Lost Decade for US Workers

[emacknight]

@monstro

Has it happened with Google? Or Apple? Or Microsoft?

Google is doing it right now with Motorola and a travel software called ITA Software, not sure about Apple, Microsoft did it in the past and right now is in the works to buy Skyppe.

@monstro

And when a ginormous company buys up a smaller company, does that create jobs? Or reduce the number of them?

Depends on the situation I guess. I’m used to medical device companies buying start ups for their technology. The larger company has the ability to mass produce and reach a wider market. So overall there would be more jobs. The small company of 10 was able to design and develop, but not able to produce and distribute.

Ideally, the small innovators make a boat load of cash, then continue to innovate, or sit on a beach some where.

[Euphonious_Polemic]

]OK, let’s agree that nobody “deserves” to have high wages. In the race to the bottom of the global wage pile, where should the end point be for American workers?

Do you think that the standard of living will remain the same at this lower wage? Will new DVD players make up for lower salaries?

Also,with corporate profits and productivity soaring, (but not incomes for workers), where is the natural endpoint for this trend? corporate profits cannot go on increasing at the expense of wages forever - where does it stop?

If we accept Krugman’s thesis that the gap between rich and poor in America is steadily and impressively growing, where will this end? How much wealth can be concentrated in fewer and fewer hands before society as we know it collapses?

[emacknight]

@Euphonious_Polemic

]OK, let’s agree that nobody “deserves” to have high wages. In the race to the bottom of the global wage pile, where should the end point be for American workers?

Some where between $0 and where it is now.

You’ve asked a few times now, where do you think it should be? Look at the list on Wiki that you provided and decide where you think the US should be relative to all the other countries.

Do you think it should be at the top? Are Americans that special that they deserve to be higher than Canadians?

@Euphonious_Polemic

Do you think that the standard of living will remain the same at this lower wage? Will new DVD players make up for lower salaries?

You won’t like this, but I think the standard of living in the US is also too high. And to head off the inevitable response, that does not mean it’s too high for a homeless dude. The fact that so many Americans have DVD players, along with the tv and dvd collection, is a luxury not a necessity. And that the average American household has multiple tvs and multiple dvd players is excess (and no, that doesn’t mean that a homeless dude has multiple tvs). But even 97.7% of those considered “poor” have a tv. Of those who are “poor” in the rest of the world, do you think they have tvs? Hell, do you think they have electricity?

@Euphonious_Polemic

Also,with corporate profits and productivity soaring,

How is it sorry if there is a lack of demand?

@Euphonious_Polemic

(but not incomes for workers), where is the natural endpoint for this trend? corporate profits cannot go on increasing at the expense of wages forever - where does it stop?

When new players enter the market, reducing those corporate profits. New players me more workers earning more wages.

The US used have something like 90% working in agriculture, but now it’s a fraction of that. Yet farms are more productive than ever. Those workers went on to do other things, partly because the cost of food dropped.

@Euphonious_Polemic

If we accept Krugman’s thesis that the gap between rich and poor in America is steadily and impressively growing, where will this end?

At 1, that’s the highest it can go. Unless the poor in America decide to compete and take a share of the ever increasing profits you claim that there are.

@Euphonious_Polemic

How much wealth can be concentrated in fewer and fewer hands before society as we know it collapses?

Lots and lots, or oodles and oodles, which ever you prefer. There are plenty of countries with higher Gini coefficients, and plenty with lower. The US didn’t just suddenly have income/wealth disparity.

For some reason Americans seem to like it, because they keep voting for it to get worse. It’s kind of like how people get excited by higher and higher jackpots, even though they still have no chance of winning. The thought that people in the US are getting richer excites the plebes and makes them think some day they’ll be that rich. The richer the rich get, the more excited the rubes. The more excited the rubes the worse political policy gets.

Fear not, eventually Canada will be forced to step and make you all socialized, the way Social Services does with kids that aren’t being taken care of.

[Euphonious_Polemic]

@emacknight

Do you think it should be at the top? Are Americans that special that they deserve to be higher than Canadians??

Good point - yes, if their productivity is higher. I don’t think that higher productivity by the workers should translate automatically into lower wages and higher profits as it is currently doing.

@emacknight

You won’t like this, but I think the standard of living in the US is also too high

Why wouldn’t I like that? I agree. The problem is in convincing everyone to go “backwards” in terms of their standard of living. This tends to lead to social unrest.

Originally Posted by Euphonious Polemic
If we accept Krugman’s thesis that the gap between rich and poor in America is steadily and impressively growing, where will this end?

@emacknight

At 1, that’s the highest it can go. Unless the poor in America decide to compete and take a share of the ever increasing profits you claim that there are.

I think that a collapse will occur sometime before it reaches 1. The trend has to flatten out at some point.

@emacknight

Lots and lots, or oodles and oodles, which ever you prefer. There are plenty of countries with higher Gini coefficients, and plenty with lower. The US didn’t just suddenly have income/wealth disparity.

No, but it has been increasing lately. And this countries with a low Gini Coefficient tend to be nice places to live (Denmark, Sweden, Japan, Norway), while those with high Gini coefficents (Haiti, Botswana, Lesotho, Namibia) tend to be not nice places to live. I don’t think it is necessarily a great plan to try to shoot to be less like Sweden and more like Haiti. This is the current trend, and I don’t think it’s a good one.

@emacknight

For some reason Americans seem to like it, because they keep voting for it to get worse. It’s kind of like how people get excited by higher and higher jackpots, even though they still have no chance of winning. The thought that people in the US are getting richer excites the plebes and makes them think some day they’ll be that rich. The richer the rich get, the more excited the rubes. The more excited the rubes the worse political policy gets.

I think you’ve hit the nail on the head with this one I don’t understand it, but I think your explanation is the best I’ve heard.

@emacknight

Fear not, eventually Canada will be forced to step and make you all socialized, the way Social Services does with kids that aren’t being taken care of.

Thanks, but I’m already nicely socialized, as I live in Canada like you.

[emacknight]

@Euphonious_Polemic

Good point - yes, if their productivity is higher. I don’t think that higher productivity by the workers should translate automatically into lower wages and higher profits as it is currently doing.

Why not? If the workers want higher wages they should go after those higher profits. If the company invests money that makes you more productive, why should you get the money?

Or, if you want, you could be paid based on your productivity, but I doubt you’d like that.

@Euphonious_Polemic

I think that a collapse will occur sometime before it reaches 1. The trend has to flatten out at some point.

The US has had a high Gini coefficient for a long time, and although it’s gotten worse, it’s only slightly worse than it’s been. The US tolerance for income inequality is rather high, like putting lobsters in warm water then gradually heating it up.

@Euphonious_Polemic

No, but it has been increasing lately. And this countries with a low Gini Coefficient tend to be nice places to live (Denmark, Sweden, Japan, Norway),

You forgot these ones:

Tanzania
Algeria
India
Uzbekistan
Vietnam
Yemen
Ghana
Indonesia
Tunisia
Morocco
China
Russia
Kenya
Cambodia
Thailand
Nicaragua
Nigeria
Iran
Cameroon
Côte d’Ivoire

How many of those would you like to live in?

@Euphonious_Polemic

Thanks, but I’m already nicely socialized, as I live in Canada like you.

I live in the US now, you should try it, it’s fun if you’re not poor.

[Euphonious_Polemic]

@emacknight

I live in the US now, you should try it, it’s fun if you’re not poor.

Been there, done that. Thanks anyway, but I’ll pass.

[suranyi]

@monstro

Has it happened with Google? Or Apple? Or Microsoft?

Just about every other week there’s an article in the local paper (San Jose Mercury News) about Google buying yet another startup company.

ITA Software was mentioned on this thread. They also just bought Zagat.