In that case, I submit that the economy there can’t be all that bad
Sorry to kick your feet out from beneath you, Jaydabee, but $7.50 an hour + medical + dental + disability + short term disability + life insurance + 401K + Employee Continuing Education Program = a living wage in Southern Wisconsin. $7.50 is the starting wage; after three months, they’re up to $8.00. If we certify you on a forklift, it’s another dollar an hour. The average wage in our little factory is around $10.50, with experience and on the job training. I’m not sure what “games” you’re referring to, but we don’t play them - we have standard grievance procedures, and they get exercised. You’re indulging in a fantasy of corporate oppression that isn’t true, at least not in our case.
If you think that I’ve got rose colored glasses on about our workforce, then you should know that the local union has failed twice to rouse enough interest in a union to even hold the vote - it’s been cancelled twice by the union because they knew they’d lose.
I’m not whining about the quality of the workforce, and I agree with Mangeorge that a lousy staff is always the fault of the management, with this caveat - some people really can’t hold a job. For whatever reason, and drugs or other problems like that are the minority reason in this case, they can’t be bothered to show up on time, they slack at work, they abuse sick time, they pull the fire alarm because they’re bored, they lift whatever things are around that they’d like to have. When unemployment is this low, we end up employing a significant number of such people through temp agencies and during busy periods when we have to staff up, and we pay for it every time. We’re a young company, and management hasn’t nearly exhausted its options for running the factory, but the fact remains that there is a strong correlation between the unemployment rate and the quality of the people coming in off the street.
Never attribute to an -ism anything more easily explained by common, human stupidity.
jaydabee wrote:
I think Rhythmdvl’s response to your living wage post was due to the fact that the term “living wage” is a marker of left-wing rhetoric. Just saying the term tells a lot about what point of view you’re coming from.
But I’d sure like to know how, if a business can’t afford to pay someone what you’d consider a “living wage”, that “capitalism deems that they be run out of business.” How do you figure?
I believe this belongs in debates if I am not mistaken.
It’s darn close, ain’t it jaydabee? But ever the optimist (HAH!), I hold out hope that someone (besides me) will return this thread to its rightful track with a discussion of NAIRU and whether the economy has indeed as some say entered a “new era” which leads to a NAIRU closer to or even equal to zero, or whether NAIRU is even useful anymore.
Takers?
Livin’ on Tums, vitamin E and Rogaine
I see the problem with 0% unemployment being that the job market is expanding, thus creating a great demand. The one person left unemployed can command great wages because of this.
Similarly to how you wouldn’t want to buy a product in a seller’s market because the prices are outrageous (ie, all your money + 10%) you don’t want to hire in a worker’s market, because they’ll (rightfully so) demand incredible wages because circumstances have made their skills a rarity.
Having any constricted market like this is going to eventually be bad because if one party is making out like a bandit, the other parties aren’t. The economy isn’t a zero sum game, but microcosms of it are.
There is a strange view of labour though, that it’s the divine right of every factory owner to have a certain number of peasants clamouring to work for them.
You’d be laughed at if you sold a product for less than the cost of the materials and expected sympathy. Similarly, you shouldn’t expect sympathy if you sell a product for less than the cost of the labour it takes to make it. If you can’t hire enough workers to make the product and still sell it at your target cost then you need to either reduce labour costs by getting better workers or better machines/processes, or raise your prices. If that doesn’t work, go to where the wages are cheaper… I remember it being very cheap to live in Florida compared to Colorado.
A ‘living wage’ doesn’t seem like it should be a leftist term, it seems like a perfectly rational thing to consider. You need to pay a wage that is high enough for your target employee to live on. If you want SUV-driving yuppies, pay more. If you desire crack-heads, pay minimum without benefits (like fast food restaurants who keep hours under the minimum for a ‘full-time’ job). You also need to consider where you are, and where your employees are. If you’re in the middle of New York, your living wage is going to be higher than in rural Kansas. Similarly, a cold climate is going to cost your workers more to live in than a warm climate. Then, when you’ve figured out what it costs the target employee to live, if you don’t pay at least that much, how can you expect to attract the employees? If the pay is so low they need to suplement their income they’ll either moonlight or turn to crime, or something else, which serves to make them much less desirable as employees. And this is because of regular market forces, if you wanted to buy apples, selling at .50/kg wholesale and you offered .30/kg, would you expect prime quality or the dregs?
Anyways, labour is a cost of doing business exactly like supplies. To expect to be able to get quality for low cost is insane.
WillGolfForFood
Uhh, yup. You’re saying the same thing I am–there is no cause-and-effect relationship between a swing in employment and a swing in inflation/recession. My example illustrates that the opposite is true–that a swing in employment reflects a swing in larger economic forces.
Take the time to read a post before you malign it.
I don’t know how to perform a hemorrhoidectomy–and my wife is a surgeon.
The Fed does not hike interest rates on the basis of low unemployment figures. The Board of Governors recognizes that the best way to correct a labor shortage is to increase the labor pool–not by decreasing the number of jobs.
A lot of welfare people are forced to work so that brings more people to the workforce.
Friday the Down fell around 250 pts. Watch it monday to see how the economy is really doing.
Good point, and I just reread your original message - and have to stand by my comments. Maybe you should reread your original message, too
- Your original statement - the one I quoted - was “for example, whenever unemployment rises by 1% or more from the previous year, the economy has been in recession”. Sure sounds like an attempt at a definition to me. I pointed out that it was incorrect as a definition. A recession is not now and has never been defined in terms of unemployment - it’s defined as the GNP declining for two consecutive quarters.
Then, right after you claimed that your statement above wasn’t a definition, you said “You’re saying the same thing I am–there is no cause-and-effect relationship between a swing in employment and a swing in inflation/recession”. ??? If your original statement wasn’t a definition, and it wasn’t a statement of cause-and-effect, what the hell was it?
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Your reply to my “my wife is an economist” - “I don’t know how to perform a hemorrhoidectomy–and my wife is a surgeon” - was a good one. Sorry about that - I should have been more specific. My wife forecasts the US economy for Oxford Economics (an international econometrics firm), and she and I do talk economics fairly often. Although I’m a programmer by trade - not an economist - I’ve worked for econometrics firms in the past. That’s how my wife and I met.
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“The Fed does not hike interest rates on the basis of low unemployment figures.” That’s gonna come as news to a lot of people, including Alan Greenspan. Unemployment rates are far from the only thing he considers, but it’s certainly a factor. It’s one of many indicators of capacity utilization.
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Your comment “The Board of Governors recognizes that the best way to correct a labor shortage is to increase the labor pool–not by decreasing the number of jobs” - is just silly. For one thing, correcting labor shortages isn’t the Fed’s job - controlling the money supply and inflation is. For another, increasing the size of the labor pool (by banning abortions, perhaps? raising the retirement age? increasing the immigration quotas?) is particularly outside the scope of the Fed’s powers.
You can download a copy of the Fed’s mission statement from http://www.federalreserve.gov/pf/pf.htm
WillGolfForFood:
Glad you enjoyed the hemorrhoid thing. Who doesn’t? [Here I am tempted to insert a smiley-face, but I hate those goddamned things.]
As I’ve already attempted to clarify this–to no effect–allow me to introduce an analogy (which is by no means factual): Whenever world-wide average temperature falls by 1% or more from the previous year, there has been a volcanic eruption. Certainly, a pursuant temperature drop is not necessary to the definition of a volcanic eruption, nor is the observed temperature drop a cause of the eruption. To the contrary, the temperature drop is one of the many effects of a larger ecological force at work.
This is absolutely, incontrovertibly, unequivocally true. So what? If a butcher can only cure your infection through amputation, while a physician is able to cure you through administration of antibiotics, it is criminal for the butcher to amputate and preclude the need to visit the physicican.
What I mean by that second analogy is that if Mr. Greenspan can only do more harm than good by intervening, he is circumspect enough to allow market forces to apply the correction through immigration.
It is a horrible misconception among many that increasing immigration only brings in unskilled labor of which we already have enough. A shortage of skilled labor in any field should result in increased wages in that field and immigration of those who possess those skills.
Mr. Greenspan would not be the Chairman of the Board of Governors if he did not already understand these things.
If they can’t find american’s to do the job, they can import or sponsor foreign people. Thus, there should always been enough people to work,right?
This is supposed to be the justification behind all working visas and most green cards - that an American cannot reasonably be found. However, immigration is capped by legislation, and high demand in recent years has led the INS to issues most of its 2000 budget of work visas in 1999, and they’ll run out this month (if anyone is skeptical, I’ll quote extensively from the letter from our company lawyers).
Besides, it would be a bad idea to staff up with immigrants during high employment periods. What happens when employment sags? Send them all home? Imagine the anti-immigration sentiment following massive layoffs in certain industries where foreign labour made up the shortfall during busy periods.
Never attribute to an -ism anything more easily explained by common, human stupidity.