But which comes first? It appears that the real dollar value of the minimum wage has been decreasing since the late 60s, but that Walmart did not spread beyond Arkansas and its surrounding states until the 80s. So did Walmart spreading lead to low wages or did low wages drive people to Walmart since it is cheaper (with the added business helping it to spread across the country)?
A recent study showed that Walmart could raise its wages up to $12 and its consumers would only see a 1.1% increase (an average of $12.50 per year).
I donât believe Walmart started out that way, but they are far and away the one thatâs taken advantage of it. The monolithic aspect of Walmart is legendary at this point. No other business has had such a stunning impact nationwide as Walmart has had on local communities. Itâs just easy for me to point out as the exampleâŚ
Maybe not. But if I make ethical choices and shop at businesses that are good for my community it helps them grow and create jobs and offer competitive options in both shopping and workplace for everyone including those who feel they have no option butâŚ
Fair enough, but you have to understand that not everyone in our current environment has the same access to options that you or I might. Even us shopping in more ethical ways is not going to solve the issue for the vast majority of people. That would to take a major sea change in our culture, not just a subcultural incursion into the mainstream.
[quote=âfireshadow, post:61, topic:13815â]
But which comes first? [/quote]
Thatâs chicken/egg or egg/chicken, in other words a moot point.
This is not simple cause-and-effect - if it were, it would be easy to fix.
Most likely: two things startig on their own but unfortunately affecting each other in a way that has an effect towards perpetuating them. Plus a lot of other factors.
Wealth is power. Democracy requires equal shares in power. If you have unequal distributions of wealth, you have unequal distribution of power, and therefore you do not have democracy.
Especially when income and inheritance taxes have been slashed on the wealthy, particularly on un-earned forms of wealth (investment income and capital gains, for example). When tax code makes it more financially prudent to invest passively than to start or improve a business. When higher education costs skyrocket so that only the very wealthy can afford to pay for it without going into a lifetime of debt. When legislation makes it easy and legal to use money to sway politicians to pass other personally helpful legislation.
This didnât just happen. A lot had to be manipulated to create the uber-rich class that currently exists in the States.
There is reason to suspect that wealth does actually automatically concentrate.
Economists like to make simulations of simplified economies. I read a paper once about one of these. I think it is called the âyard saleâ economy. It has very simple rules. There are a bunch of agents that start out with equal wealth. They make trades with each other which results in one or the other participant in the trade coming out slightly better off at random. Say they do a âtradeâ for 500, one of them gets 480, the other 520 randomly. So this is a perfect equality economy. There is no skill, no corruption, everyone starts the same, nobody dies, its all zero sum. This economy relentlessly collapses into one agent having all the wealth, and does so much faster than one might expect from a random walk. They had this all described in math, which I didnât get, but I think it was something like a ratchet mechanism. Because the size of the transaction is limited to the wealth of the poorer agent the poorer agent is unable to recover from a loss. A loss limits the size of future wins, so they trend downward. A richer agent, however, is mostly trading against agents poorer than it, so a loss does not limit future wins much (only against those richer than it) and the loss can average out.
Modifications to this model could delay or prevent the collapse into one agent with all wealth. A sufficiently high redistributive tax (eg take 20% of everyoneâs wealth and spread it out evenly every round) would prevent it forever, some lower tax would only slow the collapse. Making it so that the poorer party could win more than their own stake. Adding death an an inheritance tax could help.
Itâs obviously not a good model of the real world, but it does demonstrate that even in a system where everyone is exactly equal to start and in ability with the winner in only fair transactions where the winner is entirely random there can be a very strong tendency toward extreme inequality.
There is no real reason to expect that some kind of âneutralâ policy would result in an economy we want to live in.
The economy should be thought of as a machine we all live inside, not a work of art to expressing some ideology.
