Indeed. In some capitalist countries the poor account for a small proportion, while in others the poor are a majority. The living standards in socialist/communist countries also varied significantly, but the Marxist state is no longer regarded as a viable solution even by leftists in general, so we should probably look into the nations where poverty is not a cause of market failure and see why mixed economies seem to work better.
I am. It has been caused by external factors (such as the bursting of the U.S. housing bubble for which the banks are mainly responsible) and internal factors (such as bad management and corruption). The expenses in the public sector that burden the European nations whose economies are in trouble are the work of national and international businesses (and their corrupt associates in the political bureaucracy) who have obtained over-evaluated contracts for services or infrastructure projects.
Can you name a few ‘capitalist’ countries where the poor are the majority? I was going to ask you to define what ‘capitalist’ means to you, but I think your list here should be illuminating on that point.
[But a preponderance of evidence has shown that there are no positive effects on employment of low-skilled workers that offset the negative effects from an increase in the minimum wage. The trick is to control for other factors (“confounding variables”) affecting the demand for labor and to make sure the data and research design are valid. The focus should be on those workers adversely affected by the minimum wage—namely, younger individuals with little education and few skills.
In a recent case study that controls for confounding factors that make it difficult to isolate the impact of an increase in the minimum wage on employment for low-skilled workers, Joseph Sabia, Richard Burkhauser, and Benjamin Hansen find that when New York State increased the minimum wage from $5.15 to $6.75 per hour, in 2004–06, there was a “20.2 to 21.8 percent reduction in the employment of younger less-educated individuals,” with the greatest impact on 16-to-24 year olds.](http://www.forbes.com/sites/jamesdorn/2013/05/07/the-minimum-wage-delusion-and-the-death-of-common-sense/)
Regards,
Shodan
I knew it. I knew if I just said the same thing over and over again other people would become exasperated and give up in a debate. They laughed at me in college debate class when I said this was a valid tactic. But this (plus name calling) are the sharpest knives in my debate drawer, and I have been vindicated.
Back to the OP (since this morphed into a political debate instead of a poverty debate), I really don’t think poverty is intractable. As long as GDP continues to grow, innovation continues and efforts to reduce income inequality continue poverty should go down.
African nations are seeing some good economic growth now. I don’t know if it is as sustainable as what was seen in Asia, but it would be nice if so. Latin American countries (and China for that matter) are making efforts to build social safety nets and address income inequality. That should reduce absolute poverty. But relative poverty will still exist.
A big part of relative poverty is security. If you have no security your standard of living is not as important IMO.
Mexico is a good example. Its own government accepts that 42 percent of the population can be regarded as poor, but NGOs estimate that the real figure could be as high as 60 percent.
Mexico has a per capita PPP GDP of almost $16000 ($11000 in USD). That puts them on the border of being a ‘high income country’ rather than a middle income country. Despite that half of the country live on less than $2000 a year.
But there isn’t any automation for code monkeys (well, there is, but it’s complete shit and nobody’s using it for anything that matters). There isn’t any automated teaching, or automated applying-drywall, or automated plumbing. Hell, there ain’t even burger flipping or Walmart greeting automation !
Yet those jobs get fucked or, more accurately, on-average-just-shy-of-fucked while CEOs and Old Money stock players have been getting thoroughly blowjobbed. Technical term.
Or, to put it another way, the retribution of jobs that haven’t been automated has thoroughly shifted in favour of the few at the top, despite the fact that the nature of the jobs being considered hasn’t really changed much. What’s the reason for this, in your opinion ? Bonus question : is that a social positive ?
[QUOTE=Kobal2]
But there isn’t any automation for code monkeys (well, there is, but it’s complete shit and nobody’s using it for anything that matters). There isn’t any automated teaching, or automated applying-drywall, or automated plumbing. Hell, there ain’t even burger flipping or Walmart greeting automation !
[/QUOTE]
You forgot about the ‘expert systems’ part. In addition, some of the jobs you list DO come with fairly substantial pay checks, while others don’t. It all depends on demand for and the skill required to do a given job. If it takes a lot of skill AND is in demand, then the price is going to go up (such as for a good ‘code monkey’…or a good plumber).
I disagree that retribution is a factor. It’s all about market economics…if a job is in demand and/or takes a higher level of skill then it’s going to command more in terms of compensation. Expert systems and automation HAVE changed the nature of jobs across the board and thus have changed the equation on who can do a given job. Your burger flipper today uses automated processes and expert systems to know what and how to make the burger up to spec…so, no special skill is needed, and basically there is a much larger pool of folks who can now potentially do the job (meaning that the job isn’t going to command a very good salary). Plumbers, however still are a skilled AND sought after profession and haven’t been greatly influenced DIRECTLY due to automation or expert systems, thus still command a high salary. Code monkey types have been influenced directly with expert systems (and more efficient processes and procedural tools and techniques) that enable them to code to spec using such systems and making the potential pool of coders larger than it was in the past when it was a more manual process back in the dark ages (when I was a coder :p), though GOOD coders are still in demand. Of course your greeter at Walmart requires no more skill than someone to say ‘hello and welcome to Walmart’ (or whatever it is they say), which is why a lot of times that job falls to either elderly retired folks or the disabled.
I don’t know if it’s a ‘social positive’ or not, to be honest, but it’s a natural progression. You can’t hold back progress, especially in a competitive market, and especially in a GLOBAL competitive market. Companies and individuals are going to continually refine the system, to build in expert systems that allow for more productivity and easy of use and continue to automate the process in every way they can to be more competitive. That’s going to mean that on the one hand products will be cheaper to manufacture and produce than they would have otherwise been, but also that labor is going to be worth less (in some categories) than it would have been when business had to rely on it more.
Mexico’s economy may be more or less capitalist now, but I think that’s a relatively recent phenomenon. It was virtually feudal up until the Revolution and then the economy was largely state controlled for much of the 20th century. But I’ll let XT comment-- he has first hand experience that I don’t.
No, this is pretty much what I was getting ready to say. Mexico certainly has aspects of capitalism, but it’s pretty recent and it’s sort of a bolt on to an earlier (I’d say socialist-esque but state controlled is probably a good term) system, so calling it ‘capitalist’ at this point is a stretch IMHO. Rule of law is still not fully up to snuff in Mexico (vast understatement), and that’s one of the conditions for a true capitalist economic system. I’d say that Mexico is still more a plutocracy/kleptocracy and still highly dysfunctional.
But you *can *shape progress.
In Europe, the average wealth intake for CEOs and upper echelon execs is, IIRC, around 80 times that of their average workers. Which is still rather comfy, all things considered.
In the US, the same boss/peon salary ratio has run beyond 400x on average, and climbing.
Now, maybe US companies are well over 4 times as more advanced, productive, automated as those of other first world countries ; and maybe American boss types are just *that *fundamentally fucking worthier (or American employees *that *fucking worthless…) but I somehow doubt there is such a stark difference in aptitudes, efficiency or even relative profit-making between Mr. Citibank and Mr. Crédit Lyonnais.
Maybe that’s my ethnocentrism showing, I 'unno :).
I suspect that the mid-70s economic problems had a lot to do with that, not government policies, since Carter was president when the slope really became steep on that curve. ISTR that there was a huge drop in heavy manufacturing jobs about the same time, and they’re traditionally the workers heaviest into unions, not service workers.
I doubt service workers (cooks, janitors, etc…) were ever all that unionized to begin with, and with the decline of manufacturing, all we see nowadays in hourly positions are the service jobs and “light blue” collar jobs, none of which have ever been unionized to any great degree that I’m aware of.
The point about rule of law is a good one. Capitalism may be great at generating wealth, but without rule of law, you quickly get crony-capitalism or worse. I don’t think you can find a country where most of the people are poor and which has 1) a reasonably long history of rule of law and 2) a mostly* capitalist economy.
*no country is truly capitalist-- all free market economies are regulated to some extent.
From my cite
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In no way did I claim that this is true for all segments. If unemployment increases for the lower skilled segment, then it clearly must decrease for the higher skilled segment. Is this a problem for you?
Now, you might claim that decreasing the minimum wage increases employment. However we’ve tried that experiment - the purchasing power of a minimum wage job is lower now than in the past, and our employment picture is not so hot. Decreasing minimum wage decreases purchasing power and increases government expenditures to give the working poor minimum services. Do you like either of these? Do you have any evidence that decreasing the minimum wage improves net employment?
It would be nice to have full employment, but if someone has to be unemployed I’m ready for it to be high school dropouts. Maybe kids noting that doing this hurts in the long run will get the message, and we’ll all be better off. More education and more training in skills will leader to a more productive work force, and again we all win.
So, moving employment to the more productive (and I can see why an increase in the minimum wage does this) is not a bug, it’s a feature.
It’s not a problem. You claimed flatly that what I said was wrong, now you are saying that it isn’t wrong. Fair enough.
Regards,
Shodan
I find it hard to accept such excuses. I come from an ex communist country and the apologists of communism still claim that the fall of the Communist Block does not prove communism is unfeasible because none of the communist countries really applied communism as envisioned by Marx, Engels or Lenin. We can manipulate definitions and statistics, but the reality remains: there are millions of poor people to whom today’s capitalism and free market economies offer no future.
Really? Why is that the case?
Look, saying that every job must pay enough to provide a middle class lifestyle (“Living wage”) is simply silly.
The reason people work at jobs is to make money. But the reason employers offer jobs to people is to make money.
You can mandate that sellers sell goods below cost, but don’t be surprised when what actually happens is that these regulated goods disappear from the official market. If a kilogram of bread cannot be sold for more that $1 then bread disappears from the supermarket shelves. The only way for this to actually work is for the government to buy bread at whatever price and resell at a loss. So Iranians can buy gasoline for well below world market prices, but only because the government of Iran sells gasoline below cost.
Wages are subject to the same effect. You can subsidize wages above market value, but when you decree that a business loses more money for every worker they hire don’t be surprised when that business doesn’t hire anyone anymore.
On the other hand, we’re going to see increasing numbers of people who can’t perform any economically useful work. Nobody wants to hire them at any wage. Maybe they would have done OK back in the old days on an assembly line sticking tab A into slot B for 8 hours a day, but nowadays either a machine does that job, or a guy in China. So what do we do with all these unemployable, semi-employable, barely employable people?
And with all this horrible class envy that the rich of today have to suffer, which never existed back in the old days of 1997 when the rich were regarded with superstitious awe, it’s a wonder how the super-wealthy of today manage to get out of bed. “If poor people are jealous of me making another billion, then…well, maybe I won’t make another billion. Oh, why did I ever decide to be rich in the first place!” I guess you have to develop a bit of a thick skin to survive being rich in these days, what with essentially all the economic growth in the past few decades going to the 1%.
If the rich have a lot more money than they used to–and they do–then some small tax increases won’t exactly send them to the poorhouse. We have rich people making more money than ever. We have poor people less able to work at any sort of employment at all. If you want to make poor people clean up trash or other make-work projects to “earn” their welfare checks, then whatever, but if it isn’t profitable to pay people to do the work in the first place then it won’t be profitable to create make-work either. That’s what makes it make-work. It’s cheaper to just cut people a check and have them stay home than it does to hire a bunch of people to make sure they show up to “work” and do fuck-all.
The value of unskilled labor is slowly trending towards zero. As a country and as a planet we’re going to have to slowly get used to that idea, and figure out what to do about it.
If a man has been wounded by an arrow smeared with poison, he should not waste his time and energy asking questions about the name and background of the shooter. He should focus on how to safely pull the arrow out and cure himself. It is more useful to identify a solution to the problem instead of debating or speculating. Life is to short. (Buddha)