I don’t think rich people should hold billions of dollars in their pockets; they should keep in a money vault where they can swim in it like Scrooge McDuck.
Well…actually…yes. It does kind of sound like those workers are getting fucked.
I’m familiar with the concept of disruptive industries and the creative destruction that comes with innovation. Certainly the dismantling of obsolete jobs, companies and even entire industries is a necessary part of economic growth. However, I think that in the past, the new industries created enough new jobs and the rate of change was slow enough that people could adapt more easily.
The problem these days is that change happens so quickly that people have trouble adapting. And the companies that are doing the innovating are creating a relatively small number of high-level jobs requiring advanced skills and education while automating large numbers of jobs at all levels on a national or global scale.
If McDonald’s automated all their stores with kiosks, how many burger flippers are going to become data scientists or devops engineers?
And to your argument that Adam Smith’s “Invisible Hand” is helping the economy “in aggregate”, is it really?
Workers real wages have been stagnating or declining since the 70s.
The US is lagging behind other industrialized nations in terms of education, life expectancy, health care, obesity, and other metrics that indicate standard of living.
People aren’t any “happier” about their jobs than they were 30 years ago. Although I think they have a lot more pressure to appear that they are.
IOW, I don’t see the growing economy growing for everyone.
I’ve lost track of how many times this has been debunked on this board.
Yeah if the argument is “It’s good that there are billionaires because Bill Gates gives a lot to charity”, it’s not a good one. Many other mega-rich don’t give much to charity and as you say the US has domestic problems that perhaps the government could tackle better with a higher tax take (and if they weren’t in the pocket of corporations).
Note also that when it comes to foreign aid, the US is one of the more miserly developed countries spending only 0.18% GDP (and giving much of that to countries that don’t need it, but let’s not go there). So perhaps a fairer system is you make it harder for the mega-rich to dodge taxes and increase foreign aid.
Well, that’s certainly reassuring!
Yes. Uh-huh. Wind rises, sun blows in the East…
A pity we have no audio capacity, it would be a treat to hear posters gasping in astonishment.
So, this is a debunk?
Most everyone with a job keeps getting paid more, despite the doom and gloom being pushed by Trump and his ilk. So these gains are masked by grandpa retiring and junior getting her first job.
But we can keep going. EPI (usually the ultimate source for most stagnation claims) can only show stagnation by overstating inflation for compensation. Piketty doesn’t even use CPI (after his 2003 paper with Saez, which did use it for whatever reason) because it “tends to over-state inflation, in particular because it is not chained”. Some prefer PCE. This is easily validated by a simple sniff test – does anyone really think the typical today-wage deflated to a 30-years-ago-wage buys you an equivalent lifestyle? So suddenly a flat wage becomes a 25% increase, plus or minus depending on which deflator you choose.
And never mind that wage != compensation. We’ve seen above that household incomes are up despite there being a smaller proportion of households with two or more earners than there were in the 80s.
I think they’re confusing the fact that wage growth hasn’t kept pace with productivity since the 1970s with whether or not real wages have grown over the same period.
If you say so. But it seems to be “bunked” everywhere else.
It’s the keeping a job that’s the trick.
I found this quote from a Forbes article to be interesting (as it seems to support what I was saying):
"The fact is that in the 1980s and beyond, public companies began embracing a very different idea as to the purpose of a firm: the idea that the sole purpose of a corporation is to maximize shareholder value. Then, as executives were compensated massively with stock options to sharpen their focus on increasing shareholder value at the expense of everything else, and activist hedge funds began reinforcing the focus with corporate raids on firms that didn’t buy into the doctrine, public companies began to focus totally on maximizing shareholder as reflected in current the stock price.
Previously, firms had sought to balance the needs of all the stakeholders—customers, employees, shareholders and the community. Workers were valued both as contributors to the gains that had already been made and as the creators of future growth. But once shareholder value thinking took over, workers came to be seen as expendable commodities, whose training for the future and career development were simply not their problem. No responsibility was felt to those employees who had helped create the wealth of the company. Instead, corporate raiders, who had played no role in creating that wealth, extracted much of the gains, which they then used to conduct more raids."
Yes but the change in thinking is not a result of capitalism. It’s a symptom of the bubble economy, which itself is caused by the Fed. Also, when the shoddy managers go bust, they are bailed out. The effectiveness of a manager is too highly correlated with his ability in gaining government favor. Real capitalism weeds the shoddy managers out quite effectively.
I think this has a lot of merit. One thing I noticed even when I graduated from college was that companies would still hire employees for the long term- they’d hire entry level workers and train them / let them move up.
Over the past two decades, I’ve seen more and more companies, including ones where I’ve worked switch to a much more mercenary(?) model, where they prefer to hire contractors for specific projects where they can, and hire experienced full-time people where they can’t. Then, they staff management with experienced managers from without, and anyone who wants to work their way up in the company is out of luck. (I mean like moving from staff to management, not getting a superlative on your existing title like “Senior” or “Chief” or something like that)
Their option is pretty much to luck into one of two things- a rare promotion within their company, or to manage to talk their way into a promotion as part of a job change.
It’s very much like today’s companies view the idea of investing in someone’s training, or promoting from within as something that is only a cost to the company rather than an asset.
The fun part is using different deflators for income and productivity.
I would say the opposite. The bubble economy is a result of this change to shareholder-centric thinking.
When I first started my career in the mid-90s, I remember there being broadly two different types of companies:
- Big stodgy “old fashioned” companies where people tended to stay for long periods of time, but didn’t really work all that hard. Careers were more marathons than sprints.
- Fast paced tech startups where everyone seemed like they were under 30 and worked 100 hours a week. People expected to become VP or a stock millionaire within 18 months or they moved on (or were moved on).
I started out in the second type. I initially liked it because it seemed like a fast-track to greater success. A couple times I worked for the big stodgy older companies (either as a consultant or employee), I found the people dull and the work slow-paced and boring.
Of course now, all companies are “tech companies”. They are constantly churning people and systems, trying to squeeze every ounce of profit. Sure, some of it is necessary to stay up to date. But as a career, it’s exhausting. I’m not saying I want to find a place to settle back and ride out the next 20 years. But I also don’t want to spend the next 20 years having to pretend to be an expert in a new job or industry every 3 to 18 months either.
Per BLS, “median years of tenure with current employer for employed wage and salary workers” was 4.2 years in 2018, 4.2 in 2008, 3.5 years in 1983. There may be something interesting if we dig into specific age groups, e.g. the 55-64 crowd has fallen from 12.2 to 10.1 years, 1983 to 2018. But I’m questioning how prevalent “lifers” actually were.
Interesting. I wonder how that breaks down by other factors such as industry and education. I think there is clearly a perception that frequent corporate job-hopping has become more commonplace these days.
Hell I have that perception, which isn’t born out in the data I’ve found but may be elsewhere.