I have to laugh at a comment made earlier which claimed businesses don't raise prices because wages go up. After I commented that they actually do, this person was so sure of himself he told me I was wrong.

 

Setting the price on items comes two-fold. The price must cover the actual expenses to produce and sell that item and then it must generate an adequate profit. You will see businesses increase the price of items until it reaches a point where sales drop off. That's where the price point is to generate the optimum profit.

 

That's not easily achieved since there are many market factors affecting sales, but for the most simplistic protocol that's what happens.

 

A behemoth like Walmart or Publix or McDonalds can go to their suppliers and say; "You are cutting your prices by 7% or you're not doing business with us anymore". A small business like ours can't. In 1992 I sat in a meeting at Ford Motor Company in Dearborn, Michigan as a representative of our company who supplied product to them, when their VP of purchasing told everyone in the room exactly that. The meeting lasted about 5 minutes. Follow the daisy chain! We went to our suppliers and told them the same. And on it went.

 

Labor is like any other consumer good. It follows the laws of supply and demand. A minimum wage prevents that law from functioning, however I understand also that in times of high unemployment a large labor pool would be working for less than what they could receive from government handouts. So in essence, a minimum wage [BLEEP] the growth of government handouts which everyone subsidizes.

 

Regards...................the Chiefjag

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