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Old 07-09-2009, 02:24 PM
 
943 posts, read 3,149,542 times
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I have a number of relatives and friends who work in low wage low skilled labor. Unlike the popular media inspired perception of everyone America working in glamours well paid jobs, the reality is most Americans work by the hour in mind numbing jobs and live paycheck to paycheck.

What has happened to wages in the last 10 years for most jobs in America? They have gone down in relationship to prices/inflation. At the local grocery store the wages for cashiers have gone down since the year 2000. The same at the landscaping company, the trucking firm, the local factory, the retail stores, and on the assembly line.

Do you agree that wages have gone down in the last 10 years adjusted to inflation for most Americans, and if so, how can the economy grow?
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Old 07-09-2009, 02:59 PM
 
Location: Virginia Beach, VA
5,522 posts, read 10,164,715 times
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Quote:
Originally Posted by Weekend Traveler View Post
I have a number of relatives and friends who work in low wage low skilled labor. Unlike the popular media inspired perception of everyone America working in glamours well paid jobs, the reality is most Americans work by the hour in mind numbing jobs and live paycheck to paycheck.

What has happened to wages in the last 10 years for most jobs in America? They have gone down in relationship to prices/inflation. At the local grocery store the wages for cashiers have gone down since the year 2000. The same at the landscaping company, the trucking firm, the local factory, the retail stores, and on the assembly line.

Do you agree that wages have gone down in the last 10 years adjusted to inflation for most Americans, and if so, how can the economy grow?

I would argue that wages actually have went up for the lowest paid workers. This is because of minimum wage laws. This month, federal minimum wage will be higher then what I made as an assistant fast food manager in 2002.

Those who are on the lower end, but high enough not to have been affected by minimum wage hikes, yeah, they have likely seen a real wage fall. Many of those jobs are being shipped out, automated, or insourced through illegal and legal labor.

As for "how will the economy grow", depends on who you believe? Some people would have you believe that wealthy people create jobs, and the way to "make the economy grow" is to cut taxes on the top end and for businesses, and they will then hire people and give raises with that savings.

To me, thats a load of hogwash. I, and many others believe, that demand creates jobs, and that is independent of wealthy people. To create demand, money must be placed directly in to the consumer classes hands, or through efficient government spending.

When the wealthy are allowed to control the flow of money, they flow it directly in to their pockets. Until this crash, the wealthy have been scraping wealth off the backs of the lower classes (aided tremendously by Ronald Reagan and George Bush 2), and depending on debt to fill the gap in spending.
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Old 07-09-2009, 05:16 PM
 
48,505 posts, read 96,514,062 times
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It was not wealthy that took out those loans for houses they couldn't afford and drove the housing market up to unrealistic levels. We can in fact have high demand and cut jobs as seen so mnay timnes as automation comes into play.We have also seen the difference in demand for certain jobs that made some gain no increase in pay and other increase in demand thus increase in pay. That is why the increasing differeence between icome levels. It happened when the agriculture econmy went to industrial in the past too.The less money in the hands of investors and small business the less frowth in the economy and jobs. Companies cut jobs not because they are cheap but because they are expensive. Do you really think that Obama borrowing is not the same as other debt and just tries to fill the gap. Watch what happens as taxes go up in coming years to repay the loans with interest. It will cut demand as its paid for; a make businesses make the same job cuts to pay for it.Efficent government spending is just a joke that no one in their right mnd believes any more.
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Old 07-09-2009, 10:13 PM
 
5,652 posts, read 19,288,604 times
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I believe like the other poster has said. The lowest workers wages actually went up a little. In 1980 or so I was working min wage for like $3.00 an hour. Now those same jobs in the same area pay about $9.00 an hour. No one pays less than $8.50 an hour around here.
However, I am mid-range career level - I am making the same salary I was making in 2003. Between 2 layoffs in that time I really lost ground as far as salary. And I am lucky to be working at all.
Many places have only had raises of like 1%-2% a year - and many struggling corps have cut out raises altogether. This has been going on since post 9/11.
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Old 07-10-2009, 01:27 AM
 
3,459 posts, read 5,759,159 times
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Quote:
Originally Posted by gardener34 View Post
I believe like the other poster has said. The lowest workers wages actually went up a little. In 1980 or so I was working min wage for like $3.00 an hour. Now those same jobs in the same area pay about $9.00 an hour.
The problem with this argument is that while wages tripled, housing prices have quadrupled.
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Old 07-10-2009, 05:14 AM
 
Location: Conejo Valley, CA
12,460 posts, read 19,997,870 times
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Quote:
Originally Posted by Weekend Traveler View Post
....the reality is most Americans work by the hour in mind numbing jobs and live paycheck to paycheck.
Hey, look its reality at the door and it says you're wrong. The median household income in the US is $50,000. The median income for men working full time is around $44k/year.
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Old 07-10-2009, 07:26 AM
 
943 posts, read 3,149,542 times
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The minimum wage has not kept up with inflation even with the small recent increases. I made $1.65 an hour in 1973 and the minimum wage of $7.25 an hour seems high but is not equal to the rate of inflation!
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Old 07-10-2009, 07:30 AM
 
Location: Conejo Valley, CA
12,460 posts, read 19,997,870 times
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Quote:
Originally Posted by Weekend Traveler View Post
The minimum wage has not kept up with inflation even with the small recent increases. I made $1.65 an hour in 1973 and the minimum wage of $7.25 an hour seems high but is not equal to the rate of inflation!
$1.65 is $7.90 in today's dollars.
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Old 07-10-2009, 07:34 AM
 
12,867 posts, read 14,857,809 times
Reputation: 4459
Quote:
Originally Posted by Randomdude View Post
I would argue that wages actually have went up for the lowest paid workers. This is because of minimum wage laws. This month, federal minimum wage will be higher then what I made as an assistant fast food manager in 2002.

Those who are on the lower end, but high enough not to have been affected by minimum wage hikes, yeah, they have likely seen a real wage fall. Many of those jobs are being shipped out, automated, or insourced through illegal and legal labor.

As for "how will the economy grow", depends on who you believe? Some people would have you believe that wealthy people create jobs, and the way to "make the economy grow" is to cut taxes on the top end and for businesses, and they will then hire people and give raises with that savings.

To me, thats a load of hogwash. I, and many others believe, that demand creates jobs, and that is independent of wealthy people. To create demand, money must be placed directly in to the consumer classes hands, or through efficient government spending.

When the wealthy are allowed to control the flow of money, they flow it directly in to their pockets. Until this crash, the wealthy have been scraping wealth off the backs of the lower classes (aided tremendously by Ronald Reagan and George Bush 2), and depending on debt to fill the gap in spending.
what you are advocating is just what our government did, which was to print money and monetize debt. Where, however, does the state get the money to spend? Ah, as Hamlet might say, there's the rub. There are only three ways the government can obtain funds to throw at all their shovel-ready projects and all three leave in their wake negative economic consequences.
http://www.marketoracle.co.uk/Article11901.html

in part:The most obvious thing the government could do to raise the funds to spend on fiscal stimulus is to raise taxes. However, this method is the economic equivalent of robbing Peter to pay Paul. Taxation directly impinges on taxpayers' well-being because they are left with less income from their labors with which to provide for themselves and their families.

Additionally, taxation reduces prosperity in the long run, because it fosters capital consumption over time. Taxation reduces the ability to save and invest in capital, because savings come out of income and as people have less income at their disposal, they have less to save and invest. Taxation reduces the incentive to invest as well, because future rates of return on any investment will be reduced by taxes on positive income. A project that might have netted 10% without new taxes might only net 7% after taxes. If a 7% rate of return is not an acceptable rate for a specific capitalist, he will choose not to save and invest. If saving and investment decreases over time, capital will be consumed. Labor will become less productive, resulting in lower incomes and less prosperity. Not what you want to happen when trying to get out of a depression.

Because taxes are so politically unpopular, governments usually resort to additional ways to raise funds, one of which is borrowing. A good case can be made that government borrowing is more harmful for long-run economic progress than taxation. Although taxation reduces both consumption and investment spending, government borrowing comes entirely from the nation's pool of savings. The money that is lent to the government in Treasury bond purchases is entirely money that was saved and ready for investment. Instead of being invested in productive capital accumulation, however, it is being lent to the government to fund state consumption. When the government borrows, it becomes a major demander of loanable funds, so market interest rates increase, making it harder for private entrepreneurs to gain access to capital for their production. As private capital available for productive enterprise shrinks, our economy becomes less productive and less prosperous.

The other source of funding turned to by the government is monetary inflation. Governments can either create money and spend it outright or they can inject money into the economy through the banking system so that people and banks can use this new money to buy up government bonds, thereby monetizing the debt. This route is preferred by governments who want to borrow more money without all those nasty rate increases.

Monetary inflation produces another set of negative economic consequences. In the first place, when the government increases the money supply, in general people hold more money than they want to at prevailing overall prices. They relieve this excess supply by spending the excess money on consumer and producer goods. Increasing the money supply does not spontaneously increase the stock of these goods; it merely increases the amount of money being spent on the same quantity of goods. Because more money is spent, the demand for producer and consumer goods increases, so overall prices increase and the purchasing power of the dollar falls. There is, therefore, no general social benefit from inflation.
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Old 07-10-2009, 07:40 AM
 
12,867 posts, read 14,857,809 times
Reputation: 4459
From an economic perspective, Obama's stimulus plan is equivalent to a giant welfare scheme. Instead of the money going to lower income Americans, however, it is meant to go to municipal bureaucrats of various stripes. Instead of productive American citizens determining what to do with their own scarce resources, the state is stepping in and dictating how they will be used. Consequently, such spending is ESSENTIALLY GOVERNMENT CONSUMPTION, which is what vulgar Keynesians think we need now more than ever. Such economists are shocked — shocked! — to find out that Americans are now saving any increases in income instead of blowing it on even more consumer goods. Not to worry, however. If private citizens do not consume enough for official tastes, the government always can.
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