Rickflag
why dont Sony Phils sell TV for only P1,000?
Because their accountants know the details of profits and losses, as you said, and that is why they find it only logical and self-evident to sell TV's at say, P10,000 and not P1,000.
The same with hyperwage. Once the law is set: minimum wage of maids is P20,000, and the TV salesclerk should be around P30,000, what do you think the accountants will do?
Using your own arguments, mr rickflag, the accounts will include the new salary in their cost of operation.
The companies sell using the "cost plus profit" method. And they will not sell it at P1,000.
Is that very clear?
The competitors, facing the same set of laws, about min. wage will adjust accordingly, and their selling price will be almost similar. Agree?
This is the case of the oil companies facing the same input cost of oil in the world market. thats why they have almost the same selling prices of gasoline.
Agree so far? No conflict here between economists and accountants, so far. agree?
Problem: If the price of TV was P10,000 when the saleclerks salary was P6,000, what will be the new price of TV if the new salary of the salesclerk will be P30,000? Will it be 5x, or P50T?
the answer? according to hyperwage theory, the answer is P10T, not P50T. (our cellphones, tv, laptops, etc are already higher than in Singapore, Hong Kong or Taiwan.. so do you really expect price of Nokia or Sony to be 500% higher than Singapore?)
This is the non-linear function emphasize by the Hyperwage Theory and this is the first concept that made me think that Hyperwage Theory is not as crazy as it first seems.
Mr, rickflag, read the book, it's free. but the ideas there are worth billions of economic wealth for this country and all third world countries.
The new poor will be a better poor. And the quality of public hospitals, police cars, city halls, roads, street lights, canals, educational facilities will be better bec govt will get MORE VAT taxes and more INCOME taxes.
that is just an initial aspect of Hyperwage Theory. The more you read it, the more self-evident the theory becomes.
after reading the book, I said, why didn't somebody think of this before?
That to improve our economy we will not lower the cost of operations but INCREASE the cost of operations! (wages, specifically! This is contrary to normal economics taught in textbooks.)
Only a genius can take the opposite side and make sense out of it.
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Quote:
Originally Posted by rickflag
in Running a business salary is just one of the expenses. you still have to add up other expenses like materials and overhead cost plus you still have to pay tax. in our taxation class before if i remember correctly the tax is about 20-40% of your gross sales. take note, gross sales so you haven't deducted your expenses yet. Economist see the situation from a Macro level, but Accoutants know the details of the profits and losses. the problem with the Economic theories is sometimes they are too broad and encompassing as if simplifying everything. plus in giving salaries you have to consider the market factor too. kung daghan available workers then dili pod sila ka demand high salaries because of competition. just like you can't sell your products at a very expensive selling prices if you lots of competitions.
raising the salaries of our workers will just mean higher cost for everything. parehas ra gud na nga kung moadto ka ug states dako tuod paminawon imo sueldo kung i convert nimo to peso pero you have to spend in dollars man pod so ma offset ra.
kanang businessman nga moingon nga losing makatuo baya ko ana kay ako bossing sa una ingon ana na. manghuwam na lang money para i sueldo namo. the problem is ang ubang tao man gud kung kita ug mag kotse, moingon dayon nga dato nang tawhana. wa kahibaw nga napuno diay sa utang ug ga data data pa sa iya kotse.
Peace I am just airing my opinion.
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