USTR Hoping To Keep Corporate Sovereignty Provisions If It Excludes Big Tobacco From The Deal

from the horse-trading dept

Wed, Oct 15th 2014 1:42pm — Mike Masnick

We've been quite critical of so-called corporate sovereignty provisions in various trade agreements. These provisions -- which trade negotiators prefer to call "investor state dispute settlement" (ISDS) rules (in part because they're so boring when called that, no one pays attention to how pernicious they are) -- basically allow companies to take governments to special tribunals, if new laws and regulations somehow interfere with their attempts to profit. A key example of how this is used under existing (via NAFTA) corporate sovereignty provisions is Eli Lilly demanding $500 million from Canada for daring to reject two of its patents because the drug in question didn't actually prove to be useful. Eli Lilly claims that this undermined the company's "expected future profits" and thus filed this suit, undermining the sovereignty of the country of Canada to determine what is, and what is not, patentable.

Another popular use of corporate sovereignty claims is the tobacco industry, going after countries that pass "plain packaging" laws (which say that all cigarette packaging needs to be without logos and trademarks and such). Whether or not you agree with such laws, the idea that big tobacco companies can take entire countries to these tribunals, demanding many millions of dollars based on laws those countries decided to pass, seems troubling. It's especially been concerning to health officials who have long favored plain packaging regulations.

Apparently, the latest move to salvage corporate sovereignty provisions in the Trans Pacific Partnership (TPP) agreement has the USTR attempting to throw Big Tobacco under the bus by removing tobacco from the ISDS provisions. This is an incredibly cynical and political move, designed to try to quiet some of the health activists' talking points about the plain packaging fights -- while leaving the overall basis of these corporate sovereignty provisions wholly in place.

While I don't always (or often) agree with the AFL-CIO, its response to this cynical attempt to carve Big Tobacco out of the deal is dead on:

The proposed carve-out will not stop multinationals like Veolia from suing the government of Egypt for raising the minimum wage. It won’t stop the pharmaceutical giant Eli Lilly from suing Canada over patent requirements or stop extractive company Pacific Rim Mining (a Canadian company that has since been bought by the Australian multinational OceanaGold) from demanding compensation when El Salvador refuses to let it pollute the local water supply by operating a gold mine.

Any industry-specific carve-out will not address the serious structural problems inherent in the system itself. Issues of broad public interest should not be viewed through the narrow lens of trade and investment at all, let alone decided by unaccountable private panels. Systems of justice should be transparent and accessible on an equal basis. ISDS is anything but: Only foreign investors can use it and there are no requirements that affected communities be allowed to participate or even have their view considered. In many cases, there often are not even requirements that hearings or decisions be made available to the public at all! Even in the case of clear legal error, it is almost impossible to reverse a decision.

In fact, the cheap attempt by the USTR to toss Big Tobacco under the bus to get a deal done really does more to underline the problems of corporate sovereignty positions, rather than to help smooth things over. If ISDS isn't appropriate for Big Tobacco, why is it appropriate for Big Pharma? Or big mining companies?

The USTR has continued to push out-of-date regulatory concepts into modern trade agreements. These are clearly designed not with the public interest in mind, but with a focus on what's best for the representatives of a few giant companies who are close to the USTR. Helping a few giant multinationals undermine regulations around the globe may be good for future job prospects in the industry, but it's hardly the incentives we should want for public servants.

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Filed Under: corporate sovereignty, isds, plain packaging, plain packs, tobacco, tpp, ustr

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Mason Wheeler (profile), 15 Oct 2014 @ 1:55pm

Wow, that sounds familiar.
Systems of justice should be transparent and accessible on an equal basis. The DMCA takedown system is anything but: Only copyright holders can use it and there are no requirements that affected users be allowed to participate or even have their view considered. In many cases, there often are not even requirements that hearings or decisions exist at all! Even in the case of clear legal error, it is almost impossible to reverse a decision.
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tracyanne (profile), 15 Oct 2014 @ 2:03pm

The benefits
Helping a few giant multinationals undermine regulations around the globe may be good for future job prospects in the industry

At lower rates of pay for workers, no doubt.

The proposed carve-out will not stop multinationals like Veolia from suing the government of Egypt for raising the minimum wage.
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Anonymous Coward, 15 Oct 2014 @ 2:23pm

"What is good for a company with their main assets in your country is good for you!"
That is the political reasoning and it will not bow to idiotic "human rights", the error called the constitution or the too insignificantly biased international institutions.

Trade negotiatiators don't care about idiotic populations. It is a fight between industries in the participating countries to leverage a regulatory eoonomic advantage through the agreement and the negotiatiators are merely strawmen representing the corporate interests at play.

It is no wonder that USTRs drafting teams are based around the industrial sector quota system Hong Kong partially practices today (barring the stupid democratic elements) and the italian fascist state practiced between the world wars: It will give that much extra extreme a starting position, assuring that much more to cut during the negotiations. The beauty is that if nothing gets changed, they can live with that too... USTR is known for hating transparency like the plague on these matters since the ridiculousness of their inital drafts would shock the world (It did on the parts leaked from the ACTA-negotiations!). NSAs small spygames is one thing - USTRs negotiation methods is another level of disgusting bullying that lacks the convincing "but terrorism"-arguments NSA can use.
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Anonymous Coward, 15 Oct 2014 @ 2:38pm

The USTR is a part of the Corporate Machine, The best idea is to disband it and start from scratch with voters making the decisions not some corporate puppets who could care less about anything other than money. single dimensional thinking has never been smart.
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Anonymous Coward, 15 Oct 2014 @ 2:44pm

Re: The benefits
Pff. Minimum wage is small potatoes compared to environmental regulation, limits on IP, public hearings and lack of tax holes for tax optimization.

Most companies would concede minimum wages in a heartbeat if they can get free reign to pollute, create permanent brand equity clean zones in whole countries, avoid public overview and get rigorous regulation to protect move of surplus to tax havens - or at least allow good tax optimisation movement of assets! - for the foreseeable future. Wages are usually not really an issue compared to these other expenses.
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Mason Wheeler (profile), 15 Oct 2014 @ 2:46pm

Raising the minimum wage
You know, for the life of me I cannot understand why so many people seem to think raising the minimum wage is a good idea. Yes, I get the basic concept of "helping the poor" and "providing a living wage" and all that, and I'm all for it, really; I grew up in poverty and it's a horrendous thing that nobody deserves. But isn't it obvious, with just a tiny bit of thought, that raising the minimum wage will not achieve those goals, at least not for very long at all?

Consider this: Who makes minimum wage? Think about the types of jobs that offer it, and a common thread begins to emerge: most minimum-wage jobs are jobs that have to do with providing basic services, such as making food available. If all of the people doing minimum wage jobs magically disappeared tomorrow, we'd have societal collapse by the end of the week.

Now, take all the companies that are paying those people we all depend on, and tell them that their labor costs are about to go up significantly. In today's hyper-short-term-focused corporate world, where nothing matters more than the next quarterly report, that's going to eat into a lot of profit margins, and two things are inevitably going to happen to balance it out: prices will go up, and a lot of minimum wage workers (the people such an increase is supposed to help!) will lose their jobs. It's happened every time in the past that the minimum wage has been increased.

Meanwhile, all of us who aren't making the minimum wage don't get a raise, but because the prices on basic things we all need go up, it lowers everyone's standard of living. (Including minimum wage earners, who need all the same basic stuff too. So even the ones who don't get laid off don't actually see much of an increase in their standard of living, at least not for more than 3-6 months.)

The only way to avert such an outcome would be for the legislation that raises the minimum wage to explicitly forbid companies to respond in the obvious way, and getting something like that passed, and then trying to enforce it, would be the legislative and bureaucratic nightmare to end all legislative and bureaucratic nightmares!

So then what should be done to help raise minimum wage workers out of poverty? It's worth remembering that a wage is just a number, and it's meaningless without context. (For example, my car is worth a few million. Yen, that is... but since I don't live in Japan, that number is irrelevant.) So what's the context needed to make any discussion of "a living wage" relevant? The cost of living, of course. Current minimum wage levels weren't oppressively low when they were passed, but the cost of living has gone up since then.

If the minimum wage has stayed where they put it, enough to afford the cost of living, but the cost of living has moved, that is not the minimum wage's fault. So why is no one talking about fixing the actual problem, by pushing legislation that would drive the cost of living back down? Raising the minimum wage, in the end, would benefit nobody, and directly harm most wage earners, including (disproportionately!) the ones it's intended to help. Lowering the cost of living, on the other hand, making those few dollars go further, would benefit almost everybody. So why is no one talking about doing that?
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Anonymous Coward, 15 Oct 2014 @ 3:05pm

Re: Raising the minimum wage
This is obviously a bit off-topic, but I'll bite. One of the primary reasons that minimum wage gets discussed is because it is easy to see that "give more money to them" helps poor people. (Even if it really doesn't, the appearance is there). Addressing structural problems that lead to increased cost of living, however, is much harder to grasp. Even how to calculate "cost of living" is complicated and controversial. Since our society can't see past the next quarterly report (or tax year, or election, or whatever), the quick -- possibly insane -- fix is all that we're capable of.
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Anonymous Coward, 15 Oct 2014 @ 3:08pm

Consider this: Who makes minimum wage? Think about the types of jobs that offer it, and a common thread begins to emerge: most minimum-wage jobs are jobs that have to do with providing basic services, such as making food available.

you need to get out in the world more , that may have been the case in the 70's but now more people than ever are making minimum wage.
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John Fenderson (profile), 15 Oct 2014 @ 3:09pm

Re: Raising the minimum wage
"I cannot understand why so many people seem to think raising the minimum wage is a good idea"

Because a lot of us know our history. The history of work before the minimum wage is a history of wage slavery (actual wage slavery, not the rhetorical version that is used today). Minimum wage makes that more difficulty to pull off.
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That One Guy (profile), 15 Oct 2014 @ 3:21pm

Re: Raising the minimum wage
and a lot of minimum wage workers (the people such an increase is supposed to help!) will lose their jobs. It's happened every time in the past that the minimum wage has been increased.

If a company did do something like that, they'd be shooting themselves in the foot. Less workers = Less productivity = Less profits.

Any company stupid enough to cut workers to compensate for an increase in minimum wage, would quickly find that if they wanted to maintain their previous levels of productivity, and therefor profit, they've be all but forced to hire people right back to fill in the holes they made with the previous firings.

Sure there might be a few companies out there who would find the 'new' costs due to the increase too much to stay in business, but for that to be true, they would have had to be barely making profits beforehand, any truly profitable or successful company could almost certainly meet the increased costs and still remain profitable, if perhaps not as profitable as before.

Lowering the cost of living, on the other hand, making those few dollars go further, would benefit almost everybody. So why is no one talking about doing that?

Perhaps because such an idea would be incredibly complicated, more so than simply raising the minimum wage? 'Cost of living' involves a lot of different factors, from food costs, utilities, housing costs, and I'm sure many others.

'Just lower the cost of living' sounds nice in theory, but just how do you propose to go about that, without causing even more upheaval and problems than the alternative, raising the minimum wage to match cost of living?
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Mason Wheeler (profile), 15 Oct 2014 @ 3:27pm

Re: Re: Raising the minimum wage
I didn't say it's a bad idea to have a minimum wage, which appears to be the idea that you're responding to.
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Mason Wheeler (profile), 15 Oct 2014 @ 3:29pm

Re: Re: Raising the minimum wage
Any company stupid enough to cut workers to compensate for an increase in minimum wage, would quickly find that if they wanted to maintain their previous levels of productivity, and therefor profit, they've be all but forced to hire people right back to fill in the holes they made with the previous firings.

...or they could simply make the remaining workers work harder. Again, this is not a hypothetical; it's what has actually happened in the past when the minimum wage has been raised.
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the threat to peace is the USA, 15 Oct 2014 @ 3:40pm

fuck me i want 500 million form canada
my drugs aren't useful do shit and basically i want to make more then god ever did FUCK YOU CITIZENS

lol what a joke this IP law is becoming this is setting a stage for a world revolution....and a mean nasty kill you fucking jerks that support it kind....

mark my words it will start

and all the kings horses and all the kings men won't put humpty back together again.
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Anonymous Coward, 15 Oct 2014 @ 3:50pm

Re: The benefits
I think what he meant (or at least should have meant) is that it's great for future revolving door job prospects for regulators who wish to get an easy high paying industry job.
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Chronno S. Trigger (profile), 15 Oct 2014 @ 4:17pm

Re:
And why are they in minimum wage jobs? Because they can't find jobs that pay better. They ether don't have the education or the education they do have is outdated. So how about we solve that problem. Let's first fix the problem with our education system costing idiotic levels of money and then help these poor people stand on their own feet. It's complicated and hard, but it will actually fix the problem.

Give a man a fish... and so forth. Or as I say: Properly applied education will fix 90% of our problems.
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Mason Wheeler (profile), 15 Oct 2014 @ 4:49pm

Re: Re:
Not necessarily. As I pointed out, if all the minimum wage workers magically vanished, societal collapse would ensue very quickly. These are jobs that need to be done one way or another, and as we don't currently have the technology to replace most of them with robots or similar automation, they need to be done by human workers.

Attempting to alter the equation by giving the human workers in question more education would not change the basic underlying facts; it would most likely just further contribute to the eduflation problems we've been seeing for decades. It's already gotten to the point where, in some places, a college degree will get you a highly prestigious pizza delivery job; do we really want to make eduflation even worse?
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sorrykb (profile), 15 Oct 2014 @ 4:59pm

Re: Re:
Education is extremely important, all the more so nowadays, when so many employers require a college degree for jobs whose actual work doesn't require a college education, just to narrow down the first group of applicants to a manageable number.

But sometimes, despite all the education in the world, the jobs just aren't there. There aren't enough decent-paying jobs for all the people who are willing and able to work. This challenge isn't going away. Innovation reduces the need for certain work, or at least the incentive to pay people for certain work. That's OK. It's fine. It's good actually. But....

Our society is built on the model of "school --> job --> retirement", a model that is increasingly unsustainable for a significant portion of the population*. How do we adapt?

*setting aside for the moment that the model never actually worked for everyone anyway.

(But I digress. Yes, let's throw Big Tobacco under the bus. But that's just a start...)
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Mason Wheeler (profile), 15 Oct 2014 @ 5:10pm

Re: Re: Re:
Education is extremely important, all the more so nowadays, when so many employers require a college degree for jobs whose actual work doesn't require a college education, just to narrow down the first group of applicants to a manageable number.

Yeah, like I mentioned in my post above, this is known as eduflation, and it's caused by having too many degrees chasing too little demand. And just like the problems caused by monetary inflation (such as the cost of living being too high) can't be fixed, and indeed will only be made worse, by inflationary measures such as raising the minimum wage, you can't fix the structural problems of eduflation by handing out even more degrees to even more people. What's needed is to fix the actual underlying problems.
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Anonymous Coward, 15 Oct 2014 @ 5:27pm

Re: Raising the minimum wage
As a taxpayer, I am tired of subsidizing the Walmarts of the world. If they can not pay their workers enough to survive then maybe they should just go out of business.

People can argue and debate the merits of a minimum wage till the cows come home but it will not resolve the problem of corporate handouts and subsidies.

I find it strange that there is more outrage directed toward those who ask for a living wage than there is at the multi billionaires who steal from the poor and deride the middle class all while touting how benevolent they are for giving you a crappy job.
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Anonymous Coward, 15 Oct 2014 @ 5:32pm

Re:
"most minimum-wage jobs are jobs that have to do with providing basic services, such as making food available."

And do you really want to eat food prepared by someone who is not afforded any sick leave?

Sorry man ... I like totally sneezed on your big mac dude.
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Anonymous Coward, 15 Oct 2014 @ 5:36pm

"basically allow companies to take governments to special tribunals,"

Those are also probably secret. They don't even call it court, no - it's a tribunal. Will there be a jury of their piers? doubtful.

Just another power grab by corporations attempting to subjugate the plebes.
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Chronno S. Trigger (profile), 15 Oct 2014 @ 5:49pm

Re: Re: Re:
Education won't solve all our problems, but it will solve some (if not most). And that would snowball into fixing the other problems, or at the vary least put people into position to fix those other problems.

I'm also not just talking about forcing people to get a college degree (quite the opposite), I'm talking about getting people the information they need to know (including politicians and yes even me). I'm opposed to kids going to collage right out of high school unless they know exactly what they want out of it.

Most high school kids have no idea what they want to do with their lives, they haven't lived it yet. But they feel forced to go to collage after high school. Sorrykb pointed this out below, it's expected. They want to make the right choice, but no one can help them make it, so they take the safe path, general education (liberal arts). Thus we get running jokes in the work force about liberal arts degrees (and you get your pizza guy story). But college isn't for general education, and employers aren't looking for general education. So you end up with some paper and a student loan debt.

Now don't get me wrong, I'm sure a liberal arts degree is useful somewhere. Just because I've never seen a use for it doesn't mean it doesn't exist. I am saying that the last thing we need is most of our college graduates having generalized education.

And yes, I am talking about altering the equation, but there are more variables then just Jobs + People = Economy. Part of the equation is more educated people equals more jobs because they're starting their own businesses.
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tqk (profile), 15 Oct 2014 @ 6:05pm

Re: Re: Raising the minimum wage
> The history of work before the minimum wage is a history of wage slavery

That's the superficial canned answer (sorry). Yes, I agree it's true (what you wrote above).

The problem is, minimum wage laws make it more expensive to hire employees. Raise the minimum wage, and fewer poor people get jobs. It's not even math. It's arithmetic.

Minimum wage laws make charlatan populists (politicians) look good to potential voters, that's all. I'd prefer voter rights laws were fixed so we might get better (intelligent and knowledgable) politicians, and taxation regimes were corrected and made more sensible. *Any* tax is going to hit the poor harder than it ever will the rich.

Good workers will rise and prosper, assuming sensible employers who need good employees. They don't need gov't mandated wage floors.

Bottom line is, minimum wage laws create an impediment to poor people getting employment. They're not helping poor people. They're a battleaxe when what's needed is a scalpel.
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Ruth Townsend, 15 Oct 2014 @ 6:58pm

Re: Re: Raising the minimum wage
Yes, obviously addressing the underlying structural issues with regard to the standard of living is what should be happening. Unfortunately this trade agreement and its regulatory requirements only serves to further embed those structural issues rather than remove them. For example, rather than making the cost of medicines lower, it raises them. Big Pharma could be made comply with a government pricing system that keeps a lid on prices like in Australia and New Zealand. Instead they want to not only not adopt a system like that in the US, they want to dismantle Australia and NZ's system by arguing that those systems are limiting their ability to get a decent return on their investment. Never mind that they made over $80 billion profit in 2012 alone.
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tqk (profile), 15 Oct 2014 @ 7:57pm

Re: Re: Raising the minimum wage
> Less workers = Less productivity = Less profits.

Employers in my experience do *not* think that way. Those I've experienced consider labour (no, not "Organized Labour", aka "Unions"; just employees) something to be minimized *at all cost*. Outsource, hire consultant specialists, ship the job to ten drones in India or Brazil, or import cheap H1-Bs from India, anything but continue to pay salaries and benefits and payroll taxes; *anything*! If an automated solution can be bought, even for vast sums of money, buy it! I don't understand their thought process or why they think this way, I just know they do. North American based employers despise labour costs. Blame the MBAs, I don't know.

As an IT guy, I hate the fact that I've spent my career putting people out of work. In theory, they're now freed up to find more meaningful work at jobs with less drudgery. In practice, their lives are disrupted, they starve, families lose their homes and savings, children are suffering because their parents are holding down two or three burger flipping jobs instead of meaningful reliable employment.

>...they've be all but forced to hire people right back to fill in the holes they made with the previous firings.

Hardly. They just tell the lucky ones (?) who're still there to pick up the slack and cover the positions of those who'd been let go (or they'll be the next to go). This's been going on since the 1960s, and getting worse every year.
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Anonymous Coward, 15 Oct 2014 @ 8:47pm

Re: Raising the minimum wage
Keeping wages to your employees down is a way to keep more profit for yourself. When you can increase prices of the goods you sell, blame inflation/increasing costs and still hold down wages you pay, you get year on year of growing profits.

Is pretty cool when all you have to do is hold down wages and blame inflation.

To sneer at wage inceases while cost of living is increasing, is to devalue the worth of work a man does, to say a fellow who can do is worth less today than he was yesterday.
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Anonymous Coward, 15 Oct 2014 @ 8:49pm

Re: Re: Re: Raising the minimum wage
arithmatic is maths
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tqk (profile), 15 Oct 2014 @ 10:15pm

Re: Re: Re: Re: Raising the minimum wage
> arithmatic is maths

I'll agree to that when you agree that web page design is Computer Science.
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Anonymous Coward, 15 Oct 2014 @ 11:11pm

Re: Re:
The problem isn't just minimum wage; it's that the minimum wage isn't actually livable on without support from other means. That's a part of the reason why companies such as Walmart ask their employees to also apply for food stamps.

However, i agree with you that a properly applied education system would be excellent in terms of progress.
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That One Guy (profile), 16 Oct 2014 @ 12:10am

Re: Re: Raising the minimum wage
I find it strange that there is more outrage directed toward those who ask for a living wage than there is at the multi billionaires who steal from the poor and deride the middle class all while touting how benevolent they are for giving you a crappy job.

Take a guess who benefits the most by keeping wages as low as possible, and you've got your most likely culprit for that little bit of spin and deflection.
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Richard (profile), 16 Oct 2014 @ 3:14am

Re: Re: Re: Raising the minimum wage
Bottom line is, minimum wage laws create an impediment to poor people getting employment. They're not helping poor people. They're a battleaxe when what's needed is a scalpel.

In the absence of minimum wage one of two things will happen.

1. The worker's wages are made up to a livable level by state benefits. This effectively amounts to a state subsidy for the employer.

2. Workers starve/freeze to death.

Which are you suggesting?
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Richard (profile), 16 Oct 2014 @ 3:29am

Re:
Will there be a jury of their piers?

Now that would be an interesting jury!
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Anonymous Coward, 16 Oct 2014 @ 5:29am

Re: Re: Re: Raising the minimum wage
The well off uber riche benefit, of course - however, they have somehow brainwashed many of the lower classes into believing that low wages help them, example: walmart low prices, when in fact the low wages hurt the economy.
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Anonymous Coward, 16 Oct 2014 @ 6:58am

Re: Re: Re: Raising the minimum wage
So you agree with the idea of minimum wage, but are quibbling over the price.

So what should the price be? The same as it was when FSLA was established in 1938? Do you honestly believe that someone can live on $0.25 per hour in today's economy without substantial government assistance?

If you think $0.25/hour is too low, then you agree in concept that minimum wage must be periodically adjusted to match current economic conditions.

And if you think that, then why are you arguing?
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Anonymous Coward, 16 Oct 2014 @ 7:02am

Re: Re: Re: Raising the minimum wage
"Again, this is not a hypothetical; it's what has actually happened in the past when the minimum wage has been raised."

That is not, in fact, what has happened in the UK when the minimum wage has gone up. So I would assume you are still speaking of a hypothetical.
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tqk (profile), 16 Oct 2014 @ 7:27am

Re: Re: Re: Re: Raising the minimum wage
You've ignored the most obvious: employers would be forced to compete for the most loyal and consciencious. Offer better wages, better working conditions, and better benefits than your competition or those employees will walk and you'll find it hard to stay in business. Henry Ford shocked the world when he did this and it worked marvelously.

This ought to be an equal value for value relationship. My labour for your money. Instead, employers believe we should be on our knees thanking them for whatever crumb they deign to bestow on us, and the wage slaves fall for the political tricksters offering minimum wage laws to try to make up for the lousy deal.
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tqk (profile), 16 Oct 2014 @ 7:48am

Re: Re: Re:
> These are jobs that need to be done one way or another, and as we don't currently have the technology to replace most of them with robots or similar automation, they need to be done by human workers.
Yes, and they used to be entry level jobs; teenagers just breaking into the workforce, or the soon to retire topping up their pensions. Now, it's not at all uncommon to see middle age workers holding down two or even three part-time, minimum wage, crap jobs.

Employers also used to rely heavily on training, apprenticeships, & etc. Europeans still do this. North American employers can't be bothered with that stuff any more.
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John Fenderson (profile), 16 Oct 2014 @ 7:55am

Re: Re: Re: Raising the minimum wage
" Raise the minimum wage, and fewer poor people get jobs. It's not even math. It's arithmetic."

Except it doesn't really hold up. Nearly all the adults I know that have minimum wage jobs have two (or, in some cases, three) of them -- otherwise, they wouldn't be able to live. So, when the minimum wage is too low, it may technically make more jobs, but it also requires people to have more than one job each, so overall employment doesn't really go up.
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John Fenderson (profile), 16 Oct 2014 @ 7:56am

Re: Re: Re: Re: Re: Raising the minimum wage
"You've ignored the most obvious: employers would be forced to compete for the most loyal and consciencious"

That only happens if there's a shortage of workers. There isn't.
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Anonymous Coward, 16 Oct 2014 @ 7:57am

Plus everyone knows that even if they are excluded for now the tobacco companies will be reincluded in some future provision or act. They will lobby about how unfair it is for them to be excluded and singled out.
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Anonymous Coward, 16 Oct 2014 @ 8:10am

Re: Raising the minimum wage
Problem is you can't reduce long-term cost of living. Ever. Sure you might induce short-term reductions, but I assume you're not talking about those. You want a permanent solution.

The issue is two-fold. One is land. The other is inflation.

Cost of living goes up (partially) because land is a fixed scarcity. The only way to solve this issue is to 1 - Find new land (unlikely), 2 - Reduce the number of humans (unconscionable), or 3 - Develop more efficient usage of existing land (hold this thought)

Inflation, on the other hand, is regulated by interest rates. To make inflation go to zero you must make interest rates zero. If interest rates are zero, investment will go to zero (no interest means no ROI). If investment is zero, then there's no way to develop new things, which eliminates the #3 solution for the land problem.

See the vicious circle? If you eliminate inflation, you have no way of preventing real estate prices from soaring. If you want to keep real estate under control, you must have inflation. Ergo, you cannot prevent cost of living from going up.
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tqk (profile), 16 Oct 2014 @ 9:03am

Re: Re: Re: Re: Raising the minimum wage
That points out another reason why MWLs are bad. They artificially level the playing field for all employers within an industry. McD doesn't have to offer a living wage when BK doesn't have to either.

Interestingly, McDs isn't that stupid. They created quite a kafuffle here when they started paying better than the minimum wage to attract employees. I was in one of these part-time "Gap Jobs" between IT contracts a few years ago, hired on at $6.75/h. A couple years after I left, that same job was paying $10.75/h, and that wasn't even in the same (burger flipping) business. They raised the bar and attracted people back into the workforce. Lots of people had just given up and opted out of the workforce (stay in school, move into Mom's basement) when they couldn't find a decent paying job. McD made it worth their while to come back in.
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Pragmatic, 20 Oct 2014 @ 8:10am

Re: Re: Re: Raising the minimum wage
Raising the minimum wage would help in the short term; long term, breaking up the multinational corporations would create enough competition to keep the cost of living down. If you look up arguments in favor of Middle-out economics you'll find studies that prove that the rise in the cost of living you'd expect if wages go up is actually negligible. But that only happens where there's enough competition to keep prices down.

We need to make the market more free and more open. Bear in mind that while corporate apologists may like to talk about "the free market," there's actually no such thing and it's the last thing they want.
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Pragmatic, 20 Oct 2014 @ 8:11am

Re: Re: Re: Raising the minimum wage
Citation?
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Pragmatic, 20 Oct 2014 @ 8:13am

Re: Re: Re: Re: Raising the minimum wage
Yep. Then public services are cut because tax revenues drop. We need a rise in the minimum wage and caps on CEO pay. If they get a pay rise, I get a pay rise.
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blademan9999 (profile), 16 Dec 2014 @ 2:18am

Re: Re: Re: Raising the minimum wage
And if they made their workers work more hours they'd have to pay each worker more. Especially as for low income workers any hour after the 40th is considered overtime and pays at 1.5x the rate. So this wouldn't work.
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