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If you want to keep your domestic economy healthy, you need to make sure the domestic consumption stays on par.
Everybody who works should be able to afford housing, food and educational costs. And be able to save a little.
Today, this is not the case. We have working poor. That is unacceptable.
How to solve this?
- Stop buying Chinese crap
- Stop inflating the cost of education
- Stop paying peanuts. That's how you get monkeys.
The most profitable period in our history was when one adult could earn enough money to support an entire family. We must get back to that point.
So here's a question for you...
It appears you lay the fault at employers and that it is entirely their responsibility to simply pay more. Where I disagree with this is that often market forces and profitability outstrip an employer's ability to just "pay more". An employer can pay only so much before they no longer have a business. You harken back to a world when the vast majority of families were on one income. Today it is two incomes and the employer cannot pay double to overcome that.
It appears you lay the fault at employers and that it is entirely their responsibility to simply pay more. Where I disagree with this is that often market forces and profitability outstrip an employer's ability to just "pay more". An employer can pay only so much before they no longer have a business. You harken back to a world when the vast majority of families were on one income. Today it is two incomes and the employer cannot pay double to overcome that.
Universal healthcare is a huge way America and American employers can become more competitive. The expensive burden of employees and their dependents healthcare is a huge burden on the business owner. Employers in other first world countries do not have to take on the burden of their employees health costs, which are huge. Firms would be more likely to do more business in America without healthcare costs eating up their bottom line. Additionally, employees are more willing to leave their jobs if they are unhappy or want to do something more productive because they don't have to worry about losing their insurance and facing possible bankruptcy. You don't see employees staying in jobs they despise or industries they can't wait to get out of because of this. This makes the labor market much more productive, dynamic, and flexible.
Yup, if you want to restructure your workforce to concentrate on cloud and big data that's what you have to do. Its very hard to find American citizens with that sort of expertise. I mean, we have them, but not in big enough numbers to fulfill the demand.
Oh come on. How do the H1b's get experience in THE CLOUD over and above what their U.S. cxunterparts have unless they are being given education U.S. employees are being denied?
Universal healthcare is a huge way America and American employers can become more competitive. The expensive burden of employees and their dependents healthcare is a huge burden on the business owner. Employers in other first world countries do not have to take on the burden of their employees health costs, which are huge. Firms would be more likely to do more business in America without healthcare costs eating up their bottom line. Additionally, employees are more willing to leave their jobs if they are unhappy or want to do something more productive because they don't have to worry about losing their insurance and facing possible bankruptcy. You don't see employees staying in jobs they despise or industries they can't wait to get out of because of this. This makes the labor market much more productive, dynamic, and flexible.
Not true.
In most if not all first world countries that have universal health care, the employers and employees and everyone earning any money are heavily taxed to pay for it.
If anything, the employers in most such countries are forced to take on the burden of the health costs of people other than their employees. When half of your population is too young, too old, too sick, or too poor to pay into the system, the other half must pay for them and for themselves.
The problem is, you can't have a well functioning universal health care system without government imposing price control and using it's power as a biggest buyer of health services to negotiate better prices.
The way Obamacare is implemented, the people are forced to buy insurance but there's no attempt to control the costs. Anytime you force people to buy a product yet don't impose price control, the price of the product goes up, up, up.
It appears you lay the fault at employers and that it is entirely their responsibility to simply pay more. Where I disagree with this is that often market forces and profitability outstrip an employer's ability to just "pay more". An employer can pay only so much before they no longer have a business. You harken back to a world when the vast majority of families were on one income. Today it is two incomes and the employer cannot pay double to overcome that.
No, not at all. Do not mistake me for a commie.
The dire straits we are in have multiple reasons. For starters, we are way too nice for the Chinese. Secondly we all are hung up on cheap stuff. Thirdly, our politicians are too dependent on donations from companies that don't mean well.
Finally, creating debt is too easy. Especially household debts that don't create value (like purchasing a house), should be made harder to abtain. Borrowing money to buy stuff you can't afford is the main reason the poor will stay poor.
My solution?
- Stop doing business with China, India, Brazil, ... and do business with Europe, the UK and other "Western Style" democracies. We need to force them to adopt honest business practices. We really need to smoke them out.
- Limit the dependence on foreign oil (That is billions and billions of dollars leaving the country, every day, through the exhaust of our cars...)
- Limit the funding of politicians by companies
- Making higher education cheaper. I want to have a system like in Europe. You do pay a relatively small amount for tuition, but the bulk is paid for by the government. For example, Belgians pay about 700$ for a year of higher education. They are however limited in the number of years they can stay in school (max 8, I believe, before the tuition skyrockets). Investing in minds is the best way to guarantee that we keep our competitive edge. Nobody cares about worker ants, because their potential of uplift is almost nil. We can't compete with asian drone-like workers who'd work for a bowl of rice a day; We don't need to if we can keep our production high value. There's a reason why German cars are still viewed as being superior (even if that's no longer true, but that's another discussion); the likes of BMW, Audi and Mercedes spend over 50 billion per year on R&D. Our universities are top notch. Now we need to make sure that the best minds we have, regardless of financial backing, can have every opportunity to shine.
We could even imagine a merit-based system, where tuition fees depend on your SAT scores or something like that. My goal: those who work hard or are smarter than the rest should get ahead.
- And finally: raise the minimum wage. I know it's not a popular opinion, but basic consumption is the key to a solid home economy. My opinion is not based on ideological premises, but on facts and figures. A society where working people are poor (by that I mean unable to provide housing, food and medical expenses) is facing bankruptcy. If your bottomline is unhealthy, it will soon expand to the rest. I'm not saying we should go back to a single income family structure (while that would honestly be better for everyone, but again, other discussion). But a family where both parents have a fulltime job should be able to sustain itself and have some disposable income.
The problem is, you can't have a well functioning universal health care system without government imposing price control and using it's power as a biggest buyer of health services to negotiate better prices.
Indeed.
Again, do not mistake me for a commie, but universal third payer healthcare is the better option.
I spend a lot of time in Belgium (and Europe in general). I had to have a hip replacement some years ago. First I wanted to have it in the US (better hospitals, better technology, better doctors than in Socialist Belgium -- I was wrong), but it would cost me almost 60.000$. The same procedure in Belgium, in a top rated hospital: 16.000$.
I then went to investigate why the difference in price was so hefty.
- The hospital was as good as a US one, even better. Nurses were friendly, almost everybody spoke English and no waiting list. I was referred by a general practitioner to a specialist who was able to operate me within a week of my original appointment.
Cost of the appointment with the GP: 25€, about 30$. If i had been a Belgian, it would have cost me 2€. Cost of the appointment with the specialist: 55€. As a Belgian: 12€.
- Follow up treatment was done with the GP and a physiotherapist. 4 sessions with the GP, 18 sessions with the PT. Total cost: about 600€. If I were Belgian: 85€...
- I asked the specialist who operated on me what he earned on a yearly basis. A specialist in Belgium earns about 300 - 400k per year. So it's not because the doctors are cheaper.
- So finally I found it; the price of medical supplies is 60% lower in Belgium than the US. I asked the specialist why. Apparently, the Belgian state decides which therapies/supplies/drugs/... are covered by the healthcare system. the decide that based on clinical trials, proven effectiveness, price and availability. Experimental methods can be covered with a prior acceptance. this means you can choose any therapy you want, but only the accepted ones are covered by the taxpayer. This means that companies need to come up with good stuff at a reasonable price in order to be covered. Stuff that is not covered by the state is available, but doesn't sell very well...
The good part about this is that it's not the state who decides what is and isn't covered. A panel of doctors and other healthcare professionals, along with the universities make recommendations, and the State always follows those recommendations. Doctors and healthcare pros in Belgium are barred from exercising any function within a healthcare or pharmaceutical company if they want to practice medicine.
I suppose this is only anecdotal, and not necessarily a trend, yet, but I've heard stories of companies that tried outsourcing jobs, (usually manufacturing in nature) only to find that the lower costs didn't outweigh the decline in quality, and additional costs associated with correcting problems associated with that decline in quality. So, those companies brought those jobs back to the US.
This also works better in places like the rust belt and south, where the cost of living hasn't become ridiculously high, like it has on the coasts.
I suppose this is only anecdotal, and not necessarily a trend, yet, but I've heard stories of companies that tried outsourcing jobs, (usually manufacturing in nature) only to find that the lower costs didn't outweigh the decline in quality, and additional costs associated with correcting problems associated with that decline in quality. So, those companies brought those jobs back to the US.
This also works better in places like the rust belt and south, where the cost of living hasn't become ridiculously high, like it has on the coasts.
This is quite a bit more complex.
Companies are run by people. Management and major shareholders.
People in the management positions are more likely to be unscrupulous and concentrate on managing their careers (I am not saying this because I don't like executives, just a personal observation after 20+years in the business).
They are not dumb. They often understand that saving 20-30% in labor costs may down the road result in eroded profits due to quality issues. However, they rarely stay in the same position for more than 3-5 years. Saving 20-30% in costs will earn them bonuses right now, increase company performance short term making major shareholders happy, they can claim on their resume that they saved company millions and are a hot commodity, and by the time you-know-what starts to really hit the fan, they'd be long gone and it will be someone else's problem.
The shareholders also couldn't care less if the company they invest in goes belly up 20 years from now because of the decisions they force it to make. They need to earn money now. They can always pull the money out and put it somewhere else. So they force companies to concentrate on short term profits. Any CEO whose stock wasn't doing too hot for 3 quarters in a row will start to feel queasy, no one is going to give him a break because he's sacrificing current profits for the long term viability. People who invested in company stock don't want to wait 20 years to reap the reward.
In the meantime, it's not easy to keep moving manufacturing from one place to another. Skilled trades need years of training. With manufacturing gone, you create a skill gap - why would anyone dedicate years of their life getting trained if there's a slim chance to get a job ? The same goes for degreed professionals. At some point, you're forced to keep your business in another country simply because they've had a chance to build up their skilled labor force, and you lost yours.
And finally there's a third reason the outsourcing works, it's because this is like a game of soccer played with only one open gate. All countries that benefit from outsourcing have protective tariffs, regulations, and currency mechanisms in place to prevent us from competing on their soil. So instead of Western companies taking over their markets by selling more expensive but far higher quality products made in the West (before these countries have a chance to build up their own manufacturing base) they force these Western companies to build factories locally of face killer tariffs.
This is a vicious cycle and the only way to break it is via regulations and tariffs - give preferred trading status to the countries that have the same standard of living as your country, and erect barriers to trade with countries that force you into poverty driven competition.
The scale of business economics has changed to one that encourages the larger business to prevail over their less wealthy competitors. In short that means we will not have an economy in which the small business can keep up with an ever increasing need to pay more, inflation and it's effect on COL is truly a buster of businesses that operate on a scale that does not allow for the rising cost of living and it's corollary of workers needing a raise.
That scale, being a large part of the American business dynamic, is an inconvenient truth for many, but it does go hand in hand with the erroneous notion that seeks to hold wages at levels unsustainable to workers. All the hype of foreign born labor being the equivalent of business salvation is simply the manifestation of belief in the theory of wage stagnation as a positive in the overall economic picture.
Real economic positives have at the least one factor of positive benefit for both labor AND business. American labor isn't being served by the gains made from low wage foreign labor, or, the various labor efficiency that has resulted in mass layoffs, some may oppose this fact and posit the benefit to American workers as one that makes consumer goods cheaper, but that is of little comfort to the newly economically marginalized sector of the American labor force.
The real question of globalism relative to labor, remains as one that poses the world's labor force as a singular entity with similar (equal) financial compensation expectations, would the international conglomerates still be bleating about the terrific positive this global labor market represents? No, they wouldn't, so the truth of globalism as it relates to labor competition is one that exposes the real benefit as one that serves the internationalists and very few beyond that group.
There is some irony in the fact of American's being adamantly for self defense as it relates to firearms, but, self defense of ones livelihood is seen as a bad thing, even to the extent of calling it "protectionist" another pejorative in the modern day American lexicon.
It's too bad that we have become accustomed to thinking of all business as a single form when most of us know good and well that the internationalist business construct is much different than that of the corner welding shop, auto repair shop, or the independent operators of any small business. The trend toward less competition between large businesses is somewhat disturbing in light of the myriad complaints of big business with regard to labor unions not being amenable to the "needs" of business bottom line thinking.
So, "we" need to compete as workers, but, real competition between the mega businesses is seen as a thing less desirable than the need to belong to large "business unions" that actually encourage cooperation over competition. The fact that business gives itself periodic raises as an across the board phenomena shouldn't be surprising to anyone knowledgeable about modern pricing structures.
The high cost of living in America is a huge factor in most business decisions to go overseas, low wage nations have become the new slave plantations simply for the reason that their standard of living posits them in that situation, and like the American slave of old, the foreign worker has little say in the economics of their own country. Democracy and poverty are supposed to be at odds, the presence of one should begin to negate the effects of the other.
We now seem to be readying ourselves for the new economy of mechanized labor coupled with the foreign low wage component. That's not to say that all is lost because we can't bling as usual, but, having a ton of unemployed and broke people seems to be of little benefit to a country that at one time led the world in individual prosperity.
The good part about this is that it's not the state who decides what is and isn't covered. A panel of doctors and other healthcare professionals, along with the universities make recommendations, and the State always follows those recommendations. Doctors and healthcare pros in Belgium are barred from exercising any function within a healthcare or pharmaceutical company if they want to practice medicine.
I'd say that's a good system. And it works...
Excellent Post
Here is why our Medical and Insurance is so expensive in this country
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