6 ms·

It's kinda two ways. It raises the cost of automobiles (that's why analyses project a reduction in automobile sales by a bit over a million vehicles per year),

It's kinda two ways. It raises the cost of automobiles (that's why analyses project a reduction in automobile sales by a bit over a million vehicles per year), reduces labour demand, and erases more low-skilled work; but those who do get the jobs may be paid more than otherwise, until the numbers expire.

tom_mellior 6y ago
> It raises the cost of automobiles (that's why analyses project a reduction in automobile sales by a bit over a million vehicles per year) What do new cars cost in the US? Does a price difference of $500 or $1000 really make someone say "all right, I'd rather do without a car"?
- kulahan 6y ago
  My guess is no, but it might make someone say "all right, I'd rather get a used car".
  - gpm 6y ago
    And person a getting a used car might make person b who was going to get a used car not get a car at all (or get a lower quality used car making person c...). Also it might make some families go "all right I won't get a 2nd (or nth) car".
    - AnthonyMouse 6y ago
      It also changes the math when you have an old car in need of repair and have to decide whether to fix it or replace it.
- microcolonel 6y ago
  > Does a price difference of $500 or $1000 really make someone say "all right, I'd rather do without a car"? The answer to this is obviously yes if you think about it (assuming you're talking about deciding against buying a new car specifically). The question is how many people?
- mhb 6y ago
  Yes. Of all the people considering buying new cars, there are some at the margin of buying or not buying.
  - microcolonel 6y ago
    Beyond that it seems more than reasonable, when the average cost of a new vehicle is in the 30k range or whatever it is these days, a difference of 500 or 1000 dollars like the parent comment gives as an example is a solid couple or few percent of the cost of the vehicle, almost by definition that will make or break around the same percentage of sales.
    - yoloswagins 6y ago
      If you finance the car, that extra cost about extra ~$10/m
  - thephyber 6y ago
    That's not exactly true. There are always near-substitutes. If you can't afford a new Honda sedan you can: (1) look towards a Hyundai sedan, (2) look towards financing the same car for another year (which is why 7 year financing plans are common in the USA in the last decade), or (3) look at a used car. A $500 cost difference between this month and next month means you may consider spending another $500+ on maintenance to keep your existing car running longer, but if you get into a place where your current car is no longer usable, there are several options before you have to forgo having a car altogether.
  - csomar 6y ago
    It might boost the sales of cheaper cars. Americans buy lots of big cars. Also Americans make use of mostly new cars. In places where cars are expensive, the roads look like an American's cars junkyard.
- BurningFrog 6y ago
  Yes, when prices rise, demand lowers as a continuous function. It's not like nothing happens until it's an $800 difference and then there is "quantum leap" change.
chris11 6y ago
Doesn't it also reduce the incentive to outsource jobs overseas? It's harder for lower-skilled jobs in the US to compete with overseas workers working for less than minimum wage.
- NikkiA 6y ago
  If wage is the only cost, sure. But it's not, and hiring a mexican metalworker at $16/hr is still cheaper than hiring an american metalworker at $16/hr
  - AnthonyMouse 6y ago
    But is it cheaper than hiring an American metalworker at $8/hr? It also makes American workers start to ask questions about why it's so much cheaper to pay a Mexican worker "the same amount" and whether or not the things that money buys are worth what it's costing them.
    - NikkiA 6y ago
      The problem is that the $16/hr is an attempt to say 'not mexico!' without being discriminatory, so it doesn't say 'non-US workers at $16/hr' it says, essentially 'workers must be paid $16/hr or more', and the result is you'd have to pay US workers $16/hr to meet the same criteria, or else cars produced 100% in the US would fail to be legal.
      - AnthonyMouse 6y ago
        That's assuming corporations are too dumb to figure out how to get their other costs counted as part of the $16/hour. For example, one of the major costs in the US is employer-subsidized health insurance, and employers subsidize it because it's tax advantaged. If they instead paid the employees more only to have the employees use the money to buy health insurance, the employees would pay more taxes. But they could still do it -- pay more and then offer a health plan with no employer subsidy. And then they're paying you "$16/hour" even though you lose half of it to health insurance premiums (and then even more to tax). And if that got people asking why they pay tax on their health insurance when they buy it themselves, or why health insurance costs so much in the US, all the better.

tom_mellior 6y ago

> It raises the cost of automobiles (that's why analyses project a reduction in automobile sales by a bit over a million vehicles per year) What do new cars cost in the US? Does a price difference of $500 or $1000 really make someone say "all right, I'd rather do without a car"?

kulahan 6y ago
My guess is no, but it might make someone say "all right, I'd rather get a used car".
- gpm 6y ago
  And person a getting a used car might make person b who was going to get a used car not get a car at all (or get a lower quality used car making person c...). Also it might make some families go "all right I won't get a 2nd (or nth) car".
  - AnthonyMouse 6y ago
    It also changes the math when you have an old car in need of repair and have to decide whether to fix it or replace it.
microcolonel 6y ago
> Does a price difference of $500 or $1000 really make someone say "all right, I'd rather do without a car"? The answer to this is obviously yes if you think about it (assuming you're talking about deciding against buying a new car specifically). The question is how many people?
mhb 6y ago
Yes. Of all the people considering buying new cars, there are some at the margin of buying or not buying.
- microcolonel 6y ago
  Beyond that it seems more than reasonable, when the average cost of a new vehicle is in the 30k range or whatever it is these days, a difference of 500 or 1000 dollars like the parent comment gives as an example is a solid couple or few percent of the cost of the vehicle, almost by definition that will make or break around the same percentage of sales.
  - yoloswagins 6y ago
    If you finance the car, that extra cost about extra ~$10/m
- thephyber 6y ago
  That's not exactly true. There are always near-substitutes. If you can't afford a new Honda sedan you can: (1) look towards a Hyundai sedan, (2) look towards financing the same car for another year (which is why 7 year financing plans are common in the USA in the last decade), or (3) look at a used car. A $500 cost difference between this month and next month means you may consider spending another $500+ on maintenance to keep your existing car running longer, but if you get into a place where your current car is no longer usable, there are several options before you have to forgo having a car altogether.
- csomar 6y ago
  It might boost the sales of cheaper cars. Americans buy lots of big cars. Also Americans make use of mostly new cars. In places where cars are expensive, the roads look like an American's cars junkyard.
BurningFrog 6y ago
Yes, when prices rise, demand lowers as a continuous function. It's not like nothing happens until it's an $800 difference and then there is "quantum leap" change.

chris11 6y ago

Doesn't it also reduce the incentive to outsource jobs overseas? It's harder for lower-skilled jobs in the US to compete with overseas workers working for less than minimum wage.

NikkiA 6y ago
If wage is the only cost, sure. But it's not, and hiring a mexican metalworker at $16/hr is still cheaper than hiring an american metalworker at $16/hr
- AnthonyMouse 6y ago
  But is it cheaper than hiring an American metalworker at $8/hr? It also makes American workers start to ask questions about why it's so much cheaper to pay a Mexican worker "the same amount" and whether or not the things that money buys are worth what it's costing them.
  - NikkiA 6y ago
    The problem is that the $16/hr is an attempt to say 'not mexico!' without being discriminatory, so it doesn't say 'non-US workers at $16/hr' it says, essentially 'workers must be paid $16/hr or more', and the result is you'd have to pay US workers $16/hr to meet the same criteria, or else cars produced 100% in the US would fail to be legal.
    - AnthonyMouse 6y ago
      That's assuming corporations are too dumb to figure out how to get their other costs counted as part of the $16/hour. For example, one of the major costs in the US is employer-subsidized health insurance, and employers subsidize it because it's tax advantaged. If they instead paid the employees more only to have the employees use the money to buy health insurance, the employees would pay more taxes. But they could still do it -- pay more and then offer a health plan with no employer subsidy. And then they're paying you "$16/hour" even though you lose half of it to health insurance premiums (and then even more to tax). And if that got people asking why they pay tax on their health insurance when they buy it themselves, or why health insurance costs so much in the US, all the better.