The Vending Machine Principal

 

10478540_985954108104373_2070167541890755958_nWe have a bag of candy with 30 pieces of candy in it, if we are a liberal nut we will try to sell the whole bag for $5. This means that only those with $5 to spend will even think of buying the bag. If we open the bag and sell each piece for .25 cents, there will be far more people who can buy at .25 cents, than at $5. Notice, 30 pieces x .25 cents is far more than $5.

Again, we have a bag of hard candy with 50 pieces in the bag.  If we decide to try to sell the bag for $100, weeks may go by looking for one  buyer. If we open the bag, and sell each piece for $3, soon many buyers appear and within a short time we have sold all 50 pieces for $3 each. Notice the difference between the two ?

This is why raising the minimum wage is always a job killer. Supporters of raising the minimum wage argue that doing so will reduce poverty. But if we look at the Vending Machine Principal, raising the price does not lift low-income families out of poverty. It cuts them completely out of even being able to buy the $5 bag of candy. Higher minimum wages cost jobs and working hours. Simply because fewer are willing to pay, or are just not able.

When the economy is bad, and moves toward socialism; many will not buy things to be consumed in the future, they will only buy things that are consumed during the present time. If at all possible! We can see a very good example of this with those that smoke. As the cost of a carton of cigarettes keeps going up; more and more smokers are buying a pack of cigarettes for the short term. Gone are the days where the average smoker has 1 or 2 carton of cigarettes just laying around in the house.

So don’t be an liberal nut, and use some common sense.

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