# Are Western governments purposely driving down living standards? **URL:** \ **Category:** Great Debates\ **Created:** [July 20, 2015, 8:39pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724 "2015-07-20T20:39:55Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [July 22, 2015, 7:54pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/41 "2015-07-22T19:54:09Z")
> [@ralfy](#): > > However, businesses can only earn more if they sell to growing markets, and that can only take place with increasing living standards. On the whole, true. But not for particular companies. If a company can increase market share by decreasing their costs through screwing workers, they can grow the business in a static or even shrinking market. If you can convince yourself that you’ll grow from selling to China, you don’t care all that much about a slight loss of domestic consumers. An improving economy makes it easier - but the optimal case is that everyone but your employees get raises, since most of your customers are not your employees. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [July 22, 2015, 7:58pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/42 "2015-07-22T19:58:08Z")
> [@ITR\_champion](#): > > Employers want their employees to feel secure, confident, and happy. Only to the extent that investment to achieve those outcomes produces a high enough return in productivity and profitability. They certainly don’t do it out of altruism. The goal of all employers is to get the highest productivity at the lowest cost. If employee uncertainty about keeping their job is more effective at increasing profitability, then employee security, confidence and happiness will be sacrificed without a second thought. ---
**Author:** ![Buck\_Godot](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/buck_godot/32/6573_2.png) [@Buck\_Godot](https://boards.straightdope.com/u/Buck_Godot)\ **Post date:** [July 22, 2015, 8:46pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/43 "2015-07-22T20:46:06Z")
> [@Rick\_Kitchen](#): > > Why would businesses want to drive down the ability of their consumers to buy their products? They wouldn’t but then again they also don’t want any of their profits going to support consumer’s ability to buy their products. Its just a massive prisoner’s dilemma. What you want is every other company paying their workers enough so they can buy your products while you pay yours peanuts. However if everyone does this (as seems to be the current trends) then you end up with people having little money to spend except a small group of people sitting on big piles of money that are too big for them to personally spend but which they also can’t usefully invest because not enough money is being spent. ETA: Or what the last 5 posters have said. Need to read the thread completely before posting :smack: ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [July 22, 2015, 8:48pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/44 "2015-07-22T20:48:29Z")
I’m curious as to when someone’s going to come up with evidence that Western governments are trying to drive down the living standards of their citizenry. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [July 22, 2015, 9:26pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/45 "2015-07-22T21:26:06Z")
> [@Voyager](#): > > You can find businesses who do really care about employee morale, but you’ll find many more who don’t. > Strikes do occur when workers are unhappy. You can reduce the number of strikes by either making workers happy or by trying to kill unions. Which path do you think WalMart has chosen, to give an example. > While employee retention does save money, it is harder to measure than salaries and benefits, and lots of companies don’t seem to care. I have heard managers acknowledge that pay policies are going to make employees leave, but they do it anyway. And in my line of work someone leaving has a lot more impact than if a waitress or burger flipper leaves. I’d be willing to bet that the companies that don’t really care about worker happiness also are the ones employing huge numbers of relatively unskilled, easily replaceable people. In other words, why SHOULD they care about their happiness, if they can shit-can them and go hire 100 more just like them at the same dinky wage? But companies where the skills and abilities of the workers are the engine that makes the difference between success and failure definitely do pay a lot more attention to worker happiness. Not necessarily in the way of “making them literally happy”, but through higher compensation, better benefits, better working conditions, etc… I agree that the real problems are when things are ALWAYS looked at through a need vs. cost basis; very few worker-happiness things survive such analyses, as they’re not _necessary_ and they’re usually costly, and whatever benefits there are to be gained, are not easily quantifiable. Stupid shit like buying the cheapest toilet paper that they can find, because the more expensive stuff isn’t _necessary_. But it sure makes employees a lot happier to not have to use the cheap stuff, and it also sends a message that the company is concerned about _their_ butt-cracks, more than they are about the bottom line. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [July 22, 2015, 10:00pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/46 "2015-07-22T22:00:42Z")
> [@RickJay](#): > > Well, sure. And I want to pay $1 for a Maserati Quattroporto, and you want all the food you’d ever need and be paid to eat it, and we all wish everything was free. > > But in the REAL world, everyone, including employers, ends up paying what things are worth. If you define worth as what people pay for something, your statement is trivially true. If you involve value in some sense, things get more difficult. I have heard a top executive of a major company say that their business strategy was to capitalize on the brand and price to convince consumers that the extra cost was worth it. (The product line died, but not because of this.) Anyone who has done salary review knows that some people in the pool get paid too much, and some get paid too little. And surely not everyone who gets hired into a minimum wage job has the same value to the company. Those with power get all sort of stuff free or cheap. A CEO could probably negotiate for a $1 Maserati. Businesses would love to get labor free or cheap, and often have the power to do so. Remember the collusion between Apple and Google and others to reduce salaries by reducing worker mobility. And consider companies who have power to control entrance to an industry - those are the ones who get free intern labor. Are interns worth nothing? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [July 22, 2015, 10:09pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/47 "2015-07-22T22:09:29Z")
> [@bump](#): > > I’d be willing to bet that the companies that don’t really care about worker happiness also are the ones employing huge numbers of relatively unskilled, easily replaceable people. In other words, why SHOULD they care about their happiness, if they can shit-can them and go hire 100 more just like them at the same dinky wage? > > But companies where the skills and abilities of the workers are the engine that makes the difference between success and failure definitely do pay a lot more attention to worker happiness. Not necessarily in the way of “making them literally happy”, but through higher compensation, better benefits, better working conditions, etc… Some companies view workers making six figures as cogs also. Or, they thin 10% of workers are worth something but 90% aren’t really. When happiness goes up against the bottom line - well, too bad for happiness. And when workers are perceived as not having a choice, screw happiness. Happiness is clearly not all that important. Look at airlines. 30 years ago when I flew a lot for business flying was somewhat enjoyable. Today airlines are making good money by treating any customer they don’t really care about (not in business or first class) like shit. ---
**Author:** ![kaylasdad99](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kaylasdad99/32/3398_2.png) [@kaylasdad99](https://boards.straightdope.com/u/kaylasdad99)\ **Post date:** [July 22, 2015, 10:19pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/48 "2015-07-22T22:19:26Z")
> [@RickJay](#): > > I see no compelling evidence this is happening, nor can I fathom and compelling motive for the people running “Western” governments to do this. > [@Leaper](#): > > The implied reason seems clear to me: to make sure more money is kept in the hands of the wealthy business owners. Isn’t that always the motive when it comes to capitalism? Sounds kinda iffy to me. OTOH, under a theory that the absolute size of the global middle class lifestyle “pie” can only get so big, one could argue that making the standard size of a slice smaller could be a way of promoting sustainability as the number of claimants for one of those slices increases dramatically. ---
**Author:** ![Happy\_Fun\_Ball](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/happy_fun_ball/32/17664_2.png) [@Happy\_Fun\_Ball](https://boards.straightdope.com/u/Happy_Fun_Ball)\ **Post date:** [July 22, 2015, 11:21pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/49 "2015-07-22T23:21:49Z")
I don’t know about western governments purposely doing anything, but isn’t this a result of globalization? I have noticed that all the newly minted engineers in China have been putting downward pressure on my wages. Did the government cause this? I don’t think so. ---
**Author:** ![ralfy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ralfy/32/600_2.png) [@ralfy](https://boards.straightdope.com/u/ralfy)\ **Post date:** [July 23, 2015, 7:37am UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/50 "2015-07-23T07:37:27Z")
> [@Voyager](#): > > On the whole, true. But not for particular companies. If a company can increase market share by decreasing their costs through screwing workers, they can grow the business in a static or even shrinking market. If you can convince yourself that you’ll grow from selling to China, you don’t care all that much about a slight loss of domestic consumers. > An improving economy makes it easier - but the optimal case is that everyone but your employees get raises, since most of your customers are not your employees. Not just particular companies: many countries had been keeping wages low and exporting cheap goods to richer ones for decades, and many of the companies involved were even based in rich countries. And yet because the economies of these poor countries started improving due to accumulation of earnings, in time wages started rising, leading to a growing global middle class: > **[The rise of the global middle class](https://www.bbc.com/news/business-22956470)** > > Hundreds of millions of people have been lifted out of poverty but can the middle class continue to grow? At the same time, demand destruction started taking place in richer countries due to increasing debt. ---
**Author:** ![Sage\_Rat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sage_rat/32/399_2.png) [@Sage\_Rat](https://boards.straightdope.com/u/Sage_Rat)\ **Post date:** [July 23, 2015, 10:06am UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/51 "2015-07-23T10:06:27Z")
The first bailout to Greece was approved in May 2010 and by March 2012 had paid €72.8 billion. That’s about €39.7 billion per year of bailout money. The population of Greece is 11.03 million. So on average, €3599 was paid per year per Greek person to bail out Greece. That might not seem like much but considering that the minimum wage is about €8205 per year, it’s actually pretty decent. To an American living in the US, that’s equivalent to a bonus $607 every month. Not life changing, but you could rent an apartment for that or feed a couple of people. A minimum wage is a marker for “this is what it takes to live from day to day”. If half of that is guaranteed, for the entire population, that _should_ be a pretty robust guarantee for a country that was operating without any need for outside help just a day earlier. Remember, we’re not expecting people to live on the bailout money, this is just to help out a struggling economy. If half a living wage is insufficient to shore up a country, I’d sure be dubious that the answer is more money. The instant you hit the actual living wage, there’s no real motivation for anyone to find a job. They can just take the minimum and retire. You could maybe raise the bailout money to 150% (3/4ths of the minimum wage), but that’s probably if you’re talking about a country which has been bombed to smithereens and the fields burnt to nothing. So far as I’m aware, Greece’s infrastructure, businesses, farmland, and everything are all still there and able to be operated. If you tell a guy who goes out gambling every time he gets a paycheck, and blows 80% of it, to stop going out gambling every time he gets a paycheck, that’s not really telling him to live an austere life. Further, if I tell the guy to stop gambling away his money, but instead of doing that he tells his wife to start buying half as much food for the family and to stop sending the kids to school then, again, that’s not _really_ austerity. That’s just the guy being an idiot. The austerity measures that the Greek government have put in place are stupid. But those measures aren’t the ones that are recommended by Germany. As best I can tell, the Germans are trying to push the Greek government to accept the OECD Competition Assessment Toolkit: > **[Competition](https://www.oecd.org/en/topics/competition.html)** > > Well-designed competition law, effective enforcement and competition-based economic reform promote consumer welfare and economic growth while making markets more flexible and innovative. The OECD actively encourages governments to tackle... The key highlights (from the Executive summary) are as such: > [@](#): > > ● Repeal obsolete and outdated legislation for the four sectors analysed, especially from > the Code of Foodstuffs and Beverages. > ● Abolish all barriers to entry that have been identified. These include the strict licensing > requirements in the asphalt sector; minimum requirements for storage, or minimum > capital requirements in the building materials sector; numerous barriers to investment > in tourism activities, such as geographical restrictions or minimum quality > requirements; limits on tourist coach activities; restrictions on offices of travel agents; > limits to the trade of blended olive oils; and so on. > ● Abolish any requirement to seek price approval or to submit prices to the authorities or > to trade and industry associations for all tourist activities. > ● Remove all third-party levies and fees. These include the tax on advertising and the > levies on flour and on cement. > ● Fully liberalise Sunday trading, including for stores above 250 m2, shopping malls and > outlets. > ● The five-day restriction on the shelf life of milk should be lifted. The product’s use-by > date should be determined by the producers, according to their pasteurisation methods > and the relevant EU regulation. Milk cartons should be clearly stamped with the date of > production and the valid-to date. > ● Prices of over-the-counter medicines (OTCs) and dietary supplements such as vitamins > should be liberalised. This should be done in conjunction with a full liberalisation of the > distribution channels. > ● Retailers should be able to decide freely on shop promotions and discounts, including on > the determination of periods of seasonal sales. > ● The regulation of cruises should be relaxed by lifting the round-trip restriction on cruises > leaving a Greek port, so as to allow passengers to embark the cruise at one port and > disembark at another port. > ● The five-mile restriction on moorings should be lifted, allowing marina operators to > compete with nearby commercial or fishing ports on prices. > ● Finally, horizontal regulations that hamper or thwart the proper functioning of markets > should be removed to allow competition to drive efficiency gains and increase > productivity across all sectors of the Greek economy. > Provided all the recommendations are fully implemented, the benefits to the Greek > economy will lead to the emergence of more competitive markets, resulting in faster > productivity growth over time. In this report we do not attempt to estimate this effect. > However, in Australia, which undertook a broad programme to remove regulatory barriers > to competition in the 1990s, there have been significant benefits. In 2005 the Productivity > Commission examined the effects of selected pro-competitive reforms and calculated that, > by enhancing productivity in particular sectors, they had boosted Australia’s GDP by about > 2.5% above levels that would have otherwise prevailed. > Increased competition in the Greek economy resulting from our recommendations can > arise in several different ways, such as: > ● removal of barriers to competition between existing suppliers; > ● removal of constraints upon the ability of existing suppliers to compete; > ● removal of restrictions on the entry of new suppliers, or innovative forms of supply; and > ● reduction of costs that are particularly likely to hinder competition, for example because > they make it harder to advertise, or impose heavy costs on smaller or newer suppliers in > the market. Whereas, here is what the Greek government has implemented: > [@Wikipedia - Fifth Austerity Package](#): > > ● 22% cut in minimum wage from the current €750 per month. > ● Holiday wage bonuses (one extra months of full wage being paid each year) are permanently cancelled. > ● 150,000 jobs cut from state sector by 2015, of which 15,000 shall be cut by the end of 2012. > ● Pension cuts worth €300 million in 2012. > ● Changes to laws to make it easier to lay off workers. > ● Health and defence spending cuts. > ● Industry sectors are given the right to negotiate lower wages depending on economic development. > ● Opening up closed professions to allow for more competition, particularly in the health, tourism, and real estate sectors. > ● Privatisations worth €15 billion by 2015, including Greek gas companies DEPA and DESFA. In the medium term, the goal remains at €50 billion. When I tell a gambler to stop gambling, that he’s tossing all his money away and living beyond his means, cognitive dissonance kicks in and instead of hearing, “Stop gambling!”, he hears, “You’re not living within your means!” If he let himself hear what we were really saying, he’d have to consider stopping gambling; much better to focus on the loophole that was left in what we said. The Greeks are implementing “austerity measures” because they aren’t willing to change the things which are actually at issue. It’s their own form of cognitive dissonance where they’ve convinced themselves that the Germans want them to “live within their budget” and they hear everything in that light, just like the gambler hears that he isn’t living within his budget, because the alternative is to give up the addiction. What that addiction might be for the Greeks, I don’t know. But I’m sure that it doesn’t help that everyone else in the world is buying into the “Austerity Measures” crap and reinforcing the Greek view. And none of this has anything to do with the rest of Europe. Keynesian economics recommends floating the country when things are bad. But that’s as a way to tide things over _while the underlying issues that created or exacerbated the depression are resolved_. Tracking those down and gutting them isn’t austerity and it isn’t anti-Keynesian nor anti-Modern Economics. Granted, Western governments aren’t necessarily good at telling the difference between problem spending and healthy spending, but the point remains that cutting spending in some areas isn’t antithetical to course-correcting an economy. Crashes often happen because of excessive, stupid spending. Stopping those is good and long term that’s the goal. Bailouts are not intended to be a solution in-and-of themselves. They are a stopgap, while real solutions are put into place. Sometimes the solution is to build more infrastructure, sometimes it’s to add regulation, and sometimes it’s to renege on poorly-negotiated pension plans. It just depends on what actually caused the original issue. So far as I know, British, French, German, et. al. “austerity measures” are attempts to make sure that the economy is doing healthy spending and not unhealthy spending, nothing more, nothing less. I’m sure that they have failed in some respects, but I see no reason to believe that they had any other intentions than that. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [July 23, 2015, 10:56am UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/52 "2015-07-23T10:56:26Z")
The article OP links to is an interesting broad-ranging look. I find it peculiar that OP focused on one point which the article barely emphasizes. Wages in the developed world are much higher than in the developing world. A college graduate in web programming starts at $3 per hour in Thailand. Is a U.S. web programmer making $30 ten times as productive? Maybe, but the skill gap will narrow so the wage gap is likely to narrow also with increasing globalisation. > [@RickJay](#): > > The motive behind capitalism is to make money. One generally doesn’t make a lot of money if your customers are poor. 😕 A corporation has to be _very_ large (or specialised) before its employees form a large share of its customers. Walmart wants McDonalds’ employees to shop at its stores, but has no direct control over McDonalds’ wages. IOW, despite the famous story about Henry Ford, individual companies want to minimize the wages they pay. And to extrapolate from independent private corporations to a capitalist-controlled government you’ve got to think governments are less disorganized than they are! An exception is banks, which do dominate today’s developed governments. But banks hope for corporate profitability, which generally goes Up as wages go Down. > [@ITR\_champion](#): > > Competition drives wages up. That’s why life in capitalist countries gets better. Compare the average standard of living in the USA or Canada today to 200 years ago. 😕 😕 :eek: Living standards have risen dramatically due to penicillin, hi-tech agriculture, electronic toys, etc. and NOT due to “Competition driving wages up.” :smack: For a fair comparison, look at wages _as a share of GDP_; this has been falling in the U.S. for 30 years. The article OP links to points to ongoing changes to the human economy which are interesting and profound. Reducing these to false platitudes (“teh government and teh capitalist are teh evil greedy” on the one hand, or “teh beautiful market makes worker wages higher and higher” on the other hand) degrades the discussion. ---
**Author:** ![Fuzzy\_wuzzy](https://avatars.discourse-cdn.com/v4/letter/f/a8b319/32.png) [@Fuzzy\_wuzzy](https://boards.straightdope.com/u/Fuzzy_wuzzy)\ **Post date:** [July 23, 2015, 11:15am UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/53 "2015-07-23T11:15:38Z")
An article on how today’s smartphones replace a lot of expensive gadgets(about $3000 dollars worth according to the article) we had to purchase individually back in the 90’s. The purchase price quoted on these goods may or may not be accurate, but the general gist of the article is sound imo. This in no way proves every worker in the West is better off than during the 1990’s. But it does pushback against some of the doom-mongers suggesting the average worker in the West is seeing their living standards fall. [http://www.aei.org/publication/how-your-iphone-replaces-3000-of-tech-stuff-from-the-1990s/](http://www.aei.org/publication/how-your-iphone-replaces-3000-of-tech-stuff-from-the-1990s/) ---
**Author:** ![camille](https://avatars.discourse-cdn.com/v4/letter/c/22d042/32.png) [@camille](https://boards.straightdope.com/u/camille)\ **Post date:** [July 23, 2015, 11:45am UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/54 "2015-07-23T11:45:47Z")
> [@septimus](#): > > The article OP links to is an interesting broad-ranging look. I find it peculiar that OP focused on one point which the article barely emphasizes. > > Wages in the developed world are much higher than in the developing world. A college graduate in web programming starts at $3 per hour in Thailand. Is a U.S. web programmer making $30 ten times as productive? Maybe, but the skill gap will narrow so the wage gap is likely to narrow also with increasing globalisation. > > 😕 A corporation has to be _very_ large (or specialised) before its employees form a large share of its customers. Walmart wants McDonalds’ employees to shop at its stores, but has no direct control over McDonalds’ wages. IOW, despite the famous story about Henry Ford, individual companies want to minimize the wages they pay. > > And to extrapolate from independent private corporations to a capitalist-controlled government you’ve got to think governments are less disorganized than they are! An exception is banks, which do dominate today’s developed governments. But banks hope for corporate profitability, which generally goes Up as wages go Down. > > 😕 😕 :eek: Living standards have risen dramatically due to penicillin, hi-tech agriculture, electronic toys, etc. and NOT due to “Competition driving wages up.” :smack: For a fair comparison, look at wages _as a share of GDP_; this has been falling in the U.S. for 30 years. > > The article OP links to points to ongoing changes to the human economy which are interesting and profound. Reducing these to false platitudes (“teh government and teh capitalist are teh evil greedy” on the one hand, or “teh beautiful market makes worker wages higher and higher” on the other hand) degrades the discussion. Thank you. I thought I had missed the point when I first read the article and then saw this OP about it the next day. But I’m not sure it’s possible to have a discussion about capitalism or economics here that doesn’t degrade into platitudes and political sniping. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [July 23, 2015, 12:54pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/55 "2015-07-23T12:54:09Z")
> [@Voyager](#): > > Happiness is clearly not all that important. Look at airlines. 30 years ago when I flew a lot for business flying was somewhat enjoyable. Today airlines are making good money by treating any customer they don’t really care about (not in business or first class) like shit. That’s not what the airline issue is about at all; they’ve determined that airline customers are apparently almost entirely concerned about price. In other words, how many flyers would pay an extra $25 for 5 degrees more of lean-back angle, or how many would pay $50 on a flight for a wider seat? Most people I know might pay those amounts on an intercontinental flight, but not on a domestic one; they’d sooner save the money and tough it out for 4 hours. So the airlines respond accordingly; they do treat business and frequent flyers nicer than others, because they realize that for those folks, it’s not always all about price, so they step up the game. But that family of four taking the flight from Montana to Ohio to visit Grandma? Not a chance. That family is going to save every dime per seat they can, because instead of being $25 to lean back, it’s now $100, and $200 for wider seats, etc… My point is that within limits, there are things employers do, albeit grudgingly, to increase worker happiness (for certain values of ‘happiness’) within the skilled worker and professional ranks, that they don’t even dream of doing in the relatively unskilled hourly ranks. Stuff like benefits, flex time, etc… Not every employer does them, and not all employers do them well, but on the whole, that’s the main difference between the pay/benefits for those groups- you have to do some of that kind of thing to get and keep the skilled and professional groups. Put another way, no real IT person/accountant/marketing person/master machinist is going to put up long with being paid $10/hr and being required to clock in/clock out at certain times of the day, with no benefits, and nothing else. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [July 23, 2015, 2:15pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/56 "2015-07-23T14:15:26Z")
> [@septimus](#): > > 😕 A corporation has to be _very_ large (or specialised) before its employees form a large share of its customers. Well, of course. I am confident General Motors would do very well if its workers were all paid fifty cents an hour, even though none of its workers could afford a car; the incredible savings would more than make up for the fact that now their target market would be maybe a tenth of one percent smaller. Henry Ford paid people well because his employee turnover was too high, not so they could buy Fords. But, again, the claim is not that a particular company is trying to drive down quality of life. It’s that the GOVERNMENT is. [QUOTE=Buck Godot] They wouldn’t but then again they also don’t want any of their profits going to support consumer’s ability to buy their products. Its just a massive prisoner’s dilemma. What you want is every other company paying their workers enough so they can buy your products while you pay yours peanuts. However if everyone does this (as seems to be the current trends) then you end up with people having little money to spend except a small group of people sitting on big piles of money that are too big for them to personally spend but which they also can’t usefully invest because not enough money is being spent. [/QUOTE] Of course it’s a prisoner’s dilemma - or it would be, if the government did not exist. The point of the prisoner’s dilemma is that the participants cannot enforce compliance to a plan to maximize their expected utility. But in a functioning country, the prisoners have a method of compliance; the government. The government enforces minimum wage laws, workplace safety laws, employment laws, social welfare programs, and on and on to stop one company or another from getting away with murder. Companies can and do find loopholes but for the most part the laws do work, and of course it’s to the benefit of every company that the laws are enforced, to keep the playing field level. The extent of protection offered workers in any first world country is absolutely massive as compared to what it once was, and is so vast we kind of forget just how far we have come. So, again, the unanswered question is; where are the first world **governments** trying to drive down the living standards of their citizenry? What government is trying to do that? ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [July 23, 2015, 3:56pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/57 "2015-07-23T15:56:04Z")
> [@RickJay](#): > > So, again, the unanswered question is; where are the first world **governments** trying to drive down the living standards of their citizenry? What government is trying to do that? I think it’s clear that the governments aren’t trying to do that. However, there seems to be little effort on their part to maintain the living standards in the face of greater globalization. What we’ve had until very recently was a situation where skilled workers in one country were in a sort of vacuum, and could command whatever the local labor market could bear. So in the US, engineers were well paid, and so were many other professions. Now, with globalization, companies are saying "Hey! Why should I pay a couple of native US guys $80k a year to be programmers, when I can hire a swarm of Indians in Bangalore at 1/4 the price? In other words, the labor markets have become bigger for a lot of jobs, and when you have developed country workers competing with developing country workers, the equilibrium wage is somewhere between the two, which is good for the developing country people, but sucks for the developed country people. I think a lot of the resentment against globalization, offshoring and outsourcing is for this exact reason, coupled with the concept that those developing country people are literally trying to take away people’s jobs. There aren’t enough IT jobs in India, for example, to employ all their tech people, so they’re gunning for work from the US and Europe. I can’t fault them for this, but every job staffed by offshore Indians is a job that’s not entirely staffed by local people at higher wages. It’s a sort of wealth transfer from richer to poorer countries, and it’s at the expense of the workers of the developed countries. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [July 23, 2015, 4:14pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/58 "2015-07-23T16:14:25Z")
> [@bump](#): > > I think it’s clear that the governments aren’t trying to do that. However, there seems to be little effort on their part to maintain the living standards in the face of greater globalization. What we’ve had until very recently was a situation where skilled workers in one country were in a sort of vacuum, and could command whatever the local labor market could bear. So in the US, engineers were well paid, and so were many other professions. It’s funny that you say that in the content of _The United States of America_, which is a continent-sized country with measurable differences in labor costs between states. I am honestly curious as to why computer programmers continue to be employed in Silicon Valley at all, which you could clearly pay programmers much less in places like Montana where the cost of living is so much lower. If trade across borders hurt people, or hurt people specifically in rich places, then I’ve always wondered why the fifty U.S. states don’t erect massive tariff barriers on each other. (Of course they do in some limited areas like cigarettes, not that you can enforce that stuff much.) California is more or less analogous to what Canada would be like if Canada dropped every single trade barrier it has with the US, and vice-versa; they have about the same populations, are both rich, and are/would be now competing with slightly less rich states like Arkansas. Why does free trade amongst the U.S. states not hurt them? Would they be better off erecting trade barriers of an international level? I mean, I grant the disparity in wealth between Canada/California and Arkansas is not as great as the disparity between the U.S. and Indonesia, but the effect should be the same, and if trade barriers would help California it’d be logical to erect them. I know to a large extent that is actually unconstitutional, but suppose it wasn’t. Would California be better off cutting back on its trade with the other 49 states?(PROTIP: No.) > [@](#): > > Now, with globalization, companies are saying "Hey! Why should I pay a couple of native US guys $80k a year to be programmers, when I can hire a swarm of Indians in Bangalore at 1/4 the price? In other words, the labor markets have become bigger for a lot of jobs, and when you have developed country workers competing with developing country workers, the equilibrium wage is somewhere between the two, which is good for the developing country people, but sucks for the developed country people. No, it sucks for computer programmers, or some of them, anyway. It certainly does not suck for the vast number of people who have access to computer products of the most remarkable quality at bargain prices. It might well be that computer programmer salaries are going down. But, while programmers are for whatever reason the go-to example of “jobs” in Internet discussions, they represent a small fraction of all workers and there is no particular reason to believe that programmer salaries in particular should remain high. As time goes on economic conditions change, and some jobs get more valuable and some less. The current value of a typing pool worker is pretty much nothing and they don’t exist anymore. On the other hand you’re set to do very well if you work in medical fields. I can tell you right now if you want a lot of money become a clinical statistician. Holy moly. The salaries are high and getting higher. > [@](#): > > I think a lot of the resentment against globalization, offshoring and outsourcing is for this exact reason, coupled with the concept that those developing country people are literally trying to take away people’s jobs. I absolutely would never blame anyone for being upset about losing their job, and being angry at whatever caused them to lose their job. I’ve lost a job before and it sucks. It’s the worst. It can cause depression and anxiety to an extent that affects physical health. It blows. But a properly run market economy is going to lose jobs, and the government cannot seek to protect everyone’s job. The government’s role is to see to the general welfare of all its citizens, and all evidence we have to date is that a well regulated market economy and international free trade will do that. Individually, some people will get the short end of the stick from time to time, but frankly they always will, forever and ever, amen; something will always change to put someone out of work and put someone else in to work. Over the long haul we as a group keep getting a little better off, though. Is there a wealth transfer from richer to poorer countries? Not that I can see. India is not scamming us; this isn’t some kind of giant con job. The First World is not shipping bales of money to India; we’re trading with them, and we get value in exchange. India is getting richer faster than we are, but it is, obviously, much easier to make very poor people richer than it is to make rich people even richer. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [July 23, 2015, 4:32pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/59 "2015-07-23T16:32:52Z")
> [@bump](#): > > That’s not what the airline issue is about at all; they’ve determined that airline customers are apparently almost entirely concerned about price. In other words, how many flyers would pay an extra $25 for 5 degrees more of lean-back angle, or how many would pay $50 on a flight for a wider seat? Most people I know might pay those amounts on an intercontinental flight, but not on a domestic one; they’d sooner save the money and tough it out for 4 hours. > > So the airlines respond accordingly; they do treat business and frequent flyers nicer than others, because they realize that for those folks, it’s not always all about price, so they step up the game. But that family of four taking the flight from Montana to Ohio to visit Grandma? Not a chance. That family is going to save every dime per seat they can, because instead of being $25 to lean back, it’s now $100, and $200 for wider seats, etc… They compete on the illusion of price. Then they charge for food, bags, and seats in lockstep. And reduce capacity to jack up the price. But my point is that customer satisfaction after they got on the plane has little to do with anything. > [@](#): > > My point is that within limits, there are things employers do, albeit grudgingly, to increase worker happiness (for certain values of ‘happiness’) within the skilled worker and professional ranks, that they don’t even dream of doing in the relatively unskilled hourly ranks. Stuff like benefits, flex time, etc… Not every employer does them, and not all employers do them well, but on the whole, that’s the main difference between the pay/benefits for those groups- you have to do some of that kind of thing to get and keep the skilled and professional groups. Put another way, no real IT person/accountant/marketing person/master machinist is going to put up long with being paid $10/hr and being required to clock in/clock out at certain times of the day, with no benefits, and nothing else. There is the Costco model. Jobs where the initiative and skill of employees cannot make a difference are going to get automated out of existence anyway. Supermarket checkers are not a highly skilled set of employees, but we direct our food dollars to our local Safeway because their veteran checkers (who have good benefits - new ones don’t) can solve problems without making us wait for managers, and know how to do things. Happy customer-facing employees can make a difference - but lots of companies care more about the immediate bottom line. Yeah, professionals get paid more and get better benefits - but there is more to happiness than that, and not all companies care. We’ve had plenty of threads about this. So, while happy employees might be beneficial, lots of companies don’t give a crap about making employees happy. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [July 23, 2015, 4:47pm UTC](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724/60 "2015-07-23T16:47:39Z")
> [@RickJay](#): > > It’s funny that you say that in the content of _The United States of America_, which is a continent-sized country with measurable differences in labor costs between states. I am honestly curious as to why computer programmers continue to be employed in Silicon Valley at all, which you could clearly pay programmers much less in places like Montana where the cost of living is so much lower. You must be thinking of the model of the programmer hacking out code all by him or herself. You couldn’t be more wrong. The reason we still have programmers in Silicon Valley - and why Santa Clara county is the number one job creator in the country, I believe, is that you want a pool of programmers and programmers want to be in a pool. Because interaction with other people and other companies is important. I moved here from NJ because there it was pretty much Bell Labs or nothing. Here, when I got fed up with my company, I could move to another with zero impact on my family (and a shorter commute.) At a meeting yesterday my VP noted that half his staff came from AMD. The mixing of talents and experiences is what makes Silicon Valley work, and why Silicon Bayou, Silicon Glen, Silicon Reststop and the rest have all flopped. > [@](#): > > I mean, I grant the disparity in wealth between Canada/California and Arkansas is not as great as the disparity between the U.S. and Indonesia, but the effect should be the same, and if trade barriers would help California it’d be logical to erect them. I know to a large extent that is actually unconstitutional, but suppose it wasn’t. Would California be better off cutting back on its trade with the other 49 states?(PROTIP: No.) I can’t imagine who would thing this is a good idea. We kind of do it for gasoline, because of our clean air laws, and it makes gas more expensive for us. > [@](#): > > No, it sucks for computer programmers, or some of them, anyway. It certainly does not suck for the vast number of people who have access to computer products of the most remarkable quality at bargain prices. > > It might well be that computer programmer salaries are going down. But, while programmers are for whatever reason the go-to example of “jobs” in Internet discussions, they represent a small fraction of all workers and there is no particular reason to believe that programmer salaries in particular should remain high. As time goes on economic conditions change, and some jobs get more valuable and some less. The current value of a typing pool worker is pretty much nothing and they don’t exist anymore. On the other hand you’re set to do very well if you work in medical fields. I can tell you right now if you want a lot of money become a clinical statistician. Holy moly. The salaries are high and getting higher. My company is primarily a software company. If salaries for new programmers has gone down, it would fool me. And we have lots of them. BTW, we do have centers in India. They have been a pain to manage. The most success has been with people here moving back to India (and taking a 50% pay cut) and being the major contacts. All the vital stuff is done here, the fairly simple stuff is done there. [Previous page](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724.md?page=2) [Next page](https://boards.straightdope.com/t/are-western-governments-purposely-driving-down-living-standards/725724.md?page=4)