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#102 Oct 23 2013 at 11:47 AM Rating: Excellent
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Remind me not to open a business with gbaji. I'd like to walk away not losing money each day.
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#103 Oct 23 2013 at 2:06 PM Rating: Good
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I like how he consistently forgets his own ideology.
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#104 Oct 23 2013 at 3:42 PM Rating: Default
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Uglysasquatch wrote:
Remind me not to open a business with gbaji. I'd like to walk away not losing money each day.


That's a strange response to my post. Was there something I said about the relative value of labor that you disagree with?
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#105 Oct 23 2013 at 4:14 PM Rating: Good
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I think it was basic addition and subtraction, actually.
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#106 Oct 23 2013 at 4:40 PM Rating: Decent
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Catwho wrote:
I think it was basic addition and subtraction, actually.


That you can't pay fast food workers more than the total sales during their shift minus the total cost of all materials involved in those sales (so electricity, equipment, food, etc), on average? That's not like a shocking thing to say, is it? All I'm doing is calculating net profit (absent labor cost) over a period of time and saying that this is the upper bounds you can pay for labor.

Is there someone who thinks that's wrong? I mean, if it costs you $5 for materials to run your lemonaid stand for 5 hours, and you sell $15 of lemonaid during that time period, then your profit rate is $2/hour. If you were to hire someone to sell lemonaid for you, that would be the maximum rate you could pay them (or yourself in this case). This should not be an alien concept, but it's shocking how many people will argue that it's unfair that the lemonaid stand worker doesn't get paid as much as the guy who repairs your car. Well, if people were willing to pay 5 times as much for a glass of lemonaid at a stand on the side of the road, then you could pay your workers more. But that's the point I'm making. The value of labor is a function of the value of the product of that labor to consumers.

We can complain that this is unfair, but it's really not. As long as consumers are free to choose whether a given good or service is worth the cost being asked, then the labor to produce those goods/services will be tied to that factor. Put another way, in order to make labor not valued that way would require removing the freedom of purchasers to choose whether to buy things at a given price (ie: no free market). You can't change one without changing the other, but some continue to think that they can. I'm just trying to point out the uselessness of trying to do that unless one is really arguing against a free market entirely.

Edited, Oct 23rd 2013 3:41pm by gbaji
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#107 Oct 23 2013 at 4:57 PM Rating: Excellent
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I'm confused. Why would anyone pay an unskilled factory worker more than they had to in the first place? That's money that could be better invested elsewhere, right?
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#108 Oct 23 2013 at 5:06 PM Rating: Good
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gbaji wrote:
cost of all materials involved in those sales (so electricity, equipment, food, etc), on average?
That's what was missing first time around. Your previous wording made it seem like you were only considering product cost and labour.

SPG wrote:
I'm confused. Why would anyone pay an unskilled factory worker more than they had to in the first place? That's money that could be better invested elsewhere, right?
Unions. And when there is no union, fear of a union.

Edited, Oct 23rd 2013 10:03pm by Uglysasquatch
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#109 Oct 23 2013 at 6:04 PM Rating: Excellent
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gbaji wrote:

That's a very simplistic way of looking at it. Another way of looking at it is that it increases the relative value of the jobs remaining *and* creates the potential for greater total productivity from the market itself (meaning a bigger total pie). What makes the factory workers button pushing more valuable than the fast food workers button pushing is precisely the fact that automation means he's creating more productive output with that button push. That's not a bad thing. That's a good thing.

The argument you're making is akin to saying that tools destroy jobs. If only everyone harvested wheat by hand rather than using some kind of tool, we'd be able to employ so much more of our people harvesting wheat, right? And if we didn't replace those hand tools with automated tractors, we'd save yet more jobs. It's bad logic. In each case, we make the labor we use more efficient, which allows the entire economy to generate more productive output. The idea that this is automatically wrong because it destroys jobs is absurd and somewhat pointless. Jobs will be created to meet the demands of the labor market. The historical record on this is pretty hard to deny.


In what dream world do you live in. The reason Auto makers make so much money is because they spent the better part of 70 years fighting for competitive wages vs profits of the industry. The wages dictate the cost of the item. You are quite literally putting the cart before the horse. If Labor was reflected in terms of production value then labor rates would have scaled appropriately with the rise of profits. Yet after a decade of sh*t economics in the US and Canada NA income rates have remained mostly stagnant on the whole. At least in comparison with the massive rise in Profits.

(sorry I don't know how to post images anymore)
http://cdn.theatlantic.com/static/mt/assets/business/Screen%20Shot%202013-03-04%20at%2012.35.48%20PM.png

(from http://www.theatlantic.com/business/archive/2013/03/corporate-profits-are-eating-the-economy/273687/)

But of course if Productivity was truly the essence of Labor and the Profits dictatory of wages, why would temporary labor be rampant across North America? Why would 1 year contract positions at marked down Union wages be the way of the future. If Labor and Wages we so harmonized with Production and Profits, in what world would hiring temporary staff at 70% starting wages fit into the equation. Certainly companies don't feel that they aren't making enough, after all profits are the highest they have ever been, certainly they don't feel they aren't producing enough after all production levels of everything are at the highest they have ever been. Or maybe they just want to make more money and pay less for the production. After all, more money in the hands of people who know how to use it better is more important for the economy. Having record profits is clearly the answer to unemployment, underemployment, poverty, and homlessness. Having record profits has clearly helped work people of social assistance and other government welfare programs, having record profits has clearly led to a sustainable workforce and national economic stability...Oh wait none of these things is true even with Corporate profits at all time ************ the real world sucks.

So I wonder, at what point does the fantasy economist that runs your fairy tale world come and say, ok guys we are making Twice as much as we spend on labor...its time we increase wages to give these hard workers a fair cut of the pie, also we are going to open 100's of new factories and hire some of these unemployed people, lets also start a community building project that helps ween people off assistance, after all gentlemen we are swimming in the most profits in the history of mankind. I would love to live in your fictional world of economic growths and equal wages. Especially so I could believe in your absurd notion that Profits and Productivity determine Labor and Wages.

In the real world jobs are being lost to automation, in the real world wages do not reflect the profits nor production, in the real world people are taking jobs at half the pay rate of others just so they can live to work. In the real world companies are at an all time high in production and profits, yet, the average pay in the US and Canada hasn't even kept up with the average Cost of living increase in the last decade.

But hey simple math could tell you that.



Edited, Oct 23rd 2013 8:11pm by rdmcandie
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#110 Oct 23 2013 at 6:04 PM Rating: Default
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someproteinguy wrote:
I'm confused. Why would anyone pay an unskilled factory worker more than they had to in the first place? That's money that could be better invested elsewhere, right?


The question I was answering was why a button pusher on a factory floor gets paid more than a button pusher at a fast food restaurant (service industry in general). It's a given in the question that the factory worker *is* paid more, even if he's not considered more skilled, or the work considered any more difficult. So your question is tangential at best.
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#111 Oct 23 2013 at 6:13 PM Rating: Excellent
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gbaji wrote:
It's a given in the question that the factory worker *is* paid more, even if he's not considered more skilled, or the work considered any more difficult.
Ahh gotya, that's the part I missed then.
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#112 Oct 23 2013 at 6:18 PM Rating: Good
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gbaji wrote:
someproteinguy wrote:
I'm confused. Why would anyone pay an unskilled factory worker more than they had to in the first place? That's money that could be better invested elsewhere, right?


The question I was answering was why a button pusher on a factory floor gets paid more than a button pusher at a fast food restaurant (service industry in general). It's a given in the question that the factory worker *is* paid more, even if he's not considered more skilled, or the work considered any more difficult. So your question is tangential at best.


My question wasn't about pay though (and that's what you quoted when you posted), it was about how society views the importance of the job and how skilled the person is viewed. Pay may be a factor there, but my comment wasn't about pay. Someone looks at a burger flipper working 40 hours a week and thinks "loser". Someone looks at a button pusher on a factory floor working 40 hours a week and thinks"productive member of society".

And as far as pay... the difference isn't there if you are a non union shop. Our button pushers make between 9 and 13 dollars an hour based on whether or not they are temps and their seniority .

As long as society doesn't view these services and the people providing them as important, they won't be willing to pay more for them, and the people providing these services won't be able to earn more for their work.
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#113 Oct 23 2013 at 6:28 PM Rating: Excellent
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And to simply this even more so you can maybe understand.

You pay someone 1$hour to produce a product he can make 1 of an hour.
Your product sells competitively at 10$
Your cost of upkeep is 1$ per Shift.
Your Material is 3$ per part



Money in 80$ (8 parts at 10$EA)
Money out 33$ (24$ Mars + 8$ Wages + 1$ Operating)
47$ Profit per shift.

Now you replace the person with a robot that costs an additional dollar per shift to operate, but produces 1 part more an hour.


Suddenly you have
Money in 90$ (9 Parts @ 10$Ea)
Money out 29$ (27Mats+2Operation)
61$ Profit

In your fictional world.

Company keeps worker because Humans are awesome. They decide instead of getting a robot they want to keep Bob and opt to give him 1$ more over the 8 hour period. This dollar would have run the robot but they feel their production is already stable and doesn't warrant the extra part per shift.

Money In 80$
Money Out 34$ (24Mats+1OP+9Wages)

Profit 46$


Another Scenario, Everything else remains the same as in part 1 except instead of increasing wages or getting robots, the company opts to take 1$ off the cost of their products at the consumer level.

Money In. 72$
Money Out 33$
Profit 39$

Now lets think real hard about which one actually happens in society. Or at least which one the data supports occurring in society.

Also there is an alternative.

Fire bob and hire a temprorary contract worker he is desperate for a job and agrees to take 50% of what Bob used to make. With Jim the company now makes the same amount of stuff, but they now make 51$ in profit each shift. They see the success of this and employ it across their whole company, now with 100 people working at half the cost per shift they see they have 510$ a shift in profits...and they were glad (This is currently the most popular type of employment in North American manufacturing and nearly 40% of it is being used by foreign workers on Visas)

Edited, Oct 23rd 2013 8:29pm by rdmcandie

Edited, Oct 23rd 2013 8:34pm by rdmcandie
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#114 Oct 23 2013 at 6:30 PM Rating: Default
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rdmcandie wrote:
In what dream world do you live in.


A world in which the percentage of our population required to grow sufficient food to feed our population is 1/20th of what it was a century ago, and yet we don't have 95% unemployment. Clearly the market actually does find new things for labor freed up via automation to do. Is that really a question?

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The reason Auto makers make so much money is because they spent the better part of 70 years fighting for competitive wages vs profits of the industry. The wages dictate the cost of the item. You are quite literally putting the cart before the horse.


Both forces are in play. If you increase the cost of labor, you must increase the cost of the goods produced by that labor. That is because the total cost to produce a good cannot be greater than the price you sell the good for. You're saying the same thing I am.

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If Labor was reflected in terms of production value then labor rates would have scaled appropriately with the rise of profits.


False. I said that the upper bounds of labor value is a function of the market value of the goods and services generated by that labor. I said nothing at all about how that value differential is divided between profit and labor costs.

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Yet after a decade of sh*t economics in the US and Canada NA income rates have remained mostly stagnant on the whole. At least in comparison with the massive rise in Profits.


Which has nothing at all to do with what I was talking about.


Quote:
But of course if Productivity was truly the essence of Labor and the Profits dictatory of wages, why would temporary labor be rampant across North America? Why would 1 year contract positions at marked down Union wages be the way of the future. If Labor and Wages we so harmonized with Production and Profits, in what world would hiring temporary staff at 70% starting wages fit into the equation. Certainly companies don't feel that they aren't making enough, after all profits are the highest they have ever been, certainly they don't feel they aren't producing enough after all production levels of everything are at the highest they have ever been. Or maybe they just want to make more money and pay less for the production. After all, more money in the hands of people who know how to use it better is more important for the economy. Having record profits is clearly the answer to unemployment, underemployment, poverty, and homlessness. Having record profits has clearly helped work people of social assistance and other government welfare programs, having record profits has clearly led to a sustainable workforce and national economic stability...Oh wait none of these things is true even with Corporate profits at all time ************ the real world sucks.


That's a lot of complaining about stuff I wasn't talking about. I was answering the question of why a button pusher in a service job (like fast food) gets paid less than a button pusher on a factory floor, even if both jobs are similarly demanding in terms of skill/difficulty.

That's it. You're trying to fly before you've learned to crawl. Start by understanding the basic concepts first, then we can move on to more complex ideas.

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So I wonder, at what point does the fantasy economist that runs your fairy tale world come and say, ok guys we are making Twice as much as we spend on labor...its time we increase wages to give these hard workers a fair cut of the pie, also we are going to open 100's of new factories and hire some of these unemployed people, lets also start a community building project that helps ween people off assistance, after all gentlemen we are swimming in the most profits in the history of mankind. I would love to live in your fictional world of economic growths and equal wages. Especially so I could believe in your absurd notion that Profits and Productivity determine Labor and Wages.


I have never argued this. Ever. You're creating false conditions and getting way ahead of the issue at hand.

Let me ask you a question: Have you ever walked into a store, looked at an item on the shelf and then decided that you can afford to pay twice as much as the asking price, so you just give that money to the store? No? That's what's wrong with your question. No one does that. It's not about setting arbitrary "fair" prices for things. It's always about competing forces.

What force prevents the store from charging you $1000 for a loaf of bread? If you can answer that question, then you can answer the one you asked (or the one you should have asked).

Quote:
In the real world jobs are being lost to automation, in the real world wages do not reflect the profits nor production, in the real world people are taking jobs at half the pay rate of others just so they can live to work. In the real world companies are at an all time high in production and profits, yet, the average pay in the US and Canada hasn't even kept up with the average Cost of living increase in the last decade.


Missing the forest for the trees.
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#115 Oct 23 2013 at 6:38 PM Rating: Default
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rdmcandie wrote:

In your fictional world.

Company keeps worker because Humans are awesome...


Someone has to build, maintain, and operate the robots. And since the robots generate greater profit for the company, the value of the labor involved in doing those things is greater than the value of the labor doing what the robot is now doing. And since it requires fewer people to operate the robots relative to the number of parts built, more people can be employed operating more robots and thus building even more parts (and parts of different kinds). Thus, the cost of the end goods gets cheaper and more available over time.

It's not a fictional world I'm talking about. As I said, if your argument was true, then when we switched from farming by hand to using automated equipment allowing one person to harvest a field that would have required hundreds of people before, all of those people would be languishing in poverty and starvation. And yet, amazingly enough, they aren't.

The market will find work for labor.
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#116 Oct 23 2013 at 7:14 PM Rating: Excellent
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You guys are arguing pay rates with a guy who fought tooth and nail to say waitresses made as much as Brigadier Generals.
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#117 Oct 23 2013 at 7:23 PM Rating: Default
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lolgaxe wrote:
You guys are arguing pay rates with a guy who fought tooth and nail to say waitresses made as much as Brigadier Generals.


Why not go all the way and say it was fast food workers? Or the guy who mows my lawn? I mean, if you're just going to make stuff up, may as well really make it up!
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#118 Oct 23 2013 at 7:28 PM Rating: Good
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gbaji wrote:
rdmcandie wrote:

In your fictional world.

Company keeps worker because Humans are awesome...


Someone has to build, maintain, and operate the robots. And since the robots generate greater profit for the company, the value of the labor involved in doing those things is greater than the value of the labor doing what the robot is now doing. And since it requires fewer people to operate the robots relative to the number of parts built, more people can be employed operating more robots and thus building even more parts (and parts of different kinds). Thus, the cost of the end goods gets cheaper and more available over time.

It's not a fictional world I'm talking about. As I said, if your argument was true, then when we switched from farming by hand to using automated equipment allowing one person to harvest a field that would have required hundreds of people before, all of those people would be languishing in poverty and starvation. And yet, amazingly enough, they aren't.

The market will find work for labor.


There are no numbers that support your claim though. Average income has not risen in proportion to perceived "Higher Value" jobs. Do I make more than a guy pushing a button, In fact I do. I make 10$ more an hour because I went to school and got a piece of paper that says I know what I am I doing. But I know half a dozen guys who now make 15 dollars less than they used to because their jobs were replaced by Robots. So lets see I make 80$ more in a day, and one of those guys now makes 120$ less. Over the 6 of my friends thats a cool $720 or about a difference of 540 bucks. Now I know this affected 6 people because I installed the Robot that replaced them on the line. A line of 9 is down to 3 because we only need 1 person to load parts and push a button instead of 2 guys welding and 1 guy handling parts.

So yes higher value jobs are being added, but this in no way supports a "non-deterioration" of the Average wealth. In fact it hurts the whole town. Those 6 guys are joined by about 34 others, some who went to school, some are unemployed, most took part time jobs at minimum wage because hey, they had to put food on the table for their kids when the EI ran out. So now there are ~30 People who used to make Over 50K a year (~48K is the average in Canada) and now making under 30K/yr. 7 have lost their houses, had to sell them cause they couldn't handle the mortgage, ever rising bills, and of course feed their families. I can only imagine how Bowling Green was impacted when GM started laying people off. I can only imagine how it fell when entire truck lines were moved out of the country for cheaper labor and operation cost, especially since they had to add in the cost of health care into that ball of necessities we consider mandatory for basic life.

Of course its cool because I am making 80$ more than everyone else because I monitor the Robots. So why does it matter than hundreds of thousands of dollars has left my city. Well we lost 3 resturants, my home value has decline by 12%, we have lost 1 movie plaza, we have lost an ice cream shop, a Blockbuster...then again they went out of business (something about being able to rent thousands of movies from your couch or something...) Lots of other stuff has closed, we have seen many mom and pop shops shut down because they don't have the loyal customer base they once did. Unemployment here is just about 11%, but that doesn't include the thousands who probably don't bother saying anything, then again I am sure many work under the table too. The income of the town has declined, this year it couldn't pay its police service and a needed hospital extension...thankfully the Government of Ontario helped a bit, but then again Ontario as a whole has seen hundreds of billions sapped from its economy over 9% unemployment and for the first time in the History of Canada is now a have not province.

I mean its not like its a big deal or anything I mean those things are probably all unrelated right, I am sure the 80Dollars more a day I make is actually covering the losses oh hundreds of Billions in consumer incomes. After all companies are still making record profits so my $80 must be doing just fine. I mean I could be over thinking it and am sure that once the US economy comes roaring back to life all these jobs that robots now hold will be replaced some where in the economy, because hey I got 80 bucks and that can totally pay for one hour work for the staff who made my Quarter Pounder meal tonight.

Fantasy land economics were proven wrong in the 80's they were shown to be wrong again in the 00's and now no one has any money left to do anything to rectify the situation, except for those record setting profiteers in corporations who somehow have swallowed up several trillion in profits and put it somewhere..
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#119 Oct 23 2013 at 7:49 PM Rating: Excellent
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gbaji wrote:
Why not go all the way and say it was fast food workers? Or the guy who mows my lawn? I mean, if you're just going to make stuff up,
gbaji wrote:
Quote:
Come on now, who really wants to leave their child for 8 hours a day with someone who makes less money than a cocktail waitress?
Yeah. Just like this.

The correct statement would be to ask if you'd want to leave your child for 8 hours a day with someone who makes slightly less money than a senior engineer, or someone in middle management, or a Brigadier General. Because the median pay for public school teachers is about the same as the starting pay scale for those other jobs.
Totally made up. Smiley: laugh
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#120 Oct 24 2013 at 2:30 AM Rating: Default
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I'm also reminded on how he argued the impossibility of paying waiters more money without the collapse of your business. You know, as opposed to cutting money in other places.
#121 Oct 24 2013 at 4:56 AM Rating: Good
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That's actually valid, depending on circumstances. Most restaurants run very thin margins and profits are solely based on volume. High end restaurants can be an exception to that.
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#122 Oct 24 2013 at 6:55 AM Rating: Good
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lolgaxe wrote:
gbaji wrote:
Why not go all the way and say it was fast food workers? Or the guy who mows my lawn? I mean, if you're just going to make stuff up,
gbaji wrote:
Quote:
Come on now, who really wants to leave their child for 8 hours a day with someone who makes less money than a cocktail waitress?
Yeah. Just like this.

The correct statement would be to ask if you'd want to leave your child for 8 hours a day with someone who makes slightly less money than a senior engineer, or someone in middle management, or a Brigadier General. Because the median pay for public school teachers is about the same as the starting pay scale for those other jobs.
Totally made up. Smiley: laugh
I'm sure on average, cocktail waitresses make more money than day care providers.

When dissing occupations that you deem lowly, your superior facade is dulled by bad facts.
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#123 Oct 24 2013 at 9:24 AM Rating: Excellent
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Elinda wrote:
I'm sure on average, cocktail waitresses make more money than day care providers.
Or the average stay at home mom. No idea where that quote got dug up from, but I'm pretty sure my wife wants to kick someone in the nuts right now.
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#124 Oct 24 2013 at 9:51 AM Rating: Decent
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someproteinguy wrote:
Elinda wrote:
I'm sure on average, cocktail waitresses make more money than day care providers.
Or the average stay at home mom. No idea where that quote got dug up from, but I'm pretty sure my wife wants to kick someone in the nuts right now.


She would be looking for Gibberish Boy.
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#125 Oct 24 2013 at 9:59 AM Rating: Good
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I think I misread something. However, seeing as how my day is kind of sucking alot, addressing this little inconsequential ***** up on my part might prove helpful in keeping my attitude muted and my mouth shut here in the office. Smiley: wink

Its not friday yet is it?

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#126 Oct 24 2013 at 10:02 AM Rating: Excellent
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It is somewhere. Maybe we should all pretend we live in New Zealand for a while, at least until Sunday?
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