I don’t think that’s what he was getting at, no. But let’s say we did this…we dumped a trillion or more dollars into infrastructure projects across the country, fixed every bridge and road that we are already fixing. Who would these people be employed to do that work? How many would be employed (do that math on adding, say, a million more people to work crews with loaded rates of say $90/hour, which is reasonably what you’d be talking about)? This isn’t the good old days when everyone could just pick up a shovel and go to work on vast public projects. Even building roads and bridges today are specialized, niche labor, and not everyone would be suited to it or even want to do that sort of work. And, of course, once the projects are all done in a certain region then that’s going to be it for the majority of those workers.
That’s an interesting question. If the company put the money now paid for insurance into the paycheck and if the employee didn’t have to spend additional money on insurance, then there would be an effective raise even if the total compensation stayed the same. Taxes would go up, but if the system were more efficient not by as much as the benefit.
In the real world the company would probably take their payment for insurance back and the effective raise would be much less.
Those who pay their own insurance would see a lot bigger benefit.
I wasn’t really talking about the ‘big buck CEOs’ there, but the CEOs would have been in the decision loop to invest the money to do all those things. And those things are why the money is going where it’s going. And that trend is only accelerating.
The reduction of union power, so that the playing field for relatively commodity workers, has something to do with it. Without that pressure, there is no reason for companies to return a good portion of productivity gains to workers.
That’s the way it used to work, and the economy did fine.
The HP Board and CEOs have just a splendid record on investments, don’t they? If there were any justice they’d be making what the nice contract lady who cleans the bathrooms makes. She at least didn’t lose stockholder value.
Deciding on the money is not quite the same as risking the money. I wish I got a cut of capital money I made decisions about.
They seem to run them just fine before, what are they doing for us now to justify the huge increase?
I think he means CEOs.
If you want to access our consumer markets we can keep you from moving too much of that production offshore.
Automation usually improves productivity and usually leads to MORE demand for labor as each unit of labor produces more and more stuff. This just hasn’t been happening since the 1980s for some reason.
Protectionism, immigration enforcement, works projects, and most importantly a strong labor movement. Not too much. all things in moderation.
The traditional Keynesian model posits that you would increase economic activity by paying half your unemployed to dig holes and the other half to fill them up.
Much of the recovery from the great depression was the result of all the war production we did under the lend lease program. We might as well have built those tanks and driven them into the ocean.
Of course if you can engage in stimulus spending that actually leaves you with something of value then so much the better.
They seem to be doing pretty well now that they acquired Aruba and are using their OS and model for their networking side. I honestly don’t know much about them beyond that, to be honest, but their new generation of network infrastructure based on Aruba’s OS and network management system seems to work pretty well. Like all of the new generation of network infrastructure, however, it does a lot of the work for you both on the front end configuring and deploying the stuff and on the back end monitoring and managing it.
Yes. Interesting that some think this implies a need for a social contract to raise wages, while others view that “Iron law” as an examnple of laudable market forces at their most sublime!
Two comments:
(1) WSJ Opinion is not an objective source. If you can’t find anything better, many here will ignore such a cite but, more importantly, you owe it to yourself to learn economics via less slanted sources. (And, BTW, WSJ is behind a pay-wall.)
(2) Companies have freely entered into contracts with labor unions, preventing firings without cause. Companies have freely entered into contracts with executives guaranteeing them golden parachutes.
The fact that you seem to see a fundamental difference between the two cases suggests that … well, that, again, addiction to sites like WSJ or Forbes is not your best recipe for ignorance-fighting.
The problem, though, is that it DOES cost fifteen dollars now, but Wal-Mart is only paying ten of it and getting what is in effect a subsidy from the taxpayers (food stamps, Medicaid, daycare benefits, section 8 housing, etc.) to make up the difference, while still collecting the two dollars in profit. If Wal-Mart’s business model doesn’t allow them to make a profit from Joe’s labor directly, then I submit it is Wal-Mart’s business model that needs changing, rather than changing government policies to make sure they get their profit indirectly.
No, I am saying their idea that infrastructure spending automatically triggers economic growth didn’t work.
I don’t think you quite understand the Keynesian model either, but that points up what I mentioned earlier - stimulus spending for its own sake, that is not being spent on anything worth having, doesn’t have much of an ROI, and ends as soon as the stimulus spending dries up. Then you have done nothing much except rack up debt, and nothing new to show for it.
Not exactly. Do you understand the difference between digging holes and filling them up, and winning WWII?
Regards,
Shodan
One comment - do you really think you are the best person to be complaining about how people are being misled by cites?
Regards,
Shodan
You answered it yourself - unions. Wages for tech people in Silicon Valley are doing just fine, since most of us can negotiate with companies on a fairly equal basis. Which pisses off the companies as the Apple/Google etc deal showed. Commodity workers don’t have that power without unions. Or the support of government. Cities in Silicon Valley have been raising the minimum wage to help this. People like me and those who work around me can easily afford another dime for a burger.
What cities, how much have they raised the MW, what percentage of workers in those cities work for minimum wage, and does that dime you mention represent an accurate depiction in the rise in prices incurred by an increase in MW?
Regards,
Shodan
Heck, and what makes folks think that that ‘dime’ would translate into more jobs? Why wouldn’t it actually translate into more automation? The local McDonald’s here has a bunch of those new kiosks for ordering stuff and runs on a pretty minimal staff already. Where you’d once have a bunch of clerks and cooks you have only a couple now and it seems to get fewer and fewer each year. Going into a restaurant like Chili’s or Red Robin and you have a lot fewer wait staff since they put in those table kiosk thingies that allow you to order anything on the menu and basically use a credit card to cash out when you are ready to go. The local Walmart and Safeway, as well as Albertson’s have more and more room devoted to automated checkout…the Walmart has over half of their checkout space devoted here (something like 20-30 machines), and since they all have those kiosks throughout the store where you can check prices or even ask questions you don’t need as many people roaming around to answer customer questions.
I wonder what jobs people think there will be if we increased minimum wage to $15 an hour, or forced companies to have unions and drive up salaries. Sure, that will be great for the few people who still have those jobs, but it will be fewer and fewer people who will. I can see a day when most of those low level minimum wage jobs will be automated and you won’t need but a fraction of the people you need even today…which is a fraction of the number you needed when I was a kid (hell, I still remember when there were full service gas stations and jobs for guys to fill your tank and wash your windows).
Well, shit son. Nothing you propose will work if everything else is working against you.
“If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.”
Book 3, Chapter 10, Section 6 pg.129 “The General Theory…”
So not exactly what I said but the government can promote stimulus by paying for pointless labor. Sure its better not to throw the money away but stimulus doesn’t have to be productive. I know, I know, a lot of this stuff didn’t seem intuitive to me when I learned it during the Reagan era but economics is not always an intuitive subject.
Stimulus is not about ROI.
Stimulus is about reducing unemployment and goosing economic growth…velocity and multipliers.
Except economic momentum.
Morally, yes, I understand. Economically, no, I do not understand. What was the economic benefit to America of WWII other than spending even MORE money by sending it overseas to rebuild Europe and Japan? I suppose it eventually led to a market for us to sell our goods but selling stuff to French consumers is not what pulled us out of the great depression. Hitler was responsible for a lot of suffering but he was not the reason for the great depression.
Regards,
Shodan
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I was kinda being sarcastic. I know enough economists to have some idea of why we have seen this divergence between productivity and wages. The death of unions are not the only problem but the lack of labor power makes all the other problems more extreme.
We are the only really large economy in the world without a significant labor movement. Even the Democrats are only half assed labor politicians.
If you raise the minimum wage to $15, its going to be at least $0.17 (to as much as $0.67) more for that Big Mac depending largely on how much the higher minimum wage reduces turnover. Turns out that when you pay people $300/week there is significant turnover and that turnover cost starts to approach your payroll costs. Its not that turnover costs are that high, its that the payroll is that low.
A $15 minimum wage would have significant unemployment effects. Those $15/hour minimum wage workers do not promote enough additional economic activity to justify paying everyone that wage. But anything up to about $10/hour probably has negligible unemployment effects.
Who wants to force companies to have unions?
That automation is going to happen no matter WHAT the minimum wage is. There is no point in throwing sabots in the gears like the Dutch. there is no point dying trying to compete with machines like John Henry.
John Henry. That’s a pretty good story. Most of it isn’t about how big and strong he was or even about how he beat the steam engine and died. Most of it was about the hopes he had for his family and the promises he made to his wife. People are more than mere factors of production and if we reduce ourselves to treating people as merely factors of production and let our policies be guided by principles that only view people as factors of production, we are ALL doomed. Sure that might mean we accept a little inefficiency into the system but sometimes that inefficiency is very valuable.
As I said, I don’t think you understand Keynesian economics.
It is not the case that Keynes thought that the government could always trigger economic growth by borrow-and-spend on infrastructure. It is supposed to be counter-cyclical - the government borrows and spends to increase demand during recessions, and then runs a surplus to pay back the debt incurred. (Cite.)
As mentioned - if spending to pay people to produce things that have no ROI worked, it would have worked for Japan. It didn’t.
And please don’t keep reposting my sign off. Check your quote tags and Preview, for heaven’s sake.
Regards,
Shodan