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Old 02-19-2013, 04:25 PM
 
Location: Vallejo
13,485 posts, read 15,112,814 times
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Quote:
Originally Posted by pie_row View Post
The hourly wages are flat/declining, but the total compensation packages are on the upswing. Wealth has been redistributed from the middle to the top. This leads to a less efficient economy. And relative economic depression. Functionally making the top relatively less wealthy compared to the bottom will tend to lead us out of the recession. The over supply of labor in the world is a function of the underpayment of those workers. Normal market forces will take quite some time to get wages to equalize between 1 st 2nd ad 3rd world countries.


We can if we chose put pressure on our trading partners to speed up this process.
I think you meant overpayment and not underpayment. But yeah, wages are sticky. In my field, they've been dropping for the last couple years and there's a ton of resistance to it. I mean, I can see why, but at the same time, gotta keep busy and it's not like a 10% cut is going to ruin me. The low rates in Southern California are more entrenched, and now you've got a lot of Southern California firms that pay the lower rates breaking into the Northern California market. The local firms here either have to charge less or lose business. Most are losing business because paying less to someone who has been doing work for you for 10 years is difficult and usually results in people no longer working for you, which means you have to go find someone willing to work for lower than average rates. Easier to just lose a few accounts a year. The people who demand the high rates are either really good or are getting slower and slower while the people willing to work for 10% less keep busy.
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Old 02-19-2013, 04:36 PM
 
17,752 posts, read 15,066,263 times
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Quote:
Originally Posted by Malloric View Post
I think you meant overpayment and not underpayment. But yeah, wages are sticky. In my field, they've been dropping for the last couple years and there's a ton of resistance to it. I mean, I can see why, but at the same time, gotta keep busy and it's not like a 10% cut is going to ruin me. The low rates in Southern California are more entrenched, and now you've got a lot of Southern California firms that pay the lower rates breaking into the Northern California market. The local firms here either have to charge less or lose business. Most are losing business because paying less to someone who has been doing work for you for 10 years is difficult and usually results in people no longer working for you, which means you have to go find someone willing to work for lower than average rates. Easier to just lose a few accounts a year. The people who demand the high rates are either really good or are getting slower and slower while the people willing to work for 10% less keep busy.
Make that sticky wages trying to peel them off mortgage contracts secured with 2007 nominal prices for housing. Saving housing means saving wage overhead.
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Old 02-19-2013, 04:39 PM
 
621 posts, read 548,646 times
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Quote:
Originally Posted by Malloric View Post
I think you meant overpayment and not underpayment.
It is not that we are over paid it is that they are way underpaid. Bring everyone up rather than take the top down.
Quote:
Originally Posted by Malloric View Post
But yeah, wages are sticky. In my field, they've been dropping for the last couple years and there's a ton of resistance to it. I mean, I can see why, but at the same time, gotta keep busy and it's not like a 10% cut is going to ruin me.
But the debt load is constant and going up. The cost of servicing that debt is a real drag on the economy. It is pushing less profitable things out like making stuff.
Quote:
Originally Posted by Malloric View Post
The low rates in Southern California are more entrenched, and now you've got a lot of Southern California firms that pay the lower rates breaking into the Northern California market. The local firms here either have to charge less or lose business. Most are losing business because paying less to someone who has been doing work for you for 10 years is difficult and usually results in people no longer working for you, which means you have to go find someone willing to work for lower than average rates. Easier to just lose a few accounts a year. The people who demand the high rates are either really good or are getting slower and slower while the people willing to work for 10% less keep busy.
Wage deflation. It really bites on the economy. And there goes the tax base. We need higher wages to pay for the obligations we have.
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Old 02-19-2013, 04:59 PM
 
17,752 posts, read 15,066,263 times
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Quote:
Originally Posted by pie_row View Post
It is not that we are over paid it is that they are way underpaid. Bring everyone up rather than take the top down.

Economic fraud is so easy, yet always has the same pattern. Its either cause or effect. Its output side or input but never both. If any comparison is made to balance the equations, its some ideal descending from heaven. If you want to complain about immigration, talk about stealing jobs, not about their purchases. Its either importing or exporting, but never trade. Consumption is bad? Then tell that to the customer of your product. Discourage your wasteful customers.


It was my understanding that wages were higher in the West because we had all the capital and education. So do people mean to tell me a $10 an hour person could not complete with modern transportation, telecommunication, earth moving equipment etc against cheap third world labor.? And are we to suppose that we just squandered it with comforts? What happened in Japan where they work themselves to death? How can anyone work for a $1 a day when their rent is $1000 a month? Where is that money going?

That alone should be enough to make one wonder besides the point that it can be explained and demonstrated how productivity gains leak from the productive economy.
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Old 02-19-2013, 05:06 PM
 
Location: Metro Detroit, Michigan
11,920 posts, read 13,294,956 times
Reputation: 12675
Quote:
Originally Posted by pie_row View Post
The hourly wages are flat/declining, but the total compensation packages are on the upswing. Wealth has been redistributed from the middle to the top. This leads to a less efficient economy. And relative economic depression. Functionally making the top relatively less wealthy compared to the bottom will tend to lead us out of the recession. The over supply of labor in the world is a function of the underpayment of those workers. Normal market forces will take quite some time to get wages to equalize between 1 st 2nd ad 3rd world countries.


We can if we chose put pressure on our trading partners to speed up this process.
Oversupply of available labor is going to be an issue no matter what. During the 90's, major corporations figured out it was more profitable to replace people with robots. Today, those robots are considerably cheaper, leading to more robots replacing people. You can buy a robotic arm to load machinery for about 27K, which is cheaper than paying an American 27K, plus taxes and benefits.

It's getting to the point where American workers aren't loosing the work to China, as the work from China is slowly brought back to America to be done by armies of robots. This will put a few Americans back to work, and put thousands, and eventually hundreds of thousands of Chinese out of work. Slowly thereafter, corporations will focus on how to widdle down the last few workers in the equation.
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Old 02-19-2013, 05:12 PM
 
27,903 posts, read 33,482,694 times
Reputation: 4016
Quote:
Originally Posted by pie_row View Post
It is not that we are over paid it is that they are way underpaid. Bring everyone up rather than take the top down.
Well, let us take a look at that.

The U.S. is 4.5% of the World's population but consumes 30% of non-oil resources.

So let us do the math.

100%/4.5% = 22.22222222222222222222222222222222222222222222222 22222

22.22 x .3 = 6.6666

For the rest of the World to have the standard of living that Americans do you're going to need 6.66 planet Earths.

Now do you see your problem?

Quote:
Originally Posted by pie_row View Post
But the debt load is constant and going up. The cost of servicing that debt is a real drag on the economy. It is pushing less profitable things out like making stuff.
So it looks like all roads lead to the same place and the only thing worse than going straight to austerity is to go kicking and screaming and end up in the same place you would have eventually anyways but with as much debt as you could accumulate before you were forced into austerity.

Quote:
Originally Posted by pie_row View Post
Wage deflation. It really bites on the economy. And there goes the tax base. We need higher wages to pay for the obligations we have.
Again, all roads lead to the same place. Increase your wages and decrease the pool of workers who contribute to the economy.

You need lower wages or higher wages with a dramatic decrease in the value of a dollar. Both mean the same thing.

Fighting the natural tendency for all things in the universe to find equilibrium is going to be the undoing of the West.

"The East" took a bet that the West would hang itself given enough rope. That bet is paying off. In the end the West will have the same standard of living as the East but the West will be straddled with massive amounts of debt to the East.

The West is the Hare and the East is the Tortoise.
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Old 02-19-2013, 05:17 PM
 
17,752 posts, read 15,066,263 times
Reputation: 6378
Quote:
Originally Posted by andywire View Post
Oversupply of available labor is going to be an issue no matter what. During the 90's, major corporations figured out it was more profitable to replace people with robots. Today, those robots are considerably cheaper, leading to more robots replacing people. You can buy a robotic arm to load machinery for about 27K, which is cheaper than paying an American 27K, plus taxes and benefits.

It's getting to the point where American workers aren't loosing the work to China, as the work from China is slowly brought back to America to be done by armies of robots. This will put a few Americans back to work, and put thousands, and eventually hundreds of thousands of Chinese out of work. Slowly thereafter, corporations will focus on how to widdle down the last few workers in the equation.
We can't find anything useful for these people to do? If we are going to have so many people sitting around then why this, as just one example.

Civil Engineers Likely to Grade U.S. Infrastructure `D' - Bloomberg

There is something else going on. The worker surplus is not rotating.
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Old 02-19-2013, 05:17 PM
 
Location: Metro Detroit, Michigan
11,920 posts, read 13,294,956 times
Reputation: 12675
Quote:
Originally Posted by pie_row View Post
It is not that we are over paid it is that they are way underpaid. Bring everyone up rather than take the top down.
But the debt load is constant and going up. The cost of servicing that debt is a real drag on the economy. It is pushing less profitable things out like making stuff.
"Making stuff" used to be some of the highest profit margin work around. Then China entered the picture. "Making stuff" was soon replaced by the FIRE economy, which is basically a fraud. In the end, you can only consume relative to what you produce. Printing money, trading houses, and developing bizarre, sophisticated financial pyramid schemes does not count as production. Basically, China was able to vacuum a large portion of our productive capacity out of the country. It wasn't because they were more capable, or better at it. Quite the contrary. They were just in their developing stages, giving them a huge advantage in the cost of labor. American companies compete by finding ways to eliminate the need for labor, but this essentially turns off the flow of money to the worker/consumer. Obviously, this proves to be quite a dilemma in the capitalist model.

In the end, our government will simply enact programs that will be akin to throwing money off the tops of skyscrapers for the serfs to collect. What the likes of Obama want to do is act as the mediator of profits. After they collect all the money, they will then determine how the money should be distributed. This appears to be where we're headed. Should be fun to watch...
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Old 02-19-2013, 07:43 PM
 
621 posts, read 548,646 times
Reputation: 265
Quote:
Originally Posted by BigJon3475 View Post
Well, let us take a look at that.

The U.S. is 4.5% of the World's population but consumes 30% of non-oil resources.

So let us do the math.

100%/4.5% = 22.22222222222222222222222222222222222222222222222 22222

22.22 x .3 = 6.6666

For the rest of the World to have the standard of living that Americans do you're going to need 6.66 planet Earths.

Now do you see your problem?
I see your problem. You lack imagination. Computers use to fill rooms and consume as much power as towns if not cities. Now you can hold in your hand as much computing power as the worlds had in the (1970's?) definitely in the 1960's and it will consume as much power as a transistor radio did in the 1970's.


The amount of power used for personal transportation can be reduced by two orders of magnitude. Along with the material input into the manufacturing of them. We can easily enjoy the same standard of living on 1/6 the material utilization. So the world can enjoy our standard of living on our resource base.
Quote:
Originally Posted by BigJon3475 View Post



So it looks like all roads lead to the same place and the only thing worse than going straight to austerity is to go kicking and screaming and end up in the same place you would have eventually anyways but with as much debt as you could accumulate before you were forced into austerity.
Do you remember everyone being told to go out and get a degree so they can get a job? Piling on more debt. Austerity isn't the answer.
Quote:
Originally Posted by BigJon3475 View Post



Again, all roads lead to the same place. Increase your wages and decrease the pool of workers who contribute to the economy.

You need lower wages or higher wages with a dramatic decrease in the value of a dollar. Both mean the same thing.
No they don't. Lower wages increase the wealth disparity between the top and the bottom. Those that have money see wages as an expense. They would much rather loan their workers the money to buy the stuff the workers want, with the expectation of getting that money back with interest, as apposed to paying them wages for doing stuff.


So higher wages with a much weaker dollar means that the workers are getting money that the rich aren't expecting to get back with interest. This can reverse the expansion of the debt bubble.
Quote:
Originally Posted by BigJon3475 View Post

Fighting the natural tendency for all things in the universe to find equilibrium is going to be the undoing of the West.

"The East" took a bet that the West would hang itself given enough rope. That bet is paying off. In the end the West will have the same standard of living as the East but the West will be straddled with massive amounts of debt to the East.

The West is the Hare and the East is the Tortoise.
Or not. Our debts are valued in USD. Let us just write them a check. T-bills pay interest cash doesn't both are part of the national debt. Printing down the debt is the joke on them.




Quote:
Originally Posted by andywire View Post
"Making stuff" used to be some of the highest profit margin work around. Then China entered the picture. "Making stuff" was soon replaced by the FIRE economy, which is basically a fraud.
The FIRE economy is a parasite on the real economy. If you want long term economic health. Key the minimum wage to debt as % of GDP. If you cause enough inflation to keep the total debt down to 125% of GDP then the FIRE economy will be kept small enough relative to the rest that it wont overtake the whole thing as it has now.
Quote:
Originally Posted by andywire View Post
...
This appears to be where we're headed. Should be fun to watch...
Or not. We have self determination. Why not take the economy back to good health and keep it there.


But mostly I agree with you.
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Old 02-19-2013, 07:55 PM
 
17,752 posts, read 15,066,263 times
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Quote:
Originally Posted by andywire View Post
"Making stuff" used to be some of the highest profit margin work around. Then China entered the picture. "Making stuff" was soon replaced by the FIRE economy, which is basically a fraud.

That is all you had to say.

The more progress there is , the more occasion there is to live by rent, which is absorbed by FIRE. What is the big mystery. If you have to give over half you produce just to work the land by a fat rentier slug, you can't compete. FIRE skims 1/3 of the entire economy with no actual product at all. So production fled to China. Once the rent exceeds the ability of increased production to pay, it will flee China, again. I say again because what is happening to us happened to China already over and over again.

The facts agree with this inference. Neither wages nor interest keep step with material progress. Yet rising rents and land values invariably accompany advancement. Indeed, they are the mark of progress! Increasing rent explains why wages and interest do not increase. The same cause that gives more to the land owner also denies it to the laborer and capitalist.

Wages and interest are higher in new countries than in old. The difference is not due to nature, but to the fact that land is cheaper. Consequently, a smaller proportion is taken by rent. Wages and interest are not determined by total production, but by net production after rent has been taken out. Wages and interest are not set by the productiveness of labor, but by the value of land. Wherever the value of land is relatively low, wages and interest are relatively high. Where land is relatively high, wages and interest are relatively low.
-Henry George
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