However bad it is, the Trump/Sanders demagoguery -- "jobs! jobs! job!" -- only makes it worse.
But you're completely wrong about the other side of the equation.
Raising wages does improve the economy.
Only if it means an improvement in the production being done, in which case employers do pay higher wages as necessary in order to get that better production.
But factories transferred from China to the U.S. do not result in better production, but only in higher costs. Some U.S. workers get a higher wage from these unnecessary jobs, which pay higher than their job at McDonalds, but there's no improved production as a result, so there's no gain for the country, or all the people, but a net loss to everyone else. Despite the "good-paying jobs" babble of Bernie Sanders.
Raising Wages and the Economy
You'd have to be blinded by ideology to fail to see it.
Because of conservative economic policies, the total disposable income of the population has been going down as our wages stagnate relative to the cost of living.
Artificially transferring factories from China to the U.S. cannot improve the income relative to the stuff produced. Some of those who get the new factory jobs will experience a higher income, but the rest of the country experiences higher prices, and so their real income decreases as a result.
That means every year, fewer and fewer dollars are available to purchase the products made by corporations.
But the Trump-Sanders artificial factory jobs can't improve this, because they only increase the prices we all have to pay for those products. Even a million additional "good-paying jobs" benefit only those million workers, while the 300 million other Americans have to pay higher prices as a result.
According to your understanding, the fact that corporations are spending less and less on wages (relative to the cost of living) every year, this means that corporations should get more and more profits, which in turn leads to a stronger economy, right? Well, we've been having your ideal conditions: the money corporations spend on wages goes down every year relative to inflation, and yet companies keep going out of business and the economy keeps contracting.
It expands and contracts, and it's always been the case that more companies fail than succeed. The Trump-Sanders artificial factory jobs only make it all worse, by driving up costs with no improvement in production.
You are confused because you think that the elites are all that matter. If the elites do better, then everyone is doing better because those dirty serfs don't matter, right? And if the elites do worse, that means everyone is doing worse because again, no one cares about those stupid dirty serfs.
Or how about "Workers of the world unite! You have nothing to lose but your chains!" Yes, you're well-versed in the Marxist rhetoric, and creating new buzz-words like "elites" and "serfs" in place of "bourgeois" and "proletariat" -- that's good, mix it up, whatever gets the adrenaline going in those idiot rabble masses -- they'll slurp it up.
Meanwhile, your Trump-Sanders artificial factory jobs don't go to serfs, but to middle-class workers in the $50,000 and higher range. While millions of "serfs" in our society are among those who have to pay the cost for those "good-paying jobs" to a select few.
Here's the thing: every time minimum wage is increased, there's a boom in the economy.
No, you have the cause/effect reversed: Every time there's a boom in the economy, the minimum wage is increased.
You know that those recent minimum-wage increases are mostly subject to the condition that the unemployment rate must remain below a designated level. If the economy changes and the unemployment level rises above that level, the wage increase is cancelled or postponed. The minimum wage is never increased except when the prospect is for improvement in the employment numbers.
There is no causal relationship of higher wages > better economy. It's always better economy > higher wages and increased minimum wage.
This is particularly ironic with restaurant owners, since they are often the ones fighting hardest to keep minimum wage down in local governments. When families have to tighten their belts because their wages are not keeping up with the cost of living, the first thing they do is go out to eat less often.
No, the first thing they do is find a cheaper restaurant. Where the workers are paid less and the prices are lower.
So every time restaurants fight local government to keep wages down, they're the ones to take the negative hit first.
No, the restaurant owners are not the dummies you're saying they are. They're not stupid enough to believe that higher minimum wage produces more business for them. Rather, their increased business happens when the economy is doing better, and that's also when politician-demagogues decide to increase the minimum wage.
Conversely, when minimum wage is raised, people have more disposable income, and the first thing people do when they get more money to spend is go out to eat more often.
No, if all that happens is the minimum wage increase, then the prices also increase, to pay that higher labor cost, and the result is no net improvement in the economy, as 99% of the population experiences a net reduction in real income as a result of the higher prices.
Thus, when minimum wage is raised, it's usually the restaurants that feel the benefits first.
No, they're already feeling the benefits of the improved economy and higher business, and only then is the minimum wage increased. There's no net benefit from increasing the minimum wage per se.
When minimum wage is increased, it doesn't just mean more spending money for burger flippers. This affects wages across the board for everyone except maybe for people with 6-figure salaries.
The more widespread you push up the wages, the more widespread the prices have to go up in order to pay these higher costs of business.
But you're partly right in one respect: the big corporations can more easily absorb the higher labor cost, at least for a period, while the small mom-and-pops are the first to be driven out of business by higher costs. So your minimum wage is a good way to push out some of the small companies and favor the giant mega-corporations, if that's the result you want.
We're not just talking about restaurant employees having more disposable income, but just about anyone who works for a paycheck.
All of whom have to pay higher prices as a result of the higher labor cost. Higher wage + higher cost of living = no net gain, or even a net loss for all.
You can't spread the higher wages out to more wage-earners without also spreading the higher costs out to more employers and thus higher prices everyone has to pay.
Individual Businesses vs the Whole Economy
I think the problem people get is that they can't think on a macroscopic scale. They pick a specific example, and try to extrapolate from there.
Let's say that one individual business raises their wages, and no one else in the economy does. What happens to the bottom line of that one business? Obviously, that one business is going to earn less profit. Or at least that should be the case. Oddly, there are lots of cases where that doesn't happen, but let's not deal with that for now.
So if raising wages in one business leads to less profits, then that must mean raising wages for all businesses must cause a reduction in profit for the entire economy, right? This is a
fallacy of composition. What's true of the parts isn't necessarily true for the whole. You can look at actual economic data for places that have raised minimum wages and see what I'm talking about.
Those "studies" are mostly phony. There is no way to prove what effect a minimum-wage increase had on the economy because there are too many factors. There are an equal number of studies saying it hurt the economy as those saying it benefited the economy.
There is only one case on record, for sure, where the minimum-wage increase was large enough and had enough impact in order to determine the net result, and that is the case in Samoa 2007-09, where the percent of MW jobs was high enough so it's possible to determine the actual impact, which was devastating to the Samoan economy, and Congress had to rescind the MW increase, so even the Democrats and others who preached the benefits of MW increase had to admit they were wrong.
This is one case where we really do know the net impact of increasing the minimum wage, in contrast to all the phony "studies" by experts pretending to isolate all the factors and determine that there was a tiny net benefit from increasing it, or a net harm, which also cannot be determined, because there are too many other factors affecting the employment level in the overall economy.
So, do not believe the so-called "studies" which pretend to measure the benefits/harms caused by minimum wage increase. Virtually all of them are just false propaganda and are designed in advance to promote the theories of the economists doing the study, all of whom are promoting their ideology, on either side of the debate.
See, when one business raises their wages, nothing else in the economy changes. The people buying products from that business don't necessarily have more money to spend, but the business itself is spending more money, thus it gets lower profits.
But if all of the businesses raise their wages, then a large portion of the economy has more money to buy things, . . .
No they don't. Their real income is not higher, because the immediate result is also higher prices, meaning their money is worth less than before, so there is no real increase in their purchasing power.
. . . which in turn means certain businesses will need to buy more of the things they need to do business, which in turn means those businesses are buying more stuff from other businesses.
No they're not, because all the prices they have to pay for that stuff are higher than before.
Yes, every business is spending more money on their own employees, but their customers also have more disposable income, . . .
No, not more real income, because all the prices they have to pay are now higher than before. So there's no net higher disposable income than before.
. . . which in most cases means more disposable income for customers which means more sales for most (but not all) businesses.
No, with the higher prices to pay the higher labor cost there's no increase in real disposable income for consumers.
If everyone has to spend more money on employees, that's balanced out by having a large number of customers with more money to spend.
No they do NOT have "more money to spend" because the prices they have to pay are now higher, so their money is not worth as much as before, so the net total they have to spend is no higher.
Again, look at the economic results of places that have raised minimum wage and you'll see what I'm talking about. The positive gains will generally show up in businesses such as restaurants first.
No, any such positive gains are not a result of minimum wage increase, but are due to an improving economy BEFORE the MW increase, and when the demagogue-politicians could foresee the prospect of an improved economy, they decided to increase the minimum wage. They never increase it when the prospects for business are poor.
Conclusion
Right now, in America, wages have stagnated relative to the cost of living such that every year, more and more of the money we make has to be spent on simply keeping ourselves and our families alive.
However bad it is for some, the Trump-Sanders program of relocating factory jobs from China to the U.S. will only make it worse. Artificially driving up the labor cost or other costs of production does not benefit "our families" or "the people" or "the economy" or the nation.
That means less money to spend on restaurants, less money to spend on going out to the movies, less money to spend on home theater systems, etc.
Artificially increasing the wages with unneeded factory jobs doesn't do anything to improve it. It only increases the prices we have to pay for the movies etc. All that stuff made in China only gets more costly when we transfer the production to the U.S. where it all becomes more expensive. All that higher cost to 300 million consumers is not offset by a million (or 2 or 3 million) unneeded factory jobs paying workers more than WalMart might pay them. That extra cash they gain is paid for by the higher prices we all have to pay, including all the poor (or at least 99% of them) who shop at WalMart etc.
Suppressing wages provides a temporary benefit to the economic elites who . . .
No one benefits from "suppressing" wages, and no one favors it. What benefits us all is to let the competitive market set all the prices and wages, based on supply-and-demand. We all benefit when ALL producers, including wage-earners, have to compete in the market, to keep costs down.
. . . elites who own lots of stocks, but it hurts everyone else, including businesses in the long run.
Lower labor cost = lower prices EVERYONE pays, 300+ million consumers. As long as those lower wages are due to a competitive market driven by supply-and-demand.
And that's what's happening right now. We're in another race to the bottom just like the crash that preceded the Great Depression, . . .
And that was made worse by high wages and high tariffs in the 1920s.
All the Trump-Sanders "jobs! jobs! jobs!" policies were in place in the 1920s, including crackdown on the employment of undocumented immigrant workers, as immigration became more restricted in order to create more jobs for red-blooded Americans.
. . . only this time the crash is happening much slower because that mean ol' FDR put in place many mechanisms that were intended to prevent another race to the bottom, and the Republicans and establishment Democrats have not yet succeeded in dismantling all of those mechanisms.
Neoliberalism isn't capitalist. If anything, it's anticapitalist. Feudal economies always end the same way: with a very small number of very rich people, and everyone else living in abject poverty. Capitalism as we know it can't survive that. People need disposable income so that they can buy miniature latte machines for the kitchen and big screen televisions for the family room.
With the Trump-Sanders crackdown on China trade, all those items will become more costly for consumers, and the poor will be made worse off.
Every year, the total disposable income of the population is going down, and the executives of many of the corporations hurt by this are spending money to bribe politicians to make the disposable income of the population go down even faster.
No, they're bribing them mostly to let them produce without imposing excess costs onto them, so they can make more profits and still keep prices low.
We can return to the FDR policies that built the middle class that made the economy we knew possible, . . .
No, the FDR-Hoover policies drove up the cost of production and imposed higher prices onto consumers, and thus caused the Depression to be much worse than it would have been otherwise. (There was some deflation and lower prices, but the Hoover-FDR policies per se pushed prices up, in an effort to artificially boost the incomes of producers, including the nutty practice of having farmers destroy their produce in order to drive up prices, based on FDR's fraudulent snake-oil economics ideology.)
. . . or we can continue dismantling the middle class until no one is left who can afford to buy the products made by all those corporations, and they can switch to selling things to Europe and China.
That's more likely to happen if we pursue the Trump-Sanders China-bashing program of relocating jobs to the U.S., where they cost so much more and drive up the prices higher and make 300 million consumers worse off.
Oh, who am I kidding. Avoiding economic collapse would require millions of Republican voters to admit that they are wrong about Trickle On economics, and we all know that will never happen.
What they're wrong about is giving us a demagogue trade-bashing blowhard who's good at pandering to the idiot masses who clamor for "jobs! jobs! jobs!" instead of letting the competitive free market perform its function of serving consumers with the best production at the lowest possible cost.
While the only alternative Democrat voters offer is an equally-fraudulent trade-bashing demagogue who panders to the Democrat idiots with his "good-paying jobs" babble.
