What I’m trying to say is that as a civilization, USA is now producing hugely more of everything - more material goods, more services - than it did 40 years ago. Yet among the citizenry, everyone who is a worker and at least partially responsible for the creation of these goods and services, is on an average not receiving any more money (also known as credits towards goods and services)
However you slice it, I understand quite well that some people are far more valuable to society than others. What I have a problem with is that currently the rich/investor class is snarfing all of the pie. Objectively, the numbers show that “trickle down” doesn’t actually happen on a macro scale, or worker wages would have risen in real terms.
If, over 40 years, the average worker productivity went up by a factor of 3, surely the wealthy could share at least a taste of the gains? Raise real wages by 30% or so? Do they have to actually grab all of it?
And, for that matter, why do the citizenry allow it?
That’s a different question, and it’s not unreasonable. But it bears no relationship to how the market values someone’s work or how the workers themselves created the increased productivity (for the most part, they didn’t). There are companies that do what you suggest, BTW. But the reason the contributors of capital who assume the risk of the venture get the profits is because, well, they contributed the capital and assumed the risk. The rest of us get what our skills are valued in the market.
They needn’t. No one has to work for a company whose “share the wealth” policies offend one’s sensibilities.
200 years ago, being a farmer was the benchmark by which a factory worker’s wages were measured against.
Point of fact 20 years ago I used to do a lot of “light industrial” temp jobs during the summers when I was home from college. Most of those jobs consisted of literally pushing a button on a factory floor.
I would imagine that workers in a modern factory have to be a bit more sophisticated as their job probably has more to do with monitoring and maintaining the automation than doing the actual manual labor. I’d assume they get paid more, but there are fewer of them.
I don’t believe it is an “and/or” problem. A system where 100% of the profit is distributed to the workers is as untenable as a system where 100% of the profit goes to the owners (i.e. “slavery”). Even experts are not in agreement over the effects of minimum wage laws. Yes, in the simplistic price floor model from Econ 101 class, it creates an obvious surplus of unemployed workers who are desperate enough to work for nickels. Some economists OTOH point to the Henry Ford model where increasing workers wages to reasonable levels stimulates the economy by increasing their purchasing power.
I can’t see any connection and doubt too many “rich folk” shop at Walmart.
Walmart is a retailer in a competitive market, not a government outlet. Their sales levels fluctuate for many reasons and if a tight economic stretch drives their sales down - and some go to an even cheaper tier - it still doesn’t connect very firmly to your first statement.
The problem, in a nutshell, is that we cling to the idea that everyone can have a “GM job” and it’s a failure of the economic system if they don’t. Even at the peak of such jobs - maybe the md-1950s - not everyone had one. All of the factors discussed above apply, but none more so than the widening gap between the demand for skilled workers and the levels of production of consumer goods. It used to take more people, with higher skill sets and thus worthy of higher pay, to produce the goods we bought. Now it’s a vast number of highly automated processes needing only semi-skilled workers to supervise and do the parts not lending themselves to automation. The pool of “GM jobs” has shrunk steadily and no government or industry promises or programs is going to bring them back. Why do you think the US has become such an overwhemingly service-based economy? “Service” is the only place you can create artificially supported jobs along the “GM” model… and we’ve exhausted that route.
There are not, and never will be, “GM jobs” for an increasing number of US workers. That number is already at or past the tipping point and will only get worse.
(“GM job” - full time, reasonably assured employment for life, above poverty level for a single income family and comfortable/rising/American Dream for two incomes, with health and pension benefits.)
I think you’re right- except that back in the day, a “GM Job” was even more lucrative, in that you could basically support a family on a single blue collar income with one of these jobs, or at worst, the wife had to work a relatively low-paying job.
There aren’t that many more of them around- what blue collar jobs can you still find that’ll pay upwards of about $20/hr (roughly 40k per year) that aren’t skilled labor/tradesman type jobs? (and FWIW, GM’s starting wage IS just shy of $20)
Rich people don’t spend all their money because they have too much to spend. I know a guy who became very rich from an IPO (helicopter to work rich). His wife told him she’d divorce him if he bought any more stuff.
WalMart specifically said that their sales forecast was lowered because of the struggle of their customer base. If money from the rich who couldn’t spend it if they wanted to got funneled to them, WalMart would have done better. As would their suppliers. (Mostly in China, I know.)
I don’t know what the government has to do with anything. They can reallocate money through taxes and welfare payments, and by increasing hiring. The government is not forcing WalMart to increase wages, not nationally.
I know it’s fun to blame the unions and the workers, but maybe management not making cars people wanted to buy had teensy bit to do with it. We’ve recently got a glimpse inside the old GM because of the investigation into them killing some of their customers, and it is not pretty.
I am not advocating it - at least, not as something to return to or to keep trying to implement on a universal scale. However, it wasn’t the model per se that was faulty, it was the enormous down-the-road costs, given as union concessions over and over in lieu of more immediate wage and benefit increases.
We have long since passed the point where there is a full-time, full-wage job for every adult who wants one. Short of the Zombie Apocalypse, that situation is not coming back.
I’m trying to follow your argument here but it’s still not connecting to your original statement. Yes, consumer spending tends to fall in very tough times (and only in very tough times), but Walmart’s individual sales levels and what they say about it are a very selective sample. I can’t see that somehow forcing/getting the rich to spend at Walmart to make up the shortfall from reduced lower-tier spending makes sense on any level at all.
In general, I don’t think you can talk about economic balance between rich and bottom-half spending. They’re almost irrelevant to each other, at least in simple terms.
I use “GM jobs” because everyone who knows a little bit of economic history immediately understands what the term means. It goes far beyond GM, the auto industry and even the manufacturing industry - it’s that once-common class of job with good pay, steady advancement, plentiful benefits and more or less lifetime assurances.
That is, the kind of job everyone moons about, Ozzie and Harriet style; the kind of job too many people assume they and their kids can get if they’re just “successful” and the kind of jobs our noble leaders keep rushing in circles trying to “create.”
You know, those good old days we can get back if we just spend enough of someone else’s money - but not ours.
I’m certainly not saying that WalMart would have better sales if they tried to get the rich to shop there. They tried to upgrade their fashions to get people with a bit more money to go there, and it crashed and burned.
Unless you are talking about confiscatory tax rates, which no one is, nothing we do is going to affect spending by the rich much. That’s the point. Decreasing their tax rate is not going to increase their consumption.
OTOH is some of their income today is transferred to the bottom 50%, say, their spending and their consumption will increase. That can be done if some of the profits the rich are getting today goes to higher salaries, if the tax rate is increased and the money is used for social spending or for infrastructure improvements which should reduce the unemployment rate and thus increase wages. Wages went up in the late '90s as unemployment fell to levels not thought to be possible. The rich got richer but the poor got richer faster so inequality went down.
To anticipate an objection, taking money from the rich will reduce the amount they have to invest. But if there is already ample money for investment, few places to put it, and a lack of consumption, this won’t hurt anything. I think there was a lack of investment money somewhere around 1980 - in that situation the solutions is very different.
One more thing - we need to reduce the fear that is out there. It seems that much of the savings in gas prices has gone into savings, not consumption. That’s probably a good move for each individual but not good for the economy as a whole. It is not a surprising reaction to what we just went through.
Perhaps it is going to take time to get debt reduced and bank accounts replenished before we see a consumption increase.
GM was not the only company that screwed up. Ford survived the recession with similar labor costs. It is easy for the management to blame the workers not their poor decisions. The old boss of GM got fired, they got their shit together, and they are now making money. And not by being super cheap. Labor is a factor, but not the biggest or only factor.
I gather your last comment was some implication about the government. That is irrelevant here. When people get more money they can afford to upgrade to better quality. That is what is happening in fast food. The dollar stores are not doing as well now. Higher margins and a demand for better quality can mean the need to hire better workers by paying them better. And that means more money for the better stores. Perhaps WalMart is the tip of the iceberg, if so inequality should be reduced as the economy improves for everyone.
I think people cling to the idea that they should be able to find a job commensurate with their skills, ability and interest that is reasonably stable and will afford them the ability to live, and possibly raise a family, with a reasonable standard of living.
I have personally seen no greater symbol of the transformation of the American economy over the past several decades than the Sands casino in Bethlehem, PA. Basically they transformed the Bethlehem Steel mill from a decrepit symbol of the collapse of the American steel industry into a steel mill themed casino and entertainment complex. And to me, there is something a bit sad about that. The steel plan provided thousands of jobs for not just blue collar workers, but engineers, materials scientists, managers and executives and actually made stuff people use all over the world. The casino, hotels, restaurants and bars mostly provide a smaller number of low level service jobs for entertaining affluent people (and not so affluent people who probably can’t afford to be there) from the tri-state area.
What are you calling ‘snarfing all of the pie’?
The poor, working-class, etc…have done nothing to deserve a larger share of the capital in the world. Their basic needs are all met, more or less, via social programs currently extant, and, no thanks to them. What more should they have, for doing nothing?
I don’t deserve a chunk of Warren Buffett’s money, just because he can buy and sell me 1000 times over, and just because I don’t have one percent of what he does. Since when should the citizenry steal from him or others to make sure that I am closer in income to what he has?
And, what has the wealthy ‘grabbed’, other than the opportunity to produce, an opportunity that those less fortunate haven’t? Wealth (the pie) wasn’t just sitting there, waiting to be grabbed, and, then, looted by ‘the wealthy’, by oppressing the ‘average worker’. The wealth was created by those who possess the factors of production, and they are rewarded for it.
Here’s an article that refutes this claim on several levels.
Some quotes:
“Boeing would most certainly be in trouble if they had to pay their workers sufficient to afford a new jetliner.”
“It should be obvious that paying the workforce an extra [$10] so that they can then buy [$5] worth of company production just isn’t a way to increase your profits. It’s a great way to increase your losses though.”
More importantly, Henry Ford was suffering severe turnover in his factories. It costs money to hire and ramp up new employees, so Ford figured out that he could reduce his overall costs by increasing wages.
It doesn’t make sense for “all companies to spend X instead of Y”. Henry Ford figured out that it was worthwhile from an economic standpoint to pay $5 instead of $2. But that wage might not make sense for some other companies. It’s the reason most people earn more than minimum wage without their employers being forced to pay more.
Given the crappy state of their stores, I doubt it. Or they were going for an employee base desperate enough to work at a place where they would need government help to survive. Which up to just recently was a good bet.
Walmart stores are not in a crappy state, in spite of what the urban myth is.
It is incredible that you think that they would go 'for an employee base desperate enough to work at a place where they…survive". Obviously, you have no idea of what kind of a work base they were going for. No company designs their business to include government assistance to households. Walmart employs part-time help. Students. Housewives and househusbands. Retirees. If they, or any company, is paying attention to business, they don’t/shouldn’t give a flying fuck how the employees survive. It is the employees job to do their own surviving, just as it is not the employees responsibility to take care of overseas expansions. You are confusing the issues.
I think this says more about you than the reality of the situation. Nobody confuses a Walmart with a Nordstrom; there is likely no one who’s ever been in a Walmart more than a few times without seeing the dirty, disheveled mess that all such megastores are prone to, especially ones that pay the lowest tier of wages of any major US company.
Walmart is absolutely infamous for their decades of opening stores in locations where they quickly run all but the strongest competition into the ground - typically smaller cities and hub towns in the semi-rural areas. Having run all the competition out, they they have their pick of the employee pool that won’t or can’t drive 50 miles to the next job, and they are not all part-timers in optional pocket-money jobs.
And let’s not even get into the arm-breaking pressure they put on manufacturers to produce goods to their specs at a price they feel like paying… and the resulting problems for those workers and their families.
Wow. Just fuckin’ wow. Yeah, there’s some deep confusion here, all right. You’ve confused 2015 with the robber baron era. Probably from the viewpoint of someone with a long, cushy, government-supported career and benefits behind them (during which “they did it all themselves, without no help from nobody”), or the exact equivalent, US old-age benefits.
