And which makes it more likely to be living paycheck to paycheck, getting 10 /hour, hoping/trying for incentive pay, and trying not to burn out before the stock vests? Or 15 /hour?
I don’t know about warehouse workers who were already making 15- it’s brutal work that deserves every penny and more that they make. But a lot of employees saw a significant pay bump in November.
That housing already existed. They didn’t produce anything.
I’m fact if ome person didn’t buy up 120 houses , creating a false lack of housing then a lot more people could buy their own.
Unless you think capital investment is using your money to create a need. Which you then charge to fulfill has somehow magically produced something.
But you have managed a good argument for going back to a feudal system
Guess the Lord’s and ladies really were the ones producing everything.
How lucky those serfs were to be able to work their land all year for a few scraps of what they produced off it.
So… what’s up with this?
Starwood Waypoint, which launched its business seven years ago, now owns more than 16,000 single-family rentals, the vast majority of which were foreclosures. So far it has purchased about 200 brand-new homes from builders, with an average price point of around $180,000. These homes represent about 5 percent of the REIT’s portfolio.
The houses are there. In fact, for the most part, the houses were owned. Then the bottom fell out of the market, people foreclosed, and capitalists swooped in to pick them up to serve as rentals at a profit. They aren’t producing housing. In fact, they’re almost certainly making housing more expensive by increasing demand, and by inserting themselves as middlemen. Indeed, often the result is a building that lays empty, because the person who built it built it for the purpose of renting and could not find people to fill the apartments.
Again, we have this bizarre definition of value. Nothing has been produced. No actual work has been done. Instead, we’ve somehow seen an increase in value because… It was bought by someone who could then rent it to someone else? How is that valuable? Why should I care about that definition of value?
There is no value created when an investment capital firm buys foreclosed homes on the cheap, then uses them as rental units at a profit.
But how many family farms are left? Virtually all of them are corporate farms, where the original farmer is reduced to a manager if he’s around at all. A big bunch of the remainder contract with a supplier to produce a crop which is then bought by the supplier.
Case in point, some months ago I stumbled across Desert Durum* where a single supplier, Arizona Grain, produces hybrid wheat seed which is then sent to a bunch of contract farmers to grow. The entire crop is sold to AG and virtually all of it is exported to Italy where they love to mill it into pasta.
It greatly reduces the risk for the farmer but I don’t know what happens if a passing hail storm flattens it or it does not meet AG’s quality standards.
*Wheat crops in Arizona; who knew?
But as Correy El and I have pointed out, this isn’t correct. Consumption by the poor, however you measure it, isn’t maintained by people who make even less than the poor. It is maintained by the people who produce more, because the government takes some of what they produce and give it to the poor to consume in transfer payments.
That is, I work 40 hours a week at $50 an hour. Someone else works 10 hours a week at $10 an hour. The government then takes 40% of my $2000 and divvies it up among the someone elses who make $100 a week. Those someone elses now can consume more than $100 a week, because they have received transfer payments. No one is depending on anyone who works for less than they do - I don’t depend on the $100 a week workers for anything in particular - they don’t work for me, and I have to pay if I want whatever they produce. The $100 a week workers depend on me for the amount they consume in excess of $100 a week.
Therefore it is exactly the opposite - in order to maintain even a lifestyle that is considered poor in America, someone has to be working for more than they are in order to maintain their lifestyle.
Regards,
Shodan
That doesn’t sound like a real thing. Or at the very least it sound contradictory.
Not everyone wants to own the building they live in.
If you’re not going to live in one spot for more than a short time renting might be more convenient than purchasing.
If you don’t want to bother with maintenance - if something breaks in your apartment you don’t have to pay for the repairs. You don’t have to maintain the lawn or landscaping
If you don’t want or need much space, but your area has a minimum square footage for single residences then renting might, in absolute numbers be a better deal for you in that particular circumstance.
Not everyone can maintain a building, especially the elderly and disabled.
There are people looking to rent rather than buy, and people providing such places are, actually, creating value and serving a need without malicious intent or acting as a parasite.
That’s investment, another way of producing value.
Investment is where you risk capital into an enterprise, hoping it will pay off. If the risk pays off, you make money. If it doesn’t, you lose money. The homeowners thought investing their capital in a house would pay off. Instead, the bottom fell out of the market, and they lost their investment. Value was lost. Then the REIT thought investing their capital in a rental would pay off. If they are wrong, the houses sit empty and they lose money. If they are right, renters move in and pay rent and the REIT makes money.
Value is created in the same way that all free market exchanges create value. Renters have money, and the REIT has rental properties. The renters want the use of the properties more than they want the money, and the REIT want the money more than the properties. They exchange, and both sides come out better than before, because both side have something they wanted more than what they started with.
Regards,
Shodan
Choosing markets does not mean they perfectly value economic outputs. It means they value them better than ridiculous arbitrary statements like "burger flippers produce more than ‘[unspecified] middle managers in bullshit jobs’ ". Or even relatively more serious attempts to judge this by some committee of experts or the average of public opinion. The latter is proven not to work.
So even under the simply wrong concept of comparing output just on hours worked without any correction for value per hour worked, the idea of poorer supporting richer domestically is clearly mistaken. You would actually need to go flat out ridiculous and say that on average people paid less per hour produce more per hour than people paid more per hour, not just give value judgments about hypothetical exceptions.
Companies that employ lots of capital and little labor could generally, on paper, significantly adjust upward the pay of their few workers, who might be very highly paid already. If customers wouldn’t go elsewhere if the company raised prices. If the people investing the capital wouldn’t go elsewhere if their return was squeezed out instead. So what? It’s got nothing directly to do with the claim that each hour of labor has the same value, or proposed seat-of-the-pants evaluation of each case.
Again ‘China is ripping us off’ or ‘we’re subsidizing China by buying stuff assembled there’ (which is often heard) or ‘they are subsidizing us’ are both wrong.
If the US instituted policies to require smartphones sold in the US to be (wholly) made in the US, the price would go up and US consumers would buy fewer. But it would not go to zero and for the remaining demand, some more people in the US would have to be attracted to phone assembly, by higher wages for that general skill level of work than prevails now. But the net effect of that would be negative, by classical economics and there’s no reason to doubt it in a case like this. The US would be economically worse off, though that couldn’t be measured for the whole country just by the impact of the higher price of a phone for me. There would be some offset to that in more payroll expense going to relatively low skilled people in the US.
In China the outcome would likewise be net negative. There are people freely giving their labor (no significant role of forced labor in contractors for smart phones) labor at the prevailing price for that labor in China. Now they’d lose those jobs. Likewise the Chinese economy would adapt to the change, but worse off.
This doesn’t look like the outcome of a giver of subsidies cutting them off…because it’s not one country subsidizing the other to begin with.
None of this analysis prohibits being in favor of (domestic) transfer payments or mandates like the min wage. It’s just that they should be analyzed realistically. We don’t raise the min wage, $15 is in play here in NJ, because we’ve discovered that ‘burger flipper’ labor is really worth $15 in the market. It clearly isn’t. We’re enforcing that mandate, if so, in the belief that forcing employers to pay more for certain labor than it’s worth is beneficial to society as a whole. We don’t need to pretend we’re ‘correcting’ the market’s ‘wrong’ pricing of that labor. But by realizing what we’re actually doing, it’s probably more likely we won’t go too far overboard (eg/ $15/hr isn’t as much in excess of the value of the labor in NJ as it would be in AL, etc though even in NJ it could, arguably, have too much negative side effect, because the market’s price of labor is actually real and can’t be waved away with ‘well I don’t agree, the labor is worth whatever I say it is’).
Where are you getting any of this?
Most farms are family farms. Like 95%. Very few farms are corporate farms. Most corporate farms are run by family corporations. And most of those family corporations have single-digit shareholders.
Aside from creating them in the first place?
A big part of the problem is this entire concept of “superstar” companies like Amazon, Apple or Google. Basically, large-ish companies that attract the top talent with high (often exorbitantly high) salaries. They drive up real estate prices and place a massive strain on infrastructure in whatever city they occupy. And not only do they exist side by side not just in labor markets for burger flippers (who, let’s be honest, will always get paid shit), but in labor markets for middle class jobs like school teachers, firemen and average mooks working in regular old office jobs that don’t require a Harvard MBA or engineering degree from Stanford.
As a psuedo slumlord myself ( mobile home park) i currently make most of my income from my rental property.
I make no mistake about who’s labor and production is affording basically everything I have
It sure isn’t mine .
I spend about 3 hours a week maintaining it.
For which I’m awarded roughly $3200 a month after mortgage and expenses.
I make far more money than any of my tenants who all work 33-45 hours a week.
The only reason I’m allowed to have these people not only pay to purchase the property for me but also give me an income by asking for 1/3-2/3 of their income is the fact that I signed the bank loan.
This is of course after they are paid by Walmart and jjs fencing and the gas station less than their net production ( as we’ve established , this how companies make a profit)
So, I profit and their employers profit from their labor and productivity, far more than they do
I sure don’t delude myself into thinking that somehow because I make more than them i am more productive. I hardly do anything compared to what im making.
I mean really, truly I’m not much different than a landowner with sharecroppers, a medeival Lord or even a plantation owner except that i don’t force these people to be here and give me their productivity.
The only thing I really produce is an opportunity for the government to get a second shot at taxing that money, since none of them make enough to really have much in tax liability.
Nor do I delude myself into thinking my paying taxes on the money i got from them allows them to live a modern lifestyle.
Almost every single farm around me is married to Tyson or Butterball.
It may look like family on paper, but they are really just a franchise.
And who is taking the risk there? If all your tenants move out, then you are left having to pay on a loan with no rental income.
Yeah, there certainly is the point that capital attracts capital, and at a certain point, you are not doing any work, it is just your money doing the work for you, but that is the reward if you have taken the initiative and the risk. If you were not their landlord, they’d be paying someone else rent to live. I have some issues with certain types of investments, where in you use your money to leverage other people out of theirs, but that’s completely different fro actually running a service that provides people a place to live.
Now, if you are gouging them, and charging them rent well above the value of the residences you provide, that is a different story, as well.
This is true but misleading for a few reasons.
Sure, most farms are family farms, but the vast majority of farm produce is produced by a few very large players. If I put a vegetable garden in my backyard and start selling the food, I’ve added to the number of family farms. But I haven’t appreciably changed the state of agriculture.
The number of shareholders or whether they’re related to each other is I guess a way of defining a family farm, but it’s not the standard one. When people use the term “family farm”, they’re picturing a small farm run by a nuclear family that lives on it and maybe hires a few workers.
A corporation that owns and farms a million acres by hiring workers but is owned by a few shareholders who happen to be part of the same family isn’t a family farm any more than Walmart is a “family-owned retail store” because the Walton siblings own almost all the shares.
Yeah, but the risk is honestly pretty minimal. The biggest risk is damage really, sometimes that can cost a good bit, but at the same time old mobile homes are pretty cheap to replace. If it was that bad.
True most of them don’t have much choice, it’s either pay me , or someone else.
Main thing is though, I don’t think I’m anywhere near as productive as even one of them.
After all they produce enough for their company and me to both profit and still manage to just barely squeek by themselves.
Of course, I’m pretty lenient , but I’ve managed to do a pretty good job selecting renters too.
But here’s the thing. Jeff Bezos and Sam Walton weren’t born into Amazon or Walmart. They built those companies. At what point does “society” have the right to step in and say “You’re too successful! We’re going to redistribute your wealth.”?
For that matter, what about companies like Uber or Airbnb or even Amazon and Walmart that disrupt existing industries? Why should taxi drivers or the Hiltons or retailers like Sears be protected because someone invents some technology that out-competes them?
Minimally at the point where they directly petition the local government and promise to things like an increase in the local tax base vis a vie job creation in return for favorable taxation.
Your statements seem to imply that these companies just sort of are merrily working hard and accomplishing things on their own until big bad society wants to greedily take from these poor put upon corporations. I believe this view is grounded more in sentiment than in fact.
Of course, there’s the bird brained kind of argument that sort of implies that since these companies are so large that there must be some nefarious doings. I don’t want to give the impression that I agree with any of that either.
There are a couple of things at play here. One is that these companies and the individuals who run them are so large and wealthy that they can have a disproportionate influence on local governments and economies.
Another is that many of them are creating technology for which we have few legal precedents to deal with.
Whether it’s “nefarious” or not, these companies are often reshaping society in ways that are well beyond “cooler phones”. IOW, a society designed by Jeff Bezos, Elon Musk and Mark Zuckerberg isn’t really “democracy”.