Why Can’t Americans Get a Raise?
slate.com
slate.com
"This state of things has left analysts stumped. For nearly a decade, the Federal Reserve has kept interest rates at extraordinarily low levels in order to initiate growth and rising demand, inflation, and ultimately higher wages. But the higher wages have been stubbornly slow to materialize."
Interest rates have been dropped into the ground, and it hasn't increased investment(growth). We have the highest savings in the history of capitalism and the lowest level of investment.
This is the wheel of capitalism literally coming to a halt because the oligarchs are staring each other down waiting for someone to go first.
And I think there is a lot to be said about Wall Street leaching most of the investors' money because it promises better returns than actual investment into actual things with utility.
Wall Street is 'supposed' to be the mechanism for recycling profits into investments so that this wheel keeps spinning. Does anyone honestly still believe it's functional?
Interest rates were held low because the Federal Reserve has limited tools to stoke demand (and heh, who doesn't love a good asset bubble amirite?). It therefore "pushes the string", attempting to use monetary policy when what is really necessary is Congress to act (higher taxes and government spending, or pushing wages up with legislation).
Call your representatives.
We had a really big recession in 2008-9 folks! You might have read about it? We've been recovering since mid 2010...adding 200k jobs per month or so. But these things take time.
Businesses get anchored to a certain wage cost. In the article, they mention businesses unable to fill roles at $9 or $17 per hour. Well, there may be unemployed people, but they're not willing to do those jobs at those rates. They're not the market clearing price for those roles. If you're offering a wage for months on end, and you can't fill the role, you aren't paying enough. Full stop.
Again, I want to stress that the curious macro nature of what we're seeing is because of a combination of poor statistics and business decisions. I'm sure we're not at full employment yet, and I'm sure business are not willing to pay more for labor until they absolutely have no choice, and I'm sure that time of reckoning is almost here. But not quite yet. Still more slack to pick up, as you mention.
But ya, mostly slack. Another 2 years or so. Maybe a bit more. The 2020 census could put the nail in the coffin. A shit ton of people get hired for those things.
that's interesting, but has anyone asked the question of whether the business can actually remain profitable if the rate was $14 rather than $12?
Just a bit though. There hasn't been some sort of sea change like a lot of people seem to think.
I mean lots businesses become viable if you only have to pay $1/hr.
The current system sometimes seems designed to fail.
Consider externalizing costs, almost no one has a servant pump gasoline for them, I would imagine you have to be very old for "self service gas station" vs "full service gas station" to mean anything to most Americans.
Another option is political corruption, I'll donate $ to your re-election campaign if you create a property tax free zone for my business.
This is largely because the cost and labor of operating the pump has been externalized by pushing onto the car operator.
Retail business do this with cash registers. How many of these jobs will simply disappear? What else can be fully automated?
As soon as the supply of people needing jobs is low enough that businesses have to pay more to hire...they will do so barring alternative options.
And if your competition is foreign you're usually even better off -- wages in China have been rising a lot faster than wages in the States.
One of the issues is that it isn't just ponying up an extra $2/hr.
If a company already has, say, 10 employees at the $12/hr price point, they won't be too thrilled about a peer coming in at $14/hr. Most likely, in the short to medium term, they will have to be bumped to $14/hr, too.
So rather than being an extra $2/hr, it's actually an extra $2/hr + (10 * $2/hr) = $22/hr.
I do think that's a big part. At local meetup groups, companies come pitch their job openings, and almost always say "we're having a hard time finding folks - and we're paying market rates!" I will sometimes counter with "if you're offering a rate and no one is taking you up on it, by definition, that's not the market rate". It might be in someone else's market, but not yours. The "market rate" for ipads was $499 for a long time, but that didn't mean HP could get $499 for their tablets.
And if you're a jealous high employer of skilled personnel, you just do the same, and legislation has just recently been passed so skilled workers can now be imported just like TFW's.
Now, there will never be full employment across most of the job spectrum so salaries will never have to rise. Add in a top 3 in the world unaffordable housing market, and this is how you eliminate a middle class.
On a similar topic it irks me that in one breath people will talk of the power of future automation and in another support large scale migration.
Automation reduces demand for labour and its price falls.
Managing future budgets is claimed to be the motivation for the immigration increase, but does not stand up to scrutiny, and the government is not open to questions on the subject as it would constitute hate speech.
Do you also have huge neighborhoods of million dollar houses and hundreds of thousands of dollars of cars in the driveway, but there's no tax base because everyone's income is below the poverty level?
Wait, how does that work? I'm obviously doing something wrong...
What happens to the mom and pop coffee shop or the grocery store that charges more than Amazon Fresh?
Enployment has a bid and offer, both sides are reluctant to cross without desperation.
Nothing. Amazon Fresh doesn't exist in most places.
Coffee shops aren't known for being places to get cheap groceries; they're places where you get fancy drinks and/or snacks and hang out and talk to your friends or use the WiFi. In other words, coffee shops are selling an experience, not a fungible good.
If a coffee shop goes out of business because of an online seller, they must have been offering a really lousy experience.
And what do they say to that? Blank stares? Acting like you're crazy? When I say stuff like that on boards like this, I usually have people arguing with me that no, there really is a "shortage" of workers.
Also, companies do have a ceiling on how much they can pay without raising prices, and to the extent you want to pay people fairly, you would have to raise wages for all your employees.
Yep. That is essentially the crux of it and also why there's a big trade off between unemployment vs a small basic income. With unemployment you collect while having free time and then lose that income stream as soon as you take the job, making the decision to take a job significantly less obvious. With a small (survival level) basic income, having a job means you make more money...period.
It's an aspect of the equation that nobody wants to talk about. In low cost of living areas you almost have an incentive to collect unemployment for stretches because of it.
Right. But don't forget that it's possible for a wage to simulatenously too low and too high.
It can be too low to higher anyone, but too high to be profitable to the employer. And in that case, the job is defunct.
Given the choice between toiling and not being able to make ends meet, or playing videogames and not being able to make ends meet, Americans are choosing Halo. That's not complicated.
Most of the replies are then trying to answer the second question, because the refraiming is very likely a good one.
That's not why. Japan has had full employment for 20+ years. Their wages have steadily declined for 20+ years.
The U-6 rate is at pre-recession levels though? And it's only 1% away from pre-Dot Com levels?
There are corner cases to it but the underlying reasoning is, if your investment is just lying around accruing wealth, it's bullshit wealth.
1. Hire more people and get a tax break
2. Innovate and hire less people and have smaller payrolls
Both are win-win for companies and customers and employees.
Today, it is just point 2.
That would introduce a ton of perverse incentives.
That will also solve the unemployment problem and incentivize people to start small businesses. The family members will also have a choice between working minimum wage for their own business or seek a higher paying job, pushing wages higher and higher.
Sounds good to me.
Unfortunately dollars for employees doesn't necessarily translate to return as well as, say, hiring a process manager or automation engineer to try to eliminate the effects of a bad employee.
Like I said, there are corner cases. But most businesses would rather fire an unproductive employee than keep them around just for tax breaks.
Also, queue massive new industry that specializes in creative job accounting/number fixing in 3, 2, 1...
Here's the thing. There is still more money to be made by hiring fewer employees (because employee payroll cost > tax break).
Will it slow some things down? Sure. But it will also disincentivize the current slaughtering of humans.
>> Also, queue massive new industry that specializes in creative job accounting/number fixing in 3, 2, 1...
What do you think the current set of laws do? >>
LOL
As a very simple example, imagine that you were able to fully automate, such that you required zero workers. Imagine further that all other businesses did the same.
Well, that assumption is pretty general and doesn't account for natural resources/raw materials, energy inputs required for production, or other factors. It would also vary per sector, such that the statement is far from universally true.
>The poorest member of that society would live like a king from our present day world
But, regardless, there would be some cost for goods. How do you propose the now 100% unemployed population pay for anything, let alone "live like kings"?
The answer is that you would need to devise a method of wealth distribution that is orthogonal to capitalism. Say, for instance, a tax that subsidizes everyone else. That, of course, would not be capitalism.
The point is that wage labor is fundamental to capitalism. Somewhere between our present state and 100% automation, a capitalist system requires so much intervention that it breaks down.
If you had robots making everything you could possibly want, why would you bother selling any of it to people who don't have any land, natural resources, or rare skills? They wouldn't have anything you want.
The idea that you could do something like that is even more outlandish than having robots that could automate everything a human could.
But I didn't say this.
Certain materials can be substituted for another, but for high energy costs in making them.
You forget things such as: meaningful work, respect from society, crime, cultural differences between the poor and the rich, interclass upward mobility (see any sociology textbook), intellectual stimulation.
Actually, I like the idea of work. But, at some point, we will have to "artificially" employ people or, of course, implement a UBI. But, even with the latter, we'll have to re-imagine our relationship to work and its role as a source of self-worth.
There's this idea that without work, we'd all just instantly self-actualize and write poetry or paint masterpieces. Not sure why we imagine this vs. the more likely reality that we'd instead sit around sharing cat memes, making heinous YouTube comments, and generally getting dumber.
I'm not sure if society is really ready for a post-work world.
Of course, that's not ideal either. My main point was that a UBI (or not having to work) wouldn't be the instant panacea that some suggest, leading to a sudden heightening of the human race as we are collectively released to pursue our higher purposes.
Of course not all of them will be unemployed, so you only have to pay for 100 + (unemployment rate) × 400 people.
If the cost of your efficiency increase is not too high, you get to pocket the difference.
Unless your automation is as expensive as hundreds of workers, this will likely still be a large sum.
My neighbor bakes nice cookies. I have programmer money. You can guess whats supposed to happen here, but legally can't happen. Some education might help a little with WRT food safety, but it doesn't matter because the purpose of the government is to prevent her from going into the cookie baking business and compete with existing processed food factories.
The ultimate micro-brew isn't some multinational corporation spending lots of money on branding, but its the guy down the block. That of course is incredibly illegal, because the multinational corporation decides whats legal or illegal.
My wife's favorite hairdresser became unemployed due to the cost of health insurance; for awhile she cut hair at home on the side, but the .gov comes down heavy on that for obvious financial reasons.
Some sort of ideal world for lower IQ / lower functioning people would require better government. Rather than the government existing solely to protect Nabisco Inc sales, you'd have to refocus it entirely on safety and small business support services so my neighbor can sell cookies.
If my neighbor did all the homemade baked goods for my entire subdivision, I'm not entirely sure she's be poor, either. If she ran a 50% profit margin and everyone in my subdivision dropped $2/day for baked goods service (like she'd hand deliver you a hot loaf of bread every day?) that would be 6012500*0.50=$180K profit per year, not bad for an area where the median household income is a hair under $60K. Of course the purpose of the government it to annihilate small businesses in favor of large businesses.
Of course you could only fund the re-education of certain job fields, centrally controlled economy style, but that never worked well for the Soviets and you'd likely end up with political goals like flooding the programming market with really bad programmers who none the less work for $7.25/hr (or less) because of the "shortage". It might be possible to actually destroy economic sectors by flooding them with unqualified people. Would you go to the hospital if you knew the doctors were intentionally uneducated?
The problem with re education is it isn't likely to be any more successful in the long run than non-re education. Its the same people with the same brainpower operating off the same observed signals. If a quarter of the population was improperly educated the last time they went to school, the result of re-education is virtually certain to be a quarter of the population being differently improperly educated. Its sort of like handing out money to rebuild housing in flood plains, you know you're just going to be handing out more money to the same people in a couple years.
Then who pays the tax?
What if I invent a whole new product category that obsoletes a whole industry? Not a lot of people manufacturing typewriters anymore.
What if I invent a cheaper way to ship goods from China making it easier to shift manufacturing there? Who pays the tax then?
What if I'm an employee at the factory and I figure out a better way of doing things so that I can take on additional responsibility so when Bob (the guy next to me) retires we don't have to hire a replacement? Then do I pay?
And how long does this tax last? Forever? Are people still paying taxes for all the farmers we don't have to have anymore?
How confident are you that you can really write tax rules that make sense for the infinite number of scenarios via which productivity is enhanced in a modern economy?
But our economic system is literally grinding to a halt, which means it's not exactly perfect. I for one welcome suggestions, even if they're only slightly less imperfect.
> And how long does this tax last? Forever? Are people still paying taxes for all the farmers we don't have to have anymore?
Assume for a moment that being a farmer were hereditary and they couldn't do anything else anyone would find of value. Then when you replace all of them by machines, you make huge profit, but also leave hundreds of people without income. In such a case, I think it only fair that the farmers and their descendants be provided for indefinitely.
That this tips the scale against automation is not exactly bad: if the farmers have to be provided for anyway, additionally maintaining machines to do work they could do just as well is a further cost that should be weighted against the benefits.
However, in reality most people can learn to do other work, so automation can still end up a net positive, even when the needs of the displaced workers are taken into account.
I guess the problem will solve itself when workers will either employ themselves as revolutionaries and looters, or the beneficiaries of automation pay the equivalent of this tax to prevent this from happening.
You specifically didn't do much. Your workers did. If they make you rich and lose their jobs in the process, you pay them back.
Almost all workers are significantly more productive but wages have remained flat for a long time.
You can tell this is true because labor's share of income (vs capital's share) has remained fairly constant. It's the distribution of this share between different workers that has changed.
Labor's share of income vs capital's has not remained constant. Not even close.
Sure it has:
https://fred.stlouisfed.org/series/W270RE1A156NBEA
Every time I engage with a libertarian (always a pointless endeavor) I feel like I have to take a shower after. Just.. ugh.
Did you? If the workers bought the factory, how are you involved? Didn't you enable them too?
System works now because some of the money goes to middle and lower classes, not all is accumulated on the top. If you accumulate all the wealth in the top without any mechanism of distributing it in lower classes then whole system will collapse and you (as someone on top) will probably end up like in other revolutions in human history, hanging up from the tree.
This is why Republican/Libertarian efforts to eliminate or reduce Government is so fucking scary. Of course there are legitimate reasons to be concerned with limiting govt. overreach. But the Govt. is a required political social entity and we've gotta keep going. Whats baffling to me is that so many wealthy people don't get this. If the Government goes away, their wealth is gonna get torched/taken.
Anyways to answer your question: I don't know what the proportion would be, but likely indicators would be... unemployment level and uninsured rates. People with no healthcare and no jobs/money === desperate people whose survival instincts will kick in.
And if it were, you wouldn't need anyone to buy anything - whatever you might want can be made by your factories.
And which physical goods production can't be automated? Probably 99% can. There are first farms that are already fully automated, so whole chain along with transportation can be automated in future. You have any examples of whole industries that can't be automated? Because I can't think of any that can't, it's only matter of getting cheap technology to do that.
> And if it were, you wouldn't need anyone to buy anything - whatever you might want can be made by your factories
This is false, you don't have infinite amount of resources and for sure you don't have enough money and space to build factories for "whatever you might want".
But in any case - A hand-made item? Which apparently adds worth..
> have any examples of whole industries that can't be automated?
depends what you mean - at what technology level?
Can modelling be automated? maybe. Can barista-ing be automated? Maybe. Can programming? To some degree..
> you don't have infinite amount of resources
luckily, most needs are finite.
> you don't have enough money and space to build factories
The premise is everything you want being automated. If space/land is not automated, that breaks the premise. So there is something you'd pay people to obtain - land rights. A short transfer of all land to the elites later, and you have enough space for anything.
This is just a marketing gimmick (in case of products that we have technology to produce also by machines) in the times we live in to make you pay more for a product.
> Why just physical goods?
Because you can automate production of almost all physical goods. A lot of services also, but to certain degree, simple tasks only, state space is just too big in case of more complex services for today technology.
> depends what you mean - at what technology level? Can modelling be automated? maybe. Can barista-ing be automated? Maybe. Can programming? To some degree..
That's why I was not writing about services but physical goods because in case of services it hugely depends, some can't be automated with our current understanding of the world around us.
> luckily, most needs are finite.
This is false.
'The world has enough for everyone's need, but not enough for everyone's greed.' - Gandhi
You need to take humans into the equation. Make everything for free because it's automated and you will see 7 billion orders for Ferrari, Lamborghini etc. You have enough factories to make those in 10 years? 20 years? 100 years? Take physics into equation and amount of factories/transportation for all the resources and parts to make those products, just those products, what about other things? This will not scale on earth.
> So there is something you'd pay people to obtain - land rights.
Most people on earth do not own any land at all.
> A short transfer of all land to the elites later, and you have enough space for anything.
Read history, this would end like it always do, elites that would try that would be eliminated and replaced with new elites from proletariat. Remember that elites are protected by police and law only because other people allow that, not because this is something written in stone. Earth was already ruled by kings, they owned most of the lands, look how it ended.
as are entire industries. Human life is ultimately meaningless, so all human pursuits are too. Restricting this argument to utilitarian good begs the question - to what aim? Aesthetic good exist at the top of any manufacturing chain.
> Because you can automate production of almost all physical goods
But, wasn't the argument a "what if" scenario in which no-one could get jobs? So physical goods are all automated - just means jobs exist in other areas now.
> - Gandhi
I don't rate the guy, but it sounds like he's talking about the worlds current resources, not future resources.
> You have enough factories to make those in 10 years?
everything is automated, remember? So the factories are made by factory-factories...
> Read history
I don't buy this kind of prediction based on historical analysis.
> elites are protected by police
police have always been human - will this be true in the future?
> Earth was already ruled by kings, they owned most of the lands, look how it ended.
How?
Not sure how much it keeps the money moving, but I'm sure it encourages investment and growth.
I for one would rather pay 0.5% of my book value than the vastly larger amount in income taxes I pay. And it's a small enough value I think even extremely thin margin businesses could probably afford it.
Everyone on HN says "People would just flee" but in the end almost all the value in the US is real assets i.e. you can't move a physical building overseas.
I think the larger question is the implication that (assuming we moved to a purely wealth tax), there's a minimum rate of return on wealth - this is already functionally true, but it sets an interesting floor to the return on investment for an asset.
I'm by no means a financial wizard, I'm sure there are huge flaws in the idea I can't see after an hour's thought, I was just playing with the idea, but it seems like it solves a lot of the problems inherent in income taxation - different entities (people, corporations, foreign investors, etc) being taxed at different rates, the relative spending ratios of various income brackets, etc.
It follows essentially a similar line of thought as the land value taxes, except of course applying to all assets.
This is even more true when you consider the incentives people have for hiding assets and cheating the system, and their ability to do it over many years or even cooperatively.
That's one major benefit of the income tax option, that measurement is actually easier, even when you consider all of those non-wage incomes.
I don't have any answers for those things, but it's an interesting thought experiment - what would such a thing look like for relatively easily valued assets vs very difficult to value assets, etc
Perhaps you could simply structure it as a transactional cost, but of course, that causes overhead on every transaction. Backdating would be ruinous and cause people a strong incentive to transact often which is probably perverse.
If the market crashes then cash outperformed. There is also a lot in terms of bonds, structured products and fund products between cash and equities.
You can significantly lower variance (risk) and at the same time only slightly lower returns using diversification.
Take a look at this chart, it explains it way quicker than words could.
http://cdn.financialsamurai.com/wp-content/uploads/2016/06/T...
Note dropping from 100% equities to 70% equity and 30% bonds drops your return by about a percent while dropping your risk (variance) by just over 4%.
Taking on additional risk leads to a higher expected return, but you can see that more and more risk leads to increasingly marginal amounts of additional return in exchange for large amounts of risk.
The comment I was responding to felt distraught that he had to be exposed to the heavy risk provided by only investing in equities, when he could sleep better at night using investment diversification (ie different types of investments, not different stocks) while still maintaining a great ROI (certainly better than the negative ROI of just hoarding cash).
The French have seen their wages grow at 1/4 to 1/2 the typical rate of American wage growth for the last decade. They do not lack for collective bargaining.
The American median wage is higher than the German median wage. The Germans do not lack for collective bargaining.
The American economy and median wage has outperformed: France, Germany, Spain, Italy, Finland, Britain, among many other developed nations.
The American median wage is also higher than: Sweden, Finland, Netherlands, Germany, France.
The American median wage is so high, nations such as Britain barely qualify as matching up with our poorest states.
So much for your theory.
To meaningfully compare countries you need to either compare the gross wage costs per employee that a company actually faces or compare the net income of employees after all taxes. And correct for purchasing power of course.
You can't make incomparable values comparable by reducing them to a ratio, except in special cases.
There is a strong union presence here - both for normal employees and management. There are also actual laws to protect workers. This includes things like paid vacation, paid time off if you are sick (more if you have children), paid leave after having children (some of which can be split between the parents). Everyone is entitled to a job contract - even for temp jobs or fast food workers. Not all of the costs for the benefits is paid for by the employers: Healthcare is a tax, vacation pay is withheld from the employee's wages and paid the next year, and the government (taxes) pay for sick or parental leave.
Nope, it isn't perfect, but it surely isn't representative of the picture you paint because the one you paint leaves out the quality of life stuff.
The American Salary is higher that Germans, but Germans also work less hours on average (with higher productivity mind you, but that's not important at the moment). It actually comes out to Germans having a better median wage.
https://www.quora.com/Are-Germans-content-to-earn-19-less-th... (I wish I had a better source, but I can't find the original data that I made this conclusion before with).
https://en.wikipedia.org/wiki/Monetarism
then he doesn't have a point at all.
I'll leave the rest as an exercise to the reader.
'This is the wheel of capitalism literally coming to a halt because the oligarchs are staring each other down waiting for someone to go first.'
This makes a lot of sense. I constantly get the feeling in the US that we don't actually "do" anything anymore. And I don't just mean manufacturing. You look around at the rest of the world and infrastructure programs are at the forefront of every expanding economy. China, India, Turkey. All pouring hundreds of billions into great works at home and abroad.
Where are the massive capital expenditures we saw in the 19th and 20th centuries? America has the largest population of highly skilled, financially endowed consumers on earth yet the most that any genius Venture Capitalist can figure out to do with these billions in free money from the fed is come up with a new skin for IRC.
Those expenditures are still around: they built the roads, runways and skyscrapers that we all use today.
Why do developing countries spend a lot more on development than developed countries do? That's almost a tautology.
Biggest waste of public funds in a generation. And mostly used to build further infrastructure such as roads, burdening the maintenance budget even more. Instead of helping.
A certain little jaunt through the middle east would like to have a word with you.
I don't think it's as simple as "we're developed now". Is there some arbitrary set point at which a country is completely "developed" and we should just stop doing things? Why is there such an aversion in this society to "spending money" as if it's something that we are losing rather than simply putting people to work and generating economic output. The complete gridlock which has gripped the US over the past 40 years has left vast amounts of the population sick and dying with no hope for anything.
Do you want a limitless money sinkhole with largest positive externalities and quality of life effects? Try science.
St. Petersburg shut down a sewage treatment plant last year, and in the same year spilled 200 million gallons of sewage into the bay. For that, the city faced an $820,000 fine, which seems incredibly light. Just Wednesday this week, the city spilled 50,000 gallons of 'mostly treated' sewage into the bay. I can't image that St. Petersburg is the only city with this type of problem; though, I hope I'm wrong.
.... Kind of, and much of what we have could be upgraded. Some folks can't get clean water out of their taps (lead!), some folks have really crappy internet (dial-up or otherwise slow speeds). I'm pretty sure some areas could use an electrical grid upgrade. Railroad tracks laid long ago now block traffic and some crossings have a lot of accidents, and could be rerouted (some communities have done so, such as lafayette, Indiana). Many of our bridges are in disrepair.
On the whole though there are a lot of perfectly good roads and houses that just need a little work to keep them up. It is better to not build more than we need. I could tear down my perfectly good 2000 sq ft house and build a 4000 square ft house - but my current house is big enough for my needs so I'd rather sit back and relax.
we have been at "war" for 15 years
So is the US government! They poured $1,4 trillion into Iraq and Afghanistan.
Corporate profitability continues to grow because of increased productivity (increasing the surplus), which they haven't shared with their investors, employees, or government (taxes).
Corporate savings continue to accrue because their (effective) tax rate is low.
Whatever can be said about (low) interest rates, its effect on wage stagnation is second-order, at best.
Basically all current investments are high-risk in the age we live in, because we are "at the brink of the chasm" on all fronts:
- general technology: ...the barriers to market are so low that a startup can spring to being at any moment and eat all your profits away
- (social) media / communication: anything can change anytime, today's Facebook can be tomorrow's Hi5
- biotech: we're getting closer to the "you can do it your garage stage" which will change everything
- world politics: India and China are big players now and their moves can no longer be predicted, also US internal politics is a cauldron of volatility, and in a decade or two we'll have the "New Africa" rising... good luck predicting anything
- ML/AI: we might be at the brink of f Singularity with superhuman-AI around the corner... but we have no idea whether it will be in 5 years or 100 years (!) ...this alone is enough to fuck up all worldwide future prediction on anything... when you're staring up from somewhere around the foot of an exponential curve everything looks like "wtf, nothing makes sense"
And also, the last economic "crisis" increased everyone's aversion to risk, kind of the opposite of what you'd need now to increase level of investment...
What needs to change is the attitude of people with money towards risk! I'd love to see people like Elon Musk succeed long-term, not because I like them or what they are doing, but because they are the only ones with an attitude that can create growth right now.
We should really re-learn thinking and working with volatility, maybe starting from what Nassim Taleb says in his Antifragile (https://www.amazon.com/Antifragile-Things-That-Disorder-Ince...) and his talks like How to Live in a World we Don't Understand (https://www.youtube.com/watch?v=iEnmjMgP_Jo - warning: he's a terrible speaker... and not a great writer either, so getting to the root of his ideas will take time). Maybe not. But current "risk reduction" attitude cannot work (hint why: even if you reduce Infinity by 20% you still have f Infinity!).
Savings _rates_ in the US are actually low by historical standards: https://tradingeconomics.com/united-states/personal-savings (click the 'MAX' timespan toggle). Low interest rates discourage savings and encourage borrowing. One of the fundamentals of economics is that all other things being equal, in the long term savings is needed for growth: if we consume everything we produce, then nothing remains to be invested, so productivity won't increase. If we save more, then we have more to invest, and this greater investment will increase productivity more.
The key thing to note here is that it is investment of forgone consumption that produces value (at a simple level, compare saving some wheat seeds to plant next season vs eating them all as flour). Lowering interest rates, printing money and similar things don't achieve this: they can create _money_, but not necessarily value. What they can do is increase demand, to address temporary shortfalls in demand, which under a popular form of economic reasoning will produce more growth than letting demand slump. That demand-boosting approach is however meant to be used as an immediate solution to a temporary slump, not an ongoing thing, as few economists deny a long term positive relationship between savings rates and growth.
There've actually been attempts to model what the ideal savings rate would be: https://en.wikipedia.org/wiki/Golden_Rule_savings_rate. Such models seem to have little influence on interest rate policy, however.
If low interest rates boosted wages, the japanese worker would be the highest paid worker in the world. Instead, the japanese wage has declined for 20+ years.
A few paragraphs down they mentioned the starting salary at regional airlines: $26000.
I think I can solve your mystery
When the wage of the person responsible for 40+ lives and millions of dollars worth of equipment isn't enough to feed a family (many pilots are on food stamps) you aren't paying them enough. Never mind that they also have to pay for their own education and that includes several thousand hours of Pilot in Command time. Renting a plane is typically > $100/h. Which is why flight instructors are often cheaper than tennis instructors: the main benefit for the instructor is that the student pays for the plane.
And that's one of the main reasons why Sully said he can't recommend the profession to anyone.
And they get to see their families every day!
The reason why pilot salaries are low nowadays is because the job is so popular. It's a dream job of many so that airlines could access a pool of self-trained pilots (i.e. paid for aviation school with loans) for low salaries. This pool now seems to slowly exhaust so that airlines will have to start training their own pilots again at some point.
You also make a good point that the supply of pilots have increased, and that can also explain why so many people are becoming pilots. And part of the reason for the increase in people being able to become pilots is back to my original point that it has become easier with automation.
Maybe in the old days, high salaries could be justified.
Anyway, pilot-less planes are starting to happen: http://www.cnbc.com/2017/06/08/boeing-studies-pilotless-plan...
And even if you make it that far into this career, being a copilot in a regional airlines sucks. It's not just bad pay, but also really bad schedules. Long days with short turnarounds in-between flights. Many young copilots even have an obscenely long commute to their first flight and back home after their last one. All for the hope of being picked up by one of the major airlines.
That may be the starting salary in some places, but keep in mind that median salary is closer to $100-120k. Starting pilots either are unaware of the longer-term salary, or that longer-term salary is still too low in comparison to other professions with similar characteristics.
Not at regional airlines. According to http://work.chron.com/average-salary-regional-airline-pilot-... $26k is typical entry-level, $55k is average once you get promoted to captain, and the top of the range is about $60k as of 2012.
If you get picked up by a major airline, the numbers look quite different, and the median in 2016 across all airlines in the US was about $128k according to https://www.bls.gov/ooh/Transportation-and-Material-Moving/A... so presumably a lot of people have in fact made the move from regional to major in the past. What the future prospects of that happening are is not clear.
The rate of the growing female workforce itself started to stagnant around the 90s and 2000s, but a new worker had fully emerged on the scene by that point: The robot. It's a slight misconception that robots eliminate jobs. In reality, they compete for them just like people do. They are another worker in the supply of workers. And while robots bring new demand, as they didn't exist before, it is not proportional to what they can create like with humans.
And so, increasing supply over the rate of what increases to demand exist, and you get downward price pressure.
Interesting, and very plausible as well. Please don't get me wrong, but you happen to have any source that supports that hypothesis? I don't doubt any of what you've said and I do believe you're on to something, but I would like to read more on the subject.
The core idea is that a two income family is less financially resilient than a one income family because (a) the extra money goes to bid up housing prices (education, healthcare, etc.), and (b) if either partner has a setback, the family is at risk of bankruptcy.
Impacts of "women entering the workforce" have been relatively unexamined; one of them is that it frees up employers to practice other kinds of discrimination. For instance, many believe that black men held service jobs that got taken over by white women. You will get a woman on the Supreme Court but she will have been educated at Harvard. Pointedly, the supply of "people from high-class families" is doubled, so any bias towards hiring them can be indulged more freely.
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Some of these ideas have gotten traction in unexpected places. I was talking to a conservative friend the other day and he told me that "the gains of paying workers more would be eaten up by cost increases in housing, education and health care", which he didn't know was classic Elizabeth Warren!
As for the destruction of families, that's going to happen under capitalism anyway. Free markets don't like nepotism and families don't like mobility of labor.
For the people who don't benefit from capitalism, it's a very bad deal to them because they gave up the safety nets of familial bonds in exchange for nothing. It's why conservatives aren't enthusiastic about capitalism and free markets (anymore?).
If a person educates their own child, or cooks their own meals, or provides other domestic services, that labor does not get taxed, does not contribute to making distant investors rich, and does not employ union labor.
(I am male and I have done those all of those things at times.)
Liz Warren points out that an "at home" family member can often get a job to supplement or replace the wages of a primary wage earner; long-term changes could be weathered by the secondary wage earner becoming the primary, or it could be a temporary job to save some money or pay off some debt.
It is not a subject we have good conversations on because it is so inflammatory.
Also, I think of Daniel Patrick Moynihan, the one liberal who worked for Nixon, who caught hell for diagnosing the breakdown of black families but who laid the foundation for how people think about the breakdown of all sorts of families under economic and social pressures.
Anyone can say they want to buy a new Ferrari for $10,000, but that does not mean Ferrari should get excited about a new customer. It's all imaginary.
I wonder if you can't pull in some other evidence, such as, well, if you actually did raise your pay rate to a point where there would exist a worker willing to work for that amount, and you could further prove that worker would still be able to create enough value to the employer s.t. he or she was worth hiring in the first place, and that it then only boils down to the short-sightedness of the employer for not being willing enough to offer a higher wage?
(For example, something like the absurd valuations of some SV tech companies, and the millionaire they make, compared to the salary of an engineer. I personally think most places I've worked could move faster — generate more value — with better engineers, but that can't happen if you're paying "market rate" instead of paying competitively. But "enough" value is being generated, at least, people think, I guess.)
Paying more will have a zero-sum effect in the short term, simply attracting workers away from other software companies. In the longer term, it will encourage more newcomers to enter the field and spur the "less better" engineers to improve or update their skills.
I'm still not clear about what you meant by "better engineers"; I'm in doubt about the theory of the 10x engineer. If you meant engineers with updated skills, then I might agree with you.
I simply meant more skilled engineers. (I'll readily admit that discerning which candidates are actually more skilled during an interview is a fairly challenging problem.) My personal opinion is that "10x" is a flat-out myth, and significant culture problem in our field. Engineering anything of moderate complexity requires >1 mind, and stockpiling all your knowledge into a single person — even if he or she is a great engineer — is foolhardy. I don't think that not believing that "10x" is a thing or a good idea means that there isn't a range of skill, however.
And perhaps the above is part of the problem. I've interacted with a number of engineers writing a lot of … crap … because they don't know what they're doing, and won't take the time to learn what they're doing¹. I spend an awful lot of my own time untangling the tech debt left by the "10x"ers that came before me. While I do get paid for it, I'd usually rather be doing something else. Yet, I don't really think I could reliably pick these people out in an interview, and simply interviewing is such an endurance task of wading through the seemingly endless masses of "engineers" that can't write a for loop that can't be singled out by tech recruiters who have no tech background b/c the recruiters can't recognize a BS résumé from a non-BS one (because they have no background in tech, but are really just LinkedIn scrapers AFAICT). Lastly, I don't know that SWE is a great field for get-rich-quick: I'm not paid all that competitively if you compare SWE in the Bay Area to say, investors, doctors, lawyers, …)
¹I once interacted with someone trying to send emails. Instead of using a library, he was rolling his own serializer for emails. But he also refused to read the RFC — despite repeated attempts to show him that it contained the information he needed, and testing it repeatedly broke it. (And this is but one example out of many. I'm currently working somewhere where we have multiple broken serializers that attempt to emit data for PostgreSQL, broken for the same reasons: refusal to understand the required output format prior to writing an emitter for it. "It's just CSV/TSV"
I think that is a fair assertion. If demand disappears, the supply also disappears (why supply something that nobody is going to buy?). However, the people who would have made up that supply of labour tend to not die. They find something new to supply to the market with instead, thus putting downward pressure on the jobs that do pay sufficiently to attract people, but not to the point where nobody is willing to do the job. Thus why incomes aren't increasing (but also not heading towards $0).
> if you actually did raise your pay rate to a point where there would exist a worker willing to work for that amount, and you could further prove that worker would still be able to create enough value to the employer s.t. he or she was worth hiring in the first place
This is the issue though. The farmer in the article didn't get his crop off because the consumers didn't care enough about the product to justify its harvest. The airline had to cancel the flight because the consumers didn't care enough about making that trip to justify finding a pilot. If people were starving, they would be willing to pay more for food, and the farmer could have then afforded the necessary labour. If people had to make that trip, they would have paid more for the flight, and the airline could have afforded the necessary pilot. You have to actually have a reason to pay these people sufficiently, which is not always the case. Not all jobs are actually needed.
Price is a function of supply and demand, but just saying you want something is not actually demand. There has to be the willingness and ability to pay the price that is necessary, by the very definition of demand.
But what about extra discretionary income which would stimulate extra demand (another car, another vacation, another gadget, home services now that both partners are working)?
There's simply no competition between robots and humans, that's why I'm a firm believer that automation will take all the jobs and we need to figure out how to handle a post-work future before we start riots.
Various forms of farm machinery such as combines automated farm jobs for the better. So true with robots in factories and artificial intelligence that replaces lawyers for standard contracts.
Widespread robots mean that the entire economy runs with the SaaS accounting. High investment, relatively low maintenance, incredibly high productivity.
-Farmers in Alabama are fretting that crops may rot in the ground for a lack of workers to bring in the harvest.
-Despite high demand, home builders in Colorado are throttling back activity because they can’t find the workers to erect frames.
-An airline canceled flights because it couldn’t find enough pilots to steer them.
Those aren't demand problem but supply problems.
[0] https://www.dallasnews.com/business/airlines/2014/09/22/seve... [1] http://money.cnn.com/2017/05/09/news/companies/spirit-airlin....
It could be due to being able to obtain a product cheaper from somewhere else due to lower labor costs (happens due to converging standards of living across the world), and it could also happen that there are alternatives, such as other jobs and/or social security disability or welfare that make doing undesirable jobs need an even higher price point to make it worthwhile.
Why should my tax dollars be going to subsidize a for profit company, which is making billions of dollars of profit?
The parent is suggesting that the price of labour should be rising because the jobs he listed have increased the demand for labour. However, the jobs he listed haven't actually impacted demand at all. The employers are not willing (or, perhaps, able) to pay the price necessary to get the desired workers, thus are, by definition, not demand.
Since they are not part of the demand for labour, they cannot be considered in this discussion of labour price at all.
Reasoning the way you are, you can hand wave away anything, making it appear as if there not only is not a lack of labor, but a surplus, implying that wages are too high. This is clearly not true. It is far, far more plausible that employers have become accustom to lower labor prices, and thus are hesitant to raise wages.
Okay, and I would like someone to build and operate for me an exact Facebook clone for $5. Since I have made a real offer here, I should also be counted right?
You don't see the importance of taking price into consideration?
> You're assuming that the employers are acting perfectly rationally, which is a fallacy.
Demand is characterized by price, not people talking about what they want to do. If there is no transaction to be made, there is no demand. It makes absolutely no difference if the actors are acting rationally or not.
> Reasoning the way you are, you can hand wave away anything
These are generally accepted terms. Perhaps there is some other word that describes what you are talking about, but it certainly isn't demand. Desire, perhaps? I think it is fair to say that the farmer desires help on the farm, or that the airline desires pilots, or that I desire a developer to build a Facebook clone. That is not the same as demanding it.
> making it appear as if there not only is not a lack of labor, but a surplus
There is a surplus of labour with respect to the demand for that labour. We don't count the people looking for Facebook clones for $5 as demand. If you did, then yes, the demand would outstrip the supply by a huge margin. But I feel like this should be pretty obvious why these jobs don't count as demand.
> It is far, far more plausible that employers have become accustom to lower labor prices, and thus are hesitant to raise wages.
Then why are employees also hesitant to increase labour prices? Is it simply because they too have gotten used to lower labour prices and don't want more? That sounds a little difficult to believe. Everyone I know would be ecstatic to make more money. There is always too sides to the transaction, so you cannot pin this on one side.
The more logical explanation is that if one labourer tried to raise their price, another labourer would swoop in and do the job for less. This can only happen when supply exceeds demand, not when people are already a struggle to find.
Now you're being ridiculous. We're not talking about people acting like that. We're talking about people who do desire labor, but aren't willing to raise their price. Someone who is offering $12 when the prevailing wage is $14 is clearly in the market.
Since you had to be that ridiculous in your opening, I can't imagine the rest of your post is in good faith.
No, we're talking about demand. People who have the willingness and ability to pay what it takes to acquire the product or service they seek. Desire alone has no impact on price, and thus has no relevance to this particular thread.
> Someone who is offering $12 when the prevailing wage is $14 is clearly in the market.
Where are you gathering data that says someone will do the job for $14/hr? Just because someone doing a similar job for $14/hr does not mean someone else is willing to do this particular job for $14/hr, let alone $12/hr.
> Since you had to be that ridiculous in your opening, I can't imagine the rest of your post is in good faith.
Also known as my example taken to the logical extreme has helped you better understand the situation and the terminology used in economics. Glad that we're on the same page now.
The oil field boom in ND didn't have a problem getting skilled workers from across the country to live in tents because they paid them well.
They AL farmers are not worried about finding workers, they want to lowball American laborers so they can throw their hands the air and claim that they need a supply of immigrants laborers, which they can exploit.
The migrant farm laborers are actively avoiding Alabama as a result of anti-immigrant legislation that passed a few years ago. Even though it was subsequently voided by court order, the workers remember it, and are not stupid, so they will demand a premium for dealing with Alabama's racist, protectionist bullshit.
And even paying that is cheaper than offering the sort of labor standard that a citizen--even a high-school dropout or ex-con--would expect in America.
That's pretty much what they deserve for voting the same party in every election, without regard to their own economic self-interest.
Edit: The state raised the perceived cost of working for migrant laborers, to the point that the prevailing wage offered by the farmers is no longer sufficient to entice those workers to come to work. They aren't lowballing to preferentially employ migrants, they are just lowballing all labor, period, because as commodity producers, the labor expenses cut directly into their profit margin.
Many construction workers can't move to high demand areas because they are financially locked into the areas they currently live.
Most planes could function with 1 pilot due to automation but regulations won't allow it.
https://www.uscis.gov/working-united-states/temporary-worker...
No idea how many people use it.
In Austin, the unemployment rate is <3% and Texas as a whole is incredibly low. Since we're one of the largest population states with an unemployment rate well below average, I assume there are numerous smaller places with well above average unemployment.
But it is true that unemployment can vary widely even within state lines. Even from one town to the next. It is possible that localized unemployment is still quite low where the jobs are unable to be filled.
So companies looking for electricians or machinists are competing with companies looking for IT managers and the like. Not only is the pay much less than these people could otherwise get, the jobs are more physically demanding and often times, less flexible.
It's going to be hard to entice workers who already make 60+k a year doing a job with a lot of flexibility and downtime to take up a more demanding position. People love to talk about how much tradesman make, but the generosity of their salaries is often over-stated and ignores the seasonality and volatility of these jobs.
pass a drug test
not be a convicted felon
have reliable transportation
show up consistently(i.e. reliable childcare)
And if you fall into one of those categories good luck.
have one of your last jobs be exactly that same technology as what the company is working on, nevermind how many other similar technologies you've worked on and learned on the fly.
The issue with the entire building industry is that they don't pay carpenters, electricians, etc enough. Period. They have been able to avoid paying enough by using what I refer to as "illegally imported labor" at below-market wages. (I like the term because the verbage puts responsibility on the hiring companies who are clearly exploiting un-documented workers)
Having worked in construction, I've seen what happened to the wages paid. Essentially the large home-building companies who build the bulk of homes in this country in single, large-scale subdivision builds have increasingly been able to lower the skill threshold for construction. This by itself would have lowered the barrier to entry for documented workers, and probably has a minor downward pressure on wages.
However, the lowering of the skill threshold also made hiring undocumented workers much more viable. I didn't have to speak Spanish to train guys to use a nail gun and a saw to do framing. I usually worked on high-end, custom homes for the wealthy. These jobs paid well, required a lot of skill, and were pretty much exclusively staffed by legal workers. However, at times, I'd have to find work with the big builders doing the giant subdivisions.
They paid shit, and were largely staffed with undocumented workers. In North Carolina where I worked, the bulk of these folks came from central America. McDonald's wages were literally higher than what these folks were paid. McDonalds doesn't hire illegals, but construction companies do. So this creates a very weird situation: Why would an American work a dangerous, hot, back-breaking job for a lower wage than McDonalds?
The local construction companies in Colorado were decimated in 2009, and many never came back. Now, the bulk of building here is being executed by national builders who are used to paying low wages, and there aren't enough undocumented workers to fill the jobs at these artificially low rates. The worst part is that the low wages have caused documented workers to not even BEGIN to pursue construction, and therefore they aren't learning the skills (in certain markets), which creates a long-term labor supply issue.
There is a very easy solution to this:
Make all construction companies and their sub-contractors use E-verify. But that will never happen because congress has two parties who both have interests in not doing this:
The GOP loves cheap labor while simultaneously saying they want to crack down (using completely unrealistic plans by design) on illegal immigration to appeal to the bigots in their base as well as the "law and order" crowd.
The Democratic Party views illegals as a source of votes once their kids are old enough. They ignore the fact that illegal immigration helped to break the back of unions in the meatpacking and construction industries because they have long-since replaced alignment with labor with racial identity politics.
Because of this, I'm going to pay waaaay too much for my house, the workers will be paid too little, the house will take too long, will be built somewhat poorly, and the suits running the building company will make a ton.
E-Verify is mandatory, isn't it?
Under the current enforcement mechanism, E-Verify isn't sufficient. A failure will simply trigger a resubmission (in practice). The employee will need to come up with a different SSN / name / birthday tuple, by producing another forged Social Security card.
The above information is anecdotal and I welcome correction.
The formal process is described here: http://www.nolo.com/legal-encyclopedia/what-employers-should...
"In addition, some states have specific laws that require employers in the state to use E-Verify. This is currently the case in Alabama, Arizona, Georgia, Mississippi, North Carolina, South Carolina, and Utah (for employers with 15 or more employees). Louisiana and Tennessee require E-Verify unless an additional, alternate verification step is completed as outlined under state law. Other states have the E-Verify requirement limited to contractors or public employers. However, the list of states seems to be growing, and there is legislation afoot in both the U.S. Senate and the House of Representatives that may mandate E-Verify for all employers (depending on size)."
This is a constant claim, but it's not really true.
Some of the crop will always rot in the field since all plants don't ripen at exactly the same time and it's only economical to do a certain number of harvests.
Farmers could always use cheaper labour, so they'll always complain about the price. But there's no real disaster.
The pilot problem is real, but it's entirely a result of airlines paying low salaries for the past 15 years or so.
We don't normally do work for the sake of working. We work to provide what people want, at a price that is agreeable to all parties. If an agreeable price isn't found, it means not that we need to find people, it means the work to be provided isn't really wanted by anyone in the first place.
Aren't they just investing? Not exactly like normal investments, but if they let some crops rot, they can use it as a corner stone for an attempt to keep their normal cheap labor flowing, which ends up earning them more money than just paying Americans enough to harvest the crops.
Farmers in Alabama fretting does not mean demand. Farmers in Alabama paying workers means demand.
To put it another way, me looking at a Ferrari in a store doesn't create demand for Ferraris. Me going to the store and buying one does.
Have a look over here:
https://www.dol.gov/wb/stats/facts_over_time.htm
The US ratio of female/male employment experienced a strong long-term upward trend during and after WWII (1940s), and the absolute number of women working jobs in the US has climbed steadily right to the present day.
The modern era of wage stagnation relative to productivity started in the 1970s, somewhat before the strongest growth in the female/male employment ratio, and continuing even after that ratio flattened out.
http://www.epi.org/files/2013/ib388-figurea.jpg.538 http://www.epi.org/publication/charting-wage-stagnation/
...a corresponding increase in demand with the supply of workers would have kept incomes moving upward...
Or it could send jobs overseas to poor countries with low wages and little in the way of labor or environmental regulation.
Large companies are a bad place to concentrate money, but your entire government is working towards it.
>An airline canceled flights because it couldn’t find enough pilots to steer them. Despite high demand, homebuilders in Colorado are throttling back activity because they can’t find the workers to erect frames. Farmers in Alabama are fretting that crops may rot in the ground for a lack of workers to bring in the harvest.
Robots can't do all those jobs, and yet the wages for those jobs haven't increased enough.
The mistake the article makes is counting these jobs as demand, when they really are not demanding labour. They are no more jobs than me asking you to come clean my house for free. It's a serious offer: I will be quite happy to come have you clean my house for free. But, for all meaningful purposes of the phrase, I don't think anyone considers that a real job.
I've seen this play out at companies big and small when changes in market wages force them to change the way they think about hiring. Ironically, the replacement strategy is often to eliminate positions from the bottom half of the wage pool and to add a much smaller number of positions in the top half, at least in my experience. (It is increasingly widely believed that this latter strategy is superior in any case and there is evidence to at least suggest this is true.)
Only growing commercial concerns can afford to hire new employees. The world used to have a way of keeping people who would otherwise be economically impotent engaged, and that is cheap service work, but we've decided as a society that such things are not politically palatable.
So instead we just place more and more expectations on the people that participate usefully in society, and less and less on those who can't. The older I get, the less sympathetic I get to this viewpoint, but I suppose that's a quite common moral journey so I won't belabor the point too much.
Service work is up over the decades. What we used to have was manual labor/manufacturing jobs. https://cdn.static-economist.com/sites/default/files/images/... http://www.zerohedge.com/sites/default/files/images/user5/im...
Eventually it got stigmatized. Now most countries' labor laws prevent anything like what used to happen. Probably for good reason, some of these people toiled in horrid conditions, but I don't think re-allowing them is going to recreate those conditions.
Do you mean cutting minimum wages so that people can hire staff for their homes?
(Because lots of people are perfectly happy to hire part time staff at higher prices, cleaners that come once a week, lawn care, delivered/take out food, etc.)
I really don't know the answer. Nothing seems politically feasible at the moment.
People need stable jobs. Would-be employers need to be able to afford to keep on 'the help'. Allowing full-time, below-minimum-wage service staff seems to give a lot of people economic viability that otherwise would be constantly teetering on ruin.
Can we bring those days back? Or at least try it out? I don't know.
Perhaps the real problem is employers' tendency to over-negotiate. So the only thing the new service class can really expect is to be oppressed by their bosses. Edwardian-period England was not a nice place for servants. Maybe new tech tools will give employees an advantage that pre-industrial servants didn't have.
This is the reason that even people who can hire full-time service staff, such as nannies, often don't, and instead rely on part time contract service. It's an arrangement that better suits employers than employees.
I'm trying to think of ways we can offer people who aren't economically competitive in the workplace the ability to find stable employment. The current job market is just getting more and more hostile to the less-advantaged.
Yep, what the shareholders get is profit, what employees get is an expenditure.
Funny thing is, it may work better than the current conflict of interest company boards have.
I'm absolutely pro-dividend because I've seen too many blue chips squander investors money. But if you're only in it for the short-term, then executives using cash-on-hand to artificially inflate the company's stock price works in your favor.
https://www.forbes.com/sites/aalsin/2017/02/28/shareholders-...
underemployment, opioid addiction, crime, suicide, widening wealth gap all come to mind
If you'd like to discuss further then please provide more than a summarized sentence.
Employers aren't stupid. If they could make more money by hiring employees, they would. What this tells me is that demand isn't high enough for an employer to calculate an increased return from hiring someone.
So, what this tells us is that demand is dead. That's what happens when you hollow out the middle class.
https://data.bls.gov/timeseries/CES0000000001?output_view=ne...
The issue is that even with all these hires there is still a fairly large pool of people that want to work that don't currently have jobs. This is why wages aren't rising.
If companies were truly desperate for people they would offer higher prices or even pay to train people to their standards.
I remember in the 90s, someone telling me that tech companies (even established ones like IBM) saying they were hiring anyone with a pulse, and that they were trained on the job instead of being asked for 20 years of experience with X, Y, and Z.
If you can afford to be so picky to only hire people that can answer absurd questions like why are manhole covers round or coding a minimum spanning tree operation on a whiteboard with 0 screwups, you do not have a very large demand for people.
Microsoft used (and still uses) lots of contractors, but those were not secure jobs, nor did they provide much training opportunities.
Yes, during the dot-com boom, "HTML programmers" could be hired at startups with a minimum of experience, but this was hardly a long-lived trend.
Yes, about 200k jobs are added per month. The question you have to ask yourself, the question that actually matters, is this: what kinds of jobs are those? Are we talking about well-paying white collar jobs with benefits that turn into stable careers, or temporary, low-paying jobs with no benefits that typically represent underemployment?
That's not so clear: https://news.ycombinator.com/item?id=13017766
Rickenbacker had close to a 3 year waiting time for guitars until recently. Yet, the CEO absolutely refused to expand more than very slightly. They have been in business more than 75 years and know that business cycles in guitars come and go.
I think they are now down below 12 months and continuing to fall. Had they staffed up, they would be laying off right now.
Most people don't ask for raises, or draw no consequences from being mad about not getting a raise. So after a few generations companies adapted and simply don't offer raises anymore as default.
People who really want to make more money, still get more money. Just not in the same job. While working less in their current job they start to look for other jobs with better pay, and since they have a current job they can proactively bargain for the pay they want. If they don't get it they just don't switch.
And last but not least, but I hope at least here people have noticed that now we have a method called Start-up. That is a way to get a lot of raises in a very short time frame as well. The only requirement is the cruel real life fairness of having a growing marketshare.
So we have everything, non-increasing incomes for lazy people, regular raises by job switching from dedicated people, and fast-lane high-risers for people who can really take a risk.
And of course we also have a problem. But that problem has nothing to do with any of the three things (raises, job offer bargaining, default pay): We have more and more jobs that are automated and replaced by machines. If you have autopilots in airplanes that do a well enough job, you simply don't really need the pilots any more, for instance. I honestly don't know if we can find a solution for that, or if we are heading for another period like feudalism where only a small percentage of people actually have a good life.
But, well, as long as we don't talk about that problem we certainly won't resolve it.
1. Company towns, heavy industries, monopsony; many regions have one large employer or customer offering a variety of jobs to the inhabitants. Think: auto workers, chicken farmers. There is nobody else in the region to buy their labor or product, so unless an individual moves, they cannot change jobs without retraining and/or liquidating their assets.
2. Ultra-specialists. There are many occupations where turnover is low and the total number of people in the field is low. Compensation may be high due to a scarcity of qualified applicants, but the overall number of positions may be low. Changing jobs in a region might be exceptionally difficult since there may only be a total of a dozen jobs for a given region. Example: speech pathologists, radiographers, elevator repairers.
3. Middle management. Once someone enters the ranks of middle management, job hopping can be destructive to a career. Instead, it is expected that a manager will move to different departments. A middle manager or company officer is expected to quantifiably add value to a company. If you look at the successful managers in tech, you will find most have only been managers at 2 or 3 companies in total, with a tenure of at least 5 years at each.
About the middle management I can only suggest to read the Gervais Principle. They may be mostly the people who are not smart enough to get to the top and not socially skilled enough to job-hop easily enough.
I asked for a large raise, 20%, but I had the numbers to back them up. For 1.5 years I completed 2x the work everyday as the average person in my department. I was pulled around for awhile before they refused and said they would evaluate at the next raise cycle...and I managed a 4% raise (which included a promotion).
It was pathetic. If I was in sales it wouldn't be a problem, but I didn't have the leverage so they screwed me over. I left a few months after and even a couple years later the company is in a downward spiral (they sold off the division I used to work in - guess fucking over all your employees and forcing all the competent ones to leave results in lower profits over the long term).
So, I think "people don't ask for raises" is a very dubious claim.
We have to decide a basic level of healthcare every Citizen is entitled too and if you want more, the individual pays for it.
Cutting taxes on the already wealthy isn't a stimulus, but putting $18k ( avg annual HC premium ) back into pockets the middles classes will stimulate the economy because they will spend it all.
Cutting taxes on the wealthy just slows the Velocity of Money.
Every example of universal healthcare I’ve seen so far pays for it with huge payroll and income taxes. Payroll taxes have a direct and demonstrable effect on wages and hiring, and income taxes would just wipe out the benefit.
The problem with your idea is that it doesn’t actually do anything to contain healthcare insurance costs. Those costs have risen dramatically faster under the ACA than before, and they were already going up quickly.
I’m not opposed to universal healthcare at all, but you can’t just hand-wave and make it ‘free’, and with those costs I don’t think you’ll see the benefits to wages you’re looking for.
e.g. If you don't have the money a 75 y.o. doesn't get a heart transplant.
IMO if you don't have the money you aren't entitled to the best care but this discussion needs to happen and be debated.
Our current system encourages good money to be spent on lost causes.
Part of it seems to be a general belief that some sorts of expensive professionals are better, much like how people assume pricey wine tastes better, but I suspect most of it's just class issues.
On the other hand, I personally have a very high appreciation for high quality manual labor (eg: carpentry) and I'm always looking for the best money can buy in those areas....and it's impossibly hard.
Since no one else seem to value it, no one does it. Everyone's optimizing for cost. I had a very difficult carpentry job that needed to be done recently, and I went hunting for the best of the best, offering well over what a lawyer or software engineer would make. Crickets. It took over a year to find someone. Those people no longer exist since there's no market for it.
Once a manager, for example, hits their personal goal of "six-figures", they feel they have hit an important milestone. So they are content year after year to privately make $100,001 but publicly/subconsciously use the misleading phrase of "six-figures". A manager's salary is implicitly the upper bound of their subordinates' pay so the whole work-force suffers.
If the goal is inspire a higher paid workforce, let's stop with the "six-figures" vagueness and use concrete income milestones (e.g., $250k a year, $10k a week, etc.) instead.
I'm not a fan of my day job with regard to, regardless of their customer input (say they did a lot of business) I don't get a bump or tip or anything. No incentive to try harder also my day job any kid off the street can do so what can I say.
All the spigots for cheap labor in the USA are turned on full blast and have been increasingly so since the late 1970's when labor power was at its zenith. Those spigots are: free-trade agreements with other countries, automation, anti-union actions, flow of illegal labor, flow of legal immigrant labor, globalization.
It's the cause of social turmoil, but that's not much of a concern (in fact it's something to be harnessed and consumed) for the ruling (and chattering) classes.
Historically, before the Gold Reserve Act of 1933, the one ounce double eagle gold coins were valued at $20. You could buy a good suit with just one of those coins. Fast forward to the present, if you take a current double eagle one ounce gold coin that is produced today, you can still buy a good suit with it.
You hear all these horrible stories of elderly people having to choose between food and medicine. Prices keep escalating, and these elderly people live on fixed incomes.
* health + dental + vision insurance
* 401(k) matching
* ESPP
* other stock-based compensation, such as options
* number and flexibility of vacation days (i.e. if someone didn't get a raise, but got 5 extra vacation days, it certainly has value for them)
* free food, massage, yoga on premises, etc.
Tracking average hourly earnings also means that $1 annual salary CEOs such as Mark Zuckerberg or Larry Page are dragging down averages quite a bit. Every startup that pays sub-market salary in exchange for a generous options package is also dragging such average down.
And this article is about the broader labor market in general. Not just startups. And a lot of workers won't see any of those benefits that you listed.
http://globalnews.ca/news/3531614/average-hourly-wage-canada...
This categorization helps the salesperson do two things: - De-prioritize leads whose objections they're unlikely to overcome - Craft responses to objections they are likely to overcome and prioritize these leads
In this particular case they're unlikely to convince a soon-to-retire or luddite vet -- they should de-prioritize these, maybe put them in the CRM to ping in six months to see if anything has changed. They should also be aware that their target market doesn't include these vets, so if the proportion is high enough they might want to find a different market.
For the others, it seems they're already crafting responses to the objections - presumably they'll get a sale fairly soon if the market is big enough.
there are certainly people getting raises, so is this limited to specific industries, regions, or other category? Is there a break out where raises are occurring versus where they are lacking?
anecdotally, personally I have no friends in my circle who made mention of no raises. poor raises sure, but that is always relative to expectations
[1] http://www.foxnews.com/us/2017/07/12/minimum-wage-hikes-by-c...
1. Wages are just part of the overall benefit package per worker. Healthcare costs to firms have been rising dramatically and these higher healthcare costs (even as employers are having workers pay more out-of-pocket) have resulted in a flat overall wage payout.
2. What should be focused on is overall standard of living and not wages. In cities such as my own, NYC, but also SF, LA, SD, Boston, DC, the price of housing and commercial real estate (an increasing cost to businesses which can result in lower wages paid out) is caused because of "rent-seeking" that causes an artificial scarcity of land through politics that limit zoning density with the resultant higher proportion of income going towards housing costs. The rent-seeking benefits special interests which in this case are wealthy landlords such as Donald Trump.
3. Importing illegal immigrants holds down wage costs among the working class. Except for Trump, almost all Democratic and Republican Presidential candidates wanted to import illegal immigrants.
4. Exporting factory jobs to China and Mexico have also kept wage rates low.
5. The abuse of H1-B Visas have helped to keep wages lower among STEM workers. H1-B Visas are supposed to be used only in the case where there is no American with the skill set to fill the job. Many Democrats and some Republicans actually want to increase the number of H1-B Visas to further depress STEM wages. Trump campaigned against H1-B Visa abuse and spoke against Disney replacing 250 American IT workers with H1-B from India, a clear abuse of H1-B. Clinton did not speak out against H1-B Visa abuse.
6. Raising minimum wage by law to $15 per hour as the author suggested demonstrates to me that he wants to take this simplistic solution which ends up with higher costs to poor people who have to buy goods and services.
In summary, instead of focusing on wages alone, focus on standard of living much of which is poor because of rent-seeking which benefits wealthy landlords to the cost of everyone else. When focusing on wages, deal with the structural issues which are 1) increasing costs of healthcare and other benefits 2) increasing real-estate costs to businesses, 3) eliminating illegal immigrants 4) eliminating H1-B Visa abuse and decreasing the number of H1-B Visas.
Raising the minimum wage through law simply lowers the standard of living to the poor such as retirees on fixed incomes as the grocery store costs and other costs increase.
If Trump is largely using the presidency as a stature and money making scheme without truly divesting from his private companies, I expect you'll see a big difference depending on whether a particular piece of policy affects his own wallet.
Thus, it is Democrats who are most responsible for making Trump far, far wealthier than he would be without their assistance. This while adding to inequality and making rents for even small apartments very expensive.
Incidentally, in Japan in 2001 or so they passed a federal law which overruled local zoning density restrictions. The result is that in 2014 140,000 housing units were built in Tokyo compared with less than 90,000 for all of California and 20,000 for NYC.
take a macro class sometime.
Yes, a great many people are essentially ruled by the lies told by the rich and powerful. But ferreting out and exposing those lies won't do you a bit of good. The bullshit you are repeating here is likely to be spread and encouraged by those who stand to profit by increased consumer demand for gold, and for disaster preparation supplies.
You took the red pill, and now you think Zion is the real world. It isn't. It's the pressure release valve--the special program loaded to house "problem" residents of the Matrix. You're in an oubliette made of your own thoughts.
It just doesn't matter if the world has a secret emperor supported by a cabal of Illuminati. If you want to survive in it, you get a job or start a business that transacts in the commonly accepted currency, and you pay your taxes--not because they are just, but because you will get beaten, caged, or killed if you don't.
If you truly believe that those who threaten the system are assassinated by it, then who are you to escape that fate? You can play the game by the rules defined for it, even if they are not fair, or you can flip the game board off the table and get dogpiled into a bloody pulp by all the players who thought they had a chance at winning. You're not going to get anywhere by spending your whole turn whining about changing the rules. You'll just piss off the other players as the gamemaster waits you out.
The world is not fair. Knowing it is not fair does not make it more fair. Going back will not move you forward. The unethical asses of this world already know about gold, and have planned ahead to negate it as a threat to their influence. You would be far better off tossing out all the conspiracy theory, and trying to puzzle out some Etherium smart contracts that would obviate the kind of power one may wield by exerting private control over fiat money. Good luck.
A lot of the people suffering from same type of misinformation-fueled perceptions as OP don't know what to do after learning the "truth". Topple the system by buying gold and burying it in your backyard? How does that work?
Armed rebellion? Versus professional US military? How does that work?
Guerilla warfare against the system? Great, now you're considered terrorists, and the FBI informant in your group gets all of you shut down and imprisoned.
Amass huge numbers, organize protest marches, form a new political party or take over an existing one, and get elected into power? Okay, yes, that will probably work, except you'll never get enough people to join just by seeking the truth. That route requires money and rhetorical acumen, which is in no way related to truth. People don't vote for truth; they vote for what feels good.
As the old GI Joe cartoons often repeated, knowing is half the battle. You still need the "doing" half. Knowing that the whole world is run by money in the interests of those who have a lot of it is like knowing that the tides go in and out twice a day. What do you actually do with that information? Treasure hunting in tidepools? Fishing? Moving your beach chairs and umbrella? Designing an engine to harness power from wave energy? Collecting driftwood? Standing in one spot and slowly drowning yourself over a span of 6 hours?
You may be surprised at how often people espouse a plausible, believable hypothesis to explain some part of world politics, and then follow it up with either "so give me your money" or "so go build an intergalactic interocitor and infuse it with orgone energy and essential lavender oil". The former is preying upon the fears of weak people, and the latter is just useless lunacy.