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Imagine a situation where nearly everybody had savings, enough to get by for awhile.
To what extent would job seekers be in a position to demand higher rates of pay, regardless of their skill level because nobody would 'need' a job desperately? Seems to me that such a situation could create wage inflation (read: wage inflation, not necessarily price inflation).
So might it be true that the 'solution' to low wages is that everybody needs to save more money and get into a stronger financial position? Rather than everybody needs to acquire a new skill, job network, etc.
What do you think?
And is anyone aware of any correlations in this regard (high savings countries equaling high wage countries)? Or a refutation of this premise.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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I would say no. What drives up salaries is a shortage of workers while business is in growth mode, like we had here in the mid-late 1990s. People are not likely to ever save enough to last long without an income.
In Ireland they save almost 20%, minimum wage is the equivalent of $11.09/hour (1 of the top 10), but the median household income is $23,721 in US dollars, less than half of the //www.city-data.com/forum/econo...ate-low.htmlUS median family income of $51,900 with the $7.25 minimum wage and median family savings here of 4.9%.
Imagine a situation where nearly everybody had savings, enough to get by for awhile.
To what extent would job seekers be in a position to demand higher rates of pay, regardless of their skill level because nobody would 'need' a job desperately? Seems to me that such a situation could create wage inflation (read: wage inflation, not necessarily price inflation).
So might it be true that the 'solution' to low wages is that everybody needs to save more money and get into a stronger financial position? Rather than everybody needs to acquire a new skill, job network, etc.
What do you think?
And is anyone aware of any correlations in this regard (high savings countries equaling high wage countries)? Or a refutation of this premise.
I have been saying this on these boards, forever!
Obviously, it is not the one and only solution....but it's definitely a partial solution, and a significant one at that.
I would say no. What drives up salaries is a shortage of workers while business is in growth mode, like we had here in the mid-late 1990s. People are not likely to ever save enough to last long without an income.
In Ireland they save almost 20%, minimum wage is the equivalent of $11.09/hour (1 of the top 10), but the median household income is $23,721 in US dollars, less than half of the //www.city-data.com/forum/econo...ate-low.htmlUS median family income of $51,900 with the $7.25 minimum wage and median family savings here of 4.9%.
I don't really think Ireland is a good example. Until fairly recently, they had a low savings rate and went crazy with mortgage debt (even worse than in America). Their current high savings rate is a reaction to the financial crisis.
Seems to me that such a situation could create wage inflation (read: wage inflation, not necessarily price inflation).
Price inflation, always goes along with price inflation. When wages jump, employers have to raise the prices to keep up with the increased wage costs. Increased not only because of raising their employees wages, but also to cover the higher price for raw materials, etc., caused by everyone getting a wage increase.
Imagine a situation where nearly everybody had savings, enough to get by for awhile.
To what extent would job seekers be in a position to demand higher rates of pay,
regardless of their skill level because nobody would 'need' a job desperately?
Imagine if those job seekers didn't have as much competition when seeking work?
What if employers HAD TO train and offer benefits as well as better wage rates?
EVERYone would be doing better.
That's our real problem today.
Far too many warm bodies available for the jobs that actually need doing.
It's acute at the no/low skill end of the market but it's true higher up as well.
The irony is that training those people doesn't really help anyone...
that only dilutes the wage value of those who already can do those jobs.
The insane part is that the only real job "growth" we have is based either directly
or substantially in something related to meeting the human needs of people. How often
do we hear bragging about home construction starts that just making more bedrooms.
of COURSE it's true. there's been no excuse for getting pregnant for over 40 years now, before the woman has a fortune in the bank and stability in her life. But the stupid ones in poverty still do it.
I would say no. What drives up salaries is a shortage of workers while business is in growth mode, like we had here in the mid-late 1990s. People are not likely to ever save enough to last long without an income.
In Ireland they save almost 20%, minimum wage is the equivalent of $11.09/hour (1 of the top 10), but the median household income is $23,721 in US dollars, less than half of the //www.city-data.com/forum/econo...ate-low.htmlUS median family income of $51,900 with the $7.25 minimum wage and median family savings here of 4.9%.
I interpreted #1 (OP) to entail workers bring able to reject working for insufficient wages because they had savings oor other resources which allow them to escape (at least for a time) the necessity of going too work day after day.
If workers were financially cushioned from this necessity, they could choose to reject low wages until they reached a sufficiently high level.
I would say no. What drives up salaries is a shortage of workers while business is in growth mode, like we had here in the mid-late 1990s. People are not likely to ever save enough to last long without an income.
In Ireland they save almost 20%, minimum wage is the equivalent of $11.09/hour (1 of the top 10), but the median household income is $23,721 in US dollars, less than half of the //www.city-data.com/forum/econo...ate-low.htmlUS median family income of $51,900 with the $7.25 minimum wage and median family savings here of 4.9%.
The $23,721 is net disposable median household income, which is after taxes. The proper comparison is PPP-adjusted median household income, which is in the table below. ireland is about 2/3 the U.S.
Note that the median is pulled way down by large numbers of students, retirees, unemployed people, and singles for whom the household income equals personal income. Ireland has one of the highest proportion of singles in the world
1 Luxembg 37,178
2 Norway 33,928
3 Switz 33,669
4 US 30,932
5 Australia 30,077
6 Austria 28,495
7 Canada 28,404
8 Sweden 26,644
9 Denmark 26,421
10 Finland 25,709
11 Netherlds 25,333
12 Germany 24,623
13 Iceland 24,499
14 Belgium 24,408
15 France 24,233
16 S.Korea 23,259
17 New Zeald 22,722
18 Ireland 22,101
Love the discussions on this forum. Economics is a big interest of mine.
As some have eluded to, our issue is too many mouths to feed right now. Certainly, highly specialized career fields are experiencing some wage growth. Other, more, commodity-type jobs, if you will, have wages flat to falling.
We have a lot of people in this country. I see a lot of people who have determined they need to be their own bosses, and are working for what they can. Neither of those two factors will allow wages to raise, obviously. yet the increasing cost of EVERYTHING puts a dent into the ability to save.
Fair to say that most of us are financially worse off than we were 10 years ago.
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