Pop stores etc would close like snowflakes in a blizzard and that would only be the beginning. . .

Inflation would become rampant etc etc etc . . .

The Bigfella
04-14-2015, 09:31 PM
Yep, attempting to help everyone is "evil socialism" and thus BAD. It would be a great business plan though.

Can you explain how this business plan of yours fits with your sustainability thread?

Peter Malcolm Jardine
04-14-2015, 09:41 PM
In this case it was about an amount that was researched, and a company that was of the size that the CEO's individual salary was enough to finance the difference.

You've missed the point.... it's not about 70k. It's about deciding that as much profit as possible should be funnelled off of the company for Executives or major shareholders. Look at Walmart as a case in point....The three Walton children could fund a 10,000 dollar increase in salary for each and every Walmart employee, FROM THEIR INVESTMENT INCOME ALONE. The impact of that money on 1 million Walmart workers and the economy would be a measurable thing. The Walton family would still be worth 148 billion dollars, and their income would still be in the area of 3 billion dollars per year.

ADDITIONALLY...... American taxpayers subsidize Walmart employees with social programs for an estimated 2.5 BILLION DOLLARS per year. Well look at that, more consumers created, lower taxes to pay, .... well, that isn't going to fly is it? Sheesh.

JimJ
04-14-2015, 09:51 PM
FROM THEIR INVESTMENT INCOME ALONE.
One would need to ask where that money is invested and what effect of removing that amount from that part of the economy would have.

If you did increase the wages as suggested, would those gaining the increase still buy $7.00 jeans imported from somewhere in Asia made by someone on very low wages by comparison or would they buy locally made jeans at a higher price so that their fellow countrymen would reap the rewards of having a job and maybe have an increase in their wages?

Peter Malcolm Jardine
04-14-2015, 09:56 PM
Missed it again.... This is THEIR INVESTMENT INCOME..... income from money they have invested. NOT TOUCHING THE PRINCIPAL..... just the interest from the principal. THIS HAS NO EFFECT ON PRICING AT WALMART. IT IS A REDISTRIBUTION OF PROFIT, AND THAT'S ALL. NOTHING GOES UP IN PRICE!!!!!!!!!!!!!!!!!!!!!!!!


The Waltons would still be worth 150 billion dollars, and still collect their dividend from Walmart stock.... which is roughly 3 billion dollars a year. I recognize how hard that would be on them... but hey, some sacrifices should be made for the greater good.

I'm just kidding... they don't need this much money, but continue to keep it instead of contributing to the great good. GREED, at it's finest.

Dan McCosh
04-15-2015, 08:01 AM
Only if one's current profit margin could withstand the blow of the higher costs.
If a company had to raise its prices to fulfill that plan it could very well price it's self out of the market place and into bankruptcy.
It might not be a 'great a business plan' for many companies, or their employes who would find themselves out of work if the company failed because it raised its wage bill.

Not every (very few actually) company or business could afford to raise their average wage bill to $70Kpa.
Imagine how much a car wash by hand would cost? Would you pay it?
How much would a burger rise to if all staff had their wages/salaries raised to $70Kpa?
How much would a restaurant meal cost in Seattle? Could you afford to eat in them?
The Mom and Pop stores etc would close like snowflakes in a blizzard and that would only be the beginning. . .

Inflation would become rampant etc etc etc . . . The price of a car wash would be about $2.75 for the labor for $70,000 a year, vs. about 75 cents at minimum wage. So it would go up by two bucks.---which is about what I usually tip.

Dan McCosh
04-15-2015, 08:04 AM
One should note that the guy owns the company, which shelters his actual income. Cutting his declared income dramatically cuts his income taxes.

Figment
04-15-2015, 08:09 AM
..... GREED, at it's finest.

Could be greed.

Could also be fear.
Fear that it could all come tumbling down.
Fear that they could find themselves on the other end of the stick.
Fear that they could be the ones to squander or otherwise do injustice to the legacy provided them by the work of their forbearers.

Those poor, poor people, living with such fear 24/7/365

Minnesnowtan
04-15-2015, 09:15 AM
And then we would have massive inflation and in a short amount of time that $70k a year would be equivalent to the current wages. Simple economics. Keep looking for those magic pills.

George Jung
04-15-2015, 09:25 AM
And then we would have massive inflation and in a short amount of time that $70k a year would be equivalent to the current wages. Simple economics. Keep looking for those magic pills.


Eh? You can't just say 'and then we'd have massive inflation' without providing some supporting documentation. Fear and lies, is what it looks like. Pony up.

Gerarddm
04-15-2015, 09:37 AM
Here is a CEO who has the opportunity to to a financially moral thing, which is to help level a workplace playing field that has been tilted against the middle class for decades.

It has LONG been proven, most famously by Henry Ford, that giving workers decent wages is a win-win for economic growth.

It has LONG been proven that the regressive opposite of screwing the middle class and the poor to enrich the swollen tick oligarchy is not a win win, but a zero sum game.

i hope his example goes viral; the actual dollar amount for every situation no doubt will vary.

DMillet
04-15-2015, 10:01 AM
And then we would have massive inflation and in a short amount of time that $70k a year would be equivalent to the current wages. Simple economics. Keep looking for those magic pills.

I'd like to see some proof that something like this has been tried before and has been proven to fail. The right has been spewing this talking point for decades but i haven't seen one iota of evidence that it's true.

George Jung
04-15-2015, 10:05 AM
By all appearances, Minnesnowtan isn't going to provide proof, either.

Dave Wright
04-15-2015, 10:06 AM
The opening question was: And is there a point where more income offers diminishing returns - in terms of happiness?

We have to guess whether there is a general yes or no answer. It's likely that for some few (I hope few) individuals there is never enough, and we'd probably call them jaded, or maybe more appropriately insane. Probably we could all agree that a point of diminishing returns would be reached for the typical person in in our society.

But the conversation has gone on to other issues of providing for all, with expressions of rage and irrationality over our current economic system.

I think most of us would agree that somehow guaranteeing and delivering decent medical care, sufficient wholesome food, education, housing, and protection from physical and mental harm is desirable and a goal that all of us would like to see achieved. I would like to see this occur.

What seems to have happened here is that some feel that simply redistributing assets, for example, providing absolutely everyone with $70K or $100K per annum would achieve all of the deliverables mentioned above, perhaps with ample left over for luxuries too. It seems to me that this could be looked at as mainly a quantitative problem with none of the qualitative aspects of rage and irrationality. So who's going to present this sort of analysis? Or maybe it boils down to whether presenting this sort of analysis is a worthwhile use of one's time for this audience?

DMillet
04-15-2015, 10:29 AM
What seems to have happened here is that some feel that simply redistributing assets, for example, providing absolutely everyone with $70K or $100K per annum would achieve all of the deliverables mentioned above, perhaps with ample left over for luxuries too. It seems to me that this could be looked at as mainly a quantitative problem with none of the qualitative aspects of rage and irrationality. So who's going to present this sort of analysis? Or maybe it boils down to whether presenting this sort of analysis is a worthwhile use of one's time for this audience?

Seems to me that Dan Price is willing to test the hypothesis with his own money. Since he's essentially the only CEO in America, that I'm aware of, willing to try it I guess we'll have to wait for his results.

Apparently his idea came from this study, so someone has been thinking about it for awhile now.

http://m.pnas.org/content/107/38/16489.full

David G
04-15-2015, 10:35 AM
The opening question was: And is there a point where more income offers diminishing returns - in terms of happiness?

We have to guess whether there is a general yes or no answer. It's likely that for some few (I hope few) individuals there is never enough, and we'd probably call them jaded, or maybe more appropriately insane. Probably we could all agree that a point of diminishing returns would be reached for the typical person in in our society.

But the conversation has gone on to other issues of providing for all, with expressions of rage and irrationality over our current economic system.

I think most of us would agree that somehow guaranteeing and delivering decent medical care, sufficient wholesome food, education, housing, and protection from physical and mental harm is desirable and a goal that all of us would like to see achieved. I would like to see this occur.

What seems to have happened here is that some feel that simply redistributing assets, for example, providing absolutely everyone with $70K or $100K per annum would achieve all of the deliverables mentioned above, perhaps with ample left over for luxuries too. It seems to me that this could be looked at as mainly a quantitative problem with none of the qualitative aspects of rage and irrationality. So who's going to present this sort of analysis? Or maybe it boils down to whether presenting this sort of analysis is a worthwhile use of one's time for this audience?

Once again... I'd urge people to click on the link provided before responding.

Dave - I believe your question is addressed in the article, and in the study cited (and linked to) in the article.

Dave Wright
04-15-2015, 11:02 AM
Once again... I'd urge people to click on the link provided before responding.

Dave - I believe your question is addressed in the article, and in the study cited (and linked to) in the article.

I don't believe my question has been answered. With respect, the article addresses happiness and income, but the responses to your post have wandered into the greater issue, which is, can simply providing everyone, without exception, with a substantial amount of income above what they now have - can this result in a desirable and sustainable economic equilibrium? This is the quantitative analysis that I think we need to examine, and I wonder who here might present some version of it? Secondarily, would it be worth doing so here? Does anyone here have any real interest in it?

Dave Wright
04-15-2015, 01:27 PM
Looks like this topic has died.

Here's a fellow who graduated cum laude with a degree in accounting. He might be able to provide a first cut analysis for us. In any case, I think he has come up with wonderful words of wisdom that seem to be applicable in so many situations:

https://pbs.twimg.com/media/BLiyISYCQAAYDy2.jpg