US Economy and Permanent Job Losses

[MrVisible]

@pervert

Proposition 3:Perhaps modern productivity increases have permanently increased the capacity to create wealth. In doing so they have also changed the way wealth is created. It is possible those unwilling to change their expected source of wealth may complain about this.

Okay, I’m willing. I’m ready to believe. Baptize me in the Way of the Market. Lay that holy vitamin-enhanced caffeine-laden sports water on my brow, and let me be financially healed! So, where do I get my money when my job disappears? Please be specific.

Ok, but now we are getting to the unsinkableness of these predictions. They did not happen in 91, or 92, but they are happening now. They did not happen in 79, 80, or 81, but they are happening now. How many times do you have to see predictions fail before you start to question the sincerity of those making them?

Actually, they did happen in those years. It’s a cycle, and it’s getting worse. We may rise out of this one again, and hit another bubble, but the necessity of well-paid employees is declining. It’s a buyer’s market when it comes to employees, and it will be for some time, unless the Mystical Market Forces cough up some new industries that (despite advances in productivity) need a whole lot of employees in the US (despite the ready availability of foreign workers) and can sell their products at a low enough price that they can be bought by a whole lot of people who are currently out of work.

I have a good job, and so does my boyfriend. Neither of us have any faith in our jobs being around next year. So what are we doing? We’re saving money, buying less, and this summer we’re moving to a smaller house that will be easier to afford in the event one of us falls victim to the whims of the Market. We’re not doing much to help the economy, I’m afraid. There are a lot of folks out there who are reacting to the job market the same way, preparing for the worst. And that’s just going to make the worst more likely. And the wealthy who own the media and the wealthy in the government and the wealthy who employ us tell us “Trust us! Everything will work out for the best, even if we don’t give a damn about your wellbeing. The rules of the market will take care of everyone, after they’ve taken really good care of us! Don’t worry about your lack of health care and income, it’s all for the best in the long run. And we determine what’s best. So don’t worry.”

And it’s all giving me a whole new perspective on why a bizarre idea like communism caught on around the turn of the century.

[Kimstu]

**pervert:**Proposition 3: Perhaps modern productivity increases have permanently increased the capacity to create wealth. In doing so they have also changed the way wealth is created.

I don’t think that contradicts the other two propositions either. In fact, I would agree that the source of created wealth is tipping much more towards profit and investment and away from wages and benefits. (Wealth creation has always been heavily weighted towards capital rather than wages, of course, but it seems that the imbalance is now becoming even more pronounced.)

It is possible those unwilling to change their expected source of wealth may complain about this.

I think almost everybody would be just fine with changing their expected source of wealth from wage income to investment income and/or ownership profits. The question is, though: how are people who work for a living and don’t have large amounts of capital supposed to make this change?

[pervert]

@MrVisible

So, where do I get my money when my job disappears? Please be specific.

Dude, where do you think? From another job. Seriously, what is this odd attitude that if you do not have another job automatically, that the government owes you money? I really don’t understand.

Actually, they did happen in those years.

No, we had a few bad years, but nothing happened which would qualify for either proposition 1 or 2 in kimstu’s post above.

It’s a cycle, and it’s getting worse.

But its not getting worse. What’s getting worse?

the necessity of well-paid employees is declining.

What the heck are you talking about? There are more people now in high paying jobs than ever before. By what measure do you justify such statements?

It’s a buyer’s market when it comes to employees,

In some sectors of the economy, sure. In other sectors of the economy there are huge shortages of workers.

Mystical Market Forces

You really should trademark phrases like that. But seriously, don’t you understand anything about supply and demand? Its not mystical at all.

We’re saving money, buying less, and this summer we’re moving to a smaller house that will be easier to afford in the event one of us falls victim to the whims of the Market. We’re not doing much to help the economy, I’m afraid.

But you are doing lots to help the economy. What do you think happens to the money you save? (I assume you are not stuffing it into mattresses) It gets used as investment in the economy. You are helping the economy far more than you friends who are leveraging their future to have extra cars and large houses.

And it’s all giving me a whole new perspective on why a bizarre idea like communism caught on around the turn of the century.

Quite. This is the reason that communism caught on. Now imagine, just imagine if the doom and gloom rumors are only rumors. Are you willing to sign up for a dictatorship of the proletariat based on that kind of information?

[pervert]

[QUOTE=KimstuIn fact, I would agree that the source of created wealth is tipping much more towards profit and investment and away from wages and benefits.[/QUOTE]
No, that’s not what I was refering to. I was refering to the possibility that wealth creation might not be based on human manufacturing but on automation manufacturing. The humans who want to work, need to be willing to do other things. The whole shift from a manufacturing economy to a service economy is what I was talking about. Its been happening for a long time now.

If you want to talk about new paradigms in the workers relationship to his employers, that might lead somewhere. I think we should have switched a long time ago to a more individualistic contractor aproach. We seem to be stuck in the union paradigm, however.

The question is, though: how are people who work for a living and don’t have large amounts of capital supposed to make this change?

Well, they have to provide services that others need. There is no other way. Except perhaps theft, but I know you are not advocating that.

[pervert]

MrVisible I should have added that I hope you are looking around for your next job as well. If you don’t think your job will be here next year, you are, of course, looking to move to another yes?

[Kimstu]

pervert: I’m sory, but I can’t get my head around the idea that higher productivity is a [market] distortion. Perhaps there is a better word?

Good point. What I’m talking about is perhaps better described as a market displacement of the bargaining power of labor as compared to that of capital. Technically speaking, this isn’t distorting the way that markets operate, but it is changing the effectiveness of job markets from the point of view of the ordinary worker’s objectives.

How many times do you have to see predictions fail before you start to question the sincerity of those making them?

I don’t see that predictions of continuing and increasing long-term economic difficulty for average workers have failed over the past couple decades. Median household income has increased only slightly (while number of hours worked per household, and average number of income earners per household, have increased substantially). Individual and household debt has ballooned, savings rates are at record lows, percentage of population without healthcare coverage is increasing, unemployment duration is up, home ownership for people below 45 is declining, and major expenses like housing costs, auto prices, healthcare costs, and education have skyrocketed in comparison to the median income.

[Kimstu]

pervert: I was refering to the possibility that wealth creation might not be based on human manufacturing but on automation manufacturing. The humans who want to work, need to be willing to do other things. The whole shift from a manufacturing economy to a service economy is what I was talking about. Its been happening for a long time now.

Right, and the point we’re making is that shifting from manufacturing to service jobs generally depresses workers’ wages and benefits. In addition, as Aeschines notes, increasing demand for services may not be keeping up with decreasing demand for manufacturing labor, especially if more people have less disposable income. That puts additional downward pressure on wages.

Seriously, what is this odd attitude that if you do not have another job automatically, that the government owes you money?

That’s a very peculiar way of putting it. The point is that it’s in the government’s and society’s best interest that as many people as possible have well-paid jobs and sound finances, because that’s better for the overall long-term health of the economy. What is this odd attitude that if there is a severe shortage of good jobs, it’s not the government’s problem?

[MrVisible]

@pervert

Dude, where do you think? From another job. Seriously, what is this odd attitude that if you do not have another job automatically, that the government owes you money? I really don’t understand.

And if the other job isn’t there? If it doesn’t pay enough for me to live on? Where does my income come from then?

It’s the whole point of the thread, actually. What happens if there are too few workers, and not enough jobs?

I’m not asking for government handouts. I’m trying to point out the possibility that if things continue as they have been, increased productivity and labor competition have the potential to short-circuit the market. Enough people lose their jobs, and there won’t be enough consumers to buy whatever is produced by the industries that don’t need them anymore.

In some sectors of the economy, sure. In other sectors of the economy there are huge shortages of workers.

Where, specifically?

But you are doing lots to help the economy. What do you think happens to the money you save? (I assume you are not stuffing it into mattresses) It gets used as investment in the economy. You are helping the economy far more than you friends who are leveraging their future to have extra cars and large houses.

But helping less than if I was renting a house that cost more, and helping less than if I was buying products with my money. (It’s interesting to note that even an interest-bearing savings account isn’t paying me enough on my money to keep up with inflation.) And if my job goes away, I’m going to be withdrawing my savings pretty fast, and contributing even less.

Quite. This is the reason that communism caught on. Now imagine, just imagine if the doom and gloom rumors are only rumors. Are you willing to sign up for a dictatorship of the proletariat based on that kind of information?

So far, I haven’t seen anything to convince me that unbridled capitalism is any better. And at least communism pretends to have the interests of the workers at heart.

Well, they have to provide services that others need. There is no other way. Except perhaps theft, but I know you are not advocating that.

And when nobody needs their services enough to pay them a living wage, then what?

Stealing starts looking pretty good. After all, in the words of Bob Dylan,
“Steal a little and they throw you in jail. Steal a lot and they make you king.”

[pervert]

@Kimstu

What I’m talking about is perhaps better described as a market displacement of the bargaining power of labor as compared to that of capital.

Well, if we call it a move or change, then I’m on board. Certainly the move from a manufacturing economy to a service economy has meant lots of changes in the relationship between capital and labor. Whether or not those changes are moves from a “natural environment” or whether or not the changes are simply changes is the essential question you have to ask IMHO before you can make the sorts of value judgements being made in this thread.

Technically speaking, this isn’t distorting the way that markets operate, but it is changing the effectiveness of job markets from the point of view of the ordinary worker’s objectives.

Well, it is changing the effectiveness of old strategies to be sure. But if it is changing the effectiveness of job markets in general is another question.

I don’t see that predictions of continuing and increasing long-term economic difficulty for average workers have failed over the past couple decades.

Well, if you mean that there are difficulties now that did not exist in the past, ok. If you mean that workers are worse off now than they were in 1970, 1960, or whatever, then I’d need to see some numbers. Most of the number I did find indicate that workers are generally better off. Perhaps you have other information.

Median household income has increased only slightly (while number of hours worked per household, and average number of income earners per household, have increased substantially)

Do you have a good cite for this? I have been looking and can’t seem to find one.

[iamme99]

@MrVisible

And if the other job isn’t there? If it doesn’t pay enough for me to live on? Where does my income come from then?

It’s the whole point of the thread, actually. What happens if there are too few workers, and not enough jobs?

I’m not asking for government handouts. I’m trying to point out the possibility that if things continue as they have been, increased productivity and labor competition have the potential to short-circuit the market. Enough people lose their jobs, and there won’t be enough consumers to buy whatever is produced by the industries that don’t need them anymore.

Don’t worry, be happy, mon. Just keep repeating the new economic mantra - Something will happen to save us! Hopefully we won’t all be living out of shopping carts before it happens. :rolleyes:

[pervert]

@Kimstu

the point we’re making is that shifting from manufacturing to service jobs generally depresses workers’ wages and benefits.

Based on what data? I agree that if you get a lower paying job, then you are paid less. But I do not agree at all that service jobs tend to be lower paying than manufacturing jobs.

The point is that it’s in the government’s and society’s best interest that as many people as possible have well-paid jobs and sound finances, because that’s better for the overall long-term health of the economy.

No, that is not the point you have been trying to make. You have been trying to make the point that huge amounts of government intervention is necessary to keep people in the manner in which they have become accustom. Where in any of the proposals have you suggested creating new jobs? I have only seen offers to tax current jobs heavily to provide training to the unemployed. Did I mis something?

What is this odd attitude that if there is a severe shortage of good jobs, it’s not the government’s problem?

Well, if you think 5.6 unemployment is a severe shortage, I don’t know what to tell you.

[pervert]

@MrVisible

It’s the whole point of the thread, actually. What happens if there are too few workers, and not enough jobs?

Well, not exactly. The point of the thread has been that there already are not enough jobs and the huge government programs are our only hope.

I’m trying to point out the possibility that if things continue as they have been, increased productivity and labor competition have the potential to short-circuit the market.

No, it doesn’t. Automation is only useful if large number of consumers are available. You guys seem to think that the world is heading to some sort of fuedal society where we will have a small handful of robber barons owning factories which crank out goods which no one will be able to afford.

But this notion is simply counter to reason. Even if there were suddenly vast numbers of unemployed workers, ther would have to be a coresponding reduction in the number of consumers.

Which is what you say here:

Enough people lose their jobs, and there won’t be enough consumers to buy whatever is produced by the industries that don’t need them anymore.

Where, specifically?

But helping less than if I was renting a house that cost more, and helping less than if I was buying products with my money.

If you believe nothing else I say, believe this. This idea of yours is false. Saving money is NOT worse than spending it. The vast power of capitalism is only tapped when capital is ammassed. Saving money is far better for the economy than spending it. Save it, invest it.

So far, I haven’t seen anything to convince me that unbridled capitalism is any better.

How about the incredible amount of wealth creation over the last couple hundred years. Imagine what your life would be like a couple hundred years ago.

And at least communism pretends to have the interests of the workers at heart.

I can’t even respond to this.

[pervert]

@iamme99

Don’t worry, be happy, mon. Just keep repeating the new economic mantra - Something will happen to save us! Hopefully we won’t all be living out of shopping carts before it happens. :rolleyes:

Seriously, I have to ask again. What precisely are you looking for? Will you remain unsatisfied unless we have another tech boom?

Let me be clear about this. I believe that the economy is not really entering some totally unheard of paradigm. Things are changing, but not in some odd un market way.

Meanwhile, nothing is going to come along and save you. You have to save yourself. You have to realize that if you had it easy in the past, that was the oddity.

[pervert]

You guys post too fast for me. Why aren’t any of you asleep?

[iamme99]

@pervert

Seriously, I have to ask again. What precisely are you looking for? Will you remain unsatisfied unless we have another tech boom?

Let me be clear about this. I believe that the economy is not really entering some totally unheard of paradigm. Things are changing, but not in some odd un market way.

Meanwhile, nothing is going to come along and save you. You have to save yourself. You have to realize that if you had it easy in the past, that was the oddity.

If you want to understand what we (not just I) are looking for, perhaps you should go back to the beginning of this thread and SLOWLY, read through it. If all that has gone before here isn’t enough to convince you that there are serious problems, then there is no hope for you. Those rose-colored glasses must be glued to your face and you must be wearing horse blinders!

A few more years of this happiness and this economy will fall apart. In comparison, the 1930’s depression will look like a party.

[iamme99]

Here’s something that was written up in Arianna Huffington’s latest column: http://www.ariannaonline.com/columns/column.php?id=701

about the fact that the government’s GDP isn’t a good indicator of economic health. In the article there is a pointer to http://www.rprogress.org/media/releases/040311_gpi.html which discusses an indicator called the “Genuine Progress Indicator” as a better alternative to the GDP.

This is interesting!

[pervert]

@iamme99

perhaps you should go back to the beginning of this thread and SLOWLY, read through it. If all that has gone before here isn’t enough to convince you that there are serious problems, then there is no hope for you.

Ok. You should do the same. If doing so is not enough to convince you that there are serious questions as to your assertions that the economy is broken beyond hope, then …

Well, you get the idea.

[netscape_6]

@pervert

Meanwhile, nothing is going to come along and save you. You have to save yourself. You have to realize that if you had it easy in the past, that was the oddity.

Have you tried looking for job? It’s awefull. If this is the way the system is suppose to be then the system needs a few changes.

[netscape_6]

@netscape 6

Have you tried looking for job? It’s awefull. If this is the way the system is suppose to be then the system needs a few changes.

ugh, insert ‘right now’ after ‘looking for a job’

[Evil_Captor]

@pervert

But none of the free traders are claiming this. We are simply claiming that it will not be as bad as the issolationists claim it will be. Namely that it will not lead to the end of life as we know it.

Well, let’s talk about this matter of “corrections” and “outcomes.” Some free traders say that no matter what what happens, the free market corrects itself when things go south, so we shouldn’t even think about doing anything to palliate its effects if it somehow might impair the efficiency of the free market. Um, yeah, but you know, it’s those very corrections that many of us fear. In the Great Depression, for isntance, people starved to death. They couldn’t get enough food to eat and died of it. You may call that a correction, but I call it a dismal failure for the economy.

Even recessions that don’t actually physically kill people often have a horrible effect on people’s lives – they die because they can’t afford medical treatments that they might have afforded otherwise, they become homeless when they can’t pay their mortgages, their kids can’t go to college because they spent all their savings trying to keep a roof over their heads and food on the table.

You free traders who brag about your “corrections” are like old-time medieval “doctors” whose vaunted cures often killed patients who might otherwise have recovered. Yes, the financial system has not utterly collapsed to the point it couldn’t recover and continue, but you know, it’s caved in and killed and harmed many, many people, and I for one think we ought to consider if there isn’t at least a MODERATELY more sane way to handle economic adjustments.

In fact, free traders like Sam want to not only not impose any kinds of controls on the marketplace itself, he would like to see the safety net utterly destroyed. He’s nto just opposed to the minimum wage, he’s against MOST social safety net laws:

@Sam Stone

And you could resist the impulse to have the federal government fund day care, health care, public housing, and the myriad other new things John Kerry wants the government to pay for.

Yes, by all means let’s resist those thoughts. It’s always fun to watch strangers die in the street. (And I wouldn’t take Sam’s word on what Kerry wants, either.)

Yes, and from the standards of the day, the Irish imigrants constituted a very nearly bottomless labor pool. By the standards of the day, the newly freed blacks constituted a very nearly bottomless labor market. By the standards of the day, (I can’t think of a third example, can anyone out there help?).

I don’t think you’re really comparing apples and oranges here. The number of Irishmen in ships and the number of freed blacks isn’t anything LIKE two billion. Your “standards of the day” gives you away.

The point is that this claim has been made many times before and each and every time the doom predictions have utterly failed to come true. In fact, the market expanded every time instead making everyone richer.

Watching your kids starve to death in the Great Depression was probably close enough to “doom” for most folks. Maybe you think they had a great time doing it.