Historically, economic growth has lead to job creation. With the way our population is currently distributed, I no longer feel that this correlation is valid. Since all of the manual supply line type jobs have shifted into markets overseas, we are now in a time where we are close to the maximum amount of workers in our economy.

Even if the economy grows, you will still see diminishing job creation. There is no way around having 10 million unemployed at all times going forward. For every population, there is always a total number and a maximum amount of jobs. Sure, any given person can get those jobs, but every given person CAN'T get a job.

In a market economy, theres no way to have 100% employment unless the government makes fake jobs for the rest of the people. Unemployment benefits, healthcare and welfare are a much more efficient way to take care of those people than making fake jobs.

Lowering taxes will allow the private sector to create jobs thus taking some of the burden of unemployment away. I am not denying that fact. I am saying that government programs giving money directly to the unemployed is more efficient than giving the money to the private sector and allowing them to give SOME of that extra money to job creation.

A great example of this abuse is WAL-MART. They are doing very well right now in profits but I was in their store very late the other night and there was a huge problem. There was NOBODY working in any department and they only had two cashiers open. There were probably hundreds of shoppers in the store and a good 10 workers 8 of whom were stocking. WALMART could easily hire and adequate staff in each store and put a dent in national unemployment but thats not going to help them make more money since customers only shop at walmart late night because its the only thing open. Prime example of why giving the private sector more money won't equate to efficient job creation.

Do you think life America should simply be a game of musical chairs? Keep in mind several well educated, hard workers are part of this unemployment.

6/15/2011 6:20:22 PM

Quote :

"Even if the economy grows, you will still see diminishing job creation."

How would the economy grow when jobs do not?

Quote :

"For every population, there is always a total number and a maximum amount of jobs."

Woah, the economy is not zero sum. Everyone could be unemployed, everyone could have 4 jobs, it completely depends.

6/15/2011 6:34:09 PM

Quote :

"How would the economy grow when jobs do not?"

Jobs grow but at a diminishing rate. Companies become more competitive internationally when taxes are lower, make more sales, increase revenue but only move some of that extra revenue into extra jobs. Usually, they will just make working conditions and compensation worse since there are workers stepping over each other for jobs. At least thats what a "smart" capitalistic business would do.

6/15/2011 6:45:47 PM

Quote :

"Jobs grow but at a diminishing rate."

Then the economy grows at a diminishing rate.

Quote :

"Companies become more competitive internationally when taxes are lower, make more sales, increase revenue but only move some of that extra revenue into extra jobs."

They will continue hiring until the payoff of each additional worker no longer justifies the cost and risk of hiring him.

Quote :

"Usually, they will just make working conditions and compensation worse since there are workers stepping over each other for jobs. At least thats what a "smart" capitalistic business would do."

There's a reason why you think this. Essentially we have a lot of entities selling labor, and less entities buying labor, even if we have full employment. This is because most people buying labor hire more than one employee. It's as if you only had one or two companies selling food and a whole lot of people who wanted to buy it. This gives the buyer of labor market power, which allows them to command a curved supply/demand curve, and essentially pay less for labor than what would be normal market price. There's not really a good way around this market failure, we could only allow corporations to hire one person, but that really sucks because it doesn't take advantage of economies of scale. There are a few other options, but they suck too. One of those options is allow the workers to collectively sell their labor in unions, unfortunately that organization tends to stray away from best interests of the workers as they depend on dues and political votes. Another crappy option is to put a price floor on the markets most impacted by this market power.

I really wish it didn't work like this as the labor market is a fundamental part of the economy, it eclipses the smaller market failures, and has really slowed the world down.

Libertarians or their ilk would have you believe the reason so many people think this is just because you are stupid, or you don't understand it, or some number of other things, but there is a reason, and you aren't stupid for noticing the obvious.

[Edited on June 16, 2011 at 12:24 AM. Reason : ]

6/16/2011 12:21:28 AM

Quote :

"How would the economy grow when jobs do not?"

Seriously Kris? Productivity increases due to numerous factors causes this all the time.

6/16/2011 2:39:22 AM

Taxes are at their lowest in 60 years, as are government revenues as a percent of GDP. We're heavily in debt and skimming even more off the top will have only a marginal effect on the economy. Instead of lowering taxes further, we should examine other, more effective ways to stimulate job growth.

6/16/2011 10:00:03 AM

Quote :

"This gives the buyer of labor market power, which allows them to command a curved supply/demand curve, and essentially pay less for labor than what would be normal market price. There's not really a good way around this market failure"

Kris, this discussion again? Do the friggin' math. This is Econ 101 stuff. The price set in a market with five buyers is within a few percent of the perfectly competitive price (an infinite number of buyers). Yes, this is market power, the price is not perfectly optimal, but it is close enough to be lost in the background noise.

6/16/2011 10:24:26 AM

Quote :

"Seriously Kris? Productivity increases due to numerous factors causes this all the time."

I guess you're right, there are some cases where due to technology or whatever else more could be produced with less, but for the most part it is true, but I stress the economy going up would relate to the number of jobs going up, not neccesarily unemploment going down or anything like that.

Quote :

"The price set in a market with five buyers is within a few percent of the perfectly competitive price (an infinite number of buyers). Yes, this is market power, the price is not perfectly optimal, but it is close enough to be lost in the background noise."

What are you scaling this against? A few percent may be small for most things and could be considered "noise", but consider the difference of a few percent to a casino, it's a very large amount of money. Now imagine it across the entire economy. This is a HUGE problem. Why do you think this thinking is so widespread? Why do you think unions and minimium wage came about? Simply mass delusion? I think there is a very real reason why these things happened and why people think this way.

6/16/2011 10:55:18 AM

Decreasing working conditions or technology can offset job creation in a growing economy. This was all stated in the OP.

EX: Economy size/jobs
1. 0/0
2. 10/5
3. 20/7
4. 30/8

The number of jobs is growing with the economy but at a diminishing rate as a larger work burden is put on the workers that were required from the start.

[Edited on June 16, 2011 at 11:04 AM. Reason : 5 jobs were created when the economy went from 0-10 but less than five for each increase of 10]

6/16/2011 11:04:03 AM

^^ Sure Kris, it can be a large amount of money in absolute terms, but it is a few percentage points of the result. In an economy worth 14 trillion, the difference may be millions, but that is a few hundred bucks a year to workers earning thirty thousand a year.

^ How do you respond to the historical evidence that in the long term the number of jobs tracks with the number of people seeking work? In the mid-20th century the workforce increase dramatically as women entered the workforce, yet long term structural unemployment did not rise. So far, it seems unemployment is solely correlated with recessions, not population growth or worker participation.

6/16/2011 11:30:08 AM

Quote :

"but it is a few percentage points of the result"

That's still a massive amount and it has a very real impact. You're not attempting to scale it, you're simply writing it off saying it is only a few percentage points.

Quote :

"In an economy worth 14 trillion, the difference may be millions, but that is a few hundred bucks a year to workers earning thirty thousand a year. "

Can you prove this wasn't completely made up? I have a feeling it is.

6/16/2011 12:54:16 PM

I'm operating from the theoretical model of competition. It depends on the slope of the supply curve. Depending on the steepness of the curve, you might get within a few percentage points with as few as three competitors, you might need ten competitors.

Here is a gif of how I understand the math to work out:
http://www.thewolfweb.com/photos/00521149.jpg

[Edited on June 16, 2011 at 3:07 PM. Reason : lnk]

6/16/2011 3:06:39 PM

You're still not adding scale. Even fractions of a percent really add up when we are talking about a market as large as the labor market. This coupled with the fact that things would almost never be in favor of buyers has caused this failure to have a very large real impact. I would really like to see a poll asking who gets the better deal, buyers or sellers in this market. This coupled with the implementation of labor unions and price floors give evidence to the real world effect of this market failure.

6/16/2011 5:30:38 PM

Quote :

"This coupled with the implementation of labor unions and price floors give evidence to the real world effect of this market failure."

I disagree. That GM and Chrysler got bailed out is not evidence that America is suffering from a shortage of cars. Especially when the floor debate for the minimum wage and pro-union bills centered around stopping southern and black workers from displacing northern and white workers. It would be quite a coincidence if racism turned out to be associated with deep economic wisdom.

Quote :

"I would really like to see a poll asking who gets the better deal, buyers or sellers in this market."

The mob just rules you, doesn't it? What next, should we take a poll and use that to demonstrate that socialism is unworkable?

Quote :

"almost never be in favor of buyers has caused this failure to have a very large real impact"

In case you have not guessed, we are disagreeing over the concept of "very large real impact"

6/16/2011 6:41:20 PM

I'm still trying to understand how 'failure' is being defined here? It seems to be that there is some perfect allocation of buyers to sellers, one that we can't know...but it certainly seems to be slanted in a way that sellers of labor are getting jilted here and I just don't recall that argument being made during the boom years when sellers of labor had their pick of places to sell that work to.

6/16/2011 6:59:09 PM

Quote :

"That GM and Chrysler got bailed out is not evidence that America is suffering from a shortage of cars."

I don't think that's quite enough to write off my post. Minimum wage and labor unions have become a very large part of the unskilled labor market, the auto bail out was just some fluff.

Quote :

"The mob just rules you, doesn't it? What next, should we take a poll and use that to demonstrate that socialism is unworkable?"

You can't write this off that quickly either. This is a real phenomenon and there's a reason why everyone thinks it, and if we took a worldwide poll on socialism, I don't think it would turn out that badly.

Quote :

"In case you have not guessed, we are disagreeing over the concept of "very large real impact""

Ok, well you've yet to offer any level of scale to indicate the size of the impact.

Quote :

"I'm still trying to understand how 'failure' is being defined here?"

It's when the market fails to reach the optimum allocation.

Quote :

"but it certainly seems to be slanted in a way that sellers of labor are getting jilted here and I just don't recall that argument being made during the boom years when sellers of labor had their pick of places to sell that work to."

The unskilled labor market, by nature, is slanted to the buyers, even during boom years. The reason is that there are more selling entities than buying entities. This prevents perfect competition which prevents proper market allocation. It's the concept of "market power".

6/16/2011 7:23:27 PM

Quote :

"It's when the market fails to reach the optimum allocation"

Which on the aggregate is unknowable and will likely be that way until we have probes plugged into the back of our skull and reside in a warm cocoon.

6/16/2011 7:25:59 PM

Are you trying to get me to point out that this is theoretical so you can immediately dismiss it?

6/16/2011 7:32:31 PM

The very basis of being able to control aggregate demand rests on the idea that we can know where the curves intersect. We only can to the best of our models ability thus we'll never be able to know because the system is too chaotic.

[Edited on June 16, 2011 at 7:59 PM. Reason : .]

6/16/2011 7:59:40 PM

You could say the same thing about building a bridge, or sending a man to the moon.

6/16/2011 9:00:11 PM

lol

6/16/2011 10:48:09 PM

Oh yeah, you could say the same thing about building a bridge, and get lol'd for it.

6/17/2011 6:30:12 AM

Kris its obvious you have a very good grasp on the basics of economics but it appears you let them fall victim to confirmation bias.

Quote :

"I guess you're right, there are some cases where due to technology or whatever else more could be produced with less, but for the most part it is true"

Productivity is actually the main driving factor in the growth of the economy and is the main differentiating factor between wealthy countries and poorer ones.

Labor/jobs should rarely be considered as a primary driving factor as they have diminishing returns, which productivity does not. Given that even with 1 job available for every 1 person unemployment would be a practical impossibility, we have to accept that simple job growth will not sufficiently lead to positive economic growth.

Full employment is impossible for a variety of reasons but the most obvious being that there are some individuals who are unemployable and that at any given time there will be people who are transitioning from one job to another.

However, just to play devils advocate, lets assume, for a moment, that we could have 100% employment. This would, in most situations, be very bad for our economy. Primarily because if everyone was fully employed it would be due to some sort of policy that adversely affects imports, trade and outsourcing. This wouldn't be good, as such actions would largely reduce our competitive advantage.

Even if we could produce every item in the world more efficiently than another country, there would still be some items that we could produce better than others and thus would have the greatest overall economic prosperity if we focused our resources there. Putting our resources where they are more efficient would enhance our productivity (more output for every input) and therefore reduce the overall relative unit cost of labor and marginalize the wage advantages of other countries. Then end result is we would approach a balance where we see an influx of highly productive, higher paid jobs that are all generated by demand. This would ensure stable long term growth and have both the greatest net and individual rise in standards of living.

I hope this helps.



[Edited on June 17, 2011 at 10:50 AM. Reason : typos]

6/17/2011 10:48:22 AM

^That is correct which is why welfare, healthcare and unemployment benefits are a must.

6/17/2011 11:11:47 AM

I agree with you in principle but I suspect not to the full extreme of your position. I agree that these policies must, in some fashion, be made available, but I do not agree that they should exist in their current forms or be increased in any way.

Wealth redistribution does not work. While these social safety nets do contribute to the economy, they are flexible, impermanent gains. The economic benefits we see from social safety nets only have one of two options: Either A) in hard times the distributions are kept the same, reducing the available discretionary income from others who may exchange that capital for goods and services therefore creating no NET benefit and lowering one groups standard of living or B) in hard times distributions must be reduced in order to keep a proportionate balance and thereby reducing the standard of living of those who receive the funds. Either expansive social safety net is not a long term strategy because they lead to long term negative impacts in standards of living.

Education is a much better utilization of funds than distributed income. Education leads to a better, more educated workforce with an increased employment task potential. This transition increases productivity, which as stated earlier, is the best driving factor for economic growth and provides long term gains since productivity is far less likely to decrease than other factors.

Of course, there will be some loss in jobs as we transition from low-skilled labor to higher skilled labor- some individuals just aren't trained to perform in higher skilled jobs. In this case, where there are good, honest, hardworking people who have lost their jobs I would suggest and amendment to the TAA so that includes those whose jobs were lost due to technology and so that it includes service industries as well as manufacturing. Such an adjustment would retool current works and then provide substance for others who were unable to be retooled. This program would not have as wide of a net as current social welfare programs and, as such, would be a more effective use of means.

[Edited on June 17, 2011 at 11:34 AM. Reason : subject verb agreement]

6/17/2011 11:32:54 AM

If you are aware of the reality that 100% cannot be employed, then education won't do anything but increase competition for jobs thus devaluing said education. Educating those who are not right for high education won't increase productivity and that money will only have been wasted as they will end right back in the same situation.

These programs aren't done for economic gain. They are done for ethical reasons in a modernized nation. Of course quality of life would be a bit higher if you ignored the poor but we should have some type of moral standing in regards to the poor and you can no longer say "they should just get a job like everyone else" since everyone can't get a job.

6/17/2011 11:44:22 AM

I must leave for lunch, but I wanted to quickly point out that you are wrong. Please read what it is you wrote and evaluate it using the information I've already provided. This task will force you to separate yourself from bias and agenda.

When I get back, if you have not already reached the conclusion, I will provide it for you.

6/17/2011 11:48:20 AM

I have not reached the conclusion

6/17/2011 1:56:51 PM

Quote :

"If you are aware of the reality that 100% cannot be employed, then education won't do anything but increase competition for jobs thus devaluing said education. "

Full employment is not related to the rate of education. This fundamental misunderstanding is likely the root of your er. For starters, the leading factors in job competition are consumer demand and, to a lesser extent, marginal product of labor. Market demand for goods and services determine the number of employees needed to output those goods and services to the market, thus directing employment. Eventually, due to trade off of real wage vs. profits an employer will stop hiring employees, even if there is more demand, because ultimately they see diminishing profits for their resources.

Education, on the other hand, is one of the stronger factors in productivity, since it provides a net positive from a variety of options. Increases in productivity, especially from education, lead to higher skilled employees who can work in roles that are more labor efficient and provide a higher wage. We have already established how gains in productivity lead to a rise in economic activity and increase wealth. With the new wealth resulting from increased education there is more potential to purchase goods and services, which is an increase in demand and which will further generate more employment. Therefore, rises in education promote more job availability, not reduce it. By your explanation, due to rises in education, there would be fewer jobs and more unemployment in the 70s than 90s or the early 80's than now, a statement that couldn't be further from the truth.

Quote :

"who are not right for high education"

I am not sure what you mean by this statement. To avoid a dive into hyperbole I should clarify that I am not suggesting that we send the mentally handicapped to college for free and that I never stated "high education". My comment was that we need more education and that some workers would need to be "retooled". This outcome has many paths, one of which includes college, but others such as vocational training and technology introduction. Those of average intelligence and above- i.e. IQs of 100 and greater- are fully capable of participating in any of those previously mentioned. Any education that provides an individual skills that are better suited to operate in a modern economy will increase productivity. There are very few people who are incapable of seeing any gains in skill.

Quote :

"These programs aren't done for economic gain. They are done for ethical reasons in a modernized nation."

I do not deny that there social and ethical benefits but economic gains are a large contributing factor. This was clearly expressed during the many debates over unemployment extensions. I did a quick google search and pulled up the first page

http://usgovinfo.about.com/od/moneymatters/a/How-Unemployment-Compensation-Helps-the-Economy.htm

This isn't just national either, even the WTO recognizes this in their post-washington consensus and inclusive growth policies.

Quote :

""they should just get a job like everyone else" since everyone can't get a job."

No one ever stated that. I never implied they should "just get a job" or that the only reason they could not was because they are lazy. There will always be people who are unemployed and at an asymptotic equilibrium this will be 4 - 5% due to the factors that have all been shared above. However, with the amendments to TAA as I mentioned above most individuals would be left in good standing. The others should be cared for by individuals- family members, churches, charities, etc...- if, in fact, it is an ethical obligation.

Sorry this took me so long but I had work to do when we got back from lunch at 2. I should be around until 5 to clear up any further misunderstandings.

[Edited on June 17, 2011 at 3:19 PM. Reason : stuff]

6/17/2011 3:13:06 PM

Quote :

"Kris its obvious you have a very good grasp on the basics of economics but it appears you let them fall victim to confirmation bias."

Please explain why, given your posts in this thread I would love to hear any criticism you would be willing to provide.
I agree with everything you said afterwords, I guess I was theoretically thinking of any possible situation where the economy could expand and the number of jobs not increase, and I suppose that situation, while unlikely, is possible.

6/17/2011 7:05:00 PM

assholes hire a fw people pay them pennies and have horrible working conditions. we need to tax the shit out of big business

Quote :

"Wal-Mart probably doesn't set out with the purpose of destroying lives and wrecking the American economy. The company is trying, in a bigger way than has ever been tried before, to achieve three contradictory goals: pay its workers enough, make its mechandise affordable to almost everyone, and increase value for stockholders. In doing so, it has been both a wild success and an utter failure. In its ultimate inability to satisfy all three goals simultaneously, Wal-Mart mirrors the economy at large. A list of numbers serves to illustrate how Wal-Mart deals with tradeoffs among the interests of workers, customers, and shareholders: Pay scales, high to low $2,200,000,000: Total dividends Wal-Mart plans to pay its shareholders this fiscal year, after a 44% dividend increase announced March 2, 2004 $23,000,000: Average annual compensation for Wal-Mart CEO Lee Scott, 2000-2003 $4,500,000: Average annual compensation for previous Wal-Mart CEO David Glass, 1995-2000 $70,000 to $150,000: Bonuses (coming on top of typical base salaries exceeding $50,000) commonly earned by Wal-Mart store managers in 2002 as incentives to increase their own store's annual profit, with profit increases coming largely through holding down labor costs $9.68: Average hourly living wage as defined by 22 of the U.S. cities and towns that passed living wage ordinances between 2000 and 2004 $9.60: Average hourly wage Wal-Mart could pay if one-third of its current profits were diverted to pay its U.S. employees instead $9.54: Average hourly wage Wal-Mart could afford to pay if it raised its prices an average of 1% $9.32: Average hourly wage Wal-Mart could pay if the current annual dividend going to its stockholders were diverted to pay its U.S. employees $9.15: Hourly wage that Dana Mailloux was earning at a Ft. Myers, Florida Wal-Mart when she and more than a dozen similarly paid employees were laid off because of "lack of work", after which, as they were leaving the store, they noticed "six new hires -- red vests in hand -- filling out paperwork," and then that next weekend saw Help Wanted ads on the store's bulletin board $8.00: Approximate nationwide average hourly wage for Wal-Mart employees $6.25: Starting wage for a cashier at the Wal-Mart Supercenter in Salina, Kansas, 2003 $12,192: Income earned by a newly hired cashier working 40-hour weeks (more than the 32-hour company-wide average) for a year, with no weekdays off, at the Salina Supercenter $13,994: Minimum annual expenses for bare existence faced by a single cashier with children 4 and 12 who lives in Salina, Kansas and provides as many necessities as possible by shopping at the Supercenter where she works (Expenses do not include child care costs, which, if the cashier finds a qualified provider, are covered by a state subsidy.) $6.00: Typical hourly rate being paid by Wal-Mart to custodial contractors for the services of more than 300 undocumented workers in late 2003 (with the contractor, not Wal-Mart, having to pick up the employer's share of the workers' Social Security tax) $0.31: The legal hourly minimum wage in China $0.23: Average hourly wage at 15 Chinese factories making clothing, shoes, and handbags to be sold at U.S. Wal-Mart stores, 2001 73: Average number of hours worked per week by employees at those 15 factories Some other numbers 127: The number of Wal-Mart stores, out of 128 audited in 2000, that were found not to be allowing sufficiently for 15-minute breaks as provided for in company policy $150,000,000: The total back pay Wal-Mart is estimated to owe employees in Texas for having compelled them to work through their 15-minute breaks over a four-year period 40 hours, 36 seconds: Amount of time worked in one week by Wal-Mart employee Georgie Hartwig of Washington State, for which she was upbraided by her manager for clocking more than 40 hours, which costs the store in overtime wages 45%: Proportion of her entire annual wage that a single Wal-Mart employee might have to pay out-of-pocket before collecting any benefits from the company-sponsored health plan 42,000: Number of Wal-Mart employees in the state of Georgia in 2002 10,261: Number of children of Wal-Mart employees in Georgia who are enrolled in the state's PeachCare for Kids health insurance program, which provides medical coverage to children whose parents cannot afford it $420,750: Annual cost to U.S. taxpayers of a single 200-employee Wal-Mart store, because of support required for underpaid workers -- including subsidized school lunches, food stamps, housing credits, tax credits, energy assistance, and health care 5: Wal-Mart's rank, if it were a separate nation, among China's biggest export markets -- ahead of Germany and Britain 45%: Decrease in annual sales of Levi-Strauss clothing from 1996 through the first half of 2003, largely because of competition from less expensive jeans sold at Wal-Mart 6%: Sales increase in the third quarter of 2003, just after Levi-Strauss began supplying jeans to Wal-Mart 60: Number of U.S. clothing factories operated by Levi-Strauss in 1981 2004: The year in which Levi-Strauss will close its last two U.S. plants and stop manufacturing jeans, importing them from overseas instead"

6/20/2011 8:25:51 PM

1. Old numbers are Old.
2. So? If you think employees at Wal-Mart are worth more than minimum wage you obviously haven't visited your local Wal-Mart lately.
3. Do you think Wal-Mart is the only retail/department store that pays their employees minimum wage? Small businesses are just as guilty. Why would you pay someone more than you have to operate a cash register or stock shelves. Managers/ Supervisors get payed pretty well for retail.

6/20/2011 9:00:21 PM

Its not like they are paying the people that make the stuff. That argument would be valid if someone else was being paid but they aren't paying ANYONE besides shareholders who don't do anything.

I would have a better ability stomaching them if they actually hired all the employees they need but they employ several factors less than a group of small businessess selling the same items would. Each small business has to hire x employees but walmart only hires like .2x employees for every small business it wipes out.

This creates terrible working conditions. Sure, it isn't hard work or skilled labor but these people are doing work, that somebody has to do and they are working long hours. They should at least get paid enough to survive.

Instead, walmart puts an incredible strain on the government by forcing it to supplement thier salaries. The government should not be subsidizing walmart who already pays its factory works cents on an hour and DESTROYS the quality of american towns.

The people at the top are taking billions and billions out of this system while the workers make nothing. Then other workers pay taxes to support walmarts workers.

WALMART is the largest private employer in the US and responsibility should be put on them. Right now, they are teh epitome of why the private sector can't handle things on its own.

6/20/2011 9:19:35 PM

Quote :

"This creates terrible working conditions. Sure, it isn't hard work or skilled labor but these people are doing work, that somebody has to do and they are working long hours. They should at least get paid enough to survive."

I thought the current problem with the working poor of this nation is that the places they work for WON'T give them a 40 hour schedule, because of the penalties it avoids them, which then leads the poor to take multiple jobs.

6/20/2011 10:12:57 PM

lol, their working long hours...give them more hours!
You're arguing against yourself.

And Wal-Mart doesn't own a factory, they purchase an item, transport it, and sale it again (creating jobs along the way and employing low skilled workers). Why do you hate people with low-value/no skills?

6/20/2011 10:53:19 PM

Quote :

"They should at least get paid enough to survive."

our ancestors survived on far lower salaries than Walmart employees enjoy today. My grandfather/grandmother built their own house, grew much of their own food, and made most of their own clothing, because the ford motor plant he worked at paid jack shit and he had to raise four children.

Quote :

"Instead, walmart puts an incredible strain on the government by forcing it to supplement thier salaries. "

If the government is volunteering the subsidize the income of some citizens, that is the government's choice. If it stopped doing so, Walmart would not raise wages, those citizens would have a lower standard of living.

[Edited on June 21, 2011 at 12:59 AM. Reason : .,.]

6/21/2011 12:58:52 AM

Quote :

"our ancestors survived on far lower salaries than Walmart employees enjoy today. My grandfather/grandmother built their own house, grew much of their own food, and made most of their own clothing, because the ford motor plant he worked at paid jack shit and he had to raise four children. "

Not possible anymore in todays land since 15% of the population has claimed 75% of the land and now charge poor people to work it. Theres no way in hell somebody could get land to grow crops on a walmart salary. You are also very quick to acknowledge the fact that many are living in 3rd world conditions(ancestral) in our system.

Quote :

"If the government is volunteering the subsidize the income of some citizens, that is the government's choice. If it stopped doing so, Walmart would not raise wages, those citizens would have a lower standard of living. "

This is why the government needs to tax the hell out of the profits of corporations like walmart to pay for it instead of hard-working individuals who also by the way, pay to work.

Capitalism is inhumane without a good tax system.

6/21/2011 1:50:22 AM

Quote :

"our ancestors survived on far lower salaries than Walmart employees enjoy today. My grandfather/grandmother built their own house, grew much of their own food, and made most of their own clothing, because the ford motor plant he worked at paid jack shit and he had to raise four children. "

I can't believe you just compared Ford Motors wages to Wal-Mart. Please read up on Henry Ford, the poster-boy for over-paid workers, and stop using your anecdotes as evidence to support your statements.

That aside, it's an impressive way to live. Unfortunately, I don't see that being a feasible lifestyle for most Americans today.

[Edited on June 21, 2011 at 9:47 AM. Reason : .]

6/21/2011 9:43:32 AM

Quote :

"Not possible anymore in todays land since 15% of the population has claimed 75% of the land and now charge poor people to work it."

Do you seriously believe this? The price of land has gone up a lot, yes, but so have wages. A home is expensive today because of the house siting on it with AC, utilities, insulation, and double paned windows, not the land. What has changed is that we today are so much wealthier none of us are willing to cut into our leisure time by doing anything for ourselves. Many meals we won't even cook for ourselves anymore, going out to eat at McDonalds instead. My grandfather could never waste money on paying someone else to cook.

My grandfather in the 20s worked 40+ hours a week at the factory, my grandmother worked 40+ hours a week at the department store, then they both came home and put in yet another 40+ hours a week growing food, making clothing, building a home, etc. We today, including the poor, work less than 40 hours a week and call it a day, using money to pay others to do all this other work for us and still have money left over for amenities my grandfather had never heard of, such as air conditioning, cable television, mobile phones, etc.

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"This is why the government needs to tax the hell out of the profits of corporations like walmart to pay for it instead of hard-working individuals who also by the way, pay to work."

Some respond to this sort of statement by saying corporate taxes are born by their customers. But this statement is not always 100%, so I will stick with the always true statement: the more highly you tax corporations, the poorer we as a society are. If you tax corporations high enough, then we will all need to re-learn the lifestyle of my grandfather working 80+ hours a week to maintain a reasonable standard of living.

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"Please read up on Henry Ford, the poster-boy for over-paid workers, and stop using your anecdotes as evidence to support your statements."

The history is always generalized for the classroom. My grandfather was not a lineman but a back office worker, so he didn't qualify for the $5 a day salary. Understandable, as his work was far less grueling.

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"That aside, it's an impressive way to live. Unfortunately, I don't see that being a feasible lifestyle for most Americans today."

Why? The tradition of having a yard was so you could keep a garden, raise chickens, and sometimes pigs. We all have yards nowadays. Right now there is a keeping chickens thread in the Lounge. They are doing it as a hobby, not to save money. But the principle is sound, if you are poor. But who today is poor enough to think twice about paying $3.69 for a dozen eggs?

[Edited on June 21, 2011 at 10:07 AM. Reason : .,.]

6/21/2011 9:59:05 AM

Quote :

""Not possible anymore in todays land since 15% of the population has claimed 75% of the land and now charge poor people to work it." Do you seriously believe this? The price of land has gone up a lot, yes, but so have wages. A home is expensive today because of the house siting on it with AC, utilities, insulation, and double paned windows, not the land."

Just so you know, you didn't make any sense here. So, real estate, consisting of the price of the land+improvements experienced a boom and peaked in 2008. What does this have to do with land values and the inequitable holding of land. Land has long-since been a pet investment of the rich, and I'm talking about huge ranches, large swaths of green that is traded at monotonically increasing prices until one of the rich people who holds it develops it.

If you're arguing against the factor of speculation, yes, I largely agree that increases in land prices are ultimately driven by the fundamentals of land use because the price of land is ultimately determined by the competition for the use of that land, but this contributes significantly to the cost of a home. It's not that case that the house itself and the amenities are the only thing that matters to the cost of living as you imply. Overall competition for the land significantly adds to all of our rent and this tax on living goes directly to the capital markets. Not to mention that competition for land is influenced very heavily by social equality factors. Poor people, and particularly urban poor require a teeny tiny fraction of the land that a well-to-do lifestyle demands.

Ideally we would all profit from the appreciation of assets to offset the inflation of prices for this commodity that we all require, but you know that's not the case, and therein lies the key social injustice of land ownership. Market forces are needed for efficient land use, but that doesn't change the fact that land holdings are a major net gain for the rich and net loss for the poor. This is in addition to the fact that no productive value comes out of land ownership itself due to the basic reality that land is not "produced".

6/21/2011 10:28:26 AM

Quote :

"Market forces are needed for efficient land use, but that doesn't change the fact that land holdings are a major net gain for the rich and net loss for the poor."

I'm not catching your point. If what you say is true and the rich profit off land more than the poor, so what? I don't see the problem. The current generation of my family just sold a bunch of land in Fayetteville for $5k an acre so a developer can put $100k homes on 1/4th of an acre. The difference between the price of the land and the house works out to 1.25% of the whole. If they instead built town-homes or an apartment complex, the price of the land would factor in even less.

6/21/2011 10:40:03 AM

I grew up 5 miles from a town with about 20k people, by now, the land there will go for $20k/acre. I think you would be hard pressed to get a build-able plot for $5k/acre, although I don't doubt it would be possible to have a front yard while still paying <3% of the total price in land.

Quote :

"The current generation of my family just sold a bunch of land in Fayetteville for $5k an acre so a developer can put $100k homes on 1/4th of an acre. The difference between the price of the land and the house works out to 1.25% of the whole."

I should not claim to have a grasp on this figure, but I still have a strong expectation of a 1-to-1 or a 2-to-1 ratio for house vs. land value. Throwing around examples is so prone to error that both your and my example are almost worthless in terms of the big picture. so quick Google search finds me this:

http://www.federalreserve.gov/pubs/feds/2006/200625/200625pap.pdf
page 20 in pdf (page 18 by page enumeration)

2004 price components
Region, structure value, land value, percent land, 1984 percent land
a. Midwest 119 73 36% 11%
b. Southeast 108 79 42% 27%
c. Southwest 106 73 38% 35%
d. East Coast 131 245 64% 38%
e. West Coast 128 440 74% 55%
f. Full sample 120 187 51% 32%

This shows that, although it has not always been this way, land prices are pretty close to half of the total price, and exceed the price of the structure on average (in 2004). To your point though, someone CAN minimize this easily beyond what these numbers represent because Americans gladly purchase much more land than they need and keep it as an investment.

Now, did land prices collapse with the housing bubble? Well yes, it's the land value that is volatile and the structure stays relatively constant by some measures, although new construction slows greatly, which also feeds back to the land value. But the bubble in farmland hasn't even crashed yet, it's still headed to the moon.

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"If what you say is true and the rich profit off land more than the poor, so what? I don't see the problem."

So what's the problem? Well, there's no labor input, or any input, for the production of land. It's not produced. Everything else, at some point, requires labor. With the combination of labor and leadership, the poorest 99% always has the ability to shift the wealth accumulation back to themselves from the rich 1%, even given total non-participation from the rich, even considering some bizarre kind of protest from the rich. Except land.

6/21/2011 12:41:30 PM

http://www.cnn.com/video/#/video/bestoftv/2011/06/20/exp.am.whoriskey.income.gap.cnn?hpt=hp_mid

The high up executives and managers are basically pimps with workers being the hoes. Also, investors have no skill and executives have very few skills. The problem is that there are just more of the workers so their value goes down.

6/21/2011 12:48:33 PM

Quote :

"This is why the government needs to tax the hell out of the profits of corporations like walmart to pay for it instead of hard-working individuals who also by the way, pay to work. "

You complain about how jobs have been shipped overseas, but literally every single one of your policy suggestions would just accelerate that process.

6/21/2011 12:53:57 PM

^This.

6/21/2011 1:07:23 PM

Quote :

"With the combination of labor and leadership, the poorest 99% always has the ability to shift the wealth accumulation back to themselves from the rich 1%, even given total non-participation from the rich, even considering some bizarre kind of protest from the rich. Except land."

A skyscraper is a “machine that makes the land pay” (Gilbert, 1900).

If we break up the zoning laws and mafia construction business, construction in major cities would skyrocket, driving down the price paid for living space and therefore the price of land.

6/21/2011 2:30:17 PM

Quote :

"You complain about how jobs have been shipped overseas, but literally every single one of your policy suggestions would just accelerate that process."

It's just a fact of life that, in the 21st century, if you want to have a humane standard of living in your country then China will probably have more competitive labor than you. The only way to beat China is to become China, and Americans shouldn't want that. It's not about so and so many percent corporate tax, it's about people working for pennies a day in conditions that would make a dog kennel look like a Hilton.

Manufacturing jobs going overseas is simply going to happen as long as our citizens want to maintain their dignity. We should focus on expanding public education into more advanced professions and skills and try to churn out more engineers, scientists, and doctors. Let's build a new, modern economy instead of trying to fight with the third world over the scraps of the old one.


[Edited on June 22, 2011 at 10:05 AM. Reason : .]

6/22/2011 10:02:14 AM

Quote :

"Let's build a new, modern economy instead of trying to fight with the third world over the scraps of the old one."

We'll need to stop pumping out useless liberal arts degrees first, then. Sorry, we don't need 5 million creative writers, but we do need people that can fix refrigerators and unclog toilets. Problem is, we've been told that's for the "poor people."

I don't completely disagree that the manufacturing jobs are gone and might not be coming back, but I'm not convinced that those are beyond the "dignity" of Americans. If you can't find work, there's not much dignity in that.

Here's one thing to consider: right now, we get away with having a mostly service sector economy, because we can import cheap goods from other countries. All of our gadgets are created elsewhere. A lot of our food comes from other countries. Most of our energy comes from oil, and the price of that has been held artificially low for some time. We have the reserve currency, and China has pegs their currency to ours, so we can give them devalued money in exchange for the same amount of goods.

What happens when this whole thing falls apart? Russia and China do not want the dollar to stay the reserve currency, and they're having major talks to change that. If the RMB is allowed to gain value, and we're no longer able to keep this con game running, then what? Our standard of living falls, and no amount of regulation will stop that.

6/22/2011 12:08:02 PM

Quote :

"Sorry, we don't need 5 million creative writers, but we do need people that can fix refrigerators and unclog toilets."

How about we have engineers who understand product lifecycle management instead? Repair men happens to be a antiquated concept that's not of use to the economy today. Independent electronic repair shops were on their last leg in the 90s, now they're almost universally a loosing proposition. Increasing standard of living through economic efficiency gains results in a distribution-center type model where you stock up on durable goods, use them until they break, then send them to be recycled by the truckload. Nothing about the economy in the last 5 years or the next 5 years changes that. Customization is becoming a layer added on top of the assembly line model through software innovation - like 3D printing for instance. You may be able to order a product in small quantities that has a very specific shape that you drew in a CAD program for a low cost in 5 years. But it still rolls off the assembly line and virtually everyone involved in production is ignorant of your specific needs.

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"The only way to beat China is to become China, and Americans shouldn't want that."

I pretty much agree with that, obviously for a limited set of industries.

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"We should focus on expanding public education into more advanced professions and skills and try to churn out more engineers, scientists, and doctors."

lol, and I am totally unconvinced of this

Quote :

"If we break up the zoning laws and mafia construction business, construction in major cities would skyrocket, driving down the price paid for living space and therefore the price of land."

I absolutely agree. The economic pull of efficient land use is inarguable. The problem we have is inefficient land use in the US due to transportation infrastructure, and to a lesser extent, cultural issues.

[Edited on June 22, 2011 at 12:46 PM. Reason : ]

6/22/2011 12:46:08 PM

Quote :

"We should focus on expanding public education into more advanced professions and skills and try to churn out more engineers, scientists, and doctors. Let's build a new, modern economy instead of trying to fight with the third world over the scraps of the old one."

The problem is that not everyone can become an engineer, scientist or doctor. The reason we have a shortage to begin with is because these skill sets are difficult to acquire with a limited number of individuals able to do them. Even if we could magically churn out more engineers and scientists, we simply aren't going to have the same numerical need for them as factory workers of old.

Quote :

"The only way to beat China is to become China, and Americans shouldn't want that. "

I disagree with that. We can beat China through superior efficiency and automation. The problem is that this solution won't solve the employment issue.

This is what I'm struggling with in trying to envision the future of the American labor market. The fallacy we face is that the entire "high tech economy" or "green economy" isn't going to generate the numbers of middle class wage jobs that the traditional manufacturing economy did in prior decades. The number of engineering and scientific jobs required just can't match the millions previously employed on the line, and that assumes that enough people are "retrainable" to do these sorts of highly specialized engineering, scientific, and "creative" jobs.

For those who argue that we need to simply raise tariffs and "fair trade", the problem is that manufacturing efficiency through automation and better processes is getting better and better. Even if we were able to bring all the manufacturing back to the United States, it would only employ a fraction of what it used to, and this trend is only going to get worse as new, disruptive technologies are introduced (3D printing for parts fabrication for example).

Meanwhile, the bottom of the market is being eaten away by the influx of cheap labor into the United States. It's simple supply and demand: as your pool of unskilled and vocational labor increases, their average wage is going to drop.

In all honesty, sometimes I think that the supposed middle class model was simply a short aberration in human history, driven by the West's technology advantage and the aftermath of World War II. Now that the rest of the world is finally catching up and larger, cheaper pools of labor are accessible on a global scale, things are going to get ugly.

6/22/2011 4:11:31 PM