Fox manufacturing, a very well known company in mountain biking and motorcross has just come out with a new fork for mountain bikes. It has 8 inches of travel and is for the big hit bikes.

Forks are made out of only a couple things; metal, a little rubber and oil. Not much to it. So why $1300.00? Well, partly because of the material and time to build. But also, as Fox points out, 'costly environmental regulations and American labor rates'. Now people want to raise the minimum wage and that will cut into Fox's profits. Well, until they raise their prices to offset the minimum wage increase, that is.

Raising minimum wage will only raise the price YOU pay for products. Corporations are not going to cut their profits. So the next time you bitch about companies going off shore, think about the pay rates for unskilled entry level labor.

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Anyone ask Hillary what kind of underwear she wears, yet?

Lt. Gov Diane Denish on Bill Richardson "The governor, she said, "pinches my neck. He touches my hip, my thigh, sort of the side of my leg."

Don't forget the cost of lawsuits when retards jump off a 35 foot drop in, fold the fork and do a face plant.

Liability from stupid people is a factor in the cost of may products.

Matt

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So a guy working two minimum wage jobs to keep his family above the poverty line gets a break and somebody who has nothing better to do with their money than spend $1300 to improve one of their toys now spends $1400. That doesn't sound like a terrible tradeoff to me.

alright lets break this down, we're looking at a single fork worth 1,300. Most of that money is in materials, very high grade steel, aluminum, or titanium, fancy composites, fancy design, low rate production, and plenty of engineering. These are by far the majority of the inputs.

Now we're not even dealing with minimum wage workers here. Machine shops, do not pay minimum wage to their floor workers (e.g. average salary for mfg. worker in 2003 in canada was 37,829 http://strategis.ic.gc.ca/canadian_i...33271wage.html)

And they produce what, several thousand of these (at least), lets suppose that they hire 2 janitors and sell nothing but 3,000 forks. Lets suppose these janitors work 40 hour weeks 52 weeks a year. The increase in cost would only be $2.77, per unit, or a whopping .2% price increase! Hell for anything less expensive this would just be a rounding error.

And of course, if you think about it, fox doesn't produce only 3,000 of these things, they produce hundreds of thousands of pieces of equipment. Very little of it requires minimum wage labor. We're talking in reality maybe pennies of increase considering these are multithousand dollar bikes.

Does someone need to call the waahmbulance?

The detrimental effects on our economy and the removal of poverty that the different sides of the debate argue blow things way out of proportion. Raising the minimum wage will not raise the prices of goods or help the impovrished because there simply aren't that many people working at the federal minimum wage.

Source: http://www.bls.gov/cps/minwage2005.htm

I could care less. I don't ride bikes.

But, I've got some retail experience (albeit in another industry). If the retail price is $1,300.00, it costs far less than that to manufacture it. Dealer cost for it probably hovers around 50-60% of the retail. The manufacturer will commonly assign a mark up of between 200 and 300% of the manufacturing costs to arrive at a dealer cost.

What's being discussed here (and, again, I don't know the bicycle industry) is the consumer cost of the product, which is largely made up of perceived value. If someone thinks something is worth a lot of money, they'll jump at the first opportunity to pay a lot for it.

And the manufacturer laughs all the way to the bank...

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Yes it is. That's why forks now have what are known as "lawyer tabs". These are little tabs on the fork where your wheel attaches to it. So in the event that you did not tighten your wheel, then it shouldn't fall off and you can not sue someone else for your mistake.

GM depends on the product. Certain products can only get a certain GM due to the finished product cost. But there are hidden costs in everything. Such as keeping lawyers on retainer, meeting OSHA and NIOSH regulations and much more.

Not quite. There are other $$$ figures you are leaving out such as the insurance, workers comp, unemployment new materials for the individual, uniforms, extra work for payroll. Hiring someone for $5.00 an hour, does not only add $5.00 an hour to your overhead.

But would you be willing to take a .2% pay cust for every new employee your company hired? Or a pay cut for evey new regulation they had to conform to?

You're also trying to compare Canadian pay rates to California. That's really silly.

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Anyone ask Hillary what kind of underwear she wears, yet?

Lt. Gov Diane Denish on Bill Richardson "The governor, she said, "pinches my neck. He touches my hip, my thigh, sort of the side of my leg."

No company will ever get any sympathy from me for having to meet OSHA safety requirements. If it weren't for these requirements, workplaces would be much more dangerous.

Same goes for environmental regulations. If this company did not have to recycle the cutting fluids used in their manufacturing processes, where do you think they would put them? I'll tell you where - right out on the ground in their back yard, and then right into your drinking water.

Also, I guarantee you that no one at that company is earning minimum wage. The lowest paid worker is probably earning at least twice that. I doubt an increase in the minimum wage will effect them.

Not affected by minimum wage, and also not affected by minimum wage. The vast majority of the workers in the plant are not minimum wage workers, no where close. The people who are actually producing the thing are earning closer to 20+ dollars an hour, and are unaffected.

Yeah, and these things aren't affected by an increase in minimum wage. So why don't you cry some more, the company might lose a few extra handfuls of quarters to the janitor. Whoop-de-freaking do. The Marginal cost is negligible when it comes to increasing the minimum wage.

Do you want cheese with your whine? Its not a .2% pay cut. I was pointing out that a 2 dollar increase would be ridiculously high for what we're talking about here. Now say a plant is hiring 300 employees, including 2 janitors who need to clean the shop. Even if the janitors get a $2 pay raise per hour, and the management can't push any of it onto the consumer, and they can't take any cut to their profits, and they can push it all onto their other workers evenly (all ridiculous assumptions, in your favor) its only a difference of 13 dollars in an entire years pay.

You're right, in california the wages will likely be slightly higher, closer to 22$ an hour. You know completely unaffected by minimum wage laws

As much as I am against min wage laws and even more against min wage increases, this thread does not put forth a good case against either.

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Today's forecast: Government corruption.

Tomorrow's forecast: 100% chance of more 'politics as usual'

Maybe it's finally time to vote Libertarian

Because there isn't a good case against it. It doesn't cause unemployment, it doesn't contribute in any significant manner to inflation. Every arguement which has been given against minimum wage has been established as false. This is just an incredibly poorly presented version of the previous two views.

Oh, I am the same way. I'm glad they have standards! I know these standards better than most, since I sell the products to meet these standards. Most people, however, do not know how stringiant they are and that most manufacturers of chemicals have to make two or three different versions of one product and that increases the price of all of them. I'm just trying to show people why american made products cost so much and why many places sell off shore product. I'm merely pointing out overhead costs.

TD, not affected by minimum wage? Alot of these fees are percentages of your payroll. Oh wait, do I need to call you a whiner to make my point more valid? Seriously my friend, the name calling really makes you look silly. Try carrying on a conversation like an adult, sometime.

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Anyone ask Hillary what kind of underwear she wears, yet?

Lt. Gov Diane Denish on Bill Richardson "The governor, she said, "pinches my neck. He touches my hip, my thigh, sort of the side of my leg."

AOL, Electron, Honeywell, Philips semiconductor are just a few manufacturing plants in New Mexico that shut down and minimum wage was a main factor.

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Anyone ask Hillary what kind of underwear she wears, yet?

Lt. Gov Diane Denish on Bill Richardson "The governor, she said, "pinches my neck. He touches my hip, my thigh, sort of the side of my leg."

This is a bit far out there. I do manufacturing costing analysis for a living.

The price of selling any given product has very little to do with the material/labour cost of producing it and a whole lot to do with the customer's ability to pay.

That is to say, in the sport of high end bicycles, we're looking at a very affluent market and thus $1400 seems quite reasonable. I'll bet the price is even higher in Italy. Like what good is having a cool bike to show off with if every kid on the block can afford the same thing?

Consumption is all about creating and projecting identity. $1400 bicycle forks says you are a 'someone' with discerning taste, an eye for quality engineering and too much disposable income. The fact that the forks really only cost $85 to make is beside the point.

You do realise that Nike pays more to their advertising spokesperson than they do for their entire manufacturing payroll...

Oh, OK, sorry then. I get a bit angry when I hear someone complain about the "high" costs of compliance to safety and environmental standards - but you weren't complaining about that The main thrust of your argument here is labor costs.