Why Do Americans Work So Much?

HughPickens.com writes Rebecca Rosen has an interesting essay at The Atlantic on economist John Maynard Keynes' prediction in 1930 that with increased productivity, over the next 100 years the economy would become so productive that people would barely need to work at all. For a while, it looked like Keynes was right: In 1930 the average workweek was 47 hours. By 1970 it had fallen to slightly less than 39. But then something changed. Instead of continuing to decline, the duration of the workweek stayed put; it's hovered just below 40 hours for nearly five decades. According to Rosen there would be no mystery in this if Keynes had been wrong about the economy's increasing productivity, which he thought would lead to a standard of living "between four and eight times as high as it is today." Keynes got that right: Technology has made the economy massively more productive. Now a new paper Benjamin Friedman says that "the U.S. economy is right on track to reach Keynes's eight-fold multiple" by 2029—100 years after the last data Keynes would have had. But according to Friedman, the key reason that Keynes prediction failed to come true is that Keynes failed to allow for the changing distribution of wealth.

Comments

distribution of wealth and

[ILongForDarkness]

Greed. Family's in my experience at least have gone from being happy with 1 TV and one stereo in the "family" room to wanting fridges with TVs on them, each person having a cellphone and a tablet etc, each "adult" > 16 wanting their own car etc. We have more stuff. If we lived with the stuff you had in 1930's yeah we could work a lot less.

Re:distribution of wealth and

[Opportunist]

If we lived with the stuff we had in the 1930s you would not have had the economy boom you experienced in the second half of the 20th century. The economy was soaring and people had good jobs exactly because we started to become consumers. Because we wanted that second car and that third TV, because we wanted leisure air travel and electronic gadgets.

Without that demand, nobody would have had a job and no economic growth would have happened. Look around you, this is what you would have had for half a century now if people did not only develop the desire to consume but also have the money to do so. Today the desire remains, what's lacking is the money to actually do it, and as soon as the money for consumption was gone the economy plummeted.

Re:distribution of wealth and

[nukenerd]

in my experience at least have gone from being happy with 1 TV and one stereo in the "family" .... If we lived with the stuff you had in 1930's yeah we could work a lot less.

But a pre-1980's TV was built by hand while today robots do most of the work. The effort that went into that 1950's TV or 1930's car would make a dozen today.

The real reason for more work today is that most of it is non-productive. As automation has replaced much real work, new non-jobs have been created. It is doing stuff like safety inspections, progress chasing, advertising (half the cost of some stuff today goes to its advertising), making financial cases (that can cost more than the work) and so on ad nauseum. In the book "How to be a Wally" it gives a "Wally's" job description : - "To liaise with other Wallys". That's it, in in a nutshell.

I am a power station engineer and I spend hours sitting in meetings with a dozen other qualified engineers discussing eg whether to replace a slightly leaking seal on a large valve, whether it is cost-effective, whether we have a safety case, whether we can spare a fitter to do it. I generally take the line "Just give me a fucking spanner and I'll go down and do it this morning"; but I am treated as if that would be spoil the meeting.

Re:distribution of wealth and

[ILongForDarkness]

But the demand for more stuff is what consumed the extra labor made available by productivity improvements. Yeah wanting more stuff is what kept enough work for 40+ hours a person while women entered the work force. There would be less work if people wanted less stuff but they also would need to work less since they need less stuff. The problem IMO is the assumption that growth in sales, GDP etc is inherently good. Society needs to work enough to provide for the needs and desires of their members. So at some point you only get growth by convincing people they need more stuff. They then have to work more and have less happiness till they get their new "thing". This is psychotic. We're programmed (using that loosely since I'm from Canuckistan but close enough culturally) to be like Tazmanian devils and keep eating till we can't walk anymore rather than just say enough.

Re:distribution of wealth and

[JoeMerchant]

Military spending, infrastructure, the economic competition-wars, "medical miracle" spending, rather than kicking back with a baguette and a glass of Bordeaux, Americans are inventing new ways to keep busy, "stay on top", keep up with the Joneses, satisfy their ancestor's work-ethics, and exploit what's left of the third world.

What will be interesting is when we run out of third world labor pools to exploit - if minimum wage keeps getting kicked up it may not happen, but if conservative forces hold it down for a couple more decades, Asia and Africa's standard of living will catch up with "the West," and we won't have any substance to support our superiority complex anymore.

Re:distribution of wealth and

[mellon]

Why is it so hard to actually look at the numbers? They are really striking. They do not support this idea of yours. Please look at the numbers.

Re:distribution of wealth and

[Hognoxious]

It is doing stuff like safety inspections, progress chasing, advertising [...] making financial cases [...] and so on ad nauseum.

But not, it would seem, teaching Latin.

Re: distribution of wealth and

[Entrope]

Netcraft's latest survey confirms: Latin is a dying language.

Re:distribution of wealth and

[Gryle]

To what numbers are you referring?

Re:distribution of wealth and

[l0n3s0m3phr34k]

My American Dream is fridges with "family" in them that I can watch on the TV on the outside of the fridge.

Re:distribution of wealth and

[drewsup]

yup, but because things are damn cheap now, it doesnt matter, TV's were a high dollar item up until 1980's, computers.. forget about it, cars have remained pretty much the same accounting for inflation, but insuranse is outarageous, now housing..... THATS where the big jump has been, we are looking at generations that will never own a house now.

Re:distribution of wealth and

[l0n3s0m3phr34k]

Modern Consumerism is an invention of Edward Bernays, the cousin of Sigmund Freud. Go watch "Century of the Self"; it also details the Clinton "focus group" idea, how advertisers convinced women to smoke, the invention of modern PR and marketing...which has basically a weapon of mass destruction for corps to "convince" everyone to keep buying products via a whole slew of psychological tricks.

Re:distribution of wealth and

[l0n3s0m3phr34k]

These Numbers lol.

Re:distribution of wealth and

[Anonymous Coward]

The average cost of TVs, etc., over the lifetime of those items probably isn't particularly significant. And whilst those in the 1930s didn't have TVs, they would tend to go to bars more.

These days for under $100 you can buy a tablet which will work as a walkman, internet-enabled computer, filofax, etc. It's a fraction of the same items 35 years ago, and for $1 a week if you replace every 2 years.

TCO of cameras (including processing) is also way down.

Re:distribution of wealth and

[Anonymous Coward]

You incorrectly assume that people need to work more to get more money. Money represents time. A person should only need to spend enough time working in order to trade their time for someone else's time. If it only takes 2 man hours to create a cell phone, then someone should only need to work about 2 man hours in order to purchase said cell phone, not 60. Overly simplified, but the idea should be abundantly clear.

Re:distribution of wealth and

[mikael]

1980's TV's had large bulky CRT's and maybe a couple of large electronic circuit boards. Even in the 1990's, those widescreen TV's would fill up an entire corner of a living room and cost over £600. Now supermarkets are selling 50" flatscreens for less than £300. Those just consist of a flatscreen, plastic bezel, backcover, stand and a circuit board with CPU's, ASIC's, a dozen connectors. Smart TV's come with an OS like Android.

Re:distribution of wealth and

[Daemonik]

I live in a house built by my own hands on land I claimed after killing the Indians living here. I'm typing this on a telegraph because I'm not the kind of greedy bastard that has to have a newfangled computer. I'm only using the telegraph until I figure out how to make the internet work with an abacus. I keep my food in the root cellar instead of wasting money on one of those refrigerators and keep the house lit by candles made with fat rendered from the animals I raise. TV is shadow puppets on the wall and I ride a horse buggy into town.

YOU sound like the greediest asshole ever with all your modern conveniences! How dare you buy things??

Re:distribution of wealth and

[AthanasiusKircher]

If we lived with the stuff we had in the 1930s you would not have had the economy boom you experienced in the second half of the 20th century.

There's certainly some truth to this, but it oversimplifies things.

Without that demand, nobody would have had a job and no economic growth would have happened.

But take the premise in TFA seriously for a second. Keynes's prediction should have the average work-week around 20 hours by now. To have our current productivity, we would therefore need twice as many jobs as we currently have. But we were reach full employment long before that, so we would have to have significantly lower productivity and consumption while still having enough jobs to go around.

And of course the objection is -- "But don't people who work 20-hour weeks get paid less?" And the point of TFA is that NO -- they still get paid a living wage. The difference in the Keynes future prediction and what we actually got is that that extra money has been siphoned off to the richest folks, rather than rewarding average workers, who might then have to work less hours to still live comfortably.

(Of course, whether that could actually happen given human nature is a separate issue...)

Today the desire remains, what's lacking is the money to actually do it, and as soon as the money for consumption was gone the economy plummeted.

This is also far too oversimplified. Our economy doesn't just depend on consumption -- it depends on irrational assumptions of continuous and perpetual GROWTH of consumption.

You can't have a large corporation today and just continue making the same stuff every year and getting moderate profits that keep up with inflation. Well, you can, but nobody's going to invest in you, because Wall Street has taught us that speculation in growth is normal. Thus, if you're going to attract investors, you need to promise them an irrational and illogical perpetual growth machine that will always beat inflation in its returns.

The consequences of this logic are profound, because it's simply impossible for businesses to sustain such growth over any extended period. Once market saturation occurs, where else do you go? Well, you start doing what we see big corporations in America doing for the past few decades -- you need to keep up the illusion that profits are going up, but you can't get more revenue due to market saturation, so how do you keep up the GROWTH demand of investors?

First, you have the cost of employees. Those darn Americans and their unions cost too much. So, you send manufacturing jobs offshore. Nowadays with the lower cost of global communication, you send service jobs offshore too. And those effects continue to trickle up the offshore game -- to save money, to make greater profits, to satisfy the investment illusion that perpetual growth is possible.

But then you need more money, 'cause you've already sent all your manufacturing (and JOBS! don't forget that's what we were trying to keep in the US!) to China or whatever. But you've exhausted the revenue increases from offshoring, so you make cheaper products, which will break. You make them in such a way that they can't be repaired. Repair shops (which used to be a significant service elements in most American cities) also go out of business... more jobs lost.

You create "planned obsolescence." You spend more and more money on marketing to convince people that they need the newest gadget every year. That marketing money doesn't go to support middle or lower class workers (JOBS!) -- instead it goes to white-collar advertising agencies and such.

Eventually, you need to start tricking people into spending huge amounts of money on your products -- so, you expand the "razor/razorblades" model to products that cost hundreds of dollars. Yeah, you get a "free" iPhone every few years, but it comes with a commitment to a $100+/month phone plan. People wou

Re: distribution of wealth and

[Anonymous Coward]

Latin has been a dead language for a long time.

Re:distribution of wealth and

[Opportunist]

Whether it's immoral is irrelevant. Do you want economic growth or do you not? Growth demands consumption. Without, no economy will survive for long.

Re:distribution of wealth and

[Opportunist]

You incorrectly assume that we live in a different system. In our system, you need to work to get money.

Re:distribution of wealth and

[tverbeek]

The medical profession has a term for something that doesn't simply maintain itself but instead keeps on growing: cancer. They don't consider it healthy.

Re: distribution of wealth and

[Anonymous Coward]

wooosh!

Re:distribution of wealth and

[Anonymous Coward]

Because the law of the bankers says you can't have it all unless one your ancestors was a banker.

Re:distribution of wealth and

[Anonymous Coward]

And where can I find a job that pays my hourly rate but requires me to work fewer hours?

Re:distribution of wealth and

[Anonymous Coward]

Consider also that the stuff that people needed in the 1930's - food, energy, housing rather than gadgets - is the stuff that doesn't count towards GDP.

Re:distribution of wealth and

[Anonymous Coward]

That's not the distribution of wealth the article is talking about. Keynes predicted an increased standard of living. What he did not count on, was the redistribution of wealth. While overall standard of living has increased compared to the 1930s, most of the wealth derived from the increased productivity has gone to the relatively few at the top (the so called 1%). He predicted that increased productivity would cause all to rise proportionately, much like "all ships rise with the tide." This occurred until the late 1980s until various law changes that permitted the rich to get richer at a geometric progression. So that today, instead of everybody moving up, at least in the US, there is a new society of haves (1%ers) and have nots (everybody else).

It has nothing to do with living like in the 1930s and everything to do with the redistribution of income upwards.

Re:distribution of wealth and

[Anonymous Coward]

Today the desire remains, what's lacking is the money to actually do it, and as soon as the money for consumption was gone the economy plummeted.

Most economists will tell you that it is the middle class that drives the economy. However, over the past 30 years, the US has systematically dismantled the middle class so that it can't spend its way out of recession.

A wealthy person spending $1M on a yacht does not provide economic growth like 40 middle class families buying a new $25,000 car even though the total outlay of cash is the same. But, when you have 1% of the population owning 50% of the wealth, there isn't enough of a middle class left to purchase the goods and services that drive a healthy economy.

Re:distribution of wealth and

[ILongForDarkness]

But I ask: why do we want economic growth? It is the demand for more stuff that demands economic growth. Or do you/we have some sort of fetish for larger numbers?

If consumers stopped demanding more/newer and better toys sure the GDP wouldn't grow but it wouldn't need to because no ones asking for more junk.

Re:distribution of wealth and

[Anonymous Coward]

The "distribution of wealth" is not "changing"...
The rich are FLAT OUT engineering the economy to STEAL FROM YOU.
Until you thrown them out, YOU AND YOUR FAMILY ARE FUCKED.

Re:distribution of wealth and

[ILongForDarkness]

But we don't want just one cellphone. We want a new one every 1.5years and one for each member of the family. Once we accomplish that we start google-eyeing the next iGadget or whatever. The time we have to trade is fixed our desires aren't. Kind of the rule with work scheduling the project will expand to use all time allotted.

Re:distribution of wealth and

[roman_mir]

Oh, more nonsense by Marxist/Leninist/Keyneisianist.

Consumption is a trivial consequence of production. People have to produce first before anything at all can be consumed. Production requires investments. Investments come from savings. Even Keynes knew that even though his ideas on agreggate demand and government role in it were garbage, but even he advocated for deficit spending during bad years but then during the good years he advocated for rebuilding savings. USA never rebuilt any savings since the creation of the Federal reserve bank and the act of 1917 allowing the Fed to monetise US Treasury debt.

--------
What strangled the economy was printing all the dollars and Nixon defaulting on the gold dollar once the USA government printed all that money that it could never back with the gold it had. There is always enough gold, the only question is the relative price of gold to things, including to currencies.

Keynes was not an economist, he did not understand the economy, but he was correctly observing that increase of productivity leads to shorter working week, since that is what happened when switching from mostly agrarian economy to the industrial one. Keynes had the idea that government needed to intervene to create 'aggregate demand' when people slowed down consumption. Of course that is garbage economics, people slowing down consumption is necessary to rebuild their dwindling savings and restructure debts. Businesses should be restructured, that is what recession part of the business cycle does. Government increasing consumption via either taxation, borrowing or printing is negating the necessary effect of forcing the restructuring and deepening the problem that led to recession in the first place. Governments based on Keynesian garbage 'economics' prevent restructuring, deepen the problem of resource misallocation and lengthen and deepen the business cycle. Once no savings are left, no credit is available the only thing that a government can do to follow these garbage 'economics' is print fiat. Eventually the value of fiat drops enough that operating in it is meaningless. Getting off the gold allows this printing to continue unchecked.

The mistake in this story is multiple fold. First of all 35% of people who could be working in the USA are not working. Yet they survive, that is the welfare state effects but it shows that the productivity is not distributed evenly. SOME people are productive SOMEWHERE to give Americans all these goods in exchange for the printed dollar that 35% of them don't even have to work while the rest of them are not producing enough to feed the country, which is more than obvious after 20 years of 500,000,000,000 a year trade deficits and close to 200,000,000,000,000 dollars of debt on all levels, federal, state, municipal, private. Printing, borrowing, taxing is taking productivity of those, who are still trading with the USA in exchange for the printed paper and IOUs for more printed paper.

Economy is production. Consumption is a trivial consequence of production, not the other way around. Money that is printed and spent to support failing economies makes the problem worse with each new dollar, that is spent on foreign goods, increasing the trade deficits and debts.

Keynes was not an economist but a charlatan, but the governments love his garbage 'economics' because it gives them power. Ability to print money is the ultimate power and it is the wrong thing tondo, to give governments that power over the people's economies.

Productivity is increasing and people are working less. Only these are the people in China and other places, where former peasants are now factory, office and service sector employees instead of being subsistence farmers.

Productivity of business owners is increasing as they use their savings to automate processes that used to require manual work. Productivity of an average American is *negative* as they are consuming without producing enough even to offset what they are consuming. But this is the problem of

Re:distribution of wealth and

[ILongForDarkness]

I get your point but in a way we have. We have public schools, either public healthcare, or at least most people (maybe not in yankee doodle land but I think it is the case there too) public or employer provided healthcare, heck paved public roads and highway systems. We got more infrastructure with some of our money instead of higher income. Of course that doesn't mean the rich didn't get a disproportionate more benefit.

Re:distribution of wealth and

[Anonymous Coward]

Applied Math offers an easy explanation to this: the stock market is a sigmoid.
http://ibguides.com/biology/notes/populations

By extension: this means that 2% inflation will eventually have to give way to inflation approaching 0%, and the government will no longer have that "free money" to draw from.

Of course: all of this assumes that humans don't escape their gravity cage. If we manage to do that: the first derivative of population will have a discontinuity and any assumptions about the limit will have to consider the new evidence in order to revise their predictions.

If the reaction of the government to stagflation is another space race led by Elon Musk and Jeff Bezos: we might kick the can down the road a little further.

Eventually we WILL have to come to terms with the finite supply of energy in the Universe and we won't be able to procrastinate any longer... Until then: that's a pretty deep well to draw from!

Re:distribution of wealth and

[captjc]

So that today, instead of everybody moving up, at least in the US, there is a new society of haves (1%ers) and have nots (everybody else).

Wrong. We have a society of haves and "soon-to-have's*."

*For various definitions of "Soon" which may or may not exceed the expected lifetime of one or more generations and may be dependent on one or more of the following: hard work, extreme good fortune, unfair business practices, unethical behavior, bribery, choosing to be born of wealthy families of correct skin color in wealthy countries and the correct gender. Offer void where prohibited, see God for details.

Re:distribution of wealth and

[Anonymous Coward]

In short, we can have nice things because we have nice things.

Re:distribution of wealth and

[Opportunist]

This economy model we're using demands economic growth. The value of companies is tied to whether or not they manage to grow. The problem is that today we have reached the limit of what's sensibly possible without cannibalism.

So we're devouring what drives the economy in our quest for growth. Yes, that's eventually going to be suicidal, but don't look at me for a solution. I don't mind the collapse.

Re:distribution of wealth and

[Anonymous Coward]

Greed certainly is the problem, but not like you're describing. We work overtime just to afford health insurance, so that we can afford to go to the doctor and not die. Rent increases by double-digit percentages every year, as do health insurance premiums. TVs and cell phones ain't shit; they're cheaper than an office visit.

Re:distribution of wealth and

[captjc]

I live in a house built by my own hands on land I claimed after killing the Indians living here. I'm typing this on a telegraph because I'm not the kind of greedy bastard that has to have a newfangled computer. I'm only using the telegraph until I figure out how to make the internet work with an abacus. I keep my food in the root cellar instead of wasting money on one of those refrigerators and keep the house lit by candles made with fat rendered from the animals I raise. TV is shadow puppets on the wall and I ride a horse buggy into town.

YOU sound like the greediest asshole ever with all your modern conveniences! How dare you buy things??

Kettle, meet pot. (neither of which I own because those are such extravagances). First, look at you Mr Moneybags with your horse buggy. Us salt of the Earth types walk everywhere (barefoot, no less) not ride around like royalty! And Telegraphs and abaci?! I have a few remaining fingers and toes that I can use to count on without needing luxuries like abaci. As for communication, I typically just go on a long journey to find a person and babble incoherently to their face, because I don't have lavish things like education or language. The few times that I need to have some high speed messages, I use a magnet that was given to me to induce an electrical current on the telephone lines one hundred miles away from my alcove. I know what you are going to say, that a magnet is such opulence but at least I wasn't greedy enough to actually buy it. Someone chucked it at me while shouting something vulgar, so it's mine now!

Re:distribution of wealth and

[Anonymous Coward]

You speak as if nobody had a choice about their descent into consumerism. You don't have to buy the latest gadgets or spend money on what advertisers say that you should. You could always say to yourself, "No, I don't need that" or "No, I don't want to spend my money on that." People are responsible for their own choices. There seems to be this belief, particularly from the left which has never been big on personal responsibility, that psychologists armed with the latest scientific research are somehow able to pick off consumers like fish in a barrel and that the government must therefore step in and regulate because ordinary people are helpless against these evil advertisers and their scientific brain targeting research. Maybe we should let people make their own choices, instead of having the government make sure that nobody is stubbing their toes or skinning their knees. We are adults aren't we?

Re:distribution of wealth and

[IronChef]

> GP was right -- it IS all about greed, just on even more levels.

I think any system will, over time, evolve under pressure from the incentives that are part of that system. If the people who own the capital can enrich themselves at the expense of those who are powerless, well, that's human nature and absent a legal structure to prevent it, it's inevitable. There was plenty of exploitation going on in the old days for sure, but even with the legal protections labor has now, somehow we've seen the entire nature of the economy and class system change.

We see similar "optimizations" going on in other industries. Journalism is going down the drain, with maintstream media turning into political entertainment, and the Internet is overrun with 9 incredible headwriting techniques... You won't BELIEVE number 4!

Even video games... The $50 game-in-a-box is under attack from "freemium" games. More and more game studios are focusing on that model because it has lower risks and higher rewards... even though almost no one who likes games will say the freemium products are better.

I am not equating Candy Crush to the trouble with our economy, just observing that the relentless desire to squeeze out every dime damages lots of things. And how can you fix that? You're fighting human nature.

Re:distribution of wealth and

[Anonymous Coward]

As automation has replaced much real work, new non-jobs have been created. It is doing stuff like safety inspections

Because forbid that we make sure that machines don't fail in ways that injure or kill people.

I am a power station engineer and I spend hours sitting in meetings with a dozen other qualified engineers discussing eg whether to replace a slightly leaking seal on a large valve, whether it is cost-effective, whether we have a safety case, whether we can spare a fitter to do it. I generally take the line "Just give me a fucking spanner and I'll go down and do it this morning"; but I am treated as if that would be spoil the meeting.

Are you replacing it on your own dime and taking responsibility if something goes wrong? Is there a way to isolate that valve without disrupting operations for the rest of the plant or do you plan to just shut everything down for a few hours?

Sounds to me like you haven't actually been in the field for long.

Re: distribution of wealth and

[Anonymous Coward]

We need growth because ours is a growth economy. The economy must grow to stay afloat. If it stops growing, we get what's called a "recession", which I'm pretty sure you're familiar with. If it still doesn't grow, we get a depression which is even worse. And it will stay that way until the economy starts growing again.

Re:distribution of wealth and

[Anonymous Coward]

Oh, more nonsense by Marxist.... . Economy is production. Consumption is a trivial consequence of production, not the other way around.

These statements are at odds with each other, at least in terms of value.

Re:distribution of wealth and

[Anonymous Coward]

A large flat screen TV now costs less than buying a window of approximately the same size to install in your home.. Why is this? They are both made in China and one is far more complicated than the other.

Re:distribution of wealth and

[thinkwaitfast]

Gadgets are relatively free now. At least on ebay.

Re:distribution of wealth and

[Xyrus]

And of course the objection is -- "But don't people who work 20-hour weeks get paid less?" And the point of TFA is that NO -- they still get paid a living wage. The difference in the Keynes future prediction and what we actually got is that that extra money has been siphoned off to the richest folks, rather than rewarding average workers, who might then have to work less hours to still live comfortably.

(Of course, whether that could actually happen given human nature is a separate issue...)

This is key. Keynes thought that as things improved, everyone would get a share. Not in some socialist/communist way, but as in a "rising tide lifts all boats" kind of way. The problem is, this didn't happen.

Instead, corporate execs siphoned all those gains into their own wallets while shafting the average worker in as many ways as they can get away with. Average wages have remained mostly flat (or dropped) when accounting for inflation while Mr./Mrs. CEO's bank account keeps getting fatter. It's not really sustainable, and people are going to find that out the hard way when the GCEE (Great Consumer Economic Engine) suddenly runs out of fuel.

But Mr./Mrs. CEO doesn't really care. They don't have to. They're million and billionaires EVEN IF THEY FAIL. Once there's nothing left to siphon off, they'll just move on.

Re:distribution of wealth and

[thinkwaitfast]

My house cost $15k and was built two years ago. Zillow is full of very very cheap houses, some in good areas, that require a bit of work, but livable.

Re:distribution of wealth and

[thinkwaitfast]

Everything from 1991 Radio Shack ad I now do with my phone

Re:distribution of wealth and

[Anonymous Coward]

Well said. The model is unsustainable. Every corporation will eventually fail. The question is, is it possible to change this?

Re:distribution of wealth and

[Catmeat]

The real reason for more work today is that most of it is non-productive. As automation has replaced much real work, new non-jobs have been created. It is doing stuff like safety inspections, progress chasing, advertising (half the cost of some stuff today goes to its advertising), making financial cases (that can cost more than the work) and so on ad nauseum.

While you have a point about advertising and so on, don't write off safety inspections as "non productive".

Compare the rate of industrial accidents 70 years ago with the current rate, per person-year in a given industry. Calculate the cost of a person who was formerly a productive part of the economy becoming a lifetime drain on it if, through no fault of their own, they're unable to work thanks to a work-related injury.

Even if a particular safety inspection only reduces the chances of an accident by a trivial amount, it still represents an overall economic gain, given the costs of an accident.

Re:distribution of wealth and

[Hognoxious]

Consider also that the stuff that people needed in the 1930's - food, energy, housing rather than gadgets - is the stuff that doesn't count towards GDP.

Wrong. http://www.investopedia.com/as...

It represents the total dollar value of all goods and services produced over a specific time period

Re:distribution of wealth and

[RobinH]

I assure you most effort in an office is wasted on Facebook, "news" (i.e. entertainment) sites, and Youtube. If that weren't enough, they have to waste the time of people around them who are working with stuff like "hey, did you see...?"

Re:distribution of wealth and

[Anonymous Coward]

they also would need to work less since they need less stuff.

I disagree. The needs and quasi-needs of society (housing, health care, education) have all gotten way more expensive. My public university's tuition is nearly an order of magnitude more than when I graduated less than a decade ago. Houses are way more expensive than a few decades ago adjusting for inflation. Health care is way more expensive. And public education is so shitty that private school is the only option for good schools in many parts of the country now.

Re: distribution of wealth and

[Hognoxious]

Not surprising, the way some people treat it.

Re:distribution of wealth and

[Latinhypercube]

Yes, it's greed. But NOT from your average famile. IT IS CORPORATE GREED. Corporation have been sucking up all the productivity as INCREASED PROFIT and NOT passing that on to society. In fact they have been taking that increased profit and EXPORTING JOBS. Simple. Never vote republican.

Re:distribution of wealth and

[psmoot]

Without that demand, nobody would have had a job and no economic growth would have happened.

But take the premise in TFA seriously for a second. Keynes's prediction should have the average work-week around 20 hours by now. To have our current productivity, we would therefore need twice as many jobs as we currently have. But we were reach full employment long before that, so we would have to have significantly lower productivity and consumption while still having enough jobs to go around.

Wait, are you observing that if productivity stayed constant and people worked 20-hour weeks, we'd need twice as many jobs? Yeah, that's kinda exactly not the point. Keynes' obervation was productivity is increasing and so with a 20 hour week, we could produce the same amount of stuff with the same number of workers and have the same standard of living. It's that last part which didn't hold, we don't have the same standard of living, we have a way more expensive one.

And of course the objection is -- "But don't people who work 20-hour weeks get paid less?" And the point of TFA is that NO -- they still get paid a living wage. The difference in the Keynes future prediction and what we actually got is that that extra money has been siphoned off to the richest folks, rather than rewarding average workers, who might then have to work less hours to still live comfortably.

I don't see that. Even the very poor today live better than the middle class of the '30s. Wealth has spread around and lifted almost all boats. Yes, there still are desperately poor people living under viaducts. But almost anyone who has a job can afford a home, electricity, phone service, a car, air conditioning, refrigeration, plenty of food, good clothes, a TV, etc. etc. How is that not spreading the wealth?>/P?

Re:distribution of wealth and

[Anonymous Coward]

It doesn't take 2 man hours to create a phone though. It takes many, many man years.
It may take two hours to physically assemble the pieces - but someone didn't just find those pieces on the ground and stick them together.

Re:distribution of wealth and

[jellomizer]

Not so much greed, but pride.
Lets face it, our ability to reproduce means we need to show that we are part of an upper class. We need to prove that we are somehow better than the competition. In this Utopian leisure society where everyone is equal means we will have to find ways to differentiate ourselves from others to show that we are a better person than the others. This will not work for long, someone will always want to have more, be stronger, be more influential.

Re: distribution of wealth and

[Anonymous Coward]

People should treat it that way. It is almost useless. People can spend effort doing better things than learning Latin.

Re:distribution of wealth and

[nbauman]

Whether it's immoral is irrelevant. Do you want economic growth or do you not? Growth demands consumption. Without, no economy will survive for long.

You're assuming that all economic growth and consumption is the same, or fungible. I disagree. I want economic growth, but only useful economic growth. A lot of economic growth is wasted.

Take health care. Canada spends about $4,000 a year per capita. We spend about $8,000. (Rounding off to simplify calculations.)

About $2,000 of that $4,000 difference goes to the cost of administeration and profits of the insurance industry. (Go to your insurance company's web site and look for the "loss ratio," which is the amount they actually pay providers, usually 10-15%. Then add in the 15% that your doctor spends dealing with the insurance company.)

So the Canadian GDP for health care is $4,000 per capita, and they're spending pretty much all of it on health care. The American GDP for health care is $8,000, but we're spending $6,000 on health care and $2,000 on administration and profits for the insurance industry.

That's a totally useless $2,000, because the Canadians don't have that expense and they do just fine. Yet it's calculated in our GDP and in our economic growth.

So it seems to me that we could have an economy without health insurance companies, and all those insurance company employees could be released to do something useful, like giving actual health care, and our economy would grow fast enough.

Or you could even let them sit on the beach and go swimming, and include that in the GDP as the value of recreation.

That economy would grow fast enough for me. I just want to have enough doctors to care for me when I get sick. I don't need insurance company employees arguing with me and my doctors over payments. I certainly don't want my doctor to spend an hour a day feeding data into a computer that has no value except for insurance companies.

Re:distribution of wealth and

[nbauman]

You incorrectly assume that we live in a different system. In our system, you need to work to get money.

Not if you're in the top 0.1%. As C. Wright Mills said, they don't have to work. They can do whatever they want. For them work is a hobby.

And they seem to get most of the income and wealth in this country.

Re:distribution of wealth and

[mjwx]

I am a power station engineer and I spend hours sitting in meetings with a dozen other qualified engineers discussing eg whether to replace a slightly leaking seal on a large valve, whether it is cost-effective, whether we have a safety case, whether we can spare a fitter to do it. I generally take the line "Just give me a fucking spanner and I'll go down and do it this morning"; but I am treated as if that would be spoil the meeting.

I'll preface this with "I hate bureaucracy as much as the next man" but...

I used to know an electrician like you. He'd sit through safety briefings with a blank look and say "Just let me go and do it". That was until he opened a malfunctioning oil filled transformer like it was an ordinary transformer. It blew up and killed him and another worker. Even made the news as it shut down a major shopping centre. The result of the investigation was that the electrician in question was told the transformer was filled with oil but didn't pay attention in the safety meeting.

Safety briefings are important.

Re:distribution of wealth and

[Anonymous Coward]

People are responsible for their own choices

Does that include choices like "should I hire this person or outsource the entire division to China?"

There seems to be this belief, particularly from the left which has never been big on personal responsibility

As opposed to the right, who uses the corporate veil to absolve themselves of any responsibility? Don't worry, you can keep crying yourself to sleep knowing that gays HAVE to have been caused by godless heathen liberals and that megacorps putting estrogen in baby bottles had absolutely no responsibility at all for a generation of men turning into buttfucking pansies.

Maybe we should let people make their own choices

As long as they don't choose to have too much fun, right? Everyone ought to have the freedom to do what Republicans tell them to do.

Re:distribution of wealth and

[Anonymous Coward]

Greed. Family's in my experience at least have gone from being happy with 1 TV and one stereo in the "family" room to wanting fridges with TVs on them, each person having a cellphone and a tablet etc, each "adult" > 16 wanting their own car etc. We have more stuff. If we lived with the stuff you had in 1930's yeah we could work a lot less.

Not so true. I can buy a bunch of cheap appliances (and need too, since this crap breaks all the time) ... but I can't just retire. And I'm salaried ... so 40 hours / week is a minimum. You can always work more ... never less. And more is always expected of you. It never ends.

There is a large, vast gulf between "I want to buy more crap" and "I can retire / work less and pursue things I enjoy / leisure".

You also loose health insurance if you drop below 30 hours / week.

Nice, simple moralistic answers usually are inaccurate. Besides, is Murica-Jesus-Land really more materialistic than the rest of the world that works less?

Re:distribution of wealth and

[Anonymous Coward]

Wrong. We have a society of haves and "soon-to-have's*."

Sure you don't mean temporarily embarrassed millionaire?

Re:distribution of wealth and

[Anonymous Coward]

Greed. Family's in my experience at least have gone from being happy with 1 TV and one stereo in the "family" room to wanting fridges with TVs on them, each person having a cellphone and a tablet etc, each "adult" > 16 wanting their own car etc. We have more stuff. If we lived with the stuff you had in 1930's yeah we could work a lot less.

I'm a mid-30's, single guy and make pretty good money, live frugally, etc. The $1000 / year I spend on a phones, tablets, TV's, and other electronics (half of which are required for my BYOD plan at my job) are a drop in the bucket. In order to make good money, In the coastal cities where decent jobs are available, the big item tickets - health costs, housing, education, etc. have been pushed so high that being single and childless at 36 years old is pretty normal. A one bedroom condo 30 miles outside of my city would cost me $2500 / month by the time mortgage, obscene HOA fees, utilities, taxes, etc. are taken into consideration. Add another 50% for a typical 3 bedroom family home (median price of house in my area is over $500K - in the outer suburbs with 1.5 hour commutes). If I got married, and assuming my wife made the median income in the area, her whole salary would go towards to cost of child care and health insurance increases. Half of us still have high rate college loans in our 30's, especially since non IT related jobs require a masters to get a foot in the door.

Compare this to my Grandfather - a cop with a HS education, able to put 4 kids through college, a stay-at-home wife, and a 4 bedroom house 15 minutes outside of Manhattan. The game has changed, and it has nothing to do with the younger generations purchasing TVs and IPhones.

Re:distribution of wealth and

[Etcetera]

And of course the objection is -- "But don't people who work 20-hour weeks get paid less?" And the point of TFA is that NO -- they still get paid a living wage. The difference in the Keynes future prediction and what we actually got is that that extra money has been siphoned off to the richest folks, rather than rewarding average workers, who might then have to work less hours to still live comfortably.

Now you're equivocating. A 20-hour/week worker lives far more comfortably now than they did in the 1930s. Hell, the average 0-hour/week worker (hey, that includes SSI/Disability) lives far more comfortably now than they did in the 1930s. You can't dissociate the societal benefits from the influx in productivity.

Where does that extra comfort come from? Well, from those Americans who *still are* working 40-hour plus workweeks. We can't all live on marginal costs.

Re: distribution of wealth and

[Hognoxious]

They could save even more effort by not doing it half-assed in a vain attempt to appear erudite.

Q.E.D.

Re:distribution of wealth and

[drsmithy]

Consumption is a trivial consequence of production. People have to produce first before anything at all can be consumed.

Can you point us to some successful businesses that produce things without any expectation of selling them ? How long would you let gold toothpicks pile up unsold in a warehouse before reconsidering ?

The economy is demand driven. Without consumption, production has no point. No business produces without the expectation that their products and/or services will be consumed.

Supply-siders are always a hoot. Until you come to the horrifying realisation that they're serious, and have been running the world for the better part of forty years.

Re:distribution of wealth and

[Anonymous Coward]

Now, now. You are giving greed a bad name.

Re:distribution of wealth and

[Anonymous Coward]

Thing is, that without a growing economy we are not able to pay-off debt and interest. It's a vicious circle..

Re:distribution of wealth and

[Ol Olsoc]

In this Utopian leisure society where everyone is equal means we will have to find ways to differentiate ourselves from others to show that we are a better person than the others.

Like being able to fix Windows 10 computers after an update?

Re:distribution of wealth and

[Anonymous Coward]

I see that.

But without economic growth there is spotty and little income growth.
And without income growth interest rates would rise and lending would slow significantly.
Banks would no longer lend you money on such good terms to say buy a car, buy a home or start a business if they don't believe it will be easier for you to repay as time goes by.

Re:distribution of wealth and

[Faust6]

Don't forget cash-strapped Europe was in debt to the U.S. following the war, and rather than allow cheap imports they slapped on tariffs and got prolonged repayments.

For all the trash talk about materialism though I don't think anyone forgets that "stuff" (including technology, services) is necessary for growth.

Re:distribution of wealth and

[PuckSR]

You work at a power station, so you probably already realized that the real currency of the world is the kWh(or megajoule). Since 2010, solar and wind have been able to produce more energy during their lifetime than the total amount of energy needed to create/ship/install the product.

Robots build everything and we hypothetically have unlimited energy(we just need to use energy to build more energy production units).
That is known as a post-scarcity economy. That is what Keynes was beginning to point towards. Think of "Star Trek" or the Culture book series.

Anyway, I would argue that people work for 40-hours per week because it is the amount of work that keeps them sane. Work less and you feel lazy. We will probably always be doing about 40 hours of work, even in retirement.

Re:distribution of wealth and

[Anonymous Coward]

Seeking perpetual growth is ill-fated, but since no country wants to be left behind, the race continues. It would be unwise to try unless participants are in agreement. Most of them won't be, for a multitude of reasons, though you can find a number of namely European social democrat countries ostensibly comfortable in their slow-growth conditions and high social spending, since they're far from isolated these days and would not feel vulnerable without their economy actually tanking.

Re:distribution of wealth and

[Anonymous Coward]

*try not to participate

Re:distribution of wealth and

[Anonymous Coward]

Hey that's racist.

The correct way to say it is you killed the Native Americans living there. That is not racist.

Re:distribution of wealth and

[dywolf]

bingo.
the money for consumption is gone because wages have been flat for 40 years, ever since wages decoupled from productivity.
if they had kept pace the median salary today would be ~150k/yr instead of 52k.

Re:distribution of wealth and

[SirLordGodfrey]

Correct skin color? Wealth largely trumps any superficial BS people get hung up on.

If your family is extremely wealthy, and careful with their money, yer gonna have an easy life no matter your skin color or ethnicity.

Re:distribution of wealth and

[Anonymous Coward]

I am not sure I buy that. I have never even SEEN a fridge in a store with a TV in it. I have seen people install small LCDs in kitchens but in my experience they don't get used as much as you'd think. Having handheld tablets enables you to watch other ways.

Re:distribution of wealth and

[Anonymous Coward]

I agree, GREED, but not from the average worker.

Does the average worker in developed countries have more luxuries than 80 years ago, sure.
Did the average worker in developed countries in the 1930's have a more luxuries than in 1850, sure.

Since productivity has increased almost 8X since 1930, If I were to live now with what I had then, I could work almost as little as 5 hours a week.
If I were to want to live high on the hog, I could work 20 hours a week.

But if you are working 20 hours a week, in most jobs, you are barely surviving.

So where is the wealth going? Most of us know the answer. The rich are getting fabulously richer, seriously, rich beyond comprehension.

Re:distribution of wealth and

[ToddInSF]

Yet the medical profession actually works with corporations to do the same unhealthy things they do withe very other profession. And we pay even more dearly for the medical professions unrealistic escalating costs.

Re:distribution of wealth and

[Anonymous Coward]

Great post, AthanasiusKircher. You touched on all the things I wanted to say except that some people work so much because they HAVE to. They can't get by on one 40-hr/week job because of the reasons you elaborated on above.

Re:distribution of wealth and

[raw-sewage]

Probably preaching to the choir, but GDP is an imperfect measure of social productivity anyway. Consider my wife, a stay at home mom. Her activities don't count towards GDP, but they clearly have value (to our immediate family obviously; but also presumably to society, if you agree she's doing a reasonable job raising our kids). So, just for a thought experiment, let's say all families with two working parents suddenly had one parent lose their job; but the other's pay increased exactly by the amount of the one whose job was lost (i.e. household income is unchanged). Further assume the parent with the lost job is happy to not go back to work and be a stay at home parent. Overnight virtually all day care facilities would be out of business, causing a drop in GDP... Probably a very small drop, but you get the point.

Or what about some kind of agricultural commune or co-op: a bunch of people all work together to grow/raise their own food, and then share it. No money is exchanged. If we all did that for 100% of our food needs, I'm pretty sure that would have a huge impact on GDP, but if no one is going hungry, have we really lost anything?

I've often seen these kinds of thought experiments as prefaces to discussions about "citizen's income" policies.

Re:distribution of wealth and

[mellon]

I can't lead you by the nose to the numbers and expect you to accept them. I'm asking you to try to actually get an understanding of the problem, and then come back and tell me you still disagree with me. What you've said so far indicates that you don't actually know what the numbers are--if you did, you'd probably be outraged. It's always possible that you do know what the numbers are and think it's okay, but that's a bit hard to believe.

Re:distribution of wealth and

[Anonymous Coward]

And of course the objection is -- "But don't people who work 20-hour weeks get paid less?" And the point of TFA is that NO -- they still get paid a living wage. The difference in the Keynes future prediction and what we actually got is that that extra money has been siphoned off to the richest folks, rather than rewarding average workers, who might then have to work less hours to still live comfortably.

(Of course, whether that could actually happen in the US is a separate issue...)

FTFY. Here you can see that there are a lot of countries that don't have nearly the income inequality of the US. The culture here has been carefully crafted over time to be extremely beneficial for big industries.

Re:distribution of wealth and

[drsmithy]

Consumption is a trivial consequence of production. I can point at every business that was started with an idea for a product or a service, somebody put up their savings as investment and before the first sale ever took place money and time was spent to build the product or service.

Yes, yes, but then what ? Did they just sit in their warehouse full of goods cackling ?

Of course not. They sold it, at which point they were given money (or if you want to go back four-odd thousand years before money existed, other goods) in exchange, which they then used to fund more production.

Without the consumption - the demand - the whole thing falls apart, because without consumption, production is just a waste of time (and resources).

Just look at your own sentence - "started with an idea for a product or a service" - the key motivator is belief in DEMAND for a product or service that doesn't already exist.

Apple didn't make the first iPod without expecting people to buy it. Henry Ford didn't build the first cars expecting only the rich to buy them (hence the reason he paid his employees enough to afford them).

Without somebody doing all of that there is nothing to consume at all.

Yes there is. All the raw resources that went into the production. It's just that people have to do it (whatever "it" is) themselves rather than someone else doing it for them.

Yes, these things are done with the idea that once you provide them people would buy and the business makes money, but ability to consume comes from ability to produce.

No it does not. If nobody was building cars, people would walk. If nobody was making clothes, they would walk around naked.

Production only arises to satisfies demand - for quicker transport, better clothes, easier food. But production without anybody to consume is no different to - to use an analogy specifically for a goldbug like you - to taking a boat full of gold bars and dumping them into the deepest ocean trench you can find.

Economies are demand driven. Our ability to consume is inherent. Literally, without it, we die.

Re:distribution of wealth and

[roman_mir]

People started companies, built products, invented services and they did so in HOPE that they could TRADE with others for what the others produce, and that's not a 4000 year old idea, that's today. Everybody who goes to work and does something productive, does so to get the means to exchange for the goods/services that somebody else provides. That's what trade is all about.

Without trade we only live on what we can manage to make/gather/grow/find ourselves for ourselves, that's called being a hunter-gatherer or a subsistence farmer. You can also steal of-course, but stealing comes in many different forms.

One form of theft is to make NOTHING yet to get your hands on some money (taxes, printing, borrowing without any hope of returning it) that somebody else made by doing something useful and then use that stolen money to buy legitimate goods. That's the USA economy today.

Without production nobody trades, nobody exchanges anything. If literally there are 2 people on the planet and one fishes and the other one grows wheat, all you can do is trade fish for wheat. There is nothing else that is produced.

If a third person appears and sees your whet/fish trade, he may come up with a new product, for example tomatoes to cultivate and grow to exchange for your wheat and fish. He *CREATED* the new product and this product is something he could consume himself and because he knows he can consume it, he knows you can consume it. Since you didn't have tomatoes before, you only had wheat and fish, you would very likely want to trade for tomatoes.

However if a fourth guy came in and used a gun he had to take your fish and the wheat and tomatoes, he didn't provide you with anything, he just took your stuff. If instead of a gun he printed some paper money and convinced you to trade paper money for your fish, for the wheat, for the tomatoes, you would have that paper money. You could store the paper money, you could later come back to that guy and ask him for something useful back for that paper money.

He would just offer you other bills in exchange for the bills that he gave you earlier. What did you gain from that transaction? You can't eat paper money. Maybe you can use it as decoration or burn it, but it wouldn't be very good fuel.

If the third guy didn't come up with tomatoes you would just eat fish and wheat. But if tomatoes are introduced into the system, then you can consume them, not before they actually exist there. So consumption is a *TRIVIAL* consequence of that production and the reason you can enjoy those tomatoes is because you produce something that is of value for trade (fish).

This is as simple as it gets, it's not more complicated than that in the actual human economy today. Sure, we have more instruments, we have insurance, we want to hedge our bets, we have means of storage and accounting and exchange (money). But just creating money in itself is not something that creates value, money is a measurement of value, it is a way to exchange actual goods and services and it is a way to account for the exchanged amounts.

Money is unit of account, store of value and means of exchange. People don't trade for money, they trade for goods and services. Until somebody saves and creates those goods and services you cannot consume them. You have a *poorer* choice, that's all.

Walking is not a substitute for a car because cars can go hundreds of miles a day and they can carry a ton of useful weight. You can't replace that with walking.

Re:distribution of wealth and

[Gryle]

Perhaps I was unclear. I'm not asking you to "lead me by the nose to the numbers", I was asking for clarification on what numbers you're considering relevant here. Rates of unemployment? GDP by year? Hourly productivity rates of factories? Mean income? Poverty rates?

Re:distribution of wealth and

[drsmithy]

People started companies, built products, invented services and they did so in HOPE that they could TRADE with others for what the others produce, and that's not a 4000 year old idea, that's today.

Trade is a lot older than 4,000 years. 4,000 (ish) years is about how long our current concept of money has been around.

Without production nobody trades, nobody exchanges anything. If literally there are 2 people on the planet and one fishes and the other one grows wheat, all you can do is trade fish for wheat. There is nothing else that is produced.

If the guy with fish doesn't want any wheat, the guy with wheat won't grow any more than he needs himself. Or, he might, but it would be a pretty stupid thing to do because he's just wasting his time and effort.

If a third person appears and sees your whet/fish trade, he may come up with a new product, for example tomatoes to cultivate and grow to exchange for your wheat and fish.

Your argument is a begging the question fallacy. What if nobody wants tomatoes ? You need to examine your assumptions rather than trying to turn everything into an irrelevant anti-Government goldbug rant.

The economy is demand driven. No demand, no need for production.

Production without demand ? Complete waste of time and resources. No sane person does it (for long).

Re:distribution of wealth and

[roman_mir]

The first iPad did not have any market until people started buying.

The first tomato or potato brought into Europe didn't have much of a market until people started buying.

Nobody uses phonographs today, so producing them makes no sense except as a hobby. However the reason why phonographs are not in demand is because something else, something much better and much more convenient exists to play music for people who want to listen to it.

Demand is always there, demand is infinite. There is infinite demand for yachts out there at $1 price. There is very limited demand for yachts out there for $500,000,000 price tag. The difference between a $1 yacht and a $500,000,000 yacht is lack of production of yachts to allow for $1 prices..

If production of yachts was automated to the point where all of the components could be put together very quickly for 50 cents, then $1 yachts would be sold today and the demand for them would be through the roof.

The fact is that the only things that stop people from buying something is price or maybe that they have something better that already does the job.

In a fish/wheat economy a new type of food would be valuable and would satisfy the infinite demand of people who want tomatoes and people would want tomatoes because they have nothing like that on the table if they only eat fish and wheat.

If on the other hand there was already a fruit that was exactly like a tomato in every way, then people would STILL buy tomatoes if the price made sense. We have more than one type of tooth paste in the stores because there is demand for it the moment it is introduced and if the demand is not there, that particular product stops being produced and instead a different product is offered.

However the demand part of the economy is absolutely trivial, it is only a question of price and market saturation. Nobody forces anybody to come up with a 'better tomato' in a tomato rich environment. Come up with something else that people would want to eat.

However the PRICE element is a much more limiting factor and that's where the actual root of the question is: can you *afford* something or not? If not, then you are not producing enough of whatever it is you are doing to be able to afford that product at that price point.

The only real question is: what are *you* doing, what are *you* producing? Does anybody need what you are producing? Are you producing anything of value for somebody to exchange their production output with you?

The only limiting factor to your purchasing power is your ability to produce, not your ability to consume. You can consume, anybody can consume, what can you do to afford that consumption?

Economy is production, without production you can consume absolutely nothing that other people produce. But you can steal of-course.

Re:distribution of wealth and

[Anonymous Coward]

Really ? What the fuck country are you living in ? 30% tax rate, $1800 mo Child support, insurance costs tripled, housing, insurance costs through the roof, currency is being debased at astronomical rate... FUCKING SURVIVAL is why we work the way we do. good GAWD, your an asshole.

Re:distribution of wealth and

[drsmithy]

The first iPad did not have any market until people started buying.

Did Apple make it without expecting to sell it ? Of course not. They were answering demand.

Businesses that produce without consumption of their products or services do not stay in business - no demand, production is pointless.

Demand is always there, demand is infinite.

You have contradicted your earlier statement that demand is a function of supply.

There is infinite demand for yachts out there at $1 price.

No there’s not, because not everyone wants or can afford a yacht, even for a dollar.

We have more than one type of tooth paste in the stores because there is demand for it the moment it is introduced and if the demand is not there, that particular product stops being produced and instead a different product is offered.

You keep explaining how the production of things is driven by demand for them

Economy is production, without production you can consume absolutely nothing that other people produce.

Ah. I think I see the problem. You are assuming that all consumption needs to be someone else’s production. It does not.

Question your assumptions.

Re:distribution of wealth and

[roman_mir]

Did Apple make it without expecting to sell it ? Of course not. They were answering demand.

- The only 'demand' that Apple saw for iPads was Steve Job's idea that iPads would sell. There was no product like an iPad in the market and Jobs thought that people would want to buy it.

But that's not the main point. The main point is that for somebody to be able to consume an iPad that have to be able to *pay* for it, which means that *they have to produce* something of value themselves. Without *reciprocal* production there is no trade and nobody would give you an iPad if they didn't expect to get something back from you.

I am talking figuratively speaking, the transactions in the real market economy are not 2 way, there are many indirect transactions that take place. Somebody producing bolts and nuts that are used by car manufacturer does not sell bolts and nuts directly to a farmer, but a farmer can buy a car that has those bolts and nuts in it.

If you produce bolts and nuts and people need them, you will be able to buy things for the output of what you produce. You are trading for bread, for energy, for vegetables, for meat, for clothing, for entertainment, for whatever it is you want to buy. You are trading for those things indirectly by producing something that somebody in the entire market needs. Without you producing something you cannot demand anything from others.

Businesses that produce without consumption of their products or services do not stay in business - no demand, production is pointless.

- I am not arguing on this at all, a business needs to make a product that makes sense. However selling a product to somebody who does not produce anything in return is not a fair trade, it's not a trade at all.

Until you produce something of value you cannot expect others to trade with you.

You have contradicted your earlier statement that demand is a function of supply.

- no, you have to read carefully. Consumption is a function of supply. Human demand is infinite, it can be satisfied if there is a product and the price is right.

Demanding something and consuming something by trading your own production for what you consume are not equal. Demand exists regardless of supply, demand exists always. Consumption exists only if there is supply and consumption is a function of choices of products and price, and the price is relative to your own production level.

A billionaire can buy a 500,000,000 yacht because he already satisfied demand of millions of people for some product and he has amassed enough IOUs (money) from people who bought his products that he can afford the most expensive products.

No thereâ(TM)s not, because not everyone wants or can afford a yacht, even for a dollar.

- you have 0 imagination. Ability to buy a yacht for $1 would provide people with infinite number of possibilities for using the said yacht. A yacht is also a house. It is also a party venue. It is also a platform for a floating drone. A million yachts can be used to build a sea steading, they could be robotised and used for protection. I don't know and I don't care how, but people would buy infinite number of yachts for $1.

People are buying much less valuable things for much more than $1 today. People are paying hundreds of dollars for MODELS of yachts.

You keep explaining how the production of things is driven by demand for them

- demand is infinite. Only ability to consume is limited by production and by relative prices.

The money that you make relative to the prices for things that others produce gives you a level of your consumption.

Ah. I think I see the problem. You are assuming that all consumption needs to be someone elseâ(TM)s production. It does not.

- all consumption that you are not producing yourself has to be produced by somebody and by something, you may want to question what you know about the reality of the world, life and Universe in general.

Re:distribution of wealth and

[drsmithy]

- The only 'demand' that Apple saw for iPads was Steve Job's idea that iPads would sell. There was no product like an iPad in the market and Jobs thought that people would want to buy it.

YES. THAT'S THE WHOLE POINT. APPLE MADE THE IPAD BECAUSE THEY EXPECTED TO SELL IT.

Your argument is that Apple made the iPad *without* expecting to sell it. That production drives consumption.

Until you produce something of value you cannot expect others to trade with you.

Yes ?

This has nothing to do with demand driving production. You do not produce something for trade unless you expect someone else to trade for it.

A billionaire can buy a 500,000,000 yacht because he already satisfied demand of millions of people for some product [...]

The logic behind this is circular.

Consumption is a function of supply.

Supply does not have to come from production. Natural resources, for example.

I don't know and I don't care how, but people would buy infinite number of yachts for $1.

No they wouldn't. For example, there are people who don't have a dollar to spare.

People are buying much less valuable things for much more than $1 today. People are paying hundreds of dollars for MODELS of yachts.

Not even vaguely relevant.

- all consumption that you are not producing yourself has to be produced by somebody and by something, you may want to question what you know about the reality of the world, life and Universe in general.

*sigh*

To use an example you will surely understand, if I find a lump of gold on the side of the road, I have produced nothing, yet I can consume based on what people will give me for it.

Not all supply must be produced.

Re:distribution of wealth and

[roman_mir]

Your argument is that Apple made the iPad *without* expecting to sell it. That production drives consumption.

- nonsense, that's not my argument. My argument is that before anything can be consumed it has to exist. You are arguing against causality, do you realize that? You are arguing that consumption is what drives production, I am arguing that ability to consume relies on your ability to produce.

If you cannot produce anything you will not be able to consume anything, because nobody will trade with you. The only way to consume without producing is to be a baby, who is taken care of by the parents or to be any kind of a dependent, be it an old relative or a disabled person. Welfare state breeds people who do not produce anything and yet they are not actually disabled and they are not babies. They are just a voting block to be used by the collectivists who promise to steal (tax, print, borrow) and to redistribute.

You are arguing that consumption drives production, I am arguing that production allows consumption. Demand is always there, demand is what people want but consumption is what exists to consume and what people can afford.

Did Apple expect to sell iPads? Sure. I also expected to sell products that I build. Did Apple ALWAYS succeed with the products that they tried selling?

NOT EVEN CLOSE

Apple made tons of products that either never sold at all or were very unsuccessful and were eventually removed from production lines. So a business EXPECTS to be able to sell but the business is never certain that it can sell. It may not sell, it may fail selling.

However if a business fails selling the question is: why?

a. Is it a bad product?
b. Is it a product that enters a saturated market at the wrong price?
c. Is it a product that enters a market that actually cannot afford this product at any price because that market is full of people who are *not* producing anything and so they cannot consume anything?

I argue that USA is at this point at the level *c* - too many people are not producing anything, the trade deficits have been at negative 500,000,000,000 a year for over 20 years now. USA cannot afford products because USA is running a negative trade balance, which means that *USA on average does not produce enough to afford consumption*.

While you are arguing against something that I am not even defending, I am telling you that if you don't produce something of value people will not trade with you because you won't be able to afford the things you want that those people make because you are unproductive. USA is unproductive as a country today.

Supply does not have to come from production. Natural resources, for example.

- nonsense. What good is oil if it's not extracted? What good is coal if it's not extracted? The value of natural resources is nothing at all until somebody extracts it, ships it, refines it. That's productive work, somebody does that work and for you to be able to afford those goods you have to do some productive work of your own to exchange for those extracted goods.

What is not clear? Have you ever owned an oil rig? You think it's free to operate or something?

No they wouldn't. For example, there are people who don't have a dollar to spare.

- I am sure even beggars can get a dollar for a yacht if a yacht meant they could have a roof over their head. Anybody can buy a plastic bag for a few cents today, however 200 years ago you couldn't buy a plastic bag even if you were the richest person on this planet.

Why couldn't you buy a plastic bag 200 years ago that costs a couple of cents today that anybody can buy? Because production of plastic bags wasn't there 200 years ago.

Production is what created the market for consumption of plastic bags. Demand for plastic bags existed since the humans differentiated from other primates. A plastic bag is a wonderful thing to have, you ca

Re:distribution of wealth and

[drsmithy]

My argument is that before anything can be consumed it has to exist. You are arguing against causality, do you realize that? You are arguing that consumption is what drives production, I am arguing that ability to consume relies on your ability to produce.

And you are wrong because you are making the implicit assumption that ALL supply requires SOMEONE ELSE to produce it, when it does not. Natural resources do not require production. They are simply there.

If you cannot produce anything you will not be able to consume anything, because nobody will trade with you.

Yes I can. I can consume the things I find and make myself.

If you want to scale this up to a country, any country that has all the resources it needs to meet its own needs has no need for trade with external parties.

- nonsense. What good is oil if it's not extracted? What good is coal if it's not extracted?

You can burn them both for warmth and light.

if you found a lump of gold and gold is valuable to people it is the same thing as if you produced a lump of gold.

No it is not. That's like saying if I win a million dollars in the lottery it is the same as if I worked for fifty years to save a million dollars.

Which part of somebody has to FIND that gold before it can be used is not clear to you exactly?

Which part of NOBODY PRODUCING that gold I found is not clear to you ?

It staggers me you write example after example of how demand drives production, yet state the opposite is true. Though not as much as the cognitive dissonance in arguing that people getting money for nothing is bad when it's welfare, but good when it's a gold nugget in a stream.

Re:distribution of wealth and

[roman_mir]

And you are wrong because you are making the implicit assumption that ALL supply requires SOMEONE ELSE to produce it, when it does not. Natural resources do not require production. They are simply there.

- OMG, you are truly special. Go find yourself that lump of gold. You know that people look for gold and they do find it and sometimes they lose their lives looking for it. Ever heard of the term 'Gold Rush'? Things are "just there" except where are you? Where is your excavating effort? Where is your refinery? What are you doing that is so useful, poopooing efforts of people who bring you ENERGY as an example. You think that oil and coal and gas and uranium makes it into your car and local power station all by itself? Curious ideas you have. That piece of gold that somebody finds is PRODUCED by that act of finding. Before it was found it didn't exist in the economy. There are probably mountains of gold out there in the Universe, so what? Who is going to reach out and bring that stuff here?

Yes I can. I can consume the things I find and make myself.

- and you should re-read what I have said here, you want to be a hunter gatherer, subsistence farmer? Cool. That's fine, except you will not participate in trade economy with anybody else, you will not be able to buy anything else from anybody if you are not doing anything productive *FOR OTHER PEOPLE*. I understand now, I am arguing here with you but you are unable to process simplest of things.

Cheers.

Re:distribution of wealth and

[Anonymous Cow Ward]

Your analysis, while interesting, is flawed because you have two incorrect assumptions. First, that growth is impossible over any extended period. This may be true when populations are contracting, but in a population that grows, sales growth is certainly attainable. Even in a population that's static, if they have increasing amounts of disposable income, sales growth is possible. Secondly, you assume investors demand growth, which is not true. Investors demand profits, ideally higher than they could get elsewhere. You can keep sales the same and still increase profits if you continually improve your manufacturing or find cheaper inputs.

Now, I'm not saying Wall Street doesn't demand too much growth sometimes, and some lower profit but stable companies are undervalued, but the model isn't nearly as flawed as you make it out to be. With improvements in technology, there's no reason why growth can't be sustained.

Re:distribution of wealth and

[Anonymous Cow Ward]

Actually, when you look at after-tax compensation, average wages have risen. Not to mention that adjusting wages for inflation without taking into account how much better a lot of goods are than they used to be is silly. In addition, there are more women working now, and basic supply and demand says that when you have more people entering the workforce, wages go up more slowly than they would otherwise.

Re:distribution of wealth and

[Anonymous Coward]

I think the point was that there is also a shift in thinking amongst people that is easily identified and often exagerated in "safety culture" and that is the general unwillingness of people to take responsibility for anything. No one wants to be responsible for their own actions anymore, so they call meetings, and more meetings, and hire consultants, and commission reports, but nobody actually want to do any of the productive work because then they would be responsible for the results.

You now why he failed to account for that.

[Anonymous Coward]

Because no one would have believed anyone would believe it will trickle down just give it all to the rich.
People did not use to be that fucking stupid.

Re: You now why he failed to account for that.

[Anonymous Coward]

Before you call someone stupid check your grammar son. Used*

Re:You now why he failed to account for that.

[Anonymous Coward]

They don't work longer, they're in the office for longer. A huge difference. They're basically doing the same as old Russia, who said, "We can work as little as you pay us."

Re: You now why he failed to account for that.

[Anonymous Coward]

Before you call someone "stupid", check your punctuation, son.

Re: You now why he failed to account for that.

[Anonymous Coward]

IMO
People never used to be that stupid.

Re: You now why he failed to account for that.

[Anonymous Coward]

Shoddy ^ ad hominem - GP is correct.

Re:You now why he failed to account for that.

[Anonymous Coward]

Because no one would have believed anyone would believe it will trickle down just give it all to the rich. People did not use to be that fucking stupid.

Of course they were. Human nature hasn't change from the damn of record history. "Trickle down" went by the name of "horse and sparrow theory" in the 1890s:

* https://en.wikipedia.org/wiki/Trickle-down_economics#Criticisms

It's just that people completely forget the lessons of the past, or at the very least "misremember" what actually happened.

Take another hot topic whose history has changed take the US Second Amendment. The right for individuals to own firearms is actually a fairly recent "interpretation" of it:

The U.S. Supreme Court had never, until 2008, suggested even once that there was any such right. Warren Burger, the arch-conservative Supreme Court justice appointed by Richard Nixon, in an interview in 1991 described the then-new idea of an individual right to bear arms as “one of the greatest pieces of fraud, I repeat the word fraud, on the American public by special interest groups that I have ever seen in my lifetime.”

* http://www.theglobeandmail.com/globe-debate/article28078752.ece

Check out the book "The Second Amendment: A Biography”, which is feature in the above article.

Re: You now why he failed to account for that.

[Anonymous Coward]

The comma belongs inside the quotation mark, son.

Re:Income inequality has *RISEN* under Obama?!?!?

[Opportunist]

Income inequality has risen since at least Reagan, don't act like it's something new.

We COULD get by working 10-20 hours a week

[Opportunist]

If we could survive on what we earn in that time, that is.

There certainly isn't enough work for everyone. Well, not quite right, there COULD be enough work for everyone if, and only if, we could sell it. That's the main problem our economy has today, not enough money on the demand side. What drives our economy is consumption, and for consumption you need surplus money to use for it. And that's what's lacking.

Consumption is a self powering cycle. I consume, hence the person whose services I use gets money, who in turn gets to spend that money on consumption. It's amplifying itself. Unfortunately that also works in the opposite direction. If I don't have money, I won't get a haircut. So my hairdresser has to close his business. And can't get his plumbing fixed. Which in turn means the plumber won't get to go on vacation. Which shuts another hotel down. Which leaves that cook without the money to get his car checked. And so on.

We need money in the demand side of our economy. But for that we need people to actually get money for working. Unfortunately we have more and more people working 40+ hours a week and only get enough money to make ends meet with zero surplus at the end of the month. That's not going to work. We have to stop the money accumulation, the only thing this accomplishes is more money on the supply side. There's plenty already, we have more people who would love to invest in something sensible than there are sensible investments.

But for an investment to be sensible, there has to be a market for it. And a market will only exist if you have a demand side with the money to play its part!

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

I think part of the problem is people doing free work.
They work 50 hours a week, but only get payed for 40.
With 4 people doing that you've already done the work of one extra person.
If everyone just worked their 40 hour work week, then companies would have to hire more people.
Even if everyone did 32 hour work week it would be fine. Hire more people, everyone get more time off.
Buy 1 car less.
In europe people demand their time off.
That's why companies are buy law required to give payed leave.
In the US that's considered communist. No one should ever have time to enjoy themselves.
Idle hands are the devils playthings or whatever after all.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

Imagine what a "basic income" would do.

I've mentioned this before. I'd do something like...
Expansion of Social Security
Paid for by higher taxes on the rich (thinking $200k+/year incomes and a 10% tax on AGI with a breakeven point of $60k for a single adult (do the math below).
$500/adult/month (22+ years old)
$250/child/month (21- years old)
Not an addition to those who are on Social Security. This is a new minimum.
Add $200/person/month if we scrap S.N.A.P.

A family of two adults and two children would receive (all each separate checks/direct deposits) $18k/year. (500+500+250+250)*12
If they happen to have an AGI of $50k/year, that's $5k in that 10% special tax.
This would result in a net of $13k for that year for the family unit.

For the homeless, especially if multiple adults gather together, I imagine them being better off.
I don't know if this would cause inflation.
I assume this program would cost $1.2 trillion/year.
For some people, this could cause some financial security. Maybe some extra spending money.

Your thoughts? I know this is off-topic, but somehow related.

I also think that we should strive for a 30-hour workweek. Maybe with legislation.

Re:We COULD get by working 10-20 hours a week

[mellon]

(a) there isn't enough work for everyone because the people who have work are doing too much of it.
(b) work isn't some virtuous act that we should all do as much of as possible.

The problem we have is that work is the only metric we have for determining how to share wealth. Think about it.

Re:We COULD get by working 10-20 hours a week

[JoeMerchant]

I don't know what kind of jobs you work in, but mine simply "don't work" at 10 hours a week. If you wait tables, or bag groceries, yeah, sure, your hours are fungible - anybody can do your job. My jobs (since graduating) have always involved working in teams - whether internal to the company or across multiple companies - where interdependence and communication would break down terribly if "key people" become unavailable for long periods of time.

Actually, I'm working with a potential "partner company" right now that's failing on this front - they bought a company that makes a relatively simple technology which has true value in its entrenched place in the market, but the new owners can't get their _stuff_ together to make the tech available to new customers - everything from technical knowledge to business models. It's a month between conference calls, and each new conference call makes the same promises and failure to deliver as the previous one. We'd like to pay them $500K over the next 5 years to use their tech, estimates run about $150K/year to develop and support the same kind of thing in-house - plus, theirs is more attractive because of its established position - but their lack of availability is seriously impacting their chances of landing the contract.

Re:We COULD get by working 10-20 hours a week

[Hognoxious]

The problem we have is that work is the only metric we have for determining how to share wealth.

It is? I thought it was based on how much you already have.

Re:We COULD get by working 10-20 hours a week

[l0n3s0m3phr34k]

There WAS enough money, but most of it has been transferred to .01 of the US population, and they have transferred it into various financial vehicles were it will never get "back" into the actual economy.

Re:We COULD get by working 10-20 hours a week

[Opportunist]

Are you high?

Do you think people enjoy working so much that they work 50+ hours for getting paid 40? Do you think people love their work place enough that they work more hours than they "should"?

Move out of your mom's basement, stop smoking those blunts and get a job. Then you'll notice why they do it.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

The biggest problem I have with basic income is the future complaints about income inequality.

"I'm given $4,000 a month from the government, but my neighbour [who works over 50 hours a week but I won't mention that] gets $8,000 a month and its just not fair!"

We have that already. Look earlier in this story's postings. People on welfare don't make as much as those working and it has become a DNC campaign issue called "income inequality". You could try and say its because of the difference of the 1% from the rest, but they use numbers from those on welfare and not working to prove their points. Basic income to me sounds like slavery, or more like the Morlocks in the Time Machine, where you have a class that doesn't work living off a group that does work and the working class is going to be based by political leftists for daring to try and make their lives better.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

a 4 day work week doesn't mean you are unavailable for a whole month.

Re:We COULD get by working 10-20 hours a week

[asylumx]

If you base it on what people already have, you essentially give them and incentive to spend everything they get to keep their wealth low so they get more basic income. If you base it on what people earn, you given them incentive to keep work less so they get more basic income. Even raising it to support children doesn't make sense because some people will exploit it by having a lot of children for the wrong reasons.

I like the idea of basic income but I think it has to be a flat amount regardless of other factors. It's already a hard sell, particularly among the right and among the libertarians and even among moderates, so it has to be well thought-out in order to prevent abuse or it will never gain traction. IMO we're a long way off from being able to do something like that in the US.

Re:We COULD get by working 10-20 hours a week

[tverbeek]

I remember watching this contraction begin after the stock market bubble popped in 2008. The company I worked for took big cost-cutting measures in anticipation of an economic downturn, reassuring us that these would protect our jobs. Of course most of them meant more work for employees to pick up. And nearly all of them were clearly going to cost people outside the company their jobs: the people who used to take care of the office plants, the housekeepers who were coming in only half as often, the snow-plow drivers who were told to only clear the parking lot when there was X inches of snow, people at the media outlets where we suspended advertising, the big landscaping project that was cancelled, etc. It was a methodical undertaking whose obvious effect was to help create the economic downturn they were predicting.

Now, I'm no economist, so maybe this is impossible for some reason, but I can't help wondering what would happen if, when the stock market fell everyone just ignored it and carried on with what they were doing. Instead it took the federal government to step in and compensate for everyone going into financial lockdown, spending money which started putting people back to work, allowing them to spend money again, and so on. Maybe if the market wasn't so prone to mood swings of "irrational exuberance" and "financial panic", the government wouldn't have to get involved.

Re:We COULD get by working 10-20 hours a week

[Ol Olsoc]

We need money in the demand side of our economy.

That pretty much says it all.

For so long, we have catered pretty exclusively to the supply side.

Which is why I always ask - How little money do I have to make until I'm rich? Will everything cost less to make up for me working for half what I'm making now? Or do I just have to get by with not having things? What is the Austrian school economics plan for people who end up squatting in shantytowns to buy the things the suppliers make?

That race to the bottom doesn't have a very happy ending.

Re:We COULD get by working 10-20 hours a week

[Opportunist]

Work is the metric for determining how to share wealth? Really? Wow. No wonder top managers are falling from one burnout into the next. After all they're working an average of 800 hours a day. Right? I mean, they get about 100 times what the janitor gets, and he work about 8 hours, so they must work 800 hours. Right?

In other words: I call bullshit.

On almost everything you said.

a) People don't work so much because they are Spongebob and love flipping burgers. They do it because it's the only way they can make ends meet. When you make like 800 bucks a month from a job and your rent is about 600, overtime is what feeds you.

b) That's the one thing you're actually right about, but again, people don't toil because they hate sitting in front of the TV and loathe sleep. It's something they do because they need money. I even dare say that at the very least 9 out of 10 people, if offered the choice, would toss in their burger flipper, spit in their boss' face and tell him where to stick that damn job if they didn't have to do it because they need to pay bills.

And there are many other ways to determine how to share wealth. Some even less unfair, biased and self serving as the one we use now.

Re:We COULD get by working 10-20 hours a week

[Opportunist]

There is a solution to this. My lawyer said it's illegal, yet.

At least so far. Let's give it a while.

Re:We COULD get by working 10-20 hours a week

[Opportunist]

I don't see how your example relates to work hours, but I hope you can shed some light on this.

In the meantime, yes, there are people who are key players who cannot be replaced by anyone. And I'd really love it if management finally caught on to this and noticed that people are not fungible as soon as a mediocre level of skill gets involved. Incidentally, though, these are also the people that you can't (or at least should not) put pressure on for 60+ hours a week because then you run the risk of losing them permanently. Either because they find some job with "more money, less YOU" or because they break down.

Re:We COULD get by working 10-20 hours a week

[Orgasmatron]

Which vehicles would those be? Do you imagine vaults with diving boards, like Scrooge McDuck had? What would it be filled with? You have a cash shortage in your area?

Re:We COULD get by working 10-20 hours a week

[bjs555]

Thank you Mr. Keynes. You're correct, by the way. Seriously, you've made his argument clear. Good post.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

I'm not sure you properly read the comment you're referring to. You're effectively saying the same thing.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

My simple thought is this:

Society chooses (either through a poll or indirectly via voting) how much to give to a person, just because he/she is a person.

Respected the limits of what is feasible, this could range from a maximum (say, US $500) to a minimum (zero). What is best for society, when one considers factors like social (in)satisfaction, health aspects, social/economic stimuli, etc. ? I'm willing to bet it's not zero. Actually, I think this is related to the concept of "free samples": you can give a little money so that someone gets motivated to earn more by working. Don't give any and you have a bum.

A second approach is viewing given money as an investment. Give to ten people and one may use it to attain a better situation, either cultural or economic (or both). That can be viewed as a ROI and sometimes it's really very significant.

One can choose not to give any money, thus saving the investment spent on those 9 who wouldn't present any ROI. Meanwhile, in societies which decided to make that investment, overall development may lead to benefits for all citizens. Can we really afford not to invest?

Have in mind I'm not talking about socialism or communism or whatever. These ideas are thought to be used in a market economy.

Re:We COULD get by working 10-20 hours a week

[peragrin]

The problem with basic income is that it comes with inflation if manufacturers can't meet demand properly.

Our balance is horrible but it is self balancing based on skills for the most part. Also fixing the work week means that deadlines and thing will get missed.

For a system as complicated as human society you do not want fixed variables. For techies think of those limits like hard coded ad!in passwords. It never ends well even if it works for a while.

Society needs to be flexible. Do not hard code variables. Even limits can be troublesome.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

You don't understand what "basic income" means. Not even close. I suspect you don't want to with your delusional comparison of it to "slavery". Who is this, Ben Carson?

Re:We COULD get by working 10-20 hours a week

[tverbeek]

Maybe 10 hours/week is too much of an extreme, but how about 20? If your team all worked 10am-2pm, 5 days a week, why would you have difficulty communicating with each other? Especially if that was the cultural norm, and all your business associates worked the same hours? (Heck, adjust those standard hours by time zone – because with a workday that short we could do that – and we could avoid all of those incidents where so-and-so in San Diego can't get a hold of whats-his-name in New York because he's gone home already.) You probably already spend 15 hours every day out of touch with your co-workers, and more than 60 consecutive hours every weekend. Why couldn't you stretch that to 20 hours at a time?

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

Overseas accounts to hide fund, foreign investments/property/rents, and of course, tax avoidance schemes. The wealth generated doesn't get attacked like paytoll taxes because they use various vehicles to avoid it, vehicles the rest of the planet cannot afford to implement. The increase in wealth is then fed back into their own systems; thus increasing their wealth above and beyond realist means the 99.999% of the world can use. They basically get to keep a massive %age more of their wealth than people outside the 0.1% that own/control the majority of the planet's resources.

Re:We COULD get by working 10-20 hours a week

[Wycliffe]

If you base it on what people already have, you essentially give them and incentive to spend everything they get to keep their wealth low so they get more basic income. If you base it on what people earn, you given them incentive to keep work less so they get more basic income. Even raising it to support children doesn't make sense because some people will exploit it by having a lot of children for the wrong reasons.
I like the idea of basic income but I think it has to be a flat amount regardless of other factors. It's already a hard sell, particularly among the right and among the libertarians and even among moderates, so it has to be well thought-out in order to prevent abuse or it will never gain traction. IMO we're a long way off from being able to do something like that in the US.

The only way to do a basic income would be to give everyone a basic income of let's say $200/week then say the next $200/week is completely untaxed. If you did this then you might see a large number of people making minimum wage ($290/week) quit immediately but not all of them because although some people might be happy with $200/week without working, many more would also jump at the opportunity to double their income. Most people, even teenagers, like to work. They get bored sitting at home all day every day doing nothing especially if they are too broke to go do fun stuff. That's usually why most teenagers get their first job so they can pay for entertainment. What having a basic income would do though is make it so that workers now had more say. As they don't need a job, if the conditions get too horrible, they are able to quit and look for a better job without starving during the gap in employment.

A basic income would not really help the 40 hour / week problem though as most people make considerably more than $200 per week and still work 40 hours per week. The 40 hour per week problem is caused by the fact that it's easier to train one person to work 40 hours per week than it is to train 4 people to work 10 hours per week and as, again, most people don't mind working and have no problem exchanging time for money so they can buy more stuff, you are always going to find people willing to work 40 hours per week. The only way to reduce the 40 hours / week would be to mandate it. If the government required overtime at 35 hours then you would see hours/week drop. As a side effect, this could be used to easily manipulate unemployment. Reducing the work week by 5 hours per week would increase the number of available jobs as many jobs that require X number of hours to complete would all of a sudden need more employees to get the job done.

Re:We COULD get by working 10-20 hours a week

[Wycliffe]

I don't know what kind of jobs you work in, but mine simply "don't work" at 10 hours a week. If you wait tables, or bag groceries, yeah, sure, your hours are fungible - anybody can do your job. My jobs (since graduating) have always involved working in teams - whether internal to the company or across multiple companies - where interdependence and communication would break down terribly if "key people" become unavailable for long periods of time.

Many fortune 500 companies have "job sharing" where 2 people share one job and each work 20 hours per week. It does require some communication but it does seem to work.
More to the point though, if your whole team is working 3 days a week then the "key players" are still available the same time everyone else is.
You do hint at another problem though. If I'm a software company that works 5 days/week, I can outbid any competitor that only works 3 days/week as I can promise to deliver quicker than my competitor with the shorter work week.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

Private Hedge Funds, for one. You don't happen to live in Flint, Michigan, do you? Might want to get your blood tested for excessive lead. Stupidity is a symptom.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

60+ hours a week is not greed anymore, it is just being stupid. That sort of hours are not effective, hourly productivity always goes down after maybe two weeks of such schedule. More importantly, socialization and fun time creeps into work time as people needed use meetings and colleges to get it instead of going into pub.

Re:We COULD get by working 10-20 hours a week

[serviscope_minor]

The problem we have is that work is the only metric we have for determining how to share wealth. Think about it.

Really? I got 1/6th of my Grandfather's money when he died by virtue of being 1/6th of his total collection of grandchildren. I didn't have to put in any work for his money to be shared out. I also know a few people in banking. Some of them do investment for other people. Those people get more wealth by virtue of having wealth. They don't put in any work, they specifically pay the people I know so they don't have to work.

Likewise on the other end of the scale, I've had friends been laid off then get JSA. Naturally they're not working a job at all when getting JSA, sort of by definition.

I'd say we have lots of ways of determining how to share wealth, many of which are only marginally related to work.

Re:We COULD get by working 10-20 hours a week

[Opportunist]

Few people work 60+ hours a week out of greed. Most of them are not doing it for a new ivory back scratcher but because they need the money to survive another day.

Re:We COULD get by working 10-20 hours a week

[captjc]

I don't think it works that way. I get paid a salary for a work week. That salary assumes I only work 40 hours a week, but because it is salary, It doesn't change If I work less than 40 (which I would just be strait-up fired) nor do I get extra money for working more than 40 (no overtime pay for salary workers). Here is how it works. I want to go home at 5, but the boss comes in at 4:50 and says "don't leave until this is done." I tell him "it will probably take another day or two." He says "well, better get working then". I then stay there working until 5 AM where in I go to McDonalds get breakfast and a few cups of coffee, make a quick stop at home to get a shower, change my clothes, and return to work to start another day, thus pulling 12 extra hours which I don't get paid for.

Now assume that this isn't just a one-off thing and happens frequently. You can see how people can work 60+ hours a week and not get paid for it. Not because they love their job but because it's expected. This is how it is, pretty much everywhere in America. The only major difference is usually that some places the boss will order dinner on the companies dime instead of me going hungry because I only brought lunch and I can't leave because my card only gives me access until 6 PM.

Re:We COULD get by working 10-20 hours a week

[Solandri]

No, the problem is loans. The top 1% aren't amassing wealth by stealing it from the other 99%. The 99% are willfully agreeing to hand it over to them in the form of interest on all sorts of loans.

Productivity gains haven't translated into increased real income for two main reasons: Increased cost of housing, and increased cost of education. The market price for homes is determined almost entirely by how much people are willing to pay, not by how much it costs to build. If cost were the predominant factor, homes would depreciate as they got older, like cars. Instead they appreciate because of widespread availability of credit (loans) and increased demand (population is increasing, land area is not).

Look at the long-term inflation-adjusted home prices. From the 1890s to 1930s the average real home price decreased as you'd expect from technological progress making them cheaper to construct. But in 1934 the National Housing Act was passed, then Fannie Mae was created in 1938, then the GI Bill after WWII. Real home prices began climbing until they stabilized at nearly double what they were pre-1930 (the graph is a log scale). All of these programs allowed people to cheaply borrow money. If you double the amount of money people are able to use to bid on a home, of course the price of a home is going to double. It happened again during the housing bubble of the 2000s. Extremely low interest rates and relaxed lending standards meant a lot of money was borrowed cheaply, and when lots of people can borrow lots of money, they bid up the price of large purchases like houses.

The same thing has been going on with college education. People wring their hands over the increasing cost of college tuitions which have been vastly outpacing the rate of inflation, asking why is this happening? It's damn obvious why it's happening - the widespread availability of college loans. We've got a perverse positive feedback loop where college gets expensive, people argue that students need assistance to pay for it so we make programs to provide them low-interest loans. That borrowed money allows students to bid up the price of tuition (the school raises the price beyond a point where the student would normally decline to attend because of the high tuition, but instead they get a student loan and pay the higher tuition). That allows tuition to increase even more, leading to people arguing for more student assistance.

So it's the loans which are causing the rise in price of these non-commodity big-ticket items, which are eating up a huge portion of our productivity gains since the early 1900s. The next question is, who is the beneficiary of all these loans? Well to loan someone money, you have to have money. In other words, the 1%. You get a 30-year mortgage whose amortization means half of your total payments will go to principal, half to interest. Basically you're buying a house, and agreeing to pay for an identical house for a 1%er. (Slightly less due to inflation, but we're in a low-interest rate period. At an 8% interest rate, it's 62% interest, 38% principal. At the 16% interest rate of the early 1980s, its 79% interest, 21% principal.)

You want to stop the transfer of wealth to the 1%? Get rid of the loans. Ratchet back the maximum duration of a loan to 15, then 7 years, and make it harder to roll over balances from end of one loan to the start of another. Cap the interest rate so the percentage that's paid to interest over the life of the loan can't exceed 25% or 33%. Yes this will make it harder to buy a house or get an education - that has to happen if you want the price of those things to drop. People will have to learn to save first, buy later; instead of buy now, pay for it later. If you want to assist low-income people trying to buy a home or go to college, do it with supply-side subsidies. Build more government-funded or government-sponsored housing to increase the supply of housing. Create more public universities with capped tuitions to increase the supply of education. Don't do it with things like loans which create more demand.

Re:We COULD get by working 10-20 hours a week

[gerddie]

If you base it on what people already have, you essentially give them and incentive to spend everything they get to keep their wealth low so they get more basic income.[ ...]

I think you misunderstood the parent. Currently, if you have much wealth, you can invest in stocks etc. to get more wealth without really working for it. If you have little or no wealth and you have a badly paid job (or two) you are busy satisfying your basic needs usually you don't have enough to save something to get out of that treadmill. Hence the current distribution model is based on what you already have and it favours the rich.

Re: We COULD get by working 10-20 hours a week

[Anonymous Coward]

Actually, I do. I would only work and sleep if I could. I enjoy my work that much.

Re:We COULD get by working 10-20 hours a week

[thinkwaitfast]

I think part of the problem is people doing free work.

Like the people who write free software?

Re:We COULD get by working 10-20 hours a week

[thinkwaitfast]

If you are working at a company that has 10 hour work weeks, I will start a company that has 40 hour work weeks, pay my workers 5x as much and out compete you. You will be out of business in two years.

Re:We COULD get by working 10-20 hours a week

[JoeMerchant]

Oh, we certainly _could_ slack off from the "in by 9, stay 'til 5" routine - and I know many who have, though they generally "repay" the favor by being available electronically for extended hours. But, if you work in an unfortunately common scenario wherein multiple daily meetings are the norm, it becomes difficult a) to get anything done between the meetings, and b) to keep up with the "groupthink" that changes daily in the meetings - fall out of sync and you are no longer an effective contributor to the group goal.

Re:We COULD get by working 10-20 hours a week

[JoeMerchant]

The ones I know who do it are doing it because their "qualifications" lock them into lower rates of pay, so their employers allow them to make more money through more hours - artificial and wrong, but common.

Re:We COULD get by working 10-20 hours a week

[JoeMerchant]

Let's see, in at 9, warmed up and logged in by 9:30, meeting or coffee at 10, grab lunch and go for a run from 12-1, recovered and logged in again by 1:30, afternoon smoke or water cooler break around 3-3:30, wrapping up by 4:30... Light to moderate scattered meetings throughout the week.

Know anyone like that? If you read between the breaks, are there even 4 productive hours in a day like that? I think a lot of today's "presenteeism" is behind the continued "long work weeks" - not quite what the Japanese salarymen do with their after work parties, but it's leaning in that direction.

Re:We COULD get by working 10-20 hours a week

[JoeMerchant]

I don't know what kind of jobs you work in, but mine simply "don't work" at 10 hours a week. If you wait tables, or bag groceries, yeah, sure, your hours are fungible - anybody can do your job. My jobs (since graduating) have always involved working in teams - whether internal to the company or across multiple companies - where interdependence and communication would break down terribly if "key people" become unavailable for long periods of time.

Many fortune 500 companies have "job sharing" where 2 people share one job and each work 20 hours per week. It does require some communication but it does seem to work.
More to the point though, if your whole team is working 3 days a week then the "key players" are still available the same time everyone else is.
You do hint at another problem though. If I'm a software company that works 5 days/week, I can outbid any competitor that only works 3 days/week as I can promise to deliver quicker than my competitor with the shorter work week.

It is more efficient to pay one person to devote their whole life to a task than it is to pay 4 to do it part time and chat with each other incessantly about what is going on (of course with exceptions, such as fungible jobs mentioned above, and especially when you can get the government to subsidize your workers' cost of living and only pay them part-time with no benefits.) So, I think that's a lot of what we're seeing in the U.S. today, people overworked at one end of the payscale in the name of competitiveness/efficiency, and people underutilized / subsidized at the other end.

Re:We COULD get by working 10-20 hours a week

[RightwingNutjob]

There's a reason that old-time religion places sloth on the list of cardinal sins: because it is. Here's a clue for ya: any political or moral philosophy that can be placed in bijection with "give me free stuff in exchange for nothing" is nothing other than plain, stupid, simple, evil. If you're too damn lazy and/or stupid to carry your own weight, you deserve what you get. There's no secret stash of free stuff just sitting there, being jealously guarded by the beastly dragon of capitalism; everyone has to work for what they get, no exceptions.

Re:We COULD get by working 10-20 hours a week

[fluffernutter]

This is why I generally don't like competitive people. They really do wreck it for all of us.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

What is it, Robin Hood's guide to economy?

Re:We COULD get by working 10-20 hours a week

[mellon]

Sorry, I was insufficiently detailed in making my point. What I mean is that we have no way other than work for people who have no money to get money. Whether, and how much, you work, and how in-demand your skills are, all determine whether you can have money. So of course people work too much--it's the only way to get ahead if you are paid hourly, and it's often the only way to keep your job if you are on salary.

Re:We COULD get by working 10-20 hours a week

[mellon]

I haven't met a lot of these lazy people of whom you speak. We see them on TV, sure, but in real life? People sometimes do not want to put much effort into the meaningless job they are able to get, but if they had the opportunity to do something they considered meaningful, they'd work their asses off. But our economy isn't structured that way.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

Umm, all those publicly traded companies need the investment money to continue doing business. If the stock market starts to shrink, that means the publicly traded companies have less money to operate on.

Furthermore, most supply chains are controlled by big, publicly traded companies and if they don't deliver, then the small corner store doesn't have the middle man companies to get their products from.

Even if your own personal company where you own land that produces what you sell, you still have to have consumers to buy the stuff. If those consumers work for big, publicly traded corporations, they may of lost their job or had their hours reduced to keep the company solvent through a weak market.

So basically you can't just ignore the stock market because it reverberates through the economy when it has problems.

This doesn't even account for what government does to influence the market.

Re:We COULD get by working 10-20 hours a week

[MorePower]

Umm, all those publicly traded companies need the investment money to continue doing business. If the stock market starts to shrink, that means the publicly traded companies have less money to operate on.

Except, the stock market doesn't really provide any money to the company, except during an IPO. Publicly traded companies almost never issue new stock (because it pisses off existing stock holders when their holdings are diluted). When you buy non-IPO stock on Wall Street, the money you spend goes to the previous stock holder, not to the actual company you are "investing" in.

So any mature company that's already profitable should be able to ignore Wall Street entirely and just continue doing what it did before. But the problem is, they all have to do it or the economy will shrink and they'll have less money coming in. Which makes it kind of a prisoners' dilemma where companies don't want to be left trying to operate as "normal" when everyone else cuts back and the economy tanks. So they preemptively cut back making it a self-fulfilling prophecy.

Re:We COULD get by working 10-20 hours a week

[ArsonSmith]

Don't be silly, it's being invested into automation where there is almost no pay out, yet a large amount of pay back.

Re:We COULD get by working 10-20 hours a week

[ArsonSmith]

Of course we could, if we wanted to live at the same means of the average person of Keynes time.

Re:We COULD get by working 10-20 hours a week

[Tony Isaac]

That's funny, I'm pretty sure my money isn't being transferred to the 1%. But a whole lot of my money--thousands per year--is being transferred via taxes to the people less fortunate than I. Don't get me wrong, some of these people do need the help. But let's be clear about where the money is being "transferred."

The 1% in the US generally get rich by selling things, especially, a lot of things. If that's what you mean by "transferring," then fine, but I won't fault them for that. When you sell something, you should get money in return, and if you can make a profit, so much the better!

In any case, we have not reached the limit of our money supply. There is plenty of money to go around. If you want more of it, there are ways you can work more, or sell more, to get some of it. If you want to live on 20 hours of work a week, you can do that, it just won't be a life with multiple cars, loads of electronics, a big house, etc.

Re:We COULD get by working 10-20 hours a week

[TheSync]

So any mature company that's already profitable should be able to ignore Wall Street entirely and just continue doing what it did before.

Except the company has a fiduciary responsibility to provide value to its shareholders (i.e. owners). When the stock tanks, the stockholders get mad, and the executives get fired.

Re:We COULD get by working 10-20 hours a week

[TheSync]

We have to stop the money accumulation, the only thing this accomplishes is more money on the supply side. There's plenty already, we have more people who would love to invest in something sensible than there are sensible investments.

Investments are generally spent by the entities being invested in. Companies raise capital to spend it, not to sit on it.

But for that we need people to actually get money for working.

People do get paid money for working, but their salaries are largely based on their productivity. And productivity is largely based on skill (as well as capital equipment investment).

A ditch digger won't be paid much, because you go can purchase a mechanized ditch digger, but it has to be operated by someone who has the skills to use it (and it thus as productive as 20 people who only know how to use a shovel).

Re:We COULD get by working 10-20 hours a week

[TheSync]

The market price for homes is determined almost entirely by how much people are willing to pay,

Housing prices are determined like all other market prices, by supply and demand.

Supply is artificially reduced with land-use regulation.

This study suggests that reducing land-use restrictions in New York, San Francisco and San Jose to the level of the US median city would expand their labor forces, boosting US GDP by 9.5%.

San Francisco is the city that seems the most crazy. Unlike Dubai and Hong Kong with plenty of 50+ story apartment buildings built recently, San Francisco has a 40-foot height limit on most of its housing stock, much of which was built before 1960 and not up to modern seismic standards.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

Basic income should also put people in a better bargaining position for more accommodating schedules. I would actually like to work only part time, but in my field 40 hours is the bare minimum (with overtime being common).

Knowing people can walk away and not die should get employers to innovate a little more with how work is structured.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

The only sustainable way I've thought of for basic income is to peg it as a percentage of GDP. It becomes self-correcting- not enough people working, the amount is decreased. It should eventually find a relative equilibrium.

Ideally, you'd want to get rid of income tax as well (it becomes too complicated with basic income) and move to something like land value tax with maybe user fees.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

I have to agree with the original comment though. Some roles in companies cannot be easily split or shared (or even made part-time). We're experiencing the other end of this problem : previous fulltimers have reverted to part-timers after getting children. Which is awesome for them, but changed the turnaround time for any processes involving them from "next working day" to next week. It also means that said employees are always in 'Too much work!'-mode when they are here (having to work through a backlog) meaning that there is hardly any time, effort and help available beyond those tasks.

On the other hand, once the business processes are established and set into stone, you can easily do this. We're still in the building & innovating phase so now it is seriously cramping our style.

Re:We COULD get by working 10-20 hours a week

[Aristos Mazer]

You and the anonymous poster just said exactly the same thing. Go read the post again.

What the AC is saying is that corporations take advantage of the fact that people are willing to work 50 hours for a 40 hour wage. Volunteering in a capitalist system gets monetized and turns, within a few years, into a requirement: management rewards those who volunteer their time for free, which locks people out of the system who don't volunteer, which forces everyone to become a volunteer. This is why unions often include clauses that _ban_ people from working outside of their job description. Volunteerism erodes the free time of everyone who would like to actually have free time. Some people in an industry agreeing to work for salary means everyone who wishes they could get paid hourly and compensated for their overtime can't compete in the employee marketplace, so soon everyone has to work for salary in that industry.

Donating your time to a corporation screws your co-workers. But in the USA, we've been taught to see that as an admirable trait: hard working, dedicated, and selfless.

Re:We COULD get by working 10-20 hours a week

[Aristos Mazer]

Exactly this. People wonder why unions have rules against working outside of your job description or ban people from working extra hours... it's because of this effect. Anyone who volunteers their time for a corporation ends up forcing everyone else to become a volunteer because corporations will hire/promote those who give them the most free time -- emphasis on "free" as a *price* of your time.

And agreeing to work for salary instead of hourly is agreeing to donate free time.

Re:We COULD get by working 10-20 hours a week

[Amanitin]

No, the problem is loans.

The problem is, that 1%-ers have access to means of amassing wealth ordinary mortals don't have.

- they can afford to hire herds of lawyers and accountants to dodge taxes.
- they can afford to set up schemes where they pay themselves in equity or options so that they only pay capital gains tax instead of income tax. Or better still, offshore their revenues altogether to tax havens. Set up fake charities.
- they can afford to lobby legislation to bend rules in their favor.
- due to their wealth and connections they are essentially immune from prosecution. OK maybe not the top 1%, but the 0.1% certainly is.

The root problem is not loans, the problem is the uneven playing field. Then of course this has been the situation forever throughout human history: the number one priority of the ruling class is that they remain the ruling class. These days they are doing it better than ever under the disguise of 'democracy'.

Re:We COULD get by working 10-20 hours a week

[RuffMasterD]

...to loan someone money, you have to have money...

Kind of. Fractional-reserve banking means banks can lend out more money than they receive in deposits. You are right about borrowers paying approximately twice the value of their house on a 30 year mortgage due to interest. Most people don't mind because they expect the value of their house to double over that period too. Due to the fractional-reserve thing, not all the money goes to the depositors either. The banks use the difference between interest received and interest paid to pay wages, rent, electricity, suppliers, tax etc. What remains is profit. The 1% make their wealth in many other ways, not just interest on loans.

Re:We COULD get by working 10-20 hours a week

[RuffMasterD]

Derivatives, futures, currency swaps etc. Anything that allows vast amounts of money to move around without using actual currency.

Re:We COULD get by working 10-20 hours a week

[drsmithy]

Imagine what a "basic income" would do.

Subsidise business.

A jobs guarantee is a better solution. At least until we hit the point where there really isn't anything for the vast majority of humans to actually do (ie: the Star Trek outcome).

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

Right now, there are a few people who are "rich" thanks to their house. There are more people who are ok, but will inherit a (portion) of their parents house. Finally there are a lot of people who are struggling and have debts tide to their houses. Your plan basically hurts all of those people in favour of all the people who come after them.

The current generation are the ones with the vote.

Re:We COULD get by working 10-20 hours a week

[drsmithy]

Productivity gains haven't translated into increased real income for two main reasons: Increased cost of housing, and increased cost of education.

I think you need to think about this a bit more. Both of these things are paid out of real income.

Productivity gains haven't translated into real income increases because all the excess is getting siphoned up by a handful of people at the top and has been since the '70s.

It's important to point out that this is a deliberate policy choice.

(Also: House prices are largely driven by (artificial) supply constraints. Credit makes the problem worse, but it's a catalyst, not a cause. Look at South Korea - incredibly tight credit, but massive housing bubbles due to supply constraints. Residential use of land isn't even a rounding error - actual supply is, for most practical purposes, infinite.)

(Not to detract at all from another point you made, either, and that's the horrific cost of usury.)

Re:We COULD get by working 10-20 hours a week

[silentcoder]

There's another factor with homes: outside of extreme events like in 2008 - banks actively avoid selling them at lower prices (even at auction) than what they were bought for - because that has an incredible risk that comes from the long duration of bonds.

I own a house, it's still under bond and will be for another 19 years.
I paid R950K (about 75K USD in todays' exchange rate) for it. The bond price means I'll actually pay about three times that over it's lifetime.

Now imagine this scenario: my neighbor falls behind on his payments and the bank forecloses on his home. They sell it to recover some of the loss and by setting the reserve to low or something end up selling it for say R500K. This devalues all the homes in the neighborhood - and suddenly I find that my home is valued at say R600K - that's significantly less than what I am indebted to... if that happens I stop paying and tell the bank to come take the damn house ! And so does every one of my neighbors.

The only reason to accept paying that interest is the general pattern that in 20 years the house will have appreciated more than the interest. But it's perfectly within my legal house to give up on the loan and choose to give up the house it is secured with instead of paying it. That's what "secured with" means.

So the only way not to lose millions of customers voluntarily abandoning their homes and buying cheaper ones or renting is to do all in their power to keep the homes appreciating.
A large chunk of 2008's problem was exactly that - the moment house prices fell far enough most home owners owed more than the house was worth and instantly did the math and stopped paying - creating a downward cycle, that race to the bottom led to a global recession.
It's a good idea to try and avoid scenarios like that.

Re:We COULD get by working 10-20 hours a week

[l0n3s0m3phr34k]

Your taxes actually do go to the 1% via mass, multi-billion dollar tax breaks, refunds, pre-tax exemptions, etc. JPMorgan, 1.3 billion tax refund in 2013, American Airlines, $22 million refund, Boeing $82 million tax refund in 2013. These numbers took 10 seconds on a Google search of "tax breaks and refunds for corporations". My stats come from The Nation, and in general these "tax breaks" cost the US economy over $150 billion last year. Corporate inversions are transferring money out of the US into foreign firms.

Re:We COULD get by working 10-20 hours a week

[tehcyder]

If I'm a software company that works 5 days/week, I can outbid any competitor that only works 3 days/week as I can promise to deliver quicker than my competitor with the shorter work week.

You are assuming that the whole company just works Monday to Wednesday or something. In reality, people will spread their 3 days over the whole week. If you have a company with only one employee who has to work 18 hours a day, 7 days a week that's a different issue.

Re:We COULD get by working 10-20 hours a week

[Tony Isaac]

OK, so $150 billion went to corporations. In that same time, $2.1 trillion went to health care and social programs. It's pretty clear who is the big winner here.

Re:We COULD get by working 10-20 hours a week

[Wycliffe]

If I'm a software company that works 5 days/week, I can outbid any competitor that only works 3 days/week as I can promise to deliver quicker than my competitor with the shorter work week.

You are assuming that the whole company just works Monday to Wednesday or something. In reality, people will spread their 3 days over the whole week. If you have a company with only one employee who has to work 18 hours a day, 7 days a week that's a different issue.

No, the assumption is that if it takes 2000 hours to complete a project, the company that employees are working 40 hours per week are going to get the project done quicker than the company where the employees are only working 20 hours per week.

Re:We COULD get by working 10-20 hours a week

[DarthVain]

Or transferred it outside of the country, or inherited forever by descended royalty, or any of a number of things very wealthy people pair other really wealthy people to make laws about to allow really wealth people stay that way forever.

Re:We COULD get by working 10-20 hours a week

[dywolf]

the salary overtime cap is another part of the economic engine that created the prosperous US economy.
but when they stopped raising it, it became part of the process by which the middle class began to shrink.
in many ways it is to the middle class what minimum wage is to low income workers.
it ensures either healthy work schedule, or just compensation....but being stuck at a paltry 23660k/yr , it's essentially meaningless right now.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

When most people are barely getting by, how would you propose they save for a new house or car? Those industries would crash waiting for the average worker to buy a house or a car.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

'The problem we have is that work is the only metric we have for determining how to share wealth. Think about it.'
Actually, PRODUCTIVE work is how we determine wealth, well that and inheritance. But, as the Chinese noted centuries ago, inheritance is frittered away in a few generations anyway.
The smartest and most productive people tend to accumulate the most wealth. A few bad CEOs and politicians aside, that is true.
The 'workers' with minimal skills are many. The people with skills that can build wealth are few.
Like any other commodity, scarcity determines value.
The world is awash in mediocre programmers. Very few can truly make a difference.
Should we pay all programmers the same?
If so, I will let you have the mediocre ones. I will take the great ones.
See you on Wall St.

Re:We COULD get by working 10-20 hours a week

[JustSomeProgrammer]

I actually kindof do hope a lot of people would quit and demand would increase at fast food places since that would force them to pay better than minimum wage.

Re:We COULD get by working 10-20 hours a week

[david_thornley]

Some people work 60+ hours a week because they want to advance in the company, or because they're committed to doing a job and not necessarily doing it intelligently. There's all sorts of reasons.

Re:We COULD get by working 10-20 hours a week

[cwsumner]

You need a different job. Whether you get a new job is up to you, but if you stay that is a choice, too.

Re:We COULD get by working 10-20 hours a week

[dywolf]

ah, my mod stalker strikes again.
this is neither flamebait nor trolling but cold hard fact: the exemption from overtime for salaried workers is set far far too low, so low as to be meaningless.

Re:We COULD get by working 10-20 hours a week

[swalve]

Maybe not though. Maybe their employee satisfaction and performance is higher, and turnover is lower. Maybe they are more profitable than your 60 hour a week sweatshop.

Re:We COULD get by working 10-20 hours a week

[swalve]

All you have to do is say no. You aren't a slave.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

I'm fairly sure the GP meant that people with lots of money make lots of money (interest, speculation, 'investments', etc.) thereby bypassing any real labour, yet getting the lion's share of the income.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

Ah, but even people who make more money tend to spend more and have more expensive tastes, leading them to need to work as many hours as they do and/or forestall retirement.

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

Funny.. the current government in Brazil went for exactly that.. the result.. our economy went from growing 7 percent per year to shriking 3 percent per year within 5 years. That doe snto work. Greed is the main engine of economy.. you cannot get rid of it and expect economy to work.

Re:We COULD get by working 10-20 hours a week

[raw-sewage]

You want to stop the transfer of wealth to the 1%? Get rid of the loans. Ratchet back the maximum duration of a loan to 15, then 7 years, and make it harder to roll over balances from end of one loan to the start of another. Cap the interest rate so the percentage that's paid to interest over the life of the loan can't exceed 25% or 33%. Yes this will make it harder to buy a house or get an education - that has to happen if you want the price of those things to drop. People will have to learn to save first, buy later; instead of buy now, pay for it later. If you want to assist low-income people trying to buy a home or go to college, do it with supply-side subsidies. Build more government-funded or government-sponsored housing to increase the supply of housing. Create more public universities with capped tuitions to increase the supply of education. Don't do it with things like loans which create more demand.

Why are (selling) mortgages only the domain of the 1%?

What's to stop an ordinary person from short-selling UST futures? Note: futures are far less regulated that stocks, you can sell what you don't own fairly easily.

Take the cash you earned from short-selling your treasury futures and sell mortgages so people can buy their houses. Futures are marked to market, so you'll have to do a daily cash settlement on your short position (giving OR receiving money, depending on the price movement of the treasury futures). You can fund the payments with the profits from your mortgage.

Now you are essentially a bank... at some point you should be able to borrow money at the federal funds rate. Fractional reserve banking says you don't have to keep a lot of cash on hand to do this, and you can use the mortgage payments you're expecting as even more collateral. Or sell some more treasury futures to fund more mortgages.

Note I've never looked into actually doing this, perhaps one of these steps isn't as trivial as it seems. But for someone with the ambition to understand how all this works (should be mostly free using the library), I don't see why there isn't a potential for a rags-to-riches story.

On the flipside... say you're a 0.0001% with money coming out your ears. If it's "so easy" to keep making money, why not just sell loans/mortgages? Two factors: credit risk and interest rate competition. In general, people (or institutions) with bad credit get worse rates. So as the seller of a loan, you're always trading risk for reward. But you're also competing with other (presumably wealthy) people who want to make a return on their investment. Just like a lot of people bidding on the same thing drives the buy price up, several people trying to sell a loan drives the interest rate down. I'm not a rich person apologist by any means, but they are held to the same supply and demand forces as everyone else. So if you're super rich, say you've got $10mm. Do you really want to sell 30-year fixed mortgages at 4%? Sure, that 4% is $400k/year... but what about inflation? We're in a historically low-inflation period right now, but do you think that will hold for the next 30 years? What will $400k/year be really worth in 2046? I guess you're somewhat protected from defaults through federal programs, but what about early payoffs? It's better than losing your money of course, but that 4% you could once count on is now gone.

Here's another lending business a person of more modest means can get into: tax lien loans. I've never done this, but read about people who do it as a side business. The idea works like this: some family can't pay their property taxes, so the local government will auction off loans to pay their taxes. You compete with other investors for the interest rate (how low are you willing to go?) Say you're the winning bid: you're allowed to pay that family's property tax as a loan to the family, backed by a lien on their property. Different states have different rules for the specifics of this, but th

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

JPMorgan, 1.3 billion tax refund in 2013

JP Morgan is having a convention in San Franshitsco today. Those bankers sure do wear sharp, expensive-looking suits. Wish us proles in tech were allowed to dress like adults.

Re:We COULD get by working 10-20 hours a week

[captjc]

Easy for you to say. Some of us like keeping our jobs, the occasional bonus or, god forbid, a raise. Also, when you do leave, don't expect a good reference. I know from personal experience that one of the first questions a company asks a reference is "how many hours a week did they typically work and did they do overtime when told?"

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

If you base it on what people already have, you essentially give them and incentive to spend everything they get to keep their wealth low so they get more basic income. If you base it on what people earn, you given them incentive to keep work less so they get more basic income. Even raising it to support children doesn't make sense because some people will exploit it by having a lot of children for the wrong reasons.
I like the idea of basic income but I think it has to be a flat amount regardless of other factors. It's already a hard sell, particularly among the right and among the libertarians and even among moderates, so it has to be well thought-out in order to prevent abuse or it will never gain traction. IMO we're a long way off from being able to do something like that in the US.

The only way to do a basic income would be to give everyone a basic income of let's say $200/week then say the next $200/week is completely untaxed. If you did this then you might see a large number of people making minimum wage ($290/week) quit immediately but not all of them because although some people might be happy with $200/week without working, many more would also jump at the opportunity to double their income. Most people, even teenagers, like to work. They get bored sitting at home all day every day doing nothing especially if they are too broke to go do fun stuff. That's usually why most teenagers get their first job so they can pay for entertainment. What having a basic income would do though is make it so that workers now had more say. As they don't need a job, if the conditions get too horrible, they are able to quit and look for a better job without starving during the gap in employment.

A basic income would not really help the 40 hour / week problem though as most people make considerably more than $200 per week and still work 40 hours per week. The 40 hour per week problem is caused by the fact that it's easier to train one person to work 40 hours per week than it is to train 4 people to work 10 hours per week and as, again, most people don't mind working and have no problem exchanging time for money so they can buy more stuff, you are always going to find people willing to work 40 hours per week. The only way to reduce the 40 hours / week would be to mandate it. If the government required overtime at 35 hours then you would see hours/week drop. As a side effect, this could be used to easily manipulate unemployment. Reducing the work week by 5 hours per week would increase the number of available jobs as many jobs that require X number of hours to complete would all of a sudden need more employees to get the job done.

If you're training four people to work 10 hour shifts from now until they retire, it's not even worth mentioning it's "more work than training one guy". The amount of time spent training is insignificant compared to the working lifetime of an individual.
Now, if you're planning on making the job only just bearable and having to hire new people a few times each year....

Re:We COULD get by working 10-20 hours a week

[Anonymous Coward]

I just want to see companies figure out how to get by with 80% or 90% Total Employee Costs, so the employees are seeing increases in pay when the company is seeing increases in revenue.

Re:We COULD get by working 10-20 hours a week

[werepants]

Why does the next $200/week have to go untaxed? Everybody gets their basic income, and then everything beyond the mincome is taxed at a flat rate. If my basic needs are met and I want more money, I'm going to work for it even if it is taxed. The key thing is that working doesn't reduce your basic income, because that would provide a disincentive for working.

It ends up being a welfare system that's completely fair and a progressive tax policy that's also completely fair. It's also better than existing welfare because there is no disincentive to working.

Re:We COULD get by working 10-20 hours a week

[werepants]

I think you're right, but I think it also might end up being a self-correcting problem (to some extent). My first home went upside-down almost immediately after purchasing it. I'm kicking my ass financially right now to get out of student loan debt. Thanks to that, I'm never again going to buy a house on a 30-year term (currently on a 15-year and so much better off for it) and there's no way my kids are going to be taking on loans for university - they will either get scholarships or do it the cheap way, living at home and going to a community college as much as possible.

Whether this is a trend that actually registers on an economic scale, I don't know, but anybody who does have the sense to live without loans will leap ahead of the pack pretty quickly. So regulation may very well be part of the answer, but education and shifting cultural attitudes about debt could do the job as well.

Re:We COULD get by working 10-20 hours a week

[werepants]

The panic happens because half the people in the stock market are speculators, not investors. The original idea of the stock market was buying company stock and getting a dividend... you are part owner of the company and get part of the profits. If the company does well, with a promise of higher dividends in the future, the stock price goes up.

Now, though, many stocks don't even provide a dividend, so the coupling of stock price to reality is weak and more based on the whims of legions of day traders (and the even more frenetic HFT algorithms). It's just gambling on a massive scale.

Re:We COULD get by working 10-20 hours a week

[Arterion]

It takes 9 months to make a baby -- I don't care how many women you have working on it.

Because people want the lastest iPhone!

[laserhead]

And a Tesla model S/BMW, a bigger house, traveling around the world, somethings you didn't have 100 years ago. An average Joe today can afford the health service better than the richest people can have 100 years ago. People get more, but they want even more. Instead of work less and less to maintain the same life style, they work the same hours to increase quality of life.

Re:Because people want the lastest iPhone!

[mellon]

No, the average Joe today cannot afford better health service than the richest people of 100 years ago. He can _get_ it, but he can't _afford_ it. Wages have fallen in the past thirty years. That is why people are working more. It's cruel to paint this as people being greedy. What is happening is just the opposite.

My grandfather worked as a mechanic at an orchid farm and was able to buy a nice new car every two years and retire in relative luxury to Florida. Nothing fancy, but a really nice retirement, which he and his wife enjoyed until he passed from a burst aneurysm in his eighties, for which the treatment is the same today as it was then: hope you get lucky and notice it before it goes, and watch it like a hawk until the risk of it going is worse than the risk of dying from trying to fix it.

People doing the same thing my grandfather did for a living today are barely getting by, and are not saving for retirement. Why is that, do you think?

Re:Because people want the lastest iPhone!

[nukenerd]

And a Tesla model S/BMW, a bigger house, traveling around the world, somethings you didn't have 100 years ago. An average Joe today can afford the health service better than the richest people can have 100 years ago

Not in the UK. New houses are shockingly tiny; if you want a larger house you buy one that's 100 years old. My parents 60 years ago, with hardly any money, bought* about the most modest new-built house they could find. Today, that same house is considered middle-market; the builders would put 4 "homes" on that plot today.

In the UK, very few people are working towards getting a Tesla or BMW; they are working to survive and to keep their 15 yo VW Polo on the road (which they need to run because the politicians have cut the bus services). My father was a blue-collar worker in the 1950's, wokring only 9-5 with 4 weeks annual leave, but still managed to run a Morris 8 (== a Polo in its day), as well as the house.

100 years ago, young men travelled round the world by joining the Army or Navy.

* Bought with a mortgage. My father exagerated his income to get it.

Re: Because people want the lastest iPhone!

[Anonymous Coward]

wages have fallen over the last 30 years

Normally I'd snarkily say [citation needed] here, but since I've actually looked at the Bureau of Labor Statistics data I can just tell you that statement is just false. Real hourly wages (I.e. hourly wages adjusted for inflation) have stayed flat for the past 20 years after generally increasing over the previous 30.

Re:Because people want the lastest iPhone!

[mikael]

Well said. My parents saved and scrimped to buy a terraced Victorian flat worth £6000. Now, it's priced at £210,000. Even council housing that was bought under the "right-to-buy" is now worth £250,000 and more. What were originally single-layer red-brick homes with Georgian windows, were modernized with cladding and heat insulation, gas central-heating, double or triple glazing, shower units, fitted kitchens, an extension (two or more rooms added at the back). landscaped backyards.

Some of the council estates built in the 1950's have better features than a modern privately built housing estate (early council estates had roads wide enough for cars to be parked on either side and two double decker buses to pass each other. There were no cul-de-sacs, just junctions, straight roads and 90 degree curved turns. Modern privately built housing estates are all cul-de-sacs that branch off each other, the roads are barely wide enough for two cars to pass each other, let alone allow any bus service to operate. Having to visit friends in these areas required trying to navigate round a fractal tree where every road had the same name (Skyview Terrace, Skyview Street, Skyview Avenue, Skyview Viaduct, Skyview Lane, Skyview Road, Skyview Close, Skyview Walk).

Just to make things even worse, all the new housing has been built in flood plains, while trees and other vegetation on hillsides were cut down as part of a EU program to increase the amount of agricultural land. Rivers haven't been dredged because the sludge has to be considered to be toxic waste. Result, whole towns end up being flooded and all the experts will say is, "oh, it's due to global warming".

Re: Because people want the lastest iPhone!

[Xicor]

for sure, hourly wages adjusted for inflation have stayed flat for 20 years, but the cost of living has been increasing over that same period, so essentially it is the same as saying hourly wages (in percentage of cost of living) have been decreasing.

Re:Because people want the lastest iPhone!

[Ol Olsoc]

Not in the UK. New houses are shockingly tiny; if you want a larger house you buy one that's 100 years old.

He's probably thinking of the McMansions, a pretty much failed trend in housing during the late 90's and early oughts.

Game was developer buys a farmer's pasture, builds humongous pretend colonials of maybe 6000 square feet, sometimes less, and not always that well built. People were willing to pay a lot of money, and had a sort of faux upper class living for a while. Then when the great recession hit, and the only people who had much income for houses were non-youthful people who didn't want to live in such huge houses were not interested in multi story, poorly insulated and constructed buildings.

Re:Because people want the lastest iPhone!

[Anonymous Coward]

..they work the same hours to increase quality of life.

Except that quality of life metrics incorporate how many hours you work and whether you're satisfied with your job (does it match your education and so on). And just look at most European countries with greater happiness and life satisfaction than here: People work less, earn nominally less than Americans and have a lot more spare time, which they value. The American way of working yourself to death until you indeed die is insane.

Re:Because people want the lastest iPhone!

[tverbeek]

The housing market is still like that in a lot of places in the US. Lots of expensive homes, but not enough that are affordable to people making median-and-below.

Re:Because people want the lastest iPhone!

[laserhead]

..they work the same hours to increase quality of life.

Except that quality of life metrics incorporate how many hours you work and whether you're satisfied with your job (does it match your education and so on). And just look at most European countries with greater happiness and life satisfaction than here: People work less, earn nominally less than Americans and have a lot more spare time, which they value. The American way of working yourself to death until you indeed die is insane.

Then our criteria on quality of life is very different. That is all I can say.

Re:Because people want the lastest iPhone!

[Anonymous Coward]

In that case your criteria are different than those in all relevant studies ever made. By your criteria, I guess earning a million annually but having 30 minutes of spare time per month until you die is great. You can get a diamond as a grave stone, after all. My guess is that by your definition only material things should be considered but if you want to know what quality of life means in normal discourse, you can start with wikipedia.

Re:Because people want the lastest iPhone!

[Anonymous Coward]

No, the average Joe today cannot afford better health service than the richest people of 100 years ago. He can _get_ it, but he can't _afford_ it.

Bullshit. My eyes are shit, and I could easily afford to get them laser'd and/or scalpal'd, and have little fake lenses shoved into them. Rich people literally could not afford this a hundred years ago, period, because the technology wasn't there.

Wages have fallen in the past thirty years.

Gross oversimplification. Wages have increased. Inflation has, unfortunately, also increased. So has demand. So has population, by a huge fucking amount.

My grandfather worked

At a time when there were probably 2 billion people on the planet versus over seven billion.

Re:Because people want the lastest iPhone!

[serviscope_minor]

Maybe for you. I know people of my parent's generation (now late 60s/early 70s) who grew up in slums in Birmingham. Not an exaggeration, literally slums. No running water, only heat being filthy and inefficient open coal fires, toilet outside shared between 10 houses, frost on the inside of the windows in winter, multiple people crammed into one room, condemned buildings and so on and so forth.

When they get going it's kind of like the 4 Yorkshiremen sketch (which they acknowledge) except it actually happened.

Don't get me wrong, things aren't perfect and in some senses things were better (specifically average house purchasing ability peaked sometime back and has been on a rather unpleasant decline) but you don't have to go back awfully far before they weren't very good at all.

Re: Because people want the lastest iPhone!

[Anonymous Coward]

Which inflation numbers are you citing when you do the adjustment, btw? At least one of the inflation figures excludes food and energy.

Re:Because people want the lastest iPhone!

[Anonymous Coward]

There is nothing wrong with a "McMansion" unless you're an elitist who already has their own hand-crafted mansion. The "McMansion" trend was about getting more house for your buck using standard plans and materials. It's cheaper to build a home than it once was, and the land you're putting it on has skyrocketed in value, so why not put a nicer home on the land?

Re:Because people want the lastest iPhone!

[Anonymous Coward]

And a Tesla model S/BMW, a bigger house, traveling around the world, somethings you didn't have 100 years ago. An average Joe today can afford the health service better than the richest people can have 100 years ago

Not in the UK. New houses are shockingly tiny; if you want a larger house you buy one that's 100 years old. My parents 60 years ago, with hardly any money, bought* about the most modest new-built house they could find. Today, that same house is considered middle-market; the builders would put 4 "homes" on that plot today.

Meanwhile in the USA every new house tends to be colossal and if you want something less than 2000 sq-ft you need to buy a fixer-upper made back in the 50's or earlier. That or you have to live in a condo/townhouse and put up with a lot of HOA nonsense and restrictions that aren't much better than you'd have with an apartment, wiping out much of the advantages of home ownership.

Re:Because people want the lastest iPhone!

[Ol Olsoc]

The housing market is still like that in a lot of places in the US. Lots of expensive homes, but not enough that are affordable to people making median-and-below.

GIven demographics, and economics, I had predicted in the early oughts that eventually, many McMansions would eventually be torn down. Huge houses, usually poorly constructed, and ofen without much insulation, on ex farmer's fields, with an aging population that want's a single floor residence, and the depletion of the midwest fields due to topsoil erosion and the depletion of the ogallala aquifer plus salinization of the fields themselves, coupled with California's unsustainable water lust, and we were going to need those fields and certainly here in the dependablyrainy Northeast, so the McMansions will soon be completely unwanted.

Ermagherd! that may be the llongest run on sentence I ever wrote!

Anyhow, we'll see how the prediction pans out.

Re:Because people want the lastest iPhone!

[Ol Olsoc]

There is nothing wrong with a "McMansion" unless you're an elitist who already has their own hand-crafted mansion. The "McMansion" trend was about getting more house for your buck using standard plans and materials. It's cheaper to build a home than it once was, and the land you're putting it on has skyrocketed in value, so why not put a nicer home on the land?

Because most I have seen are shoddily built, poorly insulated, and not at all nicer. Usually built by a contractor who gives each part of the house a "budget", which is always rock bottom quality. Mobile homes have generally much better quality. My wife was involved with many houses during the McMansion era, and people either built with bottom grade cabinets or flooring, or paid a whole lot extra to get anything of quality.

Usually there wasn't much choice, because the people almost always borrowed over the max their bank would loan them, requiring creative financing. There was no wiggle room.

The late 90's early oughts were an interesting time for house construction. Anyone could call themselves a contractor, and many had a carney versus fairgoer outlook. I've been in a few million dollar houses that had worse cabinetry and carpentry and tiles and fixtures than bottom line mobile homes. But stupid people bought the places, because they'd been trained with the idea of spend as absolute as much money on a house as you can. Stupid people like that make easy pickin's for contractors who are trying to squeeze as much profit as possible out of them.

No sir - those places don't even remotely approach "nice". Especially as some time has passed, ant they are either fully upgraded, or turning into a large mess inside.

Re:Because people want the lastest iPhone!

[Anonymous Coward]

Nope, the McMansion trend was about appearing to provide more, while actually providing less.

In other words, cheating people out of their bucks.

Re:Because people want the lastest iPhone!

[Anonymous Coward]

Relative to most people, mechanics were well educated, that's why they got paid decent. Income disparity is on a power-curve. People in high demand get paid more. What is in high demand has shifted over the years. The bigger issue is technology lowers the barrier to entry, increasing competition for many jobs and sometimes completely replacing them. If you want to continue to make decent money, you need to find a job where you are irreplaceable. This also means you need to differentiate yourself from everyone else.

Re: Because people want the lastest iPhone!

[Anonymous Coward]

But what about his admittedly-anecdotal example? Plenty of middle-class people who grew up in the mid-20th century were able to afford a house, start a family and live well on single income in their 20's and save for retirement. Now the very idea of a 20-something couple buying a house on a single middle-class income is ridiculous, and only the relatively-wealthy can afford to save money. I'm about 40, living a middle-class existence with my wife in a small 1940s house we bought in our mid-30s. We obviously have phones and internet, but no TV, no expensive new cars, no kids, and I am able to put away money for retirement. This is at FOUR TIMES the median US wage. People I know working at median wage are in abject poverty. No house, no car, no new clothes, no electronics unless acquired as gift from parents or charitable friends, struggle to pay rent and feed the kids every month.

Re:Because people want the lastest iPhone!

[Anonymous Coward]

You have never met an average Joe, then. Compared to his grandfather, he lives in abject poverty. At median US wages, you may be able to rent a one-bedroom but the only way you'll afford the latest iPhone is if your parents give you one as a gift. If you need health services, you're screwed. You'll lose your job, and then you'll lose that apartment. Since you can't afford a car, the only way you'll travel "around the world" is by bus - if only the service hadn't been cut.

Re: Because people want the lastest iPhone!

[Anonymous Coward]

[Citation needed]

Work less spend more

[namgge]

If you only work a three day week, for example, you have four days you will need to fill with 'leisure' activities, which tend to involve expense. People who voluntarily retire early often say that it's nice for the first couple of months and then boredom sets in.

Re:Work less spend more

[Anonymous Coward]

Boredom sets in because they've spent their life only working, not doing anything else in terms of hobbies.
A healthy person would quickly find things to fill his time.
My dad retired 5 years ago and he's still as busy as ever.
If nothing else you could just read books or watch movies 24/7.

Re:Work less spend more

[JoeMerchant]

So, get a cheap hobby. If you can live vicariously, the internet is a window on the world (and a fuzzier window on the universe). Gardening and building things can be cheap hobbies with a little bit of infrastructure (land / workshop). Building/growing things for fun is a whole lot less demanding than building them for the market - sell 'em cheap, give them away if you want, it's a hobby.

Re:Work less spend more

[Anonymous Coward]

I took an early retirement, and I've never been happier, or by certain metrics, more productive.
I have also lost 40 pounds, and certain aches and pains that I took for granted as an outcome of growing old have vanished.

I put in an average of a 60 hour week for three decades. I accumulated 1.25 years of Sick Leave by refusing to be sick, and I took, on average, 3 days a year of Vacation. I didn't work Dayshift on Weekdays; I worked whenever demanded, as I was On Call. No Overtime, no Shift Differential. Now what did this lead to?
This led to expectations by my Employer that this was my Norm, and when I suggested cutting back a bit because I was getting fagged out, say maybe a fixed 40 hour Work Week, it was suggested that I was perhaps not happy in my work, and that I should maybe consider very different employment elsewhere. My Employer?
The Government of the United States.
As Taxpayers, I think that you got a pretty good deal here.
Especially for what I was paid.

Now why did I put up with this apparent abuse?
It certainly wasn't Patriotism. I'm not even a Citizen. It wasn't for the money; I hired people to work for me who were paid more. It wasn't for Prestige; I wasn't allowed to talk about much of my work, and most of the documentation that I produced doesn't even have my name on it.
It was for the Toys. I got to play with some of the neatest stuff ever made, most of it unique.
For example, there are things whirring away over your heads right now, beeping and booping, that literally have my initials on them. We did that sort of thing, instead of getting Bonuses.

But time passed me by. One problem with being on the very cutting edge for so very long is the scars. I found myself no longer able to keep up; no longer able to tough it out, to deliver to You Lot the very State Of the Art, on demand.
So I took an early retirement. As did the guy before me, and my last Boss, and his last Boss.

What an odd Captcha: chivalry

Re:Work less spend more

[tverbeek]

If someone retires early and gets bored, that doesn't mean they need a paying job to occupy their time. That's a failure of their imagination. Maybe they were so busy working for that early retirement that they failed to develop any hobbies or non-work-related interests. There are plenty of ways to occupy your time without spending lots of money: write a book, read books, play tennis, code, grow a garden, paint, add to Wikipedia, volunteer for a charity, etc. Face it: if you're bored, it's only because you're boring.

Re:Work less spend more

[Ol Olsoc]

If you only work a three day week, for example, you have four days you will need to fill with 'leisure' activities, which tend to involve expense. People who voluntarily retire early often say that it's nice for the first couple of months and then boredom sets in.

I certainly won't. I retired at 55 quite voluntarily, and if anything my pace of learning and activity has gone way up. One of my personality flaws is that I have a ridiculously low threshold for boredom. So I'm busy with Amateur radio in the digital realm, teach people how to implement emergency communication systems, have been learning Surface mount technology construction, and I build my own telescopes - mirrors included, and do birding and nature activities with my better half. Thinking of taking up another new hobby to keep fresh.

While I kept very busy at work, I've found retirement allows me to take on even more activities than I could before retirement. But if a person thinks they are just going to kick back and do nothing - yeah, that would be very boring in about 15 minutes.

Re:Work less spend more

[thinkwaitfast]

Exactly. You can also live very cheaply in any number of areas away from big cities with almost zero cost of living.

Last year without trying, I grew about 20% of my own food. It wasn't a big monetary savings since I cook (in itself a huge savings over eating out or buying processed food), but just to show that I could.

Re:Work less spend more

[tehcyder]

If you only work a three day week, for example, you have four days you will need to fill with 'leisure' activities, which tend to involve expense. People who voluntarily retire early often say that it's nice for the first couple of months and then boredom sets in.

You arrange your leisure activities according to your income. Just like you did when you were at work.

And, seriously, if you really find all that free time drags, just go and volunteer somewhere.

Re:Work less spend more

[david_thornley]

I'm planning to do some volunteer work after retirement, and my wife is thinking about doing some contract work. That should keep me busy enough.

Re:Work less spend more

[swalve]

Or spend a day or two a week engaging in volunteer work of some kind. Building free software, teaching kids, etc. Time off of work doesn't have to be all leisure.

Re:Work less spend more

[Arterion]

There are a lot of things people can do with their time that benefit society yet don't pay a wage. I am glad someone is an example of that. It doesn't all boil down to money (unless you have none, in which case it's pretty bad.)

Do not worry...

[martiniturbide]

....now we have social networks to avoid the danger of being productive :)

Re:distribution of wealth and_______

[rmdingler]

the influx of low income workers who keep the whole ball of capitalism rolling.

Without population increase by birth and immigration, the system begins to stagnate, especially with the large percentage of wealth in the hands of the .1%.

Re: Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

Everything is new under Obama. Before Obama there was no terrorism, no debt, no healthcare premium increases, no illegal immigration, no deadlock in government, no economic downturn, no corporate welfare, no cronyism and more.

Truly we lived in Paradise until Obama made us eat that apple. Which stands for abortion, which Obama also invented.

Mythical man month

[DarkOx]

Its the same issue as the mythical man month. Complex process don't scale to multiple people perfectly. So while your typical middle manager can now do the work of 10 men in that role say forty years ago, 10 men working one tenth of the time would be unable to do the same.

The are essentially the equivalent of fixed costs within the single job role, HR and administrative related activities, time spent learning and tracking changes in the business, new processes and methods daily activities of communications, five min periods of staring into space after a couple hours of work that most peoples brains have to do, etc. It is therefore more efficient (cheaper) to hire one person to work 40 hours than ten people would probably need to work at least six to get the same amount tasks completed.

We therefore have high skilled high complexity jobs performed by a small number of people working full time. Lower skilled lower complexity jobs where the 'fixed costs' are smaller we fill with more part time labor. We might be able to automate those jobs away but there are economic impediments to doing so.

Could you build robots to take orders and make burgers with todays tech and have a fully automated fast food joint? Quite likely, there are some kiosk sized examples of exactly that. It would be expensive to scale that up to a full size Burger Joint operation though. Still probably would be cheaper than human labor in the long run but for the fact we have this social safety net (corporate welfare program). We let people live in subsidized housing, eat subsidized food, heat with subsidized fuel and send their kids to subsidized schools.

That creates a vast supply of under market priced low skill labor. Paid for by taxing the high skilled worked. The ultimate effect is a transfer of wealth from the high skilled worker to the capital owner, who fills the bottom end of their operation with low skill subsidized labor. Thus we have a shrinking middle class and an ever expanding wealth gap. The middle class is paying for the poor to work jobs that don't pay them enough to survive.

If we rolled back these safety net programs and replaced them with worker relocation programs, we could address the wealth gap. IE can't afford to live where you are working a job you can get with the skills you have, the government will ship you and your belongings to somewhere where the cost of living is lower and low skilled work is in demand; along with a few hundred bucks and change of clothes to get you going.

The short term effect would be that wages for lower skilled work and likely middle class professional work would be pushed back up, as business would have to pay living wages to retain their workforce. Thus the person serving your coffee in San Fransisco really would get $20 and hour, because otherwise nobody would be there to do it. Otherwise the cost living will fall as wealthy people leave unable to obtain the goods and services they want in that location.

Ultimately however at $20 an hour the incentive to automate production of cheeseburgers and fancy coffee drinks would be stronger. You will see a fully robotized McDonalds and and blueberry field harvested entirely by machine. At that point I don't know what happens to the average worker.

 

Re:Mythical man month

[Gavagai80]

You're essentially talking about forcibly taking people away from their families and friends and putting them in a strange city where they don't feel safe. Not direct force, but they starve if they don't agree. That's not going to be popular.

Re:Mythical man month

[DarkOx]

1) Doing the right thing isn't always popular, maybe not even usually.
2) Popular vs who actually votes matters a lot.
3) Politicians get elected on social reform agendas all the time.
4) Its looks Donald Trump might take the nomination of a major political party and he is out there saying stuff on a daily basis nobody would guess was nearly so popular as it appears to be. Its all in how you sell it.
5) Historically this has been done and worked in the past. Quite a lot of this was done in the 1930's the WPA was created to make work, but people were expected to and did go where the work was.
6) Emotional appeals are not a strong argument for maintaining economic inefficiency, in this case the workforce not being located where the work is, which but for illegal immigration would very much be the case in this country.
7) Why can't their families relocate with them? I personal can't in vision a relocation program that did not optionally include transportation for the nuclear family.
8) We tried the great society, and it failed we are still suffering consequences of those failed actions today. We have tried trickle down economics and welfare reforms the grow in wealth gap has accelerated. Its time for something different.

Re:Mythical man month

[Anonymous Coward]

> Ultimately however at $20 an hour the incentive to automate production of cheeseburgers and fancy coffee drinks would be stronger. You will see a fully robotized McDonalds and and blueberry field harvested entirely by machine. At that point I don't know what happens to the average worker.

He stops working, of course, for no longer being competitive.

The error of our ways is believing that things will simply continue as they are, like someone imagining 200 years ago that spaceships would be steam-powered.

The average worker will have to perceive gains by other means instead of "working". Either he/she will qualify for some basic income (so that they can spend and make the Economy work) or human "work" will turn to things robots won't do, like music (real innovative, not computer-generated).

When I think of this, it strikes me as a situation which resembles slavery -- not because of any moral aspect, but because corporations in the future might want to have people with income buying their products for a longer part of the day, while machines would do a better "job" at working. That's similar, in my view, to Victorian England's opposition to slavery, so that more paid workers would exist, which in turn would buy their products worldwide.

Re:Mythical man month

[tverbeek]

...especially when that city they're being sent to is in Asia or Africa.

Re:Mythical man month

[Anonymous Coward]

"If we rolled back these safety net programs and replaced them with worker relocation programs, we could address the wealth gap. IE can't afford to live where you are working a job you can get with the skills you have, the government will ship you and your belongings to somewhere where the cost of living is lower and low skilled work is in demand; along with a few hundred bucks and change of clothes to get you going."

Except that is happening without forceful government action anyway. Places where low skilled work is in demand tend to get filled with people until that work is not in demand anymore. Simultaneously, cost of living in such places goes higher. Yes, there are companies who cry about not being able to cover positions, but when you look at them you find that considering how much they pay, relocating whole family there is bad idea because salary is not enough to cover for spouse that gonna be unemployed. Those companies also tend to pay below market rates for position they are trying to fill.

Re:Mythical man month

[Falos]

human "work" will turn to things robots won't do, like music
When Prolekistan can no longer sell their primary export (labor) the country will NOT survive on a negligible trickle of tourism (art, music, prostitution, etc) that drips out from Onepercentica.

So to echo GP, I have no idea what will happen to Prolekistan when the primary, nay SINGULAR export evaporates.

Ha ha, just kidding, we all know what happens to the currency of countries like that. They're fucked. Bad.

Fortunately we have maybe 50 years before it goes critical so it won't hit us - it'll hit those adorable grandchildren you see on the weekend.

Re:Mythical man month

[DarkOx]

I was not think of anything along the lines of deporting people. More like send the barely employed burger flipper in NYC to North Dakota to secure well paid work as roughneck or roustabout.

Re:Mythical man month

[Anonymous Coward]

> he is out there saying stuff on a daily basis nobody would guess was nearly so popular
This just shows how disconnected you are. You don't understand why Trump is popular at all.
What you are saying and what he are saying are vastly different.
"We're going to close the border to foreigners" is not going to be even remotely as popular as "we're going to decide who lives where."
Trump is telling people that they'll get to do what they want when he's in charge. You're telling people that the rich should decide what's best for the poor.
Also, who's going to pay for this relocation?

Re:Mythical man month

[Anonymous Coward]

>> human "work" will turn to things robots won't do, like music
> When Prolekistan can no longer sell their primary export (labor) the country will NOT survive on a negligible trickle of tourism (art, music, prostitution, etc) that drips out from Onepercentica.

I spoke as if it was science fiction, but I'm not that prescient: it is, in fact, already happening. Hollywood (MPAA) and the recording companies (RIAA) as well as book publishers (and scientific magazines) will continue to get the many millions they're already siphoning, I mean, receiving from "licensees".

Software companies are also migrating to revenues based on user data mining and managing social nodes. For that, they too need a primary resource: us. Now and then we hear about company A being acquired by Facebook or Microsoft. What do these companies have in common? Users (e.g. Whatsapp, Skype etc.)

Another similarity to the past is the use of agreements and international treaties which benefit said economies: TPP today and treaties sponsored by England to stop slavery. It's even about the same theme: piracy.

Re:Mythical man month

[Anonymous Coward]

The right thing is marrying young girls and getting rid of feminism and cunt kontrol of the cuntry.

Not your fucking economics bullshit.

>In the United States, as late as the 1880s most States set the minimum age at 10-12, (in Delaware it was 7 in 1895).[8] Inspired by the "Maiden Tribute" female reformers in the US initiated their own campaign[9] which petitioned legislators to raise the legal minimum age to at least 16, with the ultimate goal to raise the age to 18. The campaign was successful, with almost all states raising the minimum age to 16-18 years by 1920.
Also see: Deuteronomy chapter 22 verses 28-29, hebrew allows men to rape girl children and keep them: thus man + girl is obviously fine. Feminists are commanded to be killed as anyone enticing others to follow another ruler/judge/god is to be killed as-per Deuteronomy. It is wonderful when this happens from time to time: celebrate)

Re:Mythical man month

[cwsumner]

I was not think of anything along the lines of deporting people. More like send the barely employed burger flipper in NYC to North Dakota to secure well paid work as roughneck or roustabout.

Um... in case you don't know, roughneck and roustabout are high skilled jobs that require training and practice. As are many other non-college level jobs. Even being "the janitor" requires training and knowledge. The stories about "low level jobs" are mostly told by "poor little rich people" that have no idea what the jobs are really about. Or sometimes just repeated because someone heard someone else say it.

Sending unskilled people to the real world outside the cities would be a disaster. Mostly...

Re:Mythical man month

[swalve]

Don't cut them any slack: Trump is on the verge of being nominated by the Republican party, not just some generic "major political party".

Re:Mythical man month

[surd1618]

Moving people for work would be extremely terrible. It's one of the main features of slavery.

Re:Mythical man month

[Arterion]

Why worker relocation instead of work relocation? Move the work to where the people are that need jobs, rather than moving the people. The location of a workplace can be governed purely by logistics. There are no sentimental reasons for it to be in one place rather than another. The same is not true of workers.

70s

[Anonymous Coward]

Since the early 70s hours worked hasn't fallen, and worker share of productivity gains has decreased.

Why? I don't think it's a coincidence that the early 70s is also when we came off the gold standard. Do you get a raise when inflation goes up? I sure don't.

Re: 70s

[Anonymous Coward]

THIS!!! +1

Inflation is that hidden tax that no one seems to care about. It eats away at any saving and encourages people to borrow and spend. We are a nation of debt slaves now...

Re:70s

[Anonymous Coward]

Do you get a raise when inflation goes up?

Yes. My job has a non-official 2.5% base raise. Even a neutral worker is better when they're happy. You have to be pretty bad to not get any raise. Most people get near a 4% raise per year and some like me get about 10% per year.

Re:70s

[Sique]

The Gold standard wouldn't help very much, actually it would have made things worse.

Since at least for 100 years, the amount of gold added each year to the available gold reserves doesn't keep pace with the productivity increases, which means that there is less and less gold available to distribute between the creators of wealth. With the Gold standard, there wouldn't be any incentive to increase productivity at all, as the available wealth increase is limited by the amount of gold mined, not by the available productivity.

Until the First World War, there was an accepted way to get out of the Gold trap: War against someone who has gold and get hold of his gold to distribute between your local creators of productivity. Since then, conquering other countries and robbing their gold has been frowned upon. Thus there is simply not enough gold available to pay for the possible productivity increases, and keeping the gold standard would just strangle any economy.

Re:70s

[allcoolnameswheretak]

It has nothing to do with the gold standard. Corporations move their HQ to tax havens like Ireland and pay next to nothing on their profits. Executives collect obscene amounts of bonuses in addition to their ever increasing salaries, and then shove their billions into "charities" that are of course under their control but it makes them look great in the public eye. Meanwhile most of the tax burden has been shoved on to the middle class. All of this thanks to bullshit conservative policy making that protects the wealthy, and thanks to an elitist lock-out culture of Harvards and Yale's only the wealthy can afford, it stays that way. But this is not just a U.S. problem. Every year it gets harder and harder for the middle class to maintain the standard of living, despite the increase in productivity. In Europe it used to be you could use your hard earned, taxed income as an employee to buy a house, or company shares, or other investments as provision and to start building a fortune. Today more and more rocks are placed in your path and when you perform these investments you are taxed again and again, every time money exchanges hands. Meanwhile the super rich have their financial advisor in Monaco handle their financial transactions and don't leave a penny in taxes.
If you are down you are supposed to stay down, and politicians are not interested in changing that as they are eager to curry favor with their rich audience, for when their time in politics is over.

Re:70s

[jbolden]

In such a situation you have high deflation. The way you get out of that trap is a by having a common use currency which is not as deflationary... the silver banking system in the USA when we had the gold standard being an example.

Re: 70s

[cyber-vandal]

No you don't. You just have to work in an organisation that sucks, of which there are many.

Re:70s

[Alypius]

Your last paragraph is what ties everything together. Keynes thought it would be a good idea to reduce the wild economic swings of the boom/bust cycle (think of smoothing out a sine wave) and proposed two things: increase government spending in the bust cycle AND THEN REDUCE IT in the boom cycle. The problem is that politicians love the power that comes with the purse, so they only do the first part, never the second. Getting people to understand that second part is harder than getting Occupy hippies to take a shower.

Re: 70s

[Billly Gates]

Even Milton Friedman the beloved conservative economist has tremendous respect for Keynes. In fact he will even say he was the most influential economist ever. Go YouTube it?

Re:70s

[delt0r]

In Switzerland they have now caped a CEO salary at not more than 10x IIRC the lowest paid employee.

Re:70s

[Sique]

What strangled the economy was printing all the dollars and Nixon defaulting on the gold dollar once the USA government printed all that money that it could never back with the gold it had. There is always enough gold, the only question is the relative price of gold to things, including to currencies.

This I would call U.S.-centric ideology, not economical science. There were many more economies involved in getting rid of the Gold standard, so any interior problems of the U.S. at that time have to take second place in looking at the reasons why the Gold standard was abandoned. Why would for instance Germany or France be inclined to help Richard Nixon to deal with domestic U.S. problems in the 1970ies?

Re:70s

[roman_mir]

USD is the world reserve currency. In 1971 Nixon took the world PFF the gold.

Re: 70s

[Anonymous Coward]

You have to be pretty bad at my place of work to not get any raise.

I assumed the text in bold was understood.

Re:70s

[Ryanrule]

Does that include contractors?

Re: 70s

[Anonymous Coward]

This is not true. Provide source for your claim and read it carefully. They only voted about it.

Re:70s

[Anonymous Coward]

Shh, or Cayenn8 will be along telling us why he's great and everyone else sucks ass.

Re:70s

[psmoot]

...an elitist lock-out culture of Harvards and Yale's only the wealthy can afford, it stays that way.

Sorry, no.

Have you looked at the actual costs of the Ivys once you take financial aid into account? List price is something like $65k but the typical financial aid package is something like $40k. I just took a look at the Yale financial aid page and there are many, many students from all income ranges. The poorer students pay basically nothing. Harvard is the same way. Near as I can tell, the easiest way to finance an Ivy League education is to be dirt poor.

(Disclosure: my daughter just applied to Yale and I have no idea how I'm going to afford it if she gets in. I'm not paying list price, it's too much.)

Re:70s

[delt0r]

you can't legally CEO on contract. At least in all the countries i have lived in.

Re:70s

[Anonymous Coward]

It is not just the distribution of wealth and "conservative" policies. Liberal played a role by increasing the labor force while productivity REDUCED the number of good paying and quality jobs. In 1965 Liberals pushed for open immigration that flooded the USA with low wage workers intensifying competition at the bottom. In fact immigration is the major determinant of population growth in the USA since the 1980's.

In addition to immigration, feminism encouraged more women into the labor market and discourage and demoralized the family. With more women in the workplace that heighten competition for jobs.

Thus the Liberals hands are not clean with massively encouraging the increasing of the supply of labor that produced pressure on lowering wages.

Re:70s

[allcoolnameswheretak]

I'm pretty certain you will be expected to repay that financial aid at some point. And I can tell you that the official line is often undercut by the realities on the ground. One example from my personal experience: all the paperwork for financial aid needs to be completed and approved, which takes time. More often than not money is needed up front for enrollment, accommodation and resources before all the paperwork is finished and approval is given, so if you don't have the money up front you won't be able to enroll and if you don't enroll, then of course the whole point of the aid is moot. I've been in this money trap a couple of times during my time in college, and thankfully had family backing to bail me out.
Also I am sure there is a selection process, as these universities are interested in the paying "customers", since there is a competition going on.

I've studied in Germany, where university enrollment is officially free of charge, and still finished with a debt of 20.000 Euro, despite working part-time jobs. That's a manageable amount, if you find a job in reasonable time. A couple of times I was on the verge of dropping out because I couldn't afford some specific student fees, and could only continue thanks to family stepping in and supporting me.

I've had some nerve wracking experiences in college, most of them related to lack of money, and all of this in Germany, where you can "mostly" study for free. I can't fathom what it must be like at Harvard or Yale, if you don't have the financial resources to spare.

Re:70s

[RuffMasterD]

What he means is can the company contract out the lowest paying jobs in the company (cleaners, phone callers, paper shufflers, assemblers, etc), so only high skill high pay jobs remain within the company, then pay the CEO 10x the "lowest" paid employee. If a company only employs high skill high pay staff than the CEO can naturally earn far more than the CEO of a company which retained its low skilled low pay staff. Net effect, same pay as before.

Re:70s

[Anonymous Coward]

That is a misconception. There is no economic identity that specifies that gold/currency is "needed" to pay for extra growth. The only reason you would want extra currency is for psychological reasons.
If there is a fixed supply (bitcoin) or quasi fixed (eg gold, with negligeable mining), and there is extra productivity, then the general price level will go down. Some things become cheaper.
Now, before you go postal about 'deflation': there are different kinds of inflation & deflation. Some kinds, such as those which come from productivity increases, are good! They will not cause spending to fall.

Re:70s

[Anonymous Coward]

A way around that is allowing the gold/dollar rate of exchange to float at the same pace as productivity gains. Of course, then the productivity gains metric would be gamed.

Wage rise?

[Anonymous Coward]

The weekend incentive dropped from $5 per hour down to $1 per hour; and PPL accumulation went down too (unless you/ve been working there more than 15 years or more)

Transfer of wealth from the middle class

[Ozoner]

I'm surprised at the comments so far.

Surely the thrust of the article is that the benefits of the increase in productivity have not gone to the workers and the middle class, but to the super rich.

Re:Transfer of wealth from the middle class

[mellon]

The problem is that this is ideologically unappetizing for people who have been buying in to the trickle-down model for the past thirty years, and it is really hard to let go of a strongly-held opinion, so there must be some other reason. This is a serious problem, for which the cure is not criticism of those who are stuck in this particular rut. They are suffering from being stuck there as much as we are, but getting them out will take more than just pointing out to them that they are mistaken.

Re:Transfer of wealth from the middle class

[Anonymous Coward]

Actually, a lot of it has gone tot the workers, just not in the United States. The workers in Asia, and especially China, have seen great increases in wealth.

It is a global economy now. Workers in the west are competing with cheap labor in Asia, this naturally keeps the wages low. Soon workers in the west and Asia will be competing with labor in Africa. Only when wealth is more or less equally distributed, we may see significant increases again.
The only ones not suffering from this are the super rich. They make money from laborers, they do not provide it, so they can make money from the cheap labor in Asia.
Hence the gap in the United States increases.

You simply cannot separate these mechanisms, they are closely intertwined.

Re:Transfer of wealth from the middle class

[drinkypoo]

Surely the thrust of the article is that the benefits of the increase in productivity have not gone to the workers and the middle class, but to the super rich.

Temporarily embarrassed millionaires.

Re:Transfer of wealth from the middle class

[turbidostato]

"Surely the thrust of the article is that the benefits of the increase in productivity have not gone to the workers and the middle class, but to the super rich."

This. And even the basic premise is wrong: "over the next 100 years the economy would become so productive that people would barely need to work at all." and that's exactly right, not wrong as the summary states. The productivity increase certainly allows for most people to barely need to work at all; the socio-political system, not the productivity, is what impedes it.

Re: Transfer of wealth from the middle class

[Anonymous Coward]

"The workers in Asia, and especially China, have seen great increases in wealth."

Uh, really? That's not my observation in china. Where in china have you seen this middle class?
We get lots of Chinese tourists here in Japan now, but these are not workers.

Re:Transfer of wealth from the middle class

[phantomfive]

If you look at total compensation, people actually have been getting paid more.

Re:Transfer of wealth from the middle class

[Anonymous Coward]

What is "middle class"? Like $250k to $2MM or so per year?

That's pretty fucking super rich to me!

Re:Transfer of wealth from the middle class

[Anonymous Coward]

Insurance money doesn't go to the employee: insurance companies stay in business precisely because they take in more through premia than they pay out in claims, so insurance money is essentially a transfer of wealth to insurance providers. The employees aren't seeing any benefit out of that money (unless they're in the rare tail end of the distribution that actually needs more health care than it could pay for with the same money that goes to insurance premia).

When you talk about "total compensation," you're talking about so-called "benefits" that don't actually accrue to the worker but that serve to keep wealth in corporate hands.

Re:Transfer of wealth from the middle class

[phantomfive]

By that logic, money for food doesn't go to the employee, it gets transferred almost immediately to corporate grocery stores. Money spent on gas doesn't go to the employee either: it goes to corporate gas stations.

Re:Transfer of wealth from the middle class

[Simulant]

Puts fingers in ears. "Na na na na na na na na..."

Re:Transfer of wealth from the middle class

[Anonymous Coward]

Their job position exists because it's profitable. Every time another food/gas employee is hired, it's wealth concentrating from outside corporate to inside.

And I don't know what to do about it. I don't know how to manipulate the natural flows of capitalism into a realistic, self-sustaining fix.

Re:Transfer of wealth from the middle class

[phantomfive]

I don't know how to manipulate the natural flows of capitalism into a realistic, self-sustaining fix.

I would suggest building a mechanism by which people who have capital, that is money, can extend money out to other people, that is, allocate resources to the people who can use them to improve the economy. This will prevent the money from being hoarded and useless in the ground. Furthermore, those rich who are bad at allocating resources will quickly lose them. As a bonus, you can create a 'market' where anyone with a few dollars can by the means of production.

I don't know what you would call such a system. Can you suggest a name?

Re:Transfer of wealth from the middle class

[rocker_wannabe]

(sarcastic)Unfortunately, the trickle-down model is correct. The rich let enough money trickle down so people don't get desperate enough to kill the rich.( end sarcastic)

Re:Transfer of wealth from the middle class

[Anonymous Coward]

Sure. Because the 'super rich' have never wanted these uppity 'middle class' types even approaching the standard of living, in any way shape or form, of them, so they've taken steps over the decades to ensure that the middle class has been 'put in their place' -- which is to say, 'poor'. The 'super rich' don't want a 'middle class', they want a no-mans-land between them and the working poor, and they're managing to accomplish that. Before the end of my life there probably won't be anything like a 'middle class' in this country, there will be ONLY the 'haves' and the 'have nots', a wide gulf between, and no pathway out from poverty -- and that's the way they want it. Never mind that it'll probably destroy the United States, they don't care, their money is safely in enough non-U.S. places that they'll be fine even if the U.S. is overrun completely by it's many enemies. All that's left is to convert the U.S. from a representative democratic republic to some modern form of Feudalism, where the poor aren't just permanently stuck being poor, but are 100% beholden to the rich for their very existence, and can be jailed if they don't jump when the rich say jump.

Personally, I'd rather see the whole planet burn to the ground than have it this way. If this, and other trends I'm seeing are the direction that Humanity is going, then we shouldn't be allowed to survive as a race and should be annihilated. Let some other species try civilization on for size in a few million years, maybe they won't completely fuck it up like we're doing.

Re:Transfer of wealth from the middle class

[DanielRavenNest]

Correct. It's not how much you earn, it's how much you keep. Your savings then start earning for you, and eventually you don't have to work any more.

Re:Transfer of wealth from the middle class

[fluffernutter]

It seems to me that the original study assumed that people would, you know, help one another live instead of only helping themselves live.

Re:Transfer of wealth from the middle class

[fluffernutter]

I think there needs to be two totally independent economies. One economy is the one we know that is purely for profit. This economy needs to pay some sort of tax so that money flows into a 'public good' economy. If you are a company that does very little public good (say a computer game maker), then you pay high input to the public good economy. If you are a charitable organization that feeds the poor, then you can draw from the credits provided from the personal gain economy and operate on them. Any money that you take in is taxed at a very low rate and you can use those to operate as well. Think carbon credits but good-will credits.

The problem of course is how you rate good will. I think technology could have the answer to this. In theory if we could have a micro-voting system that accurately represented the values across all demographics then we would know what people consider important and could use that to guide the flow of money from one economy to the other.

Re:Transfer of wealth from the middle class

[Anonymous Coward]

Maybe it's gone to China? Whose money do you think it is that raised 200 million people out of poverty? And - closely related - how is it that so much cheap crap is available for the average american family to purchase, vs. thirty years ago? It's a brave new world. Good luck.

Re:Transfer of wealth from the middle class

[Anonymous Coward]

Globalism? That's a new big thing, right? Lot's of new labor, supply and demand, etc. Is it any surprise that this competition for the american worker has had an affect on the price of american labor? Good luck putting that genie back in the bottle - working american families save a lot of money buying made in china from walmart.

Re:Transfer of wealth from the middle class

[TheSync]

In theory if we could have a micro-voting system that accurately represented the values across all demographics then we would know what people consider important and could use that to guide the flow of money from one economy to the other.

Yes, that micro-voting is called "price"...and when people actually have to pay money rather than pushing a voting button, they tend to think more about what their vote means (i.e. "putting your money where your mouth is").

Re:Transfer of wealth from the middle class

[TheSync]

The productivity increase certainly allows for most people to barely need to work at all; the socio-political system, not the productivity, is what impedes it.

However it is possible that the productivity increases are due to the socio-political system - productiviy growth has been far less in countries without high levels of market-based economics. See China before Mao's death versus after, for example.

Re:Transfer of wealth from the middle class

[cwsumner]

(sarcastic)Unfortunately, the trickle-down model is correct. The rich let enough money trickle down so people don't get desperate enough to kill the rich.( end sarcastic)

Actually, that could be a way to keep the economy stable and avoid the usual alternative: Cyclic revolutions that result in half the population being killed every generation. (Not kidding...)

Re:Transfer of wealth from the middle class

[Anonymous Coward]

If cyclic revolutions result in anywhere near half the population being killed why is there a population explosion? (https://en.wikipedia.org/wiki/World_human_population). We actually need more revolutions! It's better than dying slowly from starvation.

Re:Transfer of wealth from the middle class

[turbidostato]

"However it is possible that the productivity increases are due to the socio-political system"

Not even needed to argue about that. Yesterday you wore an umbrella because it was raining, today's not raining so you don't need your umbrella anymore.

Spending time at work

[Anonymous Coward]

Is far from being the same as being working.

Productivity on those hours? Americans spend fair amount of time of small talk (HOw are you doing? .... five minutes after to the point). Coffee breaks like every hour or two. Long lunch breaks ... and so on.

Re:Spending time at work

[l0n3s0m3phr34k]

My last job I spent maybe 30 minutes out of a 10 hour shift doing "actual work". At first it was great, but eventually (even with Primewire lol) ran out of "stuff to do", and I couldn't leave the building. There probably isn't a zombie movie made in the past 15 yeas I haven't seen LOL. When the workforce reduction finally came around, in a way I was relieved because this means a severance package, good references, and some time to just chill out before going back into the grind.Unless the pay is pretty high, I won't be jumping on the next "eyes on glass" NOC job I see come along haha

We are enslaved by AI

[gatkinso]

We call this a "tech boom." We are still transitioning from human to AI economy... hence the down turns.

Inflation

[EdwardFurlong]

I think most is just inflation. Wages go up, but so do costs.

Re:Inflation

[tverbeek]

I think it's because the underpants gnomes are on a long coffee break.

(Makes about as much sense as your "theory".)

Re:Inflation

[EdwardFurlong]

I think it's because the underpants gnomes are on a long coffee break.

(Makes about as much sense as your "theory".)

I was going to write out more but I was on a long coffee break.

Re:distribution of wealth and_______

[Anonymous Coward]

Guess what... if we distributed all that concentrated wealth, we'd still need to work.

Re:Income inequality has *RISEN* under Obama?!?!?

[bluegutang]

It's really simple. Reagan entered office in 1981. China opened its economy to the West starting in 1978. Ever since then, the Chinese economy has grown at about 10% per year, and inequality has increased in the US as lower-wage jobs go to China. Any questions?

Work as art

[droptone]

Obviously not the only influence, but this quote from David Brooks sums up an interesting, less discussed aspect of why we work more / the same:

"As in so many spheres of Bobo life, all that was profane has been made holy. Businesspeople talk like artists. Corporations enthuse about their social missions. Managers emphasize creativity and liberation. .... And the weird thing is that when employees start thinking like artists, they actually work harder for the company. In the 1960s most social theorists assumed that as we got richer, we would work less. But if work is a form of self-expression or a social mission, then you never want to stop. You are driven by the relentless urge to grow, to learn, to feel more alive. Executives who dreamed of turning themselves into refined gentlemen may have valued leisure, but executives who aspire to be artists value work." -- David Brooks, Bobos in Paradise: The New Upper Class and How They Got There.

Re:Work as art

[frank_adrian314159]

Anything Brooks says about people and their motivations are wrong for the majority of people. Brooks is a moron.

Re:Work as art

[Anonymous Coward]

If that's true, why do we shout "No one will do anything!" about basic income?

Re:Work as art

[fluffernutter]

I don't know, to me this simply says that we will be more productive if we do what we are natural at and love what we do. How could that be incorrect?

Re:Work as art

[swalve]

Doesn't scale. It takes quite a bit of wealth (or tolerance for poorness) to do that.

Hint - It's All About Ratios

[Anonymous Coward]

There's a reason a CEO makes 300 times the average-paid worker in their organization, instead of around 30 times back in the 50's. Pure, unadulterated greed. Technology has only allowed this disparity to become acute and pronounced. Same thing with the "sharing economy", which is really short-hand for "we're in a fucking recession", that is why people are using their own cars to drive people around and renting parts of their houses to strangers. Very few would be doing this unless the economic demands were acute, the need for revenue extreme.

But listening to the talking heads tell it, we're about to boost to the moon because the world's economy is doing "just fine". Bullshit...

Re:Hint - It's All About Ratios

[gnupun]

There's a reason a CEO makes 300 times the average-paid worker in their organization, instead of around 30 times back in the 50's. Pure, unadulterated greed.

Or maybe, just maybe, corporations are bigger and more organized now. They make around $50 billion/year in revenue. That's a lot more than any '50s company. Meanwhile, the average worker does not work much harder than the '50s worker. And if he does, it's mostly due to him using more productive tools.

But don't let facts get in the way of the communist agenda of equalizing everyone's income, regardless of their contributions.

Re:Hint - It's All About Ratios

[Anonymous Coward]

There's a reason a CEO makes 300 times the average-paid worker in their organization, instead of around 30 times back in the 50's. Pure, unadulterated greed.

Or maybe, just maybe, corporations are bigger and more organized now. They make around $50 billion/year in revenue. That's a lot more than any '50s company. Meanwhile, the average worker does not work much harder than the '50s worker. And if he does, it's mostly due to him using more productive tools.

But don't let facts get in the way of the communist agenda of equalizing everyone's income, regardless of their contributions.

So these corporations are sharing these massive profits by raising all the employees salaries, and hiring more workers, correct? More likely they are off-shoring work, cooking the books to hide money in foreign countries, and claiming they cannot find any qualified employees in the U.S.? Corporate greed is at an all time high. Pfizer did not need to combine with another company for any reason. It was all done for money. Money that their employees will never see.

Re:Hint - It's All About Ratios

[DanielRavenNest]

CEO's are not hundreds of times smarter or more productive than the average person. A few times, yes. The reason people higher up in a corporation get paid more is so the people under them have an incentive to work hard and get promoted. But doubling salary for every two levels of management (40% per level) is quite enough incentive to produce the desired hard work in underlings. What's happened in the last few decades is top executives enriching themselves at the expense of the shareholders by ratcheting up their salaries faster than necessary. They do this by surveys and compensation committees who find out the average for similarly positioned executives, and then convincing the board that they need to pay a little more than average to get good talent. Thus the average goes up for the next round. But the quality of the talent doesn't actually go up, they are just paying more for it.

Re:Hint - It's All About Ratios

[gnupun]

So these corporations are sharing these massive profits by raising all the employees salaries

LOL, why should they raise anything? If you, as an employee, did something that deserves a lot of money, claim it. Otherwise, be satisfied with what you get.

The intellectual people, the scientists, the mathematicians, the engineers and programmers -- the people actually responsible for increasing human productivity get paid squat relative to the profit their work generates. All their output goes straight to the corps pockets and a little bit to the govt through taxes. That is the issue that needs addressing, not blindly sharing wealth to undeserving people, like commie ideology.

Corporate greed is at an all time high.

What about consumer greed? How many brick and mortar shops have gone bankrupt because of large malls and online shopping, just because the cheap/greedy consumer wanted the cheapest deal. You can't claim the moral high ground because consumers are somewhat greedy themselves.

Money that their employees will never see.

What do these tricks have to do with employees? Nothing, they get paid the same regardless of what tax tricks the company plays.

Bottom line: the CEO salary has nothing to do with common worker salary (unless you're a communist propagandist) and everything to do with performance of his company -- that is, the ratios most relevant are:

Company revenue / CEO salary
and
Company profit / CEO salary

Re:Hint - It's All About Ratios

[fluffernutter]

Maybe the average worker isn't working twice as hard as the 50's worker but by the article they are producing twice a much and thus twice as important to the company and the country as they were before at the same level of work. So by that metric people should be making twice as much even if they are working at the same rate.

Re:Hint - It's All About Ratios

[gnupun]

by the article they are producing twice a much and thus twice as important to the company

Really? Suppose an employee of a farmer uses mules and buffaloes to plow a field, producing X kg of crops. Later the farmer buys a tractor and the employee uses that instead of the animals to obtain 2X kg of crops. Does the employee deserve 2 times the pay for doing less work (since operating a tractor is easier than controlling animals)? I don't think so.

Most of the productivity gains can be attributed to scientists, mathematicians, architects, engineers and software developers -- the tool builders/enablers. Yet these group of people lot less than they deserve thereby wealth being taken by the corporations and shareholders.

Re:Hint - It's All About Ratios

[fluffernutter]

It depends how you look at it. They've bought new equipment and are doing twice more with the same work, so they have twice the profit. It's not necessarily fair for that automatically to all go to the corporation that owns the farm either, yet that is what happens.

Re:Hint - It's All About Ratios

[gnupun]

By that logic, what's stopping the tractor manufacturer from demanding a profit share from the farm? The manufacturer's machine is more responsible for the increased profit than the employee.

If you make over $100k salary, can a new car dealer charge you twice for the same car than he sells to someone who only makes $50k salary? You would not doubt call that greedy and ridiculous.

Unless the employee is performing something novel, useful and/or artistic that can be reused over and over (i.e. employee is a designer of something), he deserves only a fixed pay based on skill and standard of living. If the employee is a designer of copyrighted or patented work, he likely deserves a royalty based on the amount of sales of the product and his contribution to the product.

How can we forget the normalization of debt?

[bogaboga]

Americans work so much because among other reasons, sadly, having debts is now considered 'normal.' It's become like divorce after marriage. People are encouraged to borrow more. Even for things they do not really need. A good number of folks especially those new to the workforce do not see any problem carrying debt at all.

The "me" "me" attitude makes things worse. In fact mortgage, auto and student loan debt now is in the trillions and getting higher! It's sad. But more importantly, we still think we're at the epitome of standard of life.

Very few folks talk of saving to buy what one wants. And if they do, their voices are drowned out by corporate controlled media.

Easy

[DaMattster]

Wages have declined over the past two decadea meaning people have to work longer hours to make ends meet. Keynesian economics has nothing to di with it. Quite simple it's grees from the wealthy.

Work and Gravity . . .

[PolygamousRanchKid]

My late father used to say something like, "Work is like gravity . . . it tends to be attracted towards people capable of doing the work."

Take a look around you. At folks who are actually doing work . . . and those with long titles, and are not really doing any work.

Re:Work and Gravity . . .

[PopeRatzo]

My late father used to say something like, "Work is like gravity . . . it tends to be attracted towards people capable of doing the work."

That's actually quite a radical and left-leaning concept. If you want to move the heaviest loads, hook up the biggest horses.

Did you know your father had Marxist tendencies (though he probably didn't realize it)?

Re:Work and Gravity . . .

[Anonymous Coward]

No, realizing the way something works is different than endorsing it. Plus the Marxist tendency would only hold if all the workers were still compensated similarly.

Re:Work and Gravity . . .

[PolygamousRanchKid]

YDid you know your father had Marxist tendencies (though he probably didn't realize it)?

Being that my father grew up in the west of Canada, on a ranch, I find your comments particularly disgusting. If you take a look at the World Trade Center coming down, you can see one of my father's greatest works coming down: the multistage antenna that RCA build. Yeah, it was built in Gibsborro, New Jersey.

Now, Pope Ratzo . . .you can take your Islamic hairy ass where ever you please . . . just not in Europe or North America . . . keep it in some Islamic Hell-Hole where you belong.

Re:Work and Gravity . . .

[PopeRatzo]

Being that my father grew up in the west of Canada, on a ranch, I find your comments particularly disgusting. If you take a look at the World Trade Center coming down, you can see one of my father's greatest works coming down: the multistage antenna that RCA build. Yeah, it was built in Gibsborro, New Jersey.

None of that changes the fact that your father's saying is quite a good way to state basic Marxist thought.

My hat's off to your dad.

Re:Work and Gravity . . .

[fluffernutter]

People really have to let go of the Marxist label. Just because someone sees the possibility for an economy where more funds go to more people it just means they are less self-interested. It doesn't mean they are marxist.

Re:Work and Gravity . . .

[cwsumner]

I don't think there is anything marxist in that. It sounds more like free enterprise to me. As in, working as an independant consultant.
Of course it would depend on whether you liked the work...

Failed To Identify Cause == Bogus Analysis

[Anonymous Coward]

The entire story is flawed because the completely failed to identify the cause of the hours worked plateau. This have completely incorrectly assumed that teh hours worked average is entirely a matter of choice for American works, which is completely incorrect.

The reason that the average has remained at around 39 hours is being primarily influenced by labor laws. Hours beyond 40 require the payment of an overtime rate, a 50% increase in the pay rate. Additionally, keeping hours worked below 36 hours excuses companies from having to provide benefits to those employees. These two factors alone, drive companies to maintain two classes of workers, full time(40Hrs.) and part time(36Hrs.). These to groups of workers thus create the average of 39 hours worked. It has nothing to do with productivity or anything else, it is the simple economics fro the companies that are created by these two labor restrictions.

Salaried workers, exempt form these previous legal restrictions. are affected by another dynamic. They are closer to being influenced by the free market, where a company can replace them with a more eager competitor, and the fear of replacement compels salaried workers to work longer hours and produce more, often to their detriment. But, their hours aren't tracked and recorded as hourly workers are and their work hours don't influence the averages.

The average for hourly workers is ~39 hours per week. The average for salaried workers is much higher for fear of losing their jobs to competitors in the marketplace.

Re:Failed To Identify Cause == Bogus Analysis

[l0n3s0m3phr34k]

The ACA has "full time" pegged at 30+ hours actually. The 36 hour cut-off is changing this year, at least as far as healthcare is concerned.

Re:Failed To Identify Cause == Bogus Analysis

[EdwardFurlong]

This is part of the problem. Sure there are plenty of flexible jobs out there, 40 hours a week with two weeks off a year tends to be the standard. 30 hours a week might be considered full time, but the places I know of do not give that option, it's 40 hours or you are fired. Limiting yourself to 30 hours is going to restrict what companies will hire you, you are going to limit your advancement opportunities, hard to be a manager or part of a team if you are there 1/4 less than everyone else. I do not think this is all the businesses fault, if workers want t the option to work less hours or have more vacation they need to express that.

Re:distribution of wealth and_______

[rmdingler]

Guess what... if we distributed all that concentrated wealth, we'd still need to work.

Sure we would, and I'm not implying that it is a bad thing to have an obligation to fulfill that separates a person's free time from *his labors.

Look, redistributing wealth entirely and evenly is a dream that spawns in pipes. Economically, someone will always climb to the top of the food chain, but we've let it get way out of hand.

The present concentration of wealth is so dire that we run the risk of consolidating the World's power into a few hundred families.

reinventing the wheel

[fche]

It's endearing how so many commenters are discovering elementary facts of hundreds-of-years-old economics. ("People need money to spend." "There could be enough work, if we could sell it" "we need people to actually get money from working" You don't say!)

If only they'd take some basic education in the subject, so they don't have to reinvent all this elementary stuff from pieties and memes.

Re:Income inequality has *RISEN* under Obama?!?!?

[Ol Olsoc]

So a very small percentage of people owning almost all America's wealth is the fault of the Chinese?

Re:Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

Yes, the Chinese and a few wealthy Americans are colluding to fuck over all other Americans.

Why, indeed?

[PopeRatzo]

Americans work so much because they are scared to death.

Thanks a lot, Reagan.

distraction

[Anonymous Coward]

How to keep the people busy?
Working for a pay with which they can buy stuff noone really needs, so they can breed more workers, so the rich and bureaucratic minded can keep their lush and cushy government jobs, which also only serve to obtain a pay with which they can buy stuff they don't really need, yet manage to use a little bit more wisely etc... it is a vicious unending circle which eventually only serves to keep the people busy with stupid references to which they can reply or even make a job out of, with which they can earn a pay, which serves to buy stuff which noone needs, yet only srves to keep everyone distracted from the life they actually should be living yet totally forgot, since noone can remember what exactly it is, this life we are supposed to live.
etc etc....
there, for those that read this, enjoy and give me a call, maybe we can go out, have a beer, shoot some policitians, or maybe have some fun and join our local terrorist organisation so we can truly go out with a bang. IS!, it IS tha bomb! :-D
funny ain't it,
oh yeah, a beer would also do, but then remember, how much time and effort had to go into learning how to make beer, and the container to contain the beer and all the ingredients......
can't we just cut off the head and the butt and get it over with?
and isn't it ironic.

[wdw]

Women+Boomers+Immigrants = "Labor Shortage"

[Baldrson]

The baby boom started increasing the supply of entry level labor about 1970.

Women's liberation started increasing the supply of entry level labor about 1970.

The Immigration and Nationality Act of 1965 started increasing the supply of labor (not just entry level) about 1970.

The Donor Party liked this because it lowered labor costs. Oh, did I say "Donor"? I meant "Republican".

The Elect A New People Party liked this because 2 of the 3 sources of new labor would vote to Elect A New People. Oh, did I say "Elect A New People"? I meant "Democratic".

So you have a huge influx of labor and this is interpreted as a "labor shortage" by both parties.

Combined with the fact that FDR's "New Deal", in effect, nationalized many of the functions previously performed by the labor unions -- turning the national border into a de facto picket line that, for example, that neoNazi Eisenhower enforced with "Operation Wetback" (deporting most of the illegal immigrants) -- and the labor movement effectively collapsed.

Elizabeth Warren, before she got conned into becoming a politician, was the only mainstream academic to come close to documenting even part of this. See her Jefferson Lecture titled "The Coming Collapse of the Middle Class.

Since 1992, I've been advocating replacing taxes on economic activity with what amounts to an insurance premium for the protection of property rights, and distributing the revenue in a citizen's dividend. In that white paper I predicted a lot of what has now come to pass as a result of centralization of wealth and burgeoning welfare state rent seeking.

Here is a link to a recent synopsis of that proposal.

Re:Income inequality has *RISEN* under Obama?!?!?

[Opportunist]

Yes, why didn't the US protect its market and close the borders to Chinese cheap crap? You could even explain it with consumer health concerns.

Workers are paying for that safety net

[Anonymous Coward]

The Atlantic article didn't mention anything about the creation of the social safety net. Before 1930, no workee meant no eatee, virtually everybody worked at something and the only ones that didn't were dependent on family, friends (see Marx, Karl) and charity. This included very young children.

Creating that net meant a whole lot of people who shouldn't be working didn't have to and those who could work the system didn't have to either. So a smaller portion of the population needs to work more hours to support the non-working part.

But all that good stuff has to be paid for and the workers are it. Before 1930, there was:
. no income tax or only on the 1% (Federal, I don't know about State)
. no Social-Security/Medicare tax (7% per individual, 15% for self-employed), originally 16:2 workers/receiver now it's less than 4:1
. no sales taxes (8+% in many states)
. much lower property taxes
. much smaller military
. much smaller non-military gov't employment.

Re:Workers are paying for that safety net

[Anonymous Coward]

argh: "16:2" should be "16:1"

Re:Workers are paying for that safety net

[Anonymous Coward]

It is not true that virtually everybody worked. In particular, lower middle class women and up did not worked outside of house it was outrageous when they wanted to. The "a smaller portion of the population needs to work more hours to support the non-working part" is true only if you ignore half the population. You are also ignoring higher criminality rates, especially higher criminality rates among juveniles. (Through incarceration rates are higher now).

Besides that, unemployment still skyrocketed when economy tanked, because unemployment is not just a question of social net.

Happiness is relative

[Aviation Pete]

Psychology studies show it's not the absolute material wealth that makes you happy and content but the relative, in comparison to others in your social group. That's why top executives have spiraled up their pay packages, and why the middle class never lowered their work time below what is filling your day.

When Volkswagen experimented with 4-workday weeks 20 years ago, local plumbers and carpenters fell on hard times because everyone now used the extra day to fix things themselves, or even work on the side on that extra day. While the unions keep telling you that workers would relax during the extra time resulting from reduced work, in reality everyone tries to make a little extra on the side.

Also, having a job gives meaning to your life. Being told that you will be needed less is like telling you that you are a burden - nobody wants to hear that. That is also why today both parents work, even though they could enjoy the standard of living of a single-earner household of 50 years ago. But to keep up with the Joneses and to feel better for themselves both are now working, and the downside of less parenting seems to be generally accepted.

Re:Happiness is relative

[phantomfive]

While the unions keep telling you that workers would relax during the extra time resulting from reduced work, in reality everyone tries to make a little extra on the side.

Yeah. It turns out people would rather work harder than get paid less. And if you do work 32 hours a week (purposely, for less pay, because you'd rather have time than money), your relatives and friends will think something is wrong with you and give you peer pressure to work harder.

Re:Happiness is relative

[turbidostato]

"That is also why today both parents work, even though they could enjoy the standard of living of a single-earner household of 50 years ago."

You are delusional if you really think so.

Re:Happiness is relative

[Wycliffe]

"That is also why today both parents work, even though they could enjoy the standard of living of a single-earner household of 50 years ago."

You are delusional if you really think so.

I think it depends on how you define "standard of living". If you don't pay for any technology invented in the past 50 years (drugs, cat scans, cable tv, cell phones, internet) and reduce your house to the square footage they had back 50 years ago, move to someplace semi-rural where you chopped your own wood and had a garden, then yes, you could approximate the standard of living 50 years ago on a single income. That doesn't mean the second person is not "working" though as now that second person is tending a garden, chopping wood, etc... but the idea that 50 years ago only one person "worked" is also simply not true. Sure, only one person worked outside the home but the other person still very much worked.

Re:Happiness is relative

[Anonymous Coward]

I, for one, enjoy fixing things for myself, and generally dislike having others do the work. The only exception being particularly difficult work, simply because it takes too long to complete and interferes with earning and thus my ability to support myself. I do not want to reroof my own home, but I don't mind, and even kind of enjoy, doing my own oil changes.

Having a job makes my life dull and meaningless. I am 100% certain, if I were independently wealthy, I'd simply use my time to repair things myself and enjoy the finer points of nature. But I'm the type that, when on vacation, only enjoys it more as time goes by and regrets having to go to work the last day. I simply can't measure myself by my work.

Oh well, in the end, I've learned that jobs pay more than enough if you are willing to live on less (our family earns less than the national average, in case you think I'm cheating), and my lack of interest in material goods and willingness to make what I do have last means I rather certain I can retire at 50.

Re:Happiness is relative

[Anonymous Coward]

I would gladly work part time. My employer disallows it, seeking to eek every ounce of work from me, often demanding overtime.

You see those millions playing the lottery? Do you have any doubt they would quit working if they won? Do you really think the economy would fall apart if everyone had a bit more pocket change and more free time?

Interestingly, management has increased over 800% in my department. I hardly see those guys with has much time off they take. I have no doubts about who my extra work hours are subsidizing.

My car is over 15 years old. I regularly buy most everything used to make ends meet.

Fuck you.

Re:Happiness is relative

[IronChef]

> Also, having a job gives meaning to your life.

I think that is an overly broad generalization. It certainly doesn't apply to me.

Re:Happiness is relative

[Anonymous Coward]

Housing inflation has been faster than many of your other needs; You'd need to reduce your square footage to quite a bit less than they had 50 years ago, and an additional problem is that new houses are being built bigger (because the house construction is getting more efficient, but the land itself it what's getting more expensive), so you might not be able to find your affordably sized home close enough to the other things you need access to.... like the place where you earn the resources to pay for the house.

Re:Happiness is relative

[yes-but-no]

One who pursues relative happiness is a fool. He will never reach his goal. Thus we see the sorry state of human kind. No, the 1% is also in hell so as the remaining 99%.

Re:Happiness is relative

[turbidostato]

"I think it depends on how you define "standard of living"."

Of course yes, but I find the most reasonable way to approach it is a mix of "standard" with, maybe, a bit of adjustment in the low side, just to give the advantage to the caller.

So, it must be based on current and past status of "Average Joe": that means an average home, and average job and an average standard of living. I think you are undervaluing the standard you pose for 50 years back: it is 1965, not 1945.

Now: "Average Joe" income is 39,150$/year, since that's the median income for a 25+ male with high school/some college which, in turn, is the median education in USA (well, it's a bit above median, but I'll give that advantage to the parent post).

So, can 39,150$/year support a 4-5 members family (wife, husband and two-three children) for an average home (I'll take 1965 median: 1600sq ft, again for parent post's advantage), an average and a half car, current standards-of-living healthcare, fairly good education prospects for his children (the ability to go to Uni without bankrupt, out of savings), decent retirement and standard entertaiment (decent TV, Internet, mobile phone, going outside from time to time, etc.)? That is: the basics of today without falling into consumerism (no debt for luxuries, no "I need a bigger car than my neighbor and change it every two years", no 60" flat TV, etc).

I don't think so.

Re:Happiness is relative

[thinkwaitfast]

the relative

So envy? Fuck that.

Re:Happiness is relative

[thinkwaitfast]

if I were independently wealthy

What is independently wealthy? $20k/year buys a lot if your cost of living is below $5k/year. That's like $40/day.

Re:Happiness is relative

[readin]

Psychology studies show it's not the absolute material wealth that makes you happy and content but the relative, in comparison to others in your social group

This especially makes sense for men who are working to attract women. If you're the richest guy in the neighborhood, whether you're making $100 a week compared to everyone else's $90 a week, or whether you're making $1,000,000 a week compared to everyone else's $900,000 a week, simply by being the richest you'll have a greatly improved chance of attracting the best looking women in the neighborhood.

Re:Happiness is relative

[DarthVain]

Having time off, and not using it to work, only works if you have the money to do other things. Also having enough money that you do not want to bother trying to do your own plumbing or carpentry and paying someone else more qualified to do it (apart from a few hobbyists that might just enjoy that sort of thing, less likely of plumbing).

Having more time off and the same disposable income of course doesn't really balance out. At best you'd use half your time off trying to afford the other half.

Re:Happiness is relative

[swalve]

But I don't think Median Mike has ever been able to do those things.

Re:Happiness is relative

[Anonymous Coward]

My rent is $37/day. I pay less rent than anyone else I know in my city.

Re:Happiness is relative

[sergueyz]

I have to comment that thoses studies and VW example you've given were conducted in an environment where relative success is an ultimate goal and, more importantly, success is defined as material well-being.

Please imagine society where material well being is not a most important part of life. The outcome would be different.

Work creates extra value afaik (for others)

[Anonymous Coward]

I would think that in increase in the working force, creates extra value for people with money, and if people as a whole did not work, people with money, would probably starve if they wouldn't buy their stuff.

Scary stuff: What would your 24 hour a day of free time worth? Probably invaluable.

Re:Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

> Ever since then, the Chinese economy has grown at about 10% per year, and inequality has increased in the US as lower-wage jobs go to China. Any questions?

You know, there's a nice thing called Logic. Go read about it.

You might have a point if you're talking about unemployment, but what can Obama or any other president do about that? Companies will always prefer cheaper parts (from China or Madagascar or wherever).

But that's unemployment not inequality. An unemployed person will always have no income.

Re:Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

You're mistaking fault with reason, as many people do. There's inherent barriers to entry--capitalism is about capital used to make further capital which is inherently a self-enriching system for the rich. Further, the overall standard of the living of the world has vastly increased if you include all the Chinese who now have (relatively) good paying jobs along with all the (relatively) cheap goods produced as a by-product of a lot of manufacturing being done in China--the last part materially helps everyone.

The real issue with wealth inequality isn't the inequality per se. At some level, it functionally is equivalent to just a number in a bank or a portfolio with a set number of stock. There's still plenty of opportunity to functionally advance into the very-well-off business owner, even if very few can enter the realm of the super rich; the argument that such has to be a real possibility is absurd for the same reason it'd be absurd to think that every musician must have the opportunity to be a mega star or there won't be enough music made.

No, the real issue is how money in politics has a corrupting influence over the process and the mega rich are quite capable of altering the laws so that, oh, we see workers in the US who are compoundedly hurt by the influx of investments from factories (and the like) from China. It's cheaper to buy a smear campaign against raising minimum wage or raising taxes, even by 1%, on the top 1% of earners to offset the massive budget deficits that the 1% so heavily, indirectly, benefit from. Personal dogma of the 1% is enshrined in law above the will of the people. And while all of this will in the long-term being corrected as China's economy moves much closer to a developed state, that still means potentially decades of an oppressive "elite" who have undue influence over the system.

But, again, in the long-term, it doesn't (mostly) amount to a lot. The drug war isn't a by product of this. General "tough on crime" over-sentencing isn't a by product of this. The US won't default on its debts, even if it finally comes to raising taxes on the top 1%, because the 1% doesn't want to move from the tax/regulation paradise it bought. In general, so long as the 1% continue to be focused on numbers in a bank as more of a game, the actual real harm is mostly minimized and doesn't matter a lot*.

* One could argue about the cutting of social services, but I think that's a broader egotistical issue of Americans who subscribe to Social Darwinism and has been, sadly, a cornerstone of the US for a long, long time. The same with racism, issues of gun violence, etc. Cultural issues like that are mostly unrelated to the China/US trade relation.

Why do Americans spend so much time at work

[ugen]

FTFY: Why do Americans spend so much time at work

WE need more unions and basic health care

[Joe_Dragon]

WE need more unions and basic health care for all.

Re:WE need more unions and basic health care

[Higaran]

I agree with you on the basic health care issue, but totally disagree on the unions. I think there should be less of them, 50+ years ago they were a necessary, now they are just evil. The only people profiting off of unions are the upper management, the regular guys are just scraping by most of the time.

Re:WE need more unions and basic health care

[Anonymous Coward]

And the regular guys are forced to pay for the privilege in many cases.

Re: Income inequality has *RISEN* under Obama?!?!?

[JohnNemesh]

15% of the US trade deficit with China is dur to WalMart ALONE! So yes.

They actually do not work so much

[Anonymous Coward]

Unemployment is high in the US.

Re:Income inequality has *RISEN* under Obama?!?!?

[tverbeek]

The increase in the income gap began around the same time that trickle-down supply-side economics became national policy in the 1980s. Having one president or another in office doesn't magically change the course of the economy. That's driven largely by tax policy, which (last time I checked the Constitution) is controlled by Congress. Which is controlled by wealthy campaign donors who benefit from income inequality.

Transition to post industrial society

[jfdavis668]

The 1930's through the 1970's was the heyday of industrial society. People built things. Prior to that, we had an agricultural society, where people spent most of their effort obtaining food. Over time, we found ways to grow far more food per person, freeing most people to do something else. The same thing happened in manufacturing. In early industry you may need 4-10 people to perform a single manufacturing step. Now you have one operator running three machines simultaneously. Again freeing people to work somewhere else. Welcome to post industrial society. Now these people are working in the service industry, such as health care and entertainment. People don't just want health care from 9-5, people need to work odd hours. In the early industrial era, wages were low due to manufacturing being very inefficient, and wages needed to be keep low to make any kind of profit. This profit was often reinvested to improve manufacturing. Over time, the rational to keep it low was solved, and after a lot of fighting, was raised. We are still in the early service economy. Consumers want someone to answer questions on their products and services 24-7. Someone has to be there to answer the twitter post. These jobs are not hard to fill with low wage workers. So we have gone from agricultural to industrial to service economy. No one knows what the next one will be. When the service economy becomes efficient, and starts to create a body of excess people, we may move onto whatever the next version of the economy there is. Currently we are in the service economy. Each one improved the quality of life. People complain about wage disparity, but they also have cars, TVs, Xboxs, cell phones, iPads, etc. The profit needs to be invested back into the process to improve the service economy and cut down the need for so many people doing menial work.

Because they are stupid.

[Lumpy]

No really, Not trolling.

If you work more than 40 hours, and you dont own the business you are trying to build, then it's because you are accepting the bullshit your employer feeds you.
if you have so much work you cant get it done in 8 hours a day 5 days a week, then they need to hire more people. You instead by working all kinds of free overtime tell your boss, "i am your slave, please abuse me".

Way too many workers are too stupid or lack the backbone to tell their boss, "no, I will not give up my life because you are an asshole and refuse to hire the workers needed"

When more do this, the problem of companies and bosses abusing the workers will go away.

Re:Because they are stupid.

[Anonymous Coward]

Way too many workers are too stupid or lack the backbone to tell their boss, "no, I will not give up my life because you are an asshole and refuse to hire the workers needed"

Boss, "Ok, fuck you then. I'll hire someone else. I have 30 resumes on my desk with people desperate to work here. Bye bye!"

Re:Because they are stupid.

[Anonymous Coward]

If the person is a zero talent, no skill, low IQ idiot like you? Yes, there are thousands he can replace a low skill worker like you with.

Those of us with an IQ above 80 and actual skills, cant replace them that easily.

Re:Because they are stupid.

[Kjella]

Way too many workers are too stupid or lack the backbone to tell their boss, "no, I will not give up my life because you are an asshole and refuse to hire the workers needed"

It's rational under US labor laws where you'll get laid off at the next opportunity, if they don't fire you on the spot for calling your boss an asshole. They'll hire the next guy, the "good" company you find that gets 40 hours/week is out-competed by the "bad" company that gets 60 hours/week and they either change their tune or go bankrupt. As long as it's one worker against the company, the blackmail is going to work. That is why most European countries have mandatory overtime pay where few are exempted.

I don't think I could work at any place without overtime pay, unless it's genuinely management which is exempted here too. It's not about the total compensation, it's about the incentive. One hour isn't free for me, so it shouldn't be free for my manager to ask for another hour. All businesses have something they want to do worth more than $0, so that just mean pile on the tasks until I am working overtime no matter how efficient I am. Sure that means that short term I could stretch my hours and bill overtime. Or more correctly, I have to say to my boss this can't get done in normal time, do you approve use of overtime. Maybe he feels he must approve to reach the deadline, even though he feels I shouldn't have needed it.

But that is not something that should be compensated with free hours, if my boss is not happy with the work/$ he's getting from me the correct time to deal with that is performance reviews and raises. If my work was poor, regular hours or not I should get laid off anyway. So we're talking about the cases where the work is good, but the boss just wants it cheaper. It's like a constant "renegotiation" of your hourly wage, doesn't matter if it's creative work one hour of "software development" is an hour. You get what you get inside that time slot.

Or the tl;dr version:
If you have 120 hours of work that needs doing, hiring 3 people costs 300%.
In the US, hire two and hound them to work 150% and it costs 200% + whatever compensation you manage to get.
In Europe, hire two and pay 150% for the last 20 hours and it costs 200% + 150% = 350%.

That makes it pretty obvious why Americans work so much and Europeans so little. We get more expensive the more you work us, you get cheaper.

Re:Because they are stupid.

[StormReaver]

When more do this, the problem of companies and bosses abusing the workers will go away.

My work week is 40 hours. In order to have a less stressful commute, and to get a little more done in a day, I would come in about an hour and a half early every day for about five years. One day, when my boss was asking me to to calculate my unpaid overtime compensation hours, he got irritated when I asked if I could include my five years of uncompensated overtime. He said, "No, because we didn't ask you to do it."

At that point, I started working exactly 40 hours a week. If something wasn't done, I started telling him I would get back to it first thing in the morning, but that I was going home at exactly 5pm every day. If he wanted me to work extra hours, he would have to ask me to do it, and it was going to be part of any unpaid overtime that he asked me to calculate.

I have never since been asked to stay late or to come in early without just compensation. The one time since then that I had to come in on one of my vacation days, I was at work for about an hour. I added 4 hours to my vacation time. When I came back from vacation, my boss said that he "granted" me that same four hours of vacation. I responded with a simple, "Yes."

So yes, don't let your bosses take advantage of you. I always thought my bosses were better than the others I had read about, and I was wrong. Most bosses are ego-maniacal pricks.

Re:Because they are stupid.

[Anonymous Coward]

Most people fall into this trap, not because they are stupid, but because they do not have the opportunity to say no. There are people living in areas of high unemployment, people taking care of children/siblings/parents, people overburdened with debt, immigrants that never had the opportunity to a quality education, people that are discriminated upon because of their race/gender/education/criminal history/etc. It is easy for a white collage graduate male to say, "you don't own me". It is much more difficult for a black single mother to say the same thing. The bottom 50% of Americans have no wealth and most of their wealth involves a car (with a loan), furniture, TV, and clothes. They do not have the opportunity to simply walk away.

Re:Because they are stupid.

[Anonymous Coward]

Seriously, you are trolling!

You try doing that in a country like Singapore, Japan or South Korea (maybe China too)... you will be fired the next minute they can!

I was working in Singapore until last year. I worked on average 12 hours a day, on worse periods, it can be 18 hours a day including weekends. After burning out so much, and not being compensated for hard work; I reduced the hours to about 9 a day. And I fought hard to increase workflow effectiveness. And yes, they fired me promptly and hired a slope who is willing to put 12 hours a day while accepting all bull shit from the management.

Since then, I didn't find a job, simply because no company likes the idea "work life balance", even at a superficial level!

Moral of the story: if you want a job these days, be ready sell your soul, just like Robert Johnson did at the cross-roads!

Re:Because they are stupid.

[Anonymous Coward]

Blow his (or her) head off then.

Not like you're ever going to get to marry cute girl children anyway:

This Cunt state needs to be replaced. Men used to marry young girls, not fucking adult CUNTS who know the game.

>In the United States, as late as the 1880s most States set the minimum age at 10-12, (in Delaware it was 7 in 1895).[8] Inspired by the "Maiden Tribute" female reformers in the US initiated their own campaign[9] which petitioned legislators to raise the legal minimum age to at least 16, with the ultimate goal to raise the age to 18. The campaign was successful, with almost all states raising the minimum age to 16-18 years by 1920.
Also see: Deuteronomy chapter 22 verses 28-29, hebrew allows men to rape girl children and keep them: thus man + girl is obviously fine. Feminists are commanded to be killed as anyone enticing others to follow another ruler/judge/god is to be killed as-per Deuteronomy. It is wonderful when this happens from time to time: celebrate)

Re:Because they are stupid.

[Anonymous Coward]

Maybe they will, but you'd still be better off.

And the boss will lose in the end - it costs money to fire, hire and train staff. And there's no guarantee the next person will take his shit either.

Re:Because they are stupid.

[mjwx]

Way too many workers are too stupid or lack the backbone to tell their boss, "no, I will not give up my life because you are an asshole and refuse to hire the workers needed"

Boss, "Ok, fuck you then. I'll hire someone else. I have 30 resumes on my desk with people desperate to work here. Bye bye!"

And there in lies the problem.

I fortunately live in a country where it's illegal to do that (Australia). If my employer wants me to work more than the 37.5 hours prescribed in my employment contract they need to offer me an incentive to do so. The problem is Americans have pissed away all their working rights and the bosses have all the power. In Australia, you still get companies who try to abuse their workers, however these companies almost always end up with the worst and most incompetent employees (if they dont end up in court) because anyone who exercise their rights is gotten rid of, so they end up with the workers who literally cant get work anywhere else. This is true in blue as well as white collar.

As a side note, I'm happy to put in an extra hour or two here and there when needed to get things done... By the same token my employer is happy to let me go an extra hour or two early every now and then so I can get things done that can only be done in business hours (I.E. like taking my car for a service).

Also 4 weeks annual leave and 10 days sick leave mandated by law rocks.

Re:Because they are stupid.

[microTodd]

That's actually not the reality I've seen. Maybe this is true on the West Coast, but in Atlanta and the southeast there are more openings than people, seriously not enough talent. If my boss fired me I could walk into another job right away with no salary cut.

I don't know what its like in California or those big tech hubs, but in Atlanta if you've already got tech skills you're pretty much set.

Re:Because they are stupid.

[Tony Isaac]

Not if you're any good at what you do. Resumes or not, it costs a business a LOT of money to hire a new person, generally equivalent to 25-50% of the person's annual salary. Businesses do think hard about keeping good people.

It is possible to tell your boss you will not give up your life because they won't hire more people. It's all in the presentation. I know, I've done it many times, and have yet to be fired over it. I haven't been passed over for promotions or pay raises. AND my life has been relatively free of overtime, while many of my co-workers fell into the overtime treadmill.

Re:Because they are stupid.

[readin]

I guess I missed the part where you're boss was an "ego-maniacal prick". He asked you to calculate the uncompensated overtime. You wanted to include a lot of time that you had done without being asked for. That was going to be a huge chunk of time and would likely make him look bad somehow - and why should he get that blame when he never asked you to do it? And when you started working the 40 hour week you had agreed to when you were hired, he didn't complain and he gave you compensation (4 vacation hours in exchange for one worked hour) when you had to work on a day you had wanted to take as vacation.

Re:Because they are stupid.

[Aristos Mazer]

And that's why some industries have unions. Unions reply to the boss and say, "No, those 30 resumes don't mean shit. Now hire me some damn help or we all go on strike."

It's a balance of power, and in the USA, we have broken a lot of the union authority -- whether that's good or bad is a matter of opinion, but the fact is, we have broken that authority. Putting it back is an option.

Re:Because they are stupid.

[Anonymous Coward]

You missed a line

When more do this, the problem of companies and bosses abusing the workers will go away.

Re:Because they are stupid.

[houghi]

And in Europe you will get the 'welcome to a lawsuit' if they try that. Ironically in Europe only higher management buys that bullshit.

I work my 40 hours and by boss does not DARE to ask for unpaid overtime, regardless if I am in a union or not, because it is illegal.

So it would be bye bye boss.

Re:Because they are stupid.

[Anonymous Coward]

That's actually not the reality I've seen. Maybe this is true on the West Coast, but in Atlanta and the southeast there are more openings than people, seriously not enough talent. If my boss fired me I could walk into another job right away with no salary cut.

I don't know what its like in California or those big tech hubs, but in Atlanta if you've already got tech skills you're pretty much set.

Same talent shortage on the West coast. The situation AC describes is only for non-technical or low skill jobs.

Re:Because they are stupid.

[Anonymous Coward]

Or you can try and go to a developed country. A country in which that is allowed to happen is a shithole regardless.

Re:Because they are stupid.

[cwsumner]

Way too many workers are too stupid or lack the backbone to tell their boss, "no, I will not give up my life because you are an asshole and refuse to hire the workers needed"

Boss, "Ok, fuck you then. I'll hire someone else. I have 30 resumes on my desk with people desperate to work here. Bye bye!"

Note that, in many industries, people only get a decent raise when they move to a different company. So if your boss fires you, they might be actually doing you a favor (even though they don't think so).

Re:Because they are stupid.

[swalve]

And when his employees keep quitting, maybe he will learn the lesson.

Yeah, I got one

[rsilvergun]

what about the productivity gains? It's not just outsourcing (not that it helps). They're still been massive productivity gains, which is covered in TFA. In fact, it's exactly the gains Keynes predicted. Computers and Robots are taking our jerbs. Go look up how the Steam Controller is made. Instead of working less we work more because in our dog eat dog economy instead of lowering the work week to 30, raising minimum wage and enacting tariffs to protect workers we just let everyone's pay go down due to over supply.

An oversupply of labor lowers it's value like anything else. It's one of the funny things in American capitalism: We just can't imagine a downside to supply and demand. I think it's because when we were kids we were taught it like it was religion...

Re:Yeah, I got one

[budgenator]

An oversupply of labor lowers it's value like anything else. It's one of the funny things in American capitalism: We just can't imagine a downside to supply and demand. I think it's because when we were kids we were taught it like it was religion...

I'm not sure about you but when I took Economics the whole course was about Supply and Demand, there was no value system attached to it, the domain of politics. The only problem with American capitalism is Six-pack thinks the barriers of entry are too high for him to participate, but in reality his 401K is heavy in stocks.

Re:Yeah, I got one

[Anonymous Coward]

"An oversupply of labor lowers it's value like anything else."

I wish the oversupply of apostrophes would reduce their value to the point that no one would use apostrophes anymore. Then we'd be reduced to using "it is" and "its".

Re:Yeah, I got one

[Greystripe]

Nah, it would all be "its".

Re: Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

So, you dont, cannot blame Regan. . someone had to open the door. .could that have been the tricky dicky?

The underlying causes: greed and loss of shame

[Anonymous Coward]

Keynes failed to allow for the changing distribution of wealth.

True. But the underlying cause of that is an ongoing cultural decay that makes it increasingly acceptable for people to be absolutely ruthless, greedy, unprincipled bastards.

This increase happened because we lost the ability to feel shame, and thus the ability to censure others with shame. It turns out that shame was more important to our society than we though.

Re:The underlying causes: greed and loss of shame

[fluffernutter]

I'd rate you insightful if I had mod points. Basically in 1930 people still cared somewhat for each other. The CEO of a company cared for the employees working there and would never think of making 800x more than everyone else. Boards would never consider giving the CEO 800x more than everyone else. Times have sure changed.

Re:The underlying causes: greed and loss of shame

[Anonymous Coward]

Don't look at me, I'm not the one who used up all the shame trying to control what people did in their bedrooms. Now that the religious right has built up everyone's immunity by trying to shame people for bullshit that only they cared about, it's about as useless as penicillin.

Or we could just give people food

[rsilvergun]

shelter, transportation, education and healthcare. Some folks don't want to just consume all the time Brave New World style. And with mass communications and entertainment a lot of folks can spend their time reading, playing video games, etc with very minimal amounts of resources changing hands.

You're trying to solve this problem without Socialism. It's not going to work. You're either not going to solve the problem or going to end up with some bastardization of socialism like America's Military Industrial Complex.

Playing with numbers

[Karmashock]

People keep thinking they can outsmart reality with mathematical masturbation. The only one that gets fooled by that sort of thing is ourselves. Reality is never fooled because it doesn't calculate things in terms of our philosophies and theories and spreadsheets... it rather calculates things in terms of "is" and "is not". You can't trick that.

Print all the money you want. Its just zeros in a computer at this point. When push comes to shove... the question will be "how much of X do you have NOW". The numbers in our model rarely describe that. They talk about how much we "should" have or how much we "might" have or how much we "will" have... assuming everything goes one way or another.

If our models were so f'ing perfect we wouldn't have these collapses. We wouldn't go from bull to bear and then back to bull and then back to bear.

The truth of the economy lies somewhere between bull and bear. It is the empirical reality. Denial in that case is just self delusion. Accept that and grow wiser.

You can pretend Keynes is the end all be all... but were that the case more of his theories would not be a shit show.
https://www.youtube.com/watch?...

Re:Playing with numbers

[loonycyborg]

The problem is that money became object of fetish, a religious concept. Ultimately it's just an abstraction meant to facilitate trade. And if everyone go for making money rather than getting the work done then money as abstraction breaks down. It no longer performs its original purpose and results in various inefficiencies. If a manager's salary is 1000 times more than that of average productive worker then this manager is no longer a contributor to common goal, but rather a fetishized person akin to a religious figure or an aristocrat.

Re:Playing with numbers

[Anonymous Coward]

+Interesting post.
The standard of living in the Keynes era would be considered third world living today. Homes in the US built in the 1940's with small rooms etc, are not appealing to the new generations, they look really ghetto. Our expectations are a moving target. Advertising tells us to want more. The infinitely expanding money supply is based on smoke and mirrors, there is no reality in it, other than some will get a bigger slice of the pie than others. This has been the course of history since day one. Some will work and struggle others will by force or deception exploit everyone. Real power, economic power, will stop at nothing to perpetuate itself, by means legal or not. There is enough ruffians to do the bidding of the billionaires so they wont have to get their fingers and consciences dirty.
Gold standard for the value of money is kind of stupid, it is another mind game. The metal is useful for it technical aspects in industry, but 1500 metric tons sitting in the basement does nothing. If the supply of really necessary stuff is in short supply it would require more gold to buy it. Food, oil, energy, air water, copper, zink, steel, medications, etc cannot be substituted with gold. The real value of commodities is in its necessary and practical use, gold has little of that. Silver is also useful in practical aspects, less now with photographic films being digital. You can live without jewelry and bling but food and energy you cannot. Thus the value of gold and silver is a myth from times gone bye bye.
The mass-media perpetuates the status quo, and is designed by the billionaires to secure their position.
What is fair and reasonable? That depends where you sit.

Re:Playing with numbers

[Anonymous Coward]

If our models were so f'ing perfect we wouldn't have these collapses.

The people with the models didn't generally have collapses, they usually had slightly lessened profits. *You* had that collapse, like a body drained of too much blood. In the long term they might have collapsed too. But they let most of you recover enough to continue draining at near the maximum rate again, right?

Nothing has changed about where all the wealth flows.

Re:Playing with numbers

[Anonymous Coward]

The truth of the economy lies somewhere between bull and bear. It is the empirical reality.

Are you trying to argue that "bull and bear", or "boom and bust" as they're more often called, aren't empirically real? Because they totally are. Keynes knew that, it's what his model is all about, and so does every economist since him, and most of those before him.

If you like, you can plot an economic graph that smooths out the booms and busts and looks like a smooth curve, or even a straight line, but to pretend that that's "empirical reality" is to fly in the face of all evidence ever.

Re:Playing with numbers

[Karmashock]

That's nothing new. Money has been that way for... ever. Go back 10,000 years and money was that way.

As to money being bad because of inequality... the point of money is not to have equality but rather to represent the resources a given person or party is owed. Citing inequality suggests that there is any ceiling on what someone can own which is not an inherent economic concept.

A manager that makes 1000 times as much as employees is possible if the relative scarcity of skills is 1000 to 1. If the manager brings something to the table that is special.

Take something like a sports star or a writer or whatever... that kind of talent isn't even 1000 to 1. If I found 1000 people and asked them to do the thing probably not even 1 of them would be able to do it as well as the star. A manager in your example generally is expressing a talent which has a scarcity of about 1000 to 1. That is, if you grabbed a thousand people... probably one of them could do the job that well.

The above is a gross simplification... there are various other elements in play that will cause a valuation to go up or down indifferent to the scarcity of that skill. However, that is a good introduction as to why a manger would be paid so much more.

It is also important to keep in mind what we're really talking about here. Your complaint is something about inequality and labor markets. That isn't an issue with money itself.

Re:Playing with numbers

[loonycyborg]

You misunderstood. It was't about inequality, but rather about irrationality. The very idea that 1000 to 1 difference in income is somehow related to 1000 to 1 difference in talent or societal utility is irrational. The very idea that having more income is automatically good is irrational. Money are subjective and as long as a person has all his living needs fulfilled it shouldn't matter. Some nerds collect postal stamps, some nerds collect money, and for some reason collecting money became religiously mandated which leads to inefficiency. Why money collecting nerds should be valued more than other nerds?

Re:Playing with numbers

[Karmashock]

As to a 1000 to 1 difference being irrational... says who? That's like saying the price difference between a cheap compact and a hand made sports car is irrational.

Market forces.

Generally no one pays more than they must to get what they want. If they pay 1000 times more then that tends to mean that there weren't any other options if they wanted "that".

As to why the price difference is so intense... I believe you're talking about CEOs and not managers. Managers do not get 1000 times more... CEOs do. And a great deal of that pay comes in the form of stock options which are incentives for CEOs to juice stock prices which are ultimately what the shareholders want.

As to the notion of having more income being irrational... I don't know what you're talking about. Money is useful because you can buy things with it. If you have more then you can buy more stuff or better stuff or security or go into business for yourself or help people or all sorts of other things. Saying that seeking it is irrational is naive.

I frankly don't think you understand the subject very well at this point... and that seems baffling to me because this is pretty fundamental.

If you're against the notion of people working hard and building things and would prefer an easy hunter gatherer life where you just work hard enough to live... so be it. Go off into the wilderness and do that. No one is stopping you. However, that is basically going to damn you to a primitive poor life style forever. Here you might presume to be upset with me... this is not something you're entitled to when someone is just telling you the facts. That's the reality. Either accept it or don't... I can't really work up an ability to care if you're going to be unreasonable.

As to money collecting nerds being more valued... don't value them. No one forces you to or not. But if you want their money then you need to respect them the same way you would the stamp collecting nerd if you wanted his stamps.

When you say "respect" it sounds an awful lot like you're suggesting you should just be able to take his money away if you want it. Which would merely make you someone advocating theft. I'm fine with that... so long as you appreciate that lethal retaliation is acceptable in most places when someone tries to rob you.

Possibly this is the best resolution for your problem... you want to live like a primitive barbarian with no property rights? Okay... go rob someone, get your face blown off, and the Sun will rise on a world with one less fuckwit.

Re:Playing with numbers

[loonycyborg]

You didn't read what I wrote, right? Money is merely a mechanism, I object to its fetishization and you totally failed to show that there's something wrong with such point of view with those irrelevant rants. It seems to me you argued with someone else or you're just touched in the head..

Re:Playing with numbers

[Karmashock]

I read what you wrote. You didn't read what I wrote.

As to money as a fetish, it has value for social status which is a core element of human society.

What is more the money is also exchangeable for resources, power, influence... and thus seeking it is more than merely seeking money for money's sake unless people never do anything with it.

As to me arguing with someone else... you parroted arguments that precede you. Thus rather than arguing with your paraphrasing of someone else's words... I addressed THEIR argument which you are using instead. I consider that to be expedient.

Come up with your own argument and I'll address your position. Parrot someone else's and I'll just address their argument instead. That's entirely reasonable and fair.

Re:Playing with numbers

[loonycyborg]

You're incorrect. No parroting was involved here. You just chose to answer to me like to some commie-mutant-traitor, yet there was nothing along those lines in what I wrote. There's nothing non-obvious about money being abstract construct without direct relation to material things, and that's the only thing I stated. In order for market forces to work there must be astronomic number of participants, and even then market failures are always possible. Money are a mechanism, and each mechanism can be exploited and subverted to work against its purpose. So fetishization of market and money might prevent one from perceiving an existing market failure and responding to it by modifying laws accordingly. This makes sense since property itself is creation of law and is enforced by state, thus only state in practice can decide what property is and what isn't and how exactly it should be enforced.

Re:Playing with numbers

[Karmashock]

Check mate in four moves.

Okay, lets play this out.

Which laws do you want to change to correct the market imbalance?

As to property being a fiction of the state and thus mutable by any subsequent ruling of the state... I'll just note you made that argument.

Respond... you'll disembowel yourself on your own words if you carry the point forward... and I'll have verified my initial impression.

Dare you to prove me wrong... advance your position... I want to hear the flesh rip.

Re:Playing with numbers

[loonycyborg]

You're not making any sense. I've already fully explained my position, there's nothing to add. I just said a bunch of truisms, I have no idea what you're so riled up about.

Re:Playing with numbers

[Anonymous Coward]

Yep it the Gold Standard, or lack thereof, 1 Gold Coin or eq currency in a native flavor will buy you a nice suit for decades if not over a century. But for some reason we just want to pump more and more paper and think that bigger numbers makes it all better.

Whatever you earn now in US $s is 1/5th or less in purchasing power than it was in the 80s.

Re:Playing with numbers

[Karmashock]

So... you have concluded that the only way to win is to not play?

Very well... you see the checkmate. I'll take the victory.

And before you again make another pathetic attempt to claim you've fully explained your position. I asked a very specific question up there.

What law would you change? You can play this out if you want. If you define your position, then I can easily justify my initial ire.

if you don't define your position then you'll effectively be admitting that you know where this goes and will be attempting a squidish ink cloud followed by fleeing.

You choose. Stand and lose or run away tail between your legs. I am quite certain you're just going to make more sad attempts to evade the inevitable... that's fine. Its sad but meaningless.

Re:Playing with numbers

[loonycyborg]

What law I would want to change is irrelevant. It never was relevant. The only thing relevant is that laws change to deal with market failure. An example here would be introduction of american anti-trust laws, or activity of regulatory organizations like FCC. But in the end the decisions are made by concrete people and there are always consequences from each decision. Those decisions must be made based on understanding how exactly market works, not magic belief it'll fix everything.

Re:Playing with numbers

[david_thornley]

People keep thinking they can tell what reality is, and they're wrong. Many people have a set of fixed ideas in mind, whether or not they correspond to reality. Many have a system of ethics that would result in most people being unhappy and insecure. Nobody knows what reality actually is. Anybody who was would never be surprised.

Re:Playing with numbers

[Karmashock]

Okay... so your proscribed changes to end the fetish of money would be:

Anti Trust laws: Define what you would do here. The trusts in the first place all came to be through government monopolies. Today, we arguably don't have many of these...possibly the ISPs... again, government backed. So the Trusts are just crony capitalism.

Create an organization like the FCC... what? It clearly exists.

Your sudden vagueness seems like an attractive defense to you because after all if you're really really vague then no one can call you on your bullshit... you can't be wrong when you're incoherent after all. However, the price of that is that you actually have no argument and no point when you're this vague. Your position boils down to "You know man, like people, should... I don't know... huh ha." Not a strong argument.

Re:Playing with numbers

[Karmashock]

How post modern of you... so everything is subjective eh? *pokes you in the eye* Did I poke you in the eye or was that just a shared delusion?

Solipsism is countered by reality rather easily.

Re:Playing with numbers

[loonycyborg]

I just explained to you how things work and how it relates to subjective nature of property and money. Yet you expect some suggestions from me. Why? It's just like if I described structure of solar system to you. Would you in that case expect suggestions of improvement from me? Like adding new planets? Or removing some?

Re:Playing with numbers

[Karmashock]

So you're sticking with the "I'll be so vague that no one can validate my argument" tactic. Which is exactly what I predicted.

Very well... you have failed to make an argument so I can't rip it apart... but the price is that you didn't make an argument so you have no point.

If and when you have anything what so ever to contribute on the issue... I'll be listening. Until then... peace be with you, scrub.

Re:Playing with numbers

[loonycyborg]

Can you provide me an example of argument that you in your altered state of consciousness would accept as one? I still honestly really don't understand what you expected. I just shared my understanding of the situation, that's it. And you were like Peter Griffin asking "And?" long after it was appropriate.

Re:Playing with numbers

[Karmashock]

You said you'd change the laws to end the Fetish of money.

I asked what laws.

You said you'd pass anti trust laws... be specific on what you'd like to stop or shut down or what your law would preclude that exists right now. And please connect that to a "Fetish of money" argument.

You also said you'd create an organization like the FEC to regulate the markets. Clearly there is something wrong with the existing FEC... and i wouldn't disagree... but I would like to hear what you think the problem is... From my own perspective the issue is mostly one of corruption. People that work in the FEC should be barred from working in any industry or business regulated by the FEC for X years after retiring. There is something of a revolving door between the two groups. Its sort of like park rangers and hunters exchanging members back and forth. It creates conflicts of interest that are unacceptable. Correcting this does not require a remaking of the FEC. it merely requires some rules change.

Apparently according to you, this is all that needs to change to end the "fetish of money" which is of course nonsense.

There is ANOTHER set of laws you have conveniently not mentioned that you'd need to put into practice to stop that. And as soon as you say what they are and explain it, my initial thesis will be self evident.

But if you want to try and pretend that some anti trust law and a reform to the FEC would do it... try. Its an insult to any intelligent mind but the fact that you haven't realized you were made almost immediately means this is to be expected.

Re:Playing with numbers

[loonycyborg]

You have absolutely misunderstood me. I cited existence of anti-trust laws as evidence of the fact that everyone, including government, knows about artificial nature of money and property. I don't need to make any suggestions because other people already working on limiting it. It just takes time, and often regulatory organs can be affected by regulatory capture. Suggestions like removing corruption are of course theoretically sound, but who will do that? People who get paid for doing the opposite? The only way is to stop bitching and go work there yourself.. But the very existence of such organs proves artificial nature of money and fallibility of markets.

Re: Income inequality has *RISEN* under Obama?!?!?

[Opportunist]

Hey, that gives me an idea. Think we can somehow tack global warming onto Obama?

Keynes

[Orgasmatron]

Keynes was a nitwit. Virtually nothing he wrote was right, mostly because he was writing to his ideology.

Re:Keynes

[fluffernutter]

You're completely correct, except for the fact that the very summary explains that he was right.

Re:Keynes

[Orgasmatron]

I said virtually nothing.

Keynes lived well into the era of "indoor plumbing through electrically pumped water". That technology was going to raise the standard of living for just about everyone, at that point, wasn't so much a prediction as an observation of the blatantly obvious.

Because our employers are above the law

[Anonymous Coward]

they can make us work 6 or 7 days a week & fire us if we actually decide to take our vacation time to go on a vacation.

Less work, less workers

[tflf]

As far as I know, Keynes never predicted two contributing factors which are probably keeping hours worked inflated. One: while the amount of "work" to do has been reduced, the number of people doing the work is also reduced. Technological, organizational or operational changes usually mean job reductions in most organizations, but, the projected reductions are almost always wildly optimistic. No organization will admit the new technology/software/process/outsourcing/whatever failed to deliver the promised reduction in required bodies, as this is seen as a failure in leadership. Reality is denied so the delusion can appear to remain validated and the stock price kept inflated. Meanwhile, the survivors are doing more, including more overtime. Two: the sharp rise of part-time work as the employment norm, along with reduction in service, number of employee hours, and rates of pay. Started with retail and the service industries and is creeping into other areas of work. As late as the early 1970's, working full-time retail could pay enough to support a family. Today, many people are working 50 or 60 (or more) hours a week, spread across two or three part-time jobs.

I cant get a mortgage

[Anonymous Coward]

Why? because for the last 10 years ive been living within my means. I bought a car i could afford to pay for up-front... i havent used any credit cards and i dont have -any- outstanding debts. Even with a 30% down payment, they wont touch me.

When i went to apply for a mortgage, the banks advice was to go get a bunch of credit cards & run them up & that will somehow make me a better credit risk.

BS like this is what you get when you let the banks write all the banking laws.

Re:I cant get a mortgage

[thinkwaitfast]

Same exact thing just happened to me last week also (wanted to buy another house and already have two fully paid off). It's their money though, so I can't complain. I did get approved for three credit cards the next day.

Re:I cant get a mortgage

[Ash-Fox]

i havent used any credit cards and i dont have -any- outstanding debts.

I use credit cards for everything and I don't have any outstanding debts. What I do have though through my bank is:

Extended two year warranty on all purchases through my credit card
Cash back on all purchases
Insurance on all items purchased through the credit card
Money protection that I would not get on my debit card, nor cash
A good credit rating, which allows me to get some of the best rates on monthly utility bills and apply for pretty much most loans out there.

When i went to apply for a mortgage, the banks advice was to go get a bunch of credit cards & run them up & that will somehow make me a better credit risk.

That wasn't their advice. Their advice was to use credit cards to produce a track record of your debt handling (pay off every month, problem solved).

BS like this is what you get when you let the banks write all the banking laws.

You made it clear you don't want to be on credit systems and then complain when you can't get the riskier credit ratings for someone that has no history of credit.

Re: Income inequality has *RISEN* under Obama?!?!

[Anonymous Coward]

No, because global warming doesn't exist. I know this because the weather outside is cold, thus proving once again that Obama lied to us.

No they don't

[Anonymous Coward]

Sitting at work for 12 hours per day does not equate to higher productivity, I don't care what Alan Greenspan says.

That's a nice theory

[Anonymous Coward]

But consumption habits are what make (Western) poor people poor. Seriously; our poor people have cell phones, cable, and expensive clothes. I'm making 6 figures and spend less on "consumerism" than all of my employees, and less than half than the hourly folks. I drive a 20 year old pickup instead of making payments on something with satellite radio. The sad and funny part of that is that they see what I do, how I live, and still don't get it. Yes, I can watch every packers game at a bar for less than the cost of cable, and I get beer delivered to me in that cost differential. Of course, I read instead of watch kardashians, and that's probably THE most significant difference, as I don't let the TV tell me what I need to buy to be happy.

Re: Income inequality has *RISEN* under Obama?!?!?

[macsimcon]

What can we do about it? We could use tariffs like we did for most of America's history.

Or we could use a VAT like most of the other OECD nations do.

The fix is easy. Getting mouth-breathing sixth-grade education Republican sociopaths to see it is hard.

Re:Income inequality has *RISEN* under Obama?!?!?

[ArmoredDragon]

So a very small percentage of people owning almost all America's wealth is the fault of the Chinese?

I know this is going to be an unpopular opinion, but in my opinion it's the fault of those who routinely carry debt. Most people in America don't know shit about finances. They borrow heavily, and wonder why they never have any money. You know who profits? People who don't borrow. Not necessarily even the lenders, rather, just people who don't borrow.

And no, no amount of usury laws will change that. Usury laws create loan sharks, and unlike legitimate lenders, loan sharks don't answer to the law. Most people are just plain stupid and will borrow money at insanely dumb interest rates, even from dangerous people if they have to, just because they have no idea how to manage their own finances.

Borrowing also includes renting, by the way. Part of this comes from people who insist upon living in upscale expensive areas (i.e. New York, San Francisco) when it's clearly beyond their means, have a super high rent, and then wonder why they live paycheck to paycheck.

I personally have never made a whole lot (my current income at my IT job is just under $50k) but am already taking advantage of the situation. That is, I just paid cash on a shitty house, fixed it up, and now have renters in it paying me every month. (And no, I am not a slumlord, the last owner was, hence it was shitty, however unlike him I'm still in the process of bringing improvements to the property even while tenants are in it.)

Re:Women+Boomers+Immigrants = "Labor Shortage"

[DarkOx]

I am not sure I agree much with your history but your proposal to replace taxation with what amounts to insurance is interesting! I think I could support something like that.

What I don't understand. Is why liabilities are subtracted from assets. Why not simply 'tax' all assets at their liquidation value. After all any liability is an asset on some other parties balance sheet. Lower the 'tax' rate to where its affordable without subtraction of liabilities. I argue for this because otherwise it encourages radical private debt levels. I mean I have no incentive to pay anything other than interest on my mortgage because as long as I maintain 0% home equity I pay no taxes on the estate? Does not seem reasonable.

The other problem with this theory is acts in many ways like a wealth tax. The problem is what does a retired person with little income do? They have worked to put a roof over their head but now they have to pay taxes on it without income to support them. Should they system be pushing them to selling the property to replace their capital investment with rent expense, while in the mean time paying taxes on their now cash assets out of those very same assets? That seems like it will destroy familiar wealth accumulation. Maybe you consider that a 'feature' I and I think most will not but I know some on the political left do and will.

I would try and solve the post income earning years problem by augmenting your plan with exceptions for certain asset classes, perhaps something like residential real-estate personally occupied at least 55% of year should be exempt. It would realistically have to be more complex than even that though. Something like "residential real-estate personally occupied an average of at least 55% over the preceding five years or you must tax with interest on any years the exemption was taken" That way people are free to travel etc without inuring heavy tax penalties.

Its an interesting concept but I think there are lots of details on complexities to work out.

Re: Income inequality has *RISEN* under Obama?!?!?

[lostinbrave]

Up until you started talking about renting bring a firm of lending you were on solid ground. Your thoughts on the desire for high scale residences are in the right direction but renting isn't the problem the greed is.

Re: Income inequality has *RISEN* under Obama?!?!

[lostinbrave]

Being a form of lending*

Blame "Target Inflation"

[Slim_Jack]

Target Inflation effectively keeps people workng. If our government did not artificially maintain a target inflation then people would be happy working fewer hours. Target inflation means that costs keep going up for things and the peons have to keep working. The economists could not look good unless people are working 40 hours a week.

It's worse than you think

[Anonymous Coward]

In 1930, the average family had 1 person working 47 a week. Now it has 2 people working 40 hours per week. So we're contributing 80 hours to the economy instead of 47. All to increase the wealth of the rich. This stated with Nixon shock in the early 70's and we're paying the price for that crook to this day.

Re:It's worse than you think

[thinkwaitfast]

The 2015 family, even the poorest, are far wealthier than the 1930 family.

Re:It's worse than you think

[fluffernutter]

Only if you don't count leisure and child-rearing hours as a type of wealth, which I do. Once we went to dual income families, that effectively cut our quality of living by more than half.

Re:It's worse than you think

[fluffernutter]

Sorry for the double reply, but I guess what I'm trying to say is.... I may have a few extra TVs, a 50% bigger house, and a game console that the 1930's family didn't have. But I would give it all up any day if I could afford to have either myself or my wife at home all day to take care of things as they did in the 1930's.

Re: Income inequality has *RISEN* under Obama?!?!?

[plopez]

And no Iraq and Afghanistan.

Re:Income inequality has *RISEN* under Obama?!?!?

[plopez]

Reagan also started the "no more government" hysteria as we'll as a policy of tax cuts for the rich and corps and massive government deficits. How the hell that qualifies as economic policy beats me.

Re:Income inequality has *RISEN* under Obama?!?!?

[plopez]

I think debt is slavery.

Why do Americans Work so Much?

[Anonymous Coward]

Because they waste half of their time at work surfing the Internet, texting, tweeting, Instagraming and pretending to work. They follow that up with mistake-ridden real work that needs to be redone over and over because they can't write or puntuate, and do sloppy work because they're still at work but want to be home because the Kardashians are coming on.

Signed,

Your Boss

Re:Why do Americans Work so Much?

[thinkwaitfast]

You sound like a German coworker I had once.

An American Dream

[ITRambo]

Americans work so much, speaking as an American, to make our employers wealthier than they currently are. I retired from the rat race, a lot of it is busy work chasing your tail, and am now self employed. I don't work as much or earn as much, but I enjoy life far more.

Re:Income inequality has *RISEN* under Obama?!?!?

[jbolden]

Of course. Unearned income is a huge multiplier for wealth while borrowing does the opposite. And you are right about renting vs. owning though I think it is a bit more nuanced. Often in locations ownership can approach or pass 200 months rent in which case renting is the far better option.

Great Depression

[AF_Cheddar_Head]

Go read up about some of the root causes of the Great Depression and get back to me about raising tariffs.

Re:Great Depression

[fibonacci8]

Thinking you're in a period of economic growth and getting hit by the dustbowl era? That does make tariffs look terrible in hindsight.

Re:Great Depression

[adhdengineer]

you just need to craft the tariffs to offset the cost saving of using cheap labour in countries with worse employment and environmental laws. It makes sense to have free trade between equals, such as the US and the EU (so long as they stop letting in the poor eastern European countries) but when you open it up to goods manufactured in countries where the prevailing wage is so low that companies can afford to hire 20 people to replace 1 then every manufactured pretty much has to source their production there or else they just can't compete.

Now it is partially our fault. We, as consumers, will often seek out the cheapest price for our purchases. We will skip the locally owned shop to buy things in the nearby MegaMart. This, like outsourcing everything to the developing world, is short term thinking and it's that that is going to come back and bite us in the arse.

The market adapts to suit those that have money

[Anonymous Coward]

Simply speaking, the market is going to charge what (most) people are willing to pay. If people with excess money are willing to overpay for a shitty product, the value of that shitty product is (artificially) inflated beyond what it is worth. Think of how inflated the value of said shitty product would be if it was common practice for everyone buying it to get a loan to do so (home,car,college). Or if the person buying it had the taxpayers dollars at their disposal (F35, $100 hammer). Or if the person buying it had the insurance-payers dollars at their disposal (medical). I think the problem is that everyone is trying to "keep up with the Joneses" and we are all being forced to keep up with the Joneses' inflation.

Re: Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

"Deadlock" in government is needed and necessary to stop shit from happening.
The ultra-wealthy are in minority, yet their interest are being served at the expense of the majority, thus a "democracy" cannot be a reality.
Charitable institutions is a scam, to lighten the consciences of thieves. Tax the fuck out of the wealthy so they can't afford to be charitable and it won't even be needed.

Re: Actual Reason

[VernonNemitz]

While the article is correct in pointing out the problem caused by unfair wealth distribution, the cause of the unfair wealth distribution is not China per se. It is the Law of Supply and Demand in action, whenever population grows faster than resource-production. Folks who say the world is not overpopulated tend to focus only on food production, but people need rather more things than just food, and all of them need to be produced at the rate population grows, for wealth distribution to stay fair. I've presented more details about that (and the reverse, that when resource production increases faster than population, wealth distribution goes the other way), here.

Globalization

[Kjella]

Like everything else, labor price is about supply and demand. For a long time using foreign labor was extremely impractical on so many levels, no doubt Henry Ford had to primarily hire US workers to work on US plants to sell cars to the US population. When it became practical to use Chinese and Indian labor, this lead to a massive influx of unnaturally cheap labor. Look at this table and graph. In 2000 you could hire 30 Chinese workers for the price of one American, productivity was only 13% but you still got 4:1 on your money. Today it's 6 Chinese workers to one American, productivity is up to 38% and 2.3:1 on your money. If you take high-cost China vs low-cost US, you're down to 1.45:1.

No doubt labor costs are going to continue to rise in China. India too is on the rise, though not quite as much. Within the next 5-10 years it'll probably be roughly as expensive to manufacture in China as it is in the US and the massive negative wage pressure will be gone. Same thing with software and India, whether you like it or not it's a global market now and our wages aren't going to rise again until the other workers of the world push global wages higher. If you've seen at the GDP distribution of the world there used to be a big lump at the top in the western world, then actually a drop and then the world's poor. Check out the difference between 1970 and 2006. We just can't keep up the level of inequality we used to.

Re:Globalization

[yes-but-no]

Cheap foreign labor is just a temporary issue; Keynes talks about a situation which transcends country boundaries. Let's say you have a remote island village where there is one rich-family which owns the land; and 99 worker/laborer families. The workers are paid just enough grain for survival and they work every day (say from sunrise to sunset with breaks). Now due to some global climate change (equivalent of technological advancement), rainfall shoots up and there is lot of productivity (lot of grains from smaller land). The land-lord can employ only 50 workers..and why is there a need to pay more than what he was always paying? See the point is ..once you are in control.. when you hold the power, you can pay any amount and will find a worker for it. Laws (like minimum wage) don't keep up fast and also these days laws are anyway bought by the rich. So the underlying problem is polarization of wealth/power.. and power begets power (there is a positive feedback loop) ..so you can't easily break out of the loop [Traditionally its' social revolts that break the loop]

Re: Income inequality has *RISEN* under Obama?!?!

[ArmoredDragon]

If you're renting, you're borrowing a property. It's basically the same as paying interest.

Re:Income inequality has *RISEN* under Obama?!?!?

[ArmoredDragon]

In my area, renting tends to cost about 30% more than a mortgage. I'm not sure why, or even where else this applies, but it just is.

I think the economics of it is that a lot of people either lack the credit or the down payment (both of which come from a lack of managing one's own finances) hence the demand for rent would increase.

Re:Women+Boomers+Immigrants = "Labor Shortage"

[Baldrson]

People don't want to be in debt because they have to pay interest -- which is a disincentive similar to a tax. The incentive you worry about is a wash.

Regarding retired persons: What is worse is the load placed on family formation by taxing their home equity because that reduces the total fertility rate of the middle class and leads to social collapse (as we've been seeing as a result of the mid-to-late Boomers whose total fertility rate was trashed by the exploding cost of replacement reproduction).

However, what you are ignoring is that all revenue is distributed in a citizen's dividend, aka unconditional basic income, that acts as an annuity asset for everyone.

The more parameters you put into a plan, the more it becomes an object of public sector rent-seeking aka porkbarrel aka special interest politics -- to log-roll those parameters. "General welfare" (in the Preamble to the Constitution) should mean just that -- no citizen benefits more, or less, than any other. Before you start adding things in like exemptions (I did include an exemption for bankruptcy-protected assets, such as homestead, in my 1992 white paper) you have to consider the horrors of political log-rolling.

Re:Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

Before China, Japan was a low wage country threatening US labor rates. Then came Korea, Singapore et al.
Ching got its main push in ~2001 with entry into WTO. (a suspect organization) China did not even have to float their currency like everyone.
China has been subsidized by the western world for 16 years. Likely because the oil companies did not like crude oil at $8/barrel.
Globalization and "free trade" has seriously fucked up the standard of living for the western middle class. "Free Trade" is only about fucking up the Unions and the middle class. Most of the stuff produced in China is exported, thus they don't need most of it. China has 2 billion people that needs to be distracted and prevented from getting rid of the new emperor class. Tianamen with 10,000 people was a manageable threat, but if one million rises against the rulers they could not be stopped. Mao did it with less. It could happen again, and they are losing sleep over it, any political opposition is dealt with harshly.
Once China and the rest stops supporting the petro-dollar the US will rapidly collapse. Wars fed by lies, are used to enforce the petro-dollar rule.
The US (or rather its billionaires) does not need a middle class, the economy is global. Fuck the middle class.

Mom's skills

[tepples]

Why can't their families relocate with them?

Because mom's skills and dad's skills are needed in different states. One difference between now and the 1930s WPA is that women are more likely to work other than as homemakers. And because a lot of people value keeping in touch with the family beyond the nuclear family.

Re:Mom's skills

[Whorhay]

The strong prevalence of double income families would definitely be a complicating factor with this kind of program, but I don't think it'd be insurmountable.

The family ties thing has always kind of bemused me, I guess because I don't particularly feel that way myself. I spent most of a decade being told where I had to live, usually 700 miles or more from relatives. And it really wasn't that big of a deal since travel wasn't prohibitively expensive, I could afford to visit when I wanted. With modern communications I can keep in closer touch with my family than I did when we lived in the same zip code. I suspect that in many cases people are actually afraid to be distant from family because that is their only real safety net.

Re:Mom's skills

[fluffernutter]

Then you have to move my extended family as well. I stay where I am because our parents are here. If if weren't for having the parents nearby then I would have to leave childcare to people I don't trust, and generally run my family with less of a day to day support structure. Don't forget the concept that it takes a village to raise a child and the grandparents are a large part of that. Also, we have friends that increase our quality of life and my kids have friends as well. You're just going to separate everyone? I'll need a LOT of compensation to convince me that it's a good way to go.

Re:Mom's skills

[david_thornley]

If you don't "get" the idea of family, please ask others before suggesting breaking them up. Some of us do value our families very much, and modern communications are not the same thing.

Re:Mom's skills

[Whorhay]

Oh I get family. It's just the need some people have to be in close physical proximity to family outside of their household that has always perplexed me. I wonder if it's more heavily influenced by genetics or upbringing and such. I grew up in a large family, by today's standards, but only saw extended family every couple months or so. Now as an adult, going a couple years without seeing any one family member doesn't phase me at all. My wife, who's family situation was much the same, gets antsy when she hasn't seen extended family in a month or so.

Meanwhile one of my siblings married a man who is the oldest child in his large family. His mother expects them to be in attendance at every other Sunday dinner, despite living over an hour drive away. As well as being at her home for every single holiday, because apparently my parents don't get holiday visiting rights or something.

Job security in a small contract house

[karlandtanya]

Testing software on a Sunday and posting on /. while I wait on the testbed...

It's because when there's work to do somebody needs to do it.
If we're flexible, then we get to be those people.

Anyhow my employer's policy is--If you're willing to give +40, you're asked to do it when things are busy.
Some folks that *will* not work more than 40. Those folks aren't asked to.
As long as you say what you will do and do what you say, nobody here has a problem with it.
Enough of us are willing so that when things are slack he doesn't have to lay people off.
OBTW--someone who works for no money is called a slave. We get paid for every hour we put in.

When things got really bad in our industry around 2008, we took pay cuts (boss cut his pay to zero first--really zero, not bogus boss zero with stock options).

In 20 years of working for this company we have never had to let someone go due to lack of available work.

BTW, if you know ControlLogix programming, give me a shout. It's pretty busy 'round here!

Re:Job security in a small contract house

[thinkwaitfast]

someone who works for no money is called a slave

So people who write free software are slaves? I thought a slave was someone forced to work against their will.

Re:Job security in a small contract house

[Anonymous Coward]

"When things got really bad in our industry around 2008, we took pay cuts (boss cut his pay to zero first--really zero, not bogus boss zero with stock options)."

It must be nice working at MotherTheresa.com

Re:Job security in a small contract house

[Anonymous Coward]

This is your contribution to the conversation? Semantics?
Wow. Thanks for that. Well, at least you've chosen the best kind of correct.
yeah, it's me; not even bothering to sign in for this stupidity.

bluffing Gen-C

[Anonymous Coward]

Boss, "Ok, fuck you then. I'll hire someone else. I have 30 resumes on my desk with people desperate to work here. Bye bye!"

line up something else, then call their bluff.

if you don't have the balls to do that, you're lying every time you don't list "Wage Slave" as the position title on your CV.

Gen-X was followed by Gen-C (for "Cowards", obviously).

Re:Income inequality has *RISEN* under Obama?!?!?

[ShanghaiBill]

Income inequality has risen since at least Reagan, don't act like it's something new.

It also has a lot to do with the economic cycle. High income people make most of their money from investments, so their income plummets when the economy goes into recession and the stock market falls. When the economy recovers, and the stock market goes up (as it has under Obama), then high income people benefit disproportionately.

Re:Income inequality has *RISEN* under Obama?!?!?

[mikael]

Some properties the rent covers the cost of utilities and property tax other times the utilities are separately paid. In the UK, the tenants pay the rent and the property tax separately as well as the utilities. Landlords usually expect that tenants will pay 1/3rd their monthly salary as rent. Divide your annual salary by 40, and that's what you'll be expected to pay.

Sometimes people invest their savings in property rather than a private pension. Then when they go into care, they rent out the property as source of income, then sell it off.

Vote with your dollar

[Anonymous Coward]

The ultra-wealthy are in the majority, because every dollar is a vote.

Re: Actual Reason

[mjm1231]

A rather compelling argument has been made that widening income inequality is an inherent result of capitalism. The topic is covered in some depth in this book. Borrowing a brief summary from here:

...as long as the rate of return on capital (r) is greater than the rate of economic growth (g), wealth will tend to concentrate in a minority, and that the inequality r > g always holds over the long term...

To what extent this is a problem and what solutions there are can be debated. As long as you avoid debating with those who hold the insane position that all inherent effects of capitalism are good by definition.

Re: Income inequality has *RISEN* under Obama?!?!

[khallow]

If you're renting, you're borrowing a property. It's basically the same as paying interest.

I read your earlier post on the matter to determine what you mean by "same". The answer is no, renting is not the same as borrowing. A loan means you borrow money now in exchange for creating an obligation to pay in the future. Renting usually does not. For example, I might be renting a very expensive apartment in Manhattan today, but I can move out. I can't decide that I want a smaller loan and just move out of my old big one.

Re:Income inequality has *RISEN* under Obama?!?!?

[captjc]

One big reason renting is so popular is not being tied down to a single area. Maybe I can afford to settle down when I'm 70 but right now I need to stay flexible. Every 6 months to a year I need to evaluate my options to where the salary hotspots are go there. In the last 5 years, I have lived in Boston, Seattle, 'Frisco, Austin, Portland, Denver, and am soon moving to Manhattan. These are where the high-paying jobs are and I need to be there. Houses and family just make me less flexible thus less employable.

Money never sleeps and neither can I. This is the way of the new economy. The way of our grandparents starting with a company, staying 25-40 years and retiring are dead. Company loyalty is for the stupid. If you can't update your resume every year, you might as well just jump in front of a bus because you don't matter. The only measure of success these days is the number of figures in your paycheck and the number of prestigious jobs on your CV. A flashy car doesn't hurt either but lease, never ever buy.

Re: Actual Reason

[VernonNemitz]

Since it is well known that capitalists try to put competitors out of business, thus restricting the supply of resources so that it doesn't grow as fast as population, what you say fits as a small part of what I wrote here

Re:Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

People who carry debt carry our consumption based economy and make your lifestyle possible.

Somebody has to pay!

[Anonymous Coward]

Look at your paycheck.
Federal; 7.5% for Social Security [your employer pays just as much], Medicare, Medicaid,
State: Income tax is 0% if you're, lucky. Probably around 3~5%. Then there's sale tax. In many states it's 10%.

You probably don't belong to a union, so you need to pump up your 401(k) to 10% [good luck retiring at that contribution rate!].
That's before paying for health, dental, life.

Global security costs.
Who protects Europe?
America!

Who protects the Far East?
America!

Yes Americans work hard; thank goodness they do!

Re:Somebody has to pay!

[Anonymous Coward]

But they do pay a lot of protection money for that protection.

Found the high school kid.

[Anonymous Coward]

There WAS enough money, but most of it has been transferred to .01 of the US population

Repeat after me: wealth is not a finite resource.

transferred it into various financial vehicles were it will never get "back" into the actual economy.

Repeat after me: Only dumbasses do not have savings and investments.

Standard of living went up

[kencurry]

Which is why the amount of work went up when productivity went up. Duh.
Man, why didn't I choose economics as a career?

Re:Income inequality has *RISEN* under Obama?!?!?

[DoofusOfDeath]

I think debt is slavery.

Somewhat. I'd more say that debt which cannot be discharged via bankruptcy is like slavery.

23% growth. Work 30 hours OR Starbucks, Netflix 4k

[raymorris]

Since 1967, median real income (adjusted for inflation) has increased by 23%. That means that in order to have the same amount of spending money as people 50 years ago, you can work 23% less than they did.

Or you can work 40 hours and spend the extra money on Starbucks and Netflix HD. You can make coffee at home for 20 cents and work less, or you can buy coffee for $4 and work 40 hours.

It seems that most people decide to work about 40 hours.

TLDR

[Anonymous Coward]

You are severely over-analyzing something that is very simple:

Once an employer's business is profitable, he faces a simple choice: Reduce his employee's working hours and continue to make the same money himself, or keep his employee's working hours the same and make even more money himself. Assuming he is sane, he wants more money, so he makes the second choice.

Every single employer in the world faces this same choice, and makes the same choice. Sometimes the self-employed choose to reign in their hours, but that is a small subset of an already-small subset of people.

So, that's all there is to this. The aristocrats don't want to share with the rest of us any more than they must, so they don't, and we keep working.

 

Re: Income inequality has *RISEN* under Obama?!?!

[Opportunist]

But if we link global warming to Obama, they're gonna explode. Either they have to admit that global warming exists or they have one thing less to smear Obama with.

Keynes was right

[JustNiz]

Keynes was right, we should all have a standard of living 8x as much today. Unfortunately he just didn't allow for the greedy superrich motherfuckers being able to keep it all to themselves.

Re:Keynes was right

[Anonymous Coward]

He also didn't account for the people actively going against their own self-interest while defending the superrich!!! Because, of course, they think they'll be superrich too one day!

Re:Keynes was right

[Anonymous Coward]

Or because they think fairness is more important than their own interests.

Renting and borrowing have important differences

[dlenmn]

There are definitely similarities between renting and borrowing money, but there are important differences. Borrowing money means a (often long-term) obligation that you can't simply walk away from; you have to pay off the debt. If you're renting, you can just walk away once your contact is up. In my case, I only need to give 30 days notice if I want to move out.

The analogy between rent and interest also has problems. Rent means constant payments over time with a fixed total price and no long-term ownership; if you have a one year contract at $1k a month, then you know that you will pay $12k over the length of the contact and you don't own anything at the end of the day.

Repeated borrowing (like in credit cards or loans to pay off loans) means the price is not fixed, in part because the duration of the loan(s) is not fixed. If you have $1k in credit card debt, that could mean paying $1k immediately or it could mean paying a lot more over time. The flip side is that you do get long-term ownership of whatever you buy with the borrowed money.

Mortgages (and fixed-term borrowing) are closer to renting, but you own the property once the mortgage is payed off. Given the tax incentives for mortgages in the US, mortgages can be a pretty good deal.

Really?

[Anonymous Coward]

Among 38 OECD countries, the United States ranks 17 out of 38 in annual working hours, which is quite close to the average of OECD.

So the answer is that Americans do not work "so much" at all. Their working hour appears quite normal.

Re: Income inequality has *RISEN* under Obama?!?!

[Anonymous Coward]

No Terrorism before Obama.
Wow, just Wow. You do realize the World Trade Center was bombed twice before Obama, an American ship was bombed, several embassies blown up, just to name a few - although there are many, many more.
What you really mean is before FOX News.

Re: Income inequality has *RISEN* under Obama?!?!

[Anonymous Coward]

Just cap political donations to $10, then see the government chase the masses, not the wealthy few.

But Top Gear said Americans are lazy and slow

[Theovon]

I’m an American, but I watch a lot of Top Gear, which is where I get all of my scientific knowledge. And according to them, Americans are all lazy, fat, slow, stupid, and have the total inability to design a car that can go around a corner. So clearly there must be some flaw in this discussion that seems to assume that Americans work too much. Perhaps we spend more wall-clock time working, compared to people in other countries, to make up for the fact that we’re inefficient and incompetent. Also, as an American, I was too lazy to read the article.

Re:But Top Gear said Americans are lazy and slow

[fluffernutter]

They also make a lot of comments about cheap components... Plastic dashboards, etc. I think it is a perfect commentary on the attitudes of US companies. Don't give the consumer more than you have to to sell a vehicle. Just keep it for yourself and your shareholders.

Re:Income inequality has *RISEN* under Obama?!?!?

[jbolden]

At an interest rate of say 4% you are paying about 1/2% / mo. If renting is coming in about 30% more than that then its about 230 mo rent to pay the house off outright. If you are including taxes, upkeep... that makes owning a no brainer.

Re:Income inequality has *RISEN* under Obama?!?!?

[jbolden]

Agreed. If you are chasing income then renting makes sense even if economically you are taking a loss.

Re:Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

But now you have two jobs.. Maybe you're passionate about both IT and landlording, but don't you find it upsetting that you can't really be just an IT professional? You have to guard your wealth by also being a real estate speculator, personal finance adviser, rental property manager, etc.. jobs which your IT training didn't really prepare you for?

Original Article Paywalled

[chipschap]

The original article is paywalled and costs almost $40 to access. Thank you Springer, one of many greedy academic/scientific publishers.

Re:Income inequality has *RISEN* under Obama?!?!?

[spire3661]

"You might have a point if you're talking about unemployment, but what can Obama or any other president do about that? Companies will always prefer cheaper parts"

You tax this shit out of imports. You craft law that makes it unprofitable to do business overseas by imposing high tariffs. Lots and lots of things can be done to keep jobs on our shores and cheap chinese crap out.

Re: Income inequality has *RISEN* under Obama?!?!

[Anonymous Coward]

It would seem their sarcasm was lost on you?

Re:Income inequality has *RISEN* under Obama?!?!?

[careysub]

The sharp rise in inequality is driven by the complete disconnect between productivity growth and real wages, which used to track each other very closely. This disconnect appeared abruptly in 1971. So Reagan and China are not the origin of this problem whatever role that might have in perpetuating it.

Re:Income inequality has *RISEN* under Obama?!?!?

[delt0r]

I have no dept but i rent. I don't want the pain and hassle of owning a place, and even freehold they are not free. Especially since i travel a lot. Also it is not the same. Right now where i am moving to, interest would be far higher than rent. And if something happens with my job, i can just move to somewhere cheaper. I can't do that so easily with a mortgage, and fixed terms can even penalize early payment. Furthermore desperate selling could really lose you a lot of money on back market conditions and just back luck, if you have to sell in on month flat.

Keynes was wrong about everything else..

[Anonymous Coward]

So why the surprise here? Keynesian economics is a complete crock. You can't just throw money at problems to make them go away.

Re:Income inequality has *RISEN* under Obama?!?!?

[Ol Olsoc]

So a very small percentage of people owning almost all America's wealth is the fault of the Chinese?

I know this is going to be an unpopular opinion, but in my opinion it's the fault of those who routinely carry debt. Most people in America don't know shit about finances. They borrow heavily, and wonder why they never have any money.

I cannot disagree with that premise. I can agree it is an unpopular opinion. I've spent a lot of time offering an alternative to living from paycheck to paycheck. Mostly I am told I am full of shit.

You know who profits? People who don't borrow. Not necessarily even the lenders, rather, just people who don't borrow.

Surely - I have and do. A small example of this is the credit card conundrum. I have two credit cards One that I live on, and one for fuel. Cashback cards. I pay off the bill in full every month, then get cash back at the end of the year. I also have a fine itemized expense report courtesy of the credit card company. And as an example of how people don't know what they are talking about, the Credit card companiy loves me. Where Joe Schmo is making those easy payments for the rest of hi life, my average balance of zero, and paying them a few thou every month is cash flow for them.

Part of this comes from people who insist upon living in upscale expensive areas (i.e. New York, San Francisco) when it's clearly beyond their means, have a super high rent, and then wonder why they live paycheck to paycheck.

I think it's a perversion of the American dream. Both the financially challenged, and many of the conservative poor just consider themselves "pre-millionaires". The poor are just poor - the reasonably well off are just incapable of any discipline. In addition, both cannot imagine any other way.

I've had people making twice as much as me tell me it's harder when you make twice as much. Ummm, no you stupid shits, you just put more in the bank and investments. But they are busy "movin' on up", and making suicidal financial decisions. And in the end, they come out the poorer. They lived high off the hog, while I saved and invested, living below my means, and now I'm retired, early, on my own terms, and living just as well as I did before I retired. Which is better than they will.

And I do note that I took a gamble - If I had croaked at say age 50, by comparison, the financially stupid would have won.

Reminds me of the old Cowboy saying "If I'd a-known I would have lived this long, I'd a-taken better care of myself.

Same goes for money.

I personally have never made a whole lot (my current income at my IT job is just under $50k) but am already taking advantage of the situation. That is, I just paid cash on a shitty house, fixed it up, and now have renters in it paying me every month. (And no, I am not a slumlord, the last owner was, hence it was shitty, however unlike him I'm still in the process of bringing improvements to the property even while tenants are in it.)

Sounds like a good plan. You always, and I mean always - should take advantage of whatever financial offerings you can. I had two tax deferred accounts in my early 20's though a quirk of the tax laws and where I was employed. Plus a retirement account. Plus investments and a bank account.

That Escalade my co workers bought when they refinanced their house is in the junkyard now, and they are still paying on it via their mortgage.

But aside from most people's poor financial skills and discipline, there is still a problem now with many people runining the financial ladder in reverse.

But what I find the most distressing is the odd attitude people take. I've been excoriated for how I've saved money, and many people with nary a retirement investment are pissed at people with pension plans, and attempting to eliminate them. Of course with the backing of the

Re:Income inequality has *RISEN* under Obama?!?!?

[delt0r]

Hay my family have loved following me around the world. Families don't really tie you down unless you let them.

Re: 23% growth. Work 30 hours OR Starbucks, Netfli

[Billly Gates]

Does that include rent, fuel, insurance, and mortgages?

Only those are skyrocketing and not recorded. Paying $500 a month for auto and health insurance is unheard of anytime in human history adjusted for inflation.

Fact is statistics show the majority of Americans bought new cars 30 years ago as an example. Debt was next to nothing and you could make today's money of $40,000 a year with just a high school diploma no problem in a factory or chemical plant.

$12 an hour for a college grad job with $50,000 student loan is considered good today??! I mean come on

Re:Income inequality has *RISEN* under Obama?!?!?

[delt0r]

Yea, where i am, interest is much higher than rent would be even with a 30% or more deposit. Since i intend to move in the next few years at most. Renting makes sense. In the EU stamp duty (changing the deed) can be as high as 10000EUR! So short term investment property is not really a thing.

Re:Income inequality has *RISEN* under Obama?!?!?

[tnk1]

The world where you actually allow other states to develop is a safer, more stable place. This is why no one seriously believes that the Chinese will attack the US short of some small land squabbles and trade issues.

The Chinese will eventually have to deal with the same issues we had to, and their standard of living will rise which will bring their benefits (and expenses) in line with US standards.

The major problem with that is the situations where countries like the US were riding high on a temporary inflated standard of living have to deal with a retraction of that. For all those who loved the 1950s, that was a windfall for the US because we were the only big country with any real undamaged industrial capacity left. That wasn't going to last forever. It was certainly not going to turn into some permanent prosperity situation were you could pay UAW union rates to unskilled workers and a pension forever. The enormous balance of human history has not really had any sense of "retirement" where you are somehow able to live off of capital built up in your life in Florida. Your only real retirement option was having some children, particularly daughters, around when you couldn't work anymore to take care of you, and maybe you owned your house and land.

Anyway, while the world will probably never completely equal out, a rising tide can lift all ships. As long as the barriers don't go up, prosperity elsewhere will eventually spread out and actual standards of living will rise over time. This may hurt for the West and the US in particular, but we shouldn't find ourselves relegated to the 19th Century again.

Re:Income inequality has *RISEN* under Obama?!?!?

[roman_mir]

For the people who actually do care to learn something about the Great Depression that they are not generally taught in schools (normally they are taught nonsensical government version of it).

All economics is supply side or more correctly production economics. Consumptions economics is nonsense, everything that is consumed has to be produced first. Those who don't get it need to get a 1,000,000 dollars and a year vacation on a rock in the middle of an ocean somewhere without any productive land, without anything. Then see how you survive with a million bucks and nothing to buy for them.

1911 - Sherman act is applied to Standard Oil, one of the most successful companies on the planet, producing the richest person in history. Rockefeller started with nothing but was worth over 600,000,000,000 inflation adjusted dollars. Private property rights took a gigantic hit.

1913 - IRS is set up. Income taxes are now collected by the government instead of Constitutional capitation, excise, import, duty taxes. Not only private property rights are destroyed but basically self determination and self ownership is destroyed at this moment in time.

1913 - Federal reserve bank is set up. A supposedly private institution to print US dollar but at the time by law the Fed actually would have a higher reserve of gold per dollar printed than other banks.

1917 - Federal reserve bank is allowed by Congress to monetize USA Treasury debt. This begins the inflation that destroyed the USA economy over the next 100 years.

1920 - a depression happens during Harding, the government didn't participate, didn't create any new policies, didn't create new debt, didn't infuse money into the economy. The depression is over in about a year.

1925 - Federal reserve bank starts monetizing UK debt that USA buys from the French. Over the next 4 years this policy inflates a bubble in agricultural stocks that blows up in 1929.

1929 - The bubble inflated by the Federal reserve bank blows up, this restructures the debts, companies fail, stocks go down. (Hayek, Andreson, Harwood predict this depression, Keynes actually loses money in it.)

1929 - 1939 - a series of gigantic interventionist policies is implemented. Billions of dollars are printed and spent into the economy, even on such amazing feats of government nonsensical Keynesian bullshit like buying productive output from farmers and ploughing it into the ground to prevent prices from going down (trying to prevent the deflation during a recession, when deflation and falling prices are actually super helpful for people who lost their jobs). The nonsensical 'New Deal' is introduced. SS is started, minimum wage is introduced, etc.etc., all the things that governments promise to do to provide something for nothing. This something obviously to be paid for by huge taxes, printing, borrowing.

1945 - the end of WWII, USA lowers its taxes by 30%, lowers spending by 60%. This allows very fast transition from war to post war economy. USA economy booms even though it is faced with competition from other markets with much lower labour costs.

1950s through 1970s - hot wars, cold war, space race, 'war on poverty' and all the other unnecessary and expensive crap that could not be paid for lead to 1971, when Nixon defaults on the gold dollar because of all the outstanding debts that cannot be paid for. The French asked for their gold and were denied, the dollar default coupled with all the impossible and unsustainable programs lead to the stagnation of 1970s. Huge inflation and huge unemployment, something that Keynes wouldn't believe to be possible.

1981 - Paul Volcker takes interest rates to about 20% to stop inflation. This succeeds in stopping the inflation, causes a housing market bubble crash. Government started coming up with ideas on how to under report inflation, under report unemployment and over report GDP.

1982-1987 - the Fed starts

Re:Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

"I know this is going to be an unpopular opinion, but in my opinion it's the fault of those who routinely carry debt."..."Borrowing also includes renting, by the way."..."I just paid cash on a shitty house, fixed it up, and now have renters in it paying me every month."

*Face-fúcking-palm*

Re:distribution of wealth and_______

[Anonymous Coward]

>>>The present concentration of wealth is so dire that we run the risk of consolidating the World's power into a few hundred families.

that's how things already are

A TV is a one off cost.

[Anonymous Coward]

So as long as you have savings, you can have more than 1 TV. The price drop of TVs meant that they were no longer a specialty item but were a commodity and cheap to supply. So I call tired old man BS on that claim. You don't need to earn enough to rebuy 10 TVs a year, so multiple TVs could occur solely by TVs lasting longer and no expense needs to be accrued.

Re:A TV is a one off cost.

[ILongForDarkness]

What TV lasts longer? My parents had a TV for something like 30 years it was the late 80's before they replaced it: the old one was still black and white and you had to get off your ass to change the channel. They still exist but how many people do you see without a flat panel? How long did the 720p flat panel last before you "had" to replace it with a 1080p? Now it is OLED or UHD pushing the need to upgrade. Even if they do last and we pass them on to our kid's room or whatever it still means we are picking up a new TV every 1-2 years because we got 4 of them on the go at any given time.

You're blind if you don't see that we have way more crap than before.

Re: Income inequality has *RISEN* under Obama?!?!?

[FlyHelicopters]

Tax the fuck out of the wealthy so they can't afford to be charitable and it won't even be needed.

Sure, but that has been done.... did you not learn anything from history?

The USSR is a perfect example of what happens when you take all wealth from people and give it to the state.

Re: distribution of wealth and_______

[Anonymous Coward]

What makes you think it hasn't always been that way?

Re:Income inequality has *RISEN* under Obama?!?!?

[thinkwaitfast]

Absolutely true. I did the same thing. So did a few of my friends, one of whom is a multimillionaire now, but lives in a really crappy house worse than the ones they rent out.

Re:Women+Boomers+Immigrants = "Labor Shortage"

[Anonymous Coward]

I don't know where you live, but where I live you don't pay capital gains on your primary residence when you sell it, so having 0% equity doesn't change anything with respect to taxes. I suspect this is quite common.

Re:Income inequality has *RISEN* under Obama?!?!?

[thinkwaitfast]

If the 'slave' freely entered into the deal, it is not slavery.

Re:Income inequality has *RISEN* under Obama?!?!?

[thinkwaitfast]

A rolling stone gathers no moss.

Re:Income inequality has *RISEN* under Obama?!?!?

[Micah]

Yep. I know the Bible isn't necessarily the most popular source of wisdom around here, but Proverbs 22:7 nails it:

The rich rule over the poor,
        and the borrower is slave to the lender.

I work more hours now so I can retire earlier.

[charyou-tree]

I work 50-60 hours per week. That extra work now means I'll be able to quit working entirely around age 50-55.

I make the most of my time off now and don't feel overworked. I enjoy my job.

It does seem that most people are working extra hours to make the interest payment on the debt they incurred buying shit they didn't need with money they didn't have, but vaguely planned to earn later. Maybe that's just observational bias. Everybody likes to think they've got it all figured out and are acting rationally and responsibly, in a manner superior to the "average" person; I'm probably no exception.

But I don't think so.

Re:I work more hours now so I can retire earlier.

[fluffernutter]

By the article, at 60 hours a week you are filling three times your share towards the requirements of the economy right now. You should be getting paid three times the rate per hour as the 1930's person, at which point you could probably just work a 40 hour week and retire at 55. But you're not.

Re:I work more hours now so I can retire earlier.

[charyou-tree]

By the article, at 60 hours a week you are filling three times your share towards the requirements of the economy right now. You should be getting paid three times the rate per hour as the 1930's person, at which point you could probably just work a 40 hour week and retire at 55. But you're not.

In the 1930s my occupation didn't exist as anything remotely resembling what I do today.

It's a little odd for you to pretend to know what I "should" be getting paid, compared to then, on the basis of some speculation about productivity.

I work a job I enjoy and expect to able to retire by 50 (55 if the markets perform really poorly), and you think this is something to bitch about? What a sad fucked up little worldview to have.

Re:I work more hours now so I can retire earlier.

[fluffernutter]

Well sir, you are lucky to have ended up in your pretentious little mountain top.

Re:I work more hours now so I can retire earlier.

[Anonymous Coward]

Most people I know (UK) would work more if we got paid more, but the only reward for more work is... more work. so no thanks. I'll stick to my 37.5 hours per week thanks.

Re:I work more hours now so I can retire earlier.

[david_thornley]

I have a mortgage. I also have a car loan at an interest rate lower than I normally get from my investments (although last year 0% would have been a touch more than I got). I pay off the credit cards each month.

In other words, I'm not in trouble, and you're not likely to see any news stories about my plight, or reports that I've snapped under the financial strain. There are people like me.

Also, in my experience people who get behind on their credit cards tend to do so because they've got more reasonable expenses than income. I'm sure there are many who spend more than they make for stuff they don't need, but I don't personally know any.

Re:I work more hours now so I can retire earlier.

[charyou-tree]

Well sir, you are lucky to have ended up in your pretentious little mountain top.

I am lucky; I am content. Some of it's attributable to hard work, but most of the truth is I was born on 3rd base.

It's nice of you to somehow think I "deserve" more. But it seems you're just projecting your own dissatisfaction (with either your lot in life, or that of the middle class at large) upon me. How weird.

The headline asks why Americans work so much. I gave my answer. Who are you to tell me I'm wrong? That I'm getting screwed? That I should demand more?

Only 40% in USA work fulltime

[peter303]

131M out of 320M. Another 26M work less than 35 hours a week bringing all workers to 52%. 68M of the 320M are under 16 or over 65. Excluding them would make it 59% workers then. http://www.bls.gov/news.releas...

Even the "rich" work too much

[ffkom]

Keynes sure didn't account for the unwillingness of the capital owners to let ordinary workers partake in the benefits of increased productivity. But there's another side to it: Having met and worked with many people considered "rich", I can say I am totally baffled about their lack of ideas what to do with their life other than accumulating money. Ask somebody currently making a million per year what his next goal is, and chances are he'll tell you something along the lines of "making two millions per year".

And yes, this attitude is more common amongst well earning US citizens than with people from elsewhere in the world.

(The exception to this are, of course, spoilt heirs who never had to work for their money. They might often not be likeable people, but their attitude with regards to spending money for fun rather than working is pretty rational, given their situation.)

Re: Income inequality has *RISEN* under Obama?!?

[Anonymous Coward]

I live in country with such limits are in place. It will lead to more sophisticated rising of money , all kinds of shadow deals, like "we can provide with you amount x of positive airtime, in exchange of our minister seat in new government". of course things are more complicated and taked wels to settle out, but you got an idea.
Forget about fairer society, it is so XIX, XX century. get all you can, while you can.

Re:distribution of wealth and_______

[Anonymous Coward]

This probably explains all of the dire warnings/prophecies from collapsed empires. Once everyone starts feeling the pinch of implosion: the audience is suddenly more receptive to the idea that the gravy train isn't infinite and the last dying breath of their culture is engraved in stone(with a reasonable level of accuracy to their prediction): the lifespan of a civilization is finite.

Don't let that stop you from making babies though. :)

Actually those are CHEAPER than CPI

[raymorris]

> Does that include rent, fuel, insurance, and mortgages?
> Only those are skyrocketing and not recorded

50 years ago, a gallon of gas cost 33 cents. If gas prices kept up with inflation (CPI), it would cost $2.48 today. I just passed a gas station and the sign says $1.87. So today's pay checks can buy MORE gas than the could 50 years ago.

You asked about mortgage / rent. Fifty years ago, the average home was 1,600 square feet. The average is now 2,600 square feet - people can afford much larger homes than they used to.

What's not represented in CPI is that the 1960s car needed a tuneup every few months (points, plugs, etc) while today's cars go 100,000 miles on a set of plugs. It doesn't represent the fact that 50 years ago, you had three channels in black and white while today you have 300 channels in HD.

I guess it's human nature to complain, but the simple fact is today we're spoiled compared to our parents and grandparents. Try wasting some food at an old person's house and you'll see they didn't grow up having plenty to waste like we do.

Re: Income inequality has *RISEN* under Obama?!?!?

[zAPPzAPP]

No, that was Clinton.

I will always retort more than 40 is fantasy

[NotSoHeavyD3]

When someone brings up labor laws as why we work 40 hours a week. My understanding is that efficiency experts were brought in to factories by employers such as Ford and tried to figure out what the most amount of manual work they could get out of people a week. At least from those studies it was 40 hours a week over the long term. I'd expect for intellectual, IE creative work, such as engineering the max is probably less than 40. (Hence my opinion if an employer really thinks he's getting 50-60 hours of work a week for an extended period of time they are just kidding themselves.)

Re:I will always retort more than 40 is fantasy

[EdwardFurlong]

When someone brings up labor laws as why we work 40 hours a week. My understanding is that efficiency experts were brought in to factories by employers such as Ford and tried to figure out what the most amount of manual work they could get out of people a week. At least from those studies it was 40 hours a week over the long term. I'd expect for intellectual, IE creative work, such as engineering the max is probably less than 40. (Hence my opinion if an employer really thinks he's getting 50-60 hours of work a week for an extended period of time they are just kidding themselves.)

There have indeed been many studies past and present that say working over 40 hours for a long period of time ends up being inefficient.

Re: Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

The USSR is a perfect example of what happens when you take all wealth from people and give it to the state.

A few people are very well-off and the majority of people barely scrape by?

Re: Income inequality has *RISEN* under Obama?!?!?

[Opportunist]

Amazing what damage a little hot air can do...

Re: Actual Reason

[ebusinessmedia1]

Highly recommended as a supplement to Piketty: http://www.amazon.com/Inequali...

Here's an excerpt from one of the reviews,on Amazon: "The author asserts that it is not morally wrong and that the conversation should be around the concept of - do you have enough (sufficiency) vs do you have the same as someone else (equality)."

This is a short book: highly recommended, along with Piketty.

Because "socialism"

[Computershack]

The rest of the first world with our Commie governments have given us such nasty socialist things such as universal healthcare free at the point of use, minimum mandatory annual paid vacation (4 weeks minimum in the EU, 5.6 weeks here in the UK), in work benefits and far superior employment rights in regards to being laid off so we don't have to work like slaves. Americans are at the whim of their employers who can pull the plug on their healthcare plan at a whim should an employee get a little out of line. All they have to do is threaten to fire you which they can do instantly without notice and you'll do just what you're told because you can't afford to lose that healthcare plan.

Re:Income inequality has *RISEN* under Obama?!?!?

[RabidReindeer]

Unpopular? How about delusional?

Borrowing is at the heart of countless fortunes. Many of the classic rags-to-riches tales start off with "Mr. X had an idea. So he borrowed from his friends/relatives/random people on the street" to get enough capital to start his business. Today it's worth XX billion dollars. Without checking, I'd lay even money that one of the names you could substitute for "X" is Bill Gates.

Borrowing is the very heart of Capitalism. Not the Free Market, but BORROWING. Also known as "Raising Capital".

It's true, of course, that few people know how to borrow WELL, but that's a different affair entirely.

And I'd like to know how you can make a decent property without either borrowing or being a slumlord. I've rented out property and the profit margins weren't very good. The only real ways I could have made any significant money would have been to own a whole bunch of properties (which I wouldn't be able to do without borrowing) or to let the place turn into a roach hotel.

Re:Income inequality has *RISEN* under Obama?!?!?

[RabidReindeer]

Freely as in "You have two choices: become my slave or I kill you here and now?"

Re:Income inequality has *RISEN* under Obama?!?!?

[RabidReindeer]

Yep. I know the Bible isn't necessarily the most popular source of wisdom around here, but Proverbs 22:7 nails it:

The rich rule over the poor,

        and the borrower is slave to the lender.

Or maybe the more recent proverb:

If you owe the bank a little money, the bank owns you.
        If you owe the bank a LOT of money, you owns the bank.

?

Re:Income inequality has *RISEN* under Obama?!?!?

[RabidReindeer]

The economy has risen and fallen many times in US history, but the spread in income inequality started widening with Reagan. Not even Carter was as bad.

Probably fuck some of you

[Anonymous Coward]

I'm an American and I don't even have a job. Fuck that shit, and fuck whoever jumps in here calling me lazy, too. Work your life away for nothing you can keep and then go fuck yourself. Thanks.

What do private hedge funds do with the money?

[Brannon]

Think about it for awhile.

Re: Income inequality has *RISEN* under Obama?!?!

[thecombatwombat]

From what I can tell, what is meant by "same" is that "both are something poor people do who aren't building wealth." It makes sense if you believe an important way to build wealth is to get a mortgage, stay in one place for a long time, and your residence is a big investment. It's an idea that makes sense if you were raised in a time where everyone believed housing could only go up.

For example, say I have 100k and am looking for a place to live. In one scenario I put 20% down on a 400k home, pay a bunch of closing costs and such. I'm left with a little leftover. I get a mortgage, build equity. Five or ten years alter I need to sell the house, but the value has fallen 20%. I pay more costs to get the place sold, and if I'm lucky, get 80-100k back.

Other scenario. I pay rent approximate to my mortgage. My 100k is invested, pretty conservatively, let's say it does 4% a year. At the end of the five years I have around 120k.

The renter has more money, and a lot more freedom when it comes time to move. This is kind of an oversimplification, but if we stopped subsidizing the first scenario (mortgage interest deduction, capital gains exeptions, etc) there would be even more scenarios where the renter builds a lot more wealth.

Perhaps taxes?

[Trachman]

Americans work so much, on average, not because they are greedy or because the want to work.

They work because there is so many who do not work so hard. Those who do not work so hard are, as a rule, fueled by the taxpayer collected money. It has already been proven, without any doubt, that, on average, governmental job pays way way more than private job.

Have you heard about NJ cops making $100K or $150K? Yes, I agree, that $100K is not that much money, however it needs to be taken into account that cops need to work 20 years and then they get taxpayer funded pension and medical benefits. I am not trying to bash cops, or single them out. If US GAAP rules are used (meaning US Generally Accepted Accounting Principles are used), which means that expenses need to be accrued when incurred, such jobs would need to be accounted as costing not $100K, but $200K, for defined benefits (pension, medical) need to accrue at the same time. It is not even the largest issue. The larger issue is entitlement culture and "social" payments to the population which traditionally keeps voting for politicians who keep promising more freebies and benefits only if you vote for them.

One and only one conclusion comes to my mind: The taxation level. Some might say that those socialist Europeans pay more taxes, however there are some very important differences. For example, in Europe, as a rule, schools are funded from federal budget. In US schools are funded from property taxation, except for low income areas which, logically, cannot afford their schools and get funded from the state or federal funds. This leads to de-facto segregation in United States by school districts, that nobody likes to talk, yet everybody knows. Low income areas have few meaningful jobs, which leads to many non-working Americans living here. Higher income areas do have high property taxes which automatically do add additional hours for higher living standards need to be maintained with additional work.

The truth is that current taxation system is the primary driver of the human behavior. Some people will continue working to death and other part of population will keep continuing voting for the status quo that allows more tax benefits, irrespective of the economic class of the voter, be it Dianne Feinstein's husband ingenuity winning profitable real estate business related contracts, whether it will be teacher's, police or FDA "scientist"'s benefits, or generationally unemployed welfare receivers.

That is taxes, baby!

Re:Perhaps taxes?

[Anonymous Coward]

In US schools are funded from property taxation, except for low income areas which, logically, cannot afford their schools and get funded from the state or federal funds.

School funding per pupil is 4 times what it was in the 1960s. FOUR TIMES. Even if we assume the poor districts increased by a smaller portion, and the rich districts by a large portion, how wide a skew could it possibly be? There's a lot more poor people than rich ones. Even if we assume poor districts only doubled, and rich ones octupled, that still means that spending on poor pupils STILL DOUBLED.

So where's the results? 35th place in math and 27th place in science. Something changed between the 1960s and today, but it sure isn't a lack of funding that's causing it.

Re:Perhaps taxes?

[DarthVain]

So your entire argument to account for all of this is excess government salary and compensation? lol

OK Ok, I'll even add to that argument every single person is is not working and collecting some sort of social program. I would still laugh at that response.

If you follow the money, you will see where it is going. To the already wealthy in the form of debt, to which they reap more wealth, forever. Multiple that by 40 years of progressively getting worse. This wealth is not adding "liquidity" to the economy which is the new thing wealthy people like to throw around, just like "trickle down" economics never really works, because most of this is hoarded up, and sat on, never entering the economy again, other than as loans, to create debt, to create more wealth, by not doing anything. The values involved are several levels of magnitude higher than all of what you are talking about (salary + welfare) combined.

About the only interesting argument I've seen that may account for it in another way is more social, in the increasing number of women entering into the workforce, immigration, etc... increasing workforce numbers (and worker competition) thereby keeping wages and working hours stagnant (along with efficiency with automation).

Re:Perhaps taxes?

[cwsumner]

“A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury."

Not necessarily certain, but certainly a danger...

Re: Income inequality has *RISEN* under Obama?!?!

[Anonymous Coward]

Amazing that ideology can make someone so blind that they would equate life in the USA now vs life in the Soviet Union. How many people would swap one for the other? Stupid douche.

Re:Renting and borrowing have important difference

[ArmoredDragon]

When I say that, I'm speaking in terms of building your own net worth. Renting a house doesn't do that, instead it adds to somebody else's net worth. Borrowing money and paying interest does the same thing.

Which by the way, my savings alone didn't pay cash for the house I just bought, rather it was the result of having a mortgage on a house in 2011, and selling it in 2014. If I had rented in 2011 instead, I'd have nothing. Instead it was sold at $116,000 above what it was purchased for (after realtor fees, closing costs, and whatnot) and added my monthly savings over the course of a few years to pay cash on another house.

This is exactly why I equate renting to borrowing money. It's also why somebody else is building my net worth. I'm sure some random derp is going to call me out for being greedy, but so be it. Unlike most, I save money, and invest wisely. No amount of me telling this to other people is going to make them change their ways, even when I point out how stupid their status quo is, so I may as well take advantage, and I will.

Re:Income inequality has *RISEN* under Obama?!?!?

[ArmoredDragon]

When somebody takes out a loan, they aren't offered death as an alternative.

As I mentioned earlier, I'm not by any means rich, yet I've never felt it necessary to take out a loan.

Re:Income inequality has *RISEN* under Obama?!?!?

[ArmoredDragon]

Surely - I have and do. A small example of this is the credit card conundrum. I have two credit cards One that I live on, and one for fuel. Cashback cards. I pay off the bill in full every month, then get cash back at the end of the year.

I do the same thing, but I don't consider it borrowing. If you already have the cash reserves and pay it back before it accrues interest, then you're not the category of person I'm referring to.

Re:Income inequality has *RISEN* under Obama?!?!?

[ArmoredDragon]

Borrowing is at the heart of countless fortunes. Many of the classic rags-to-riches tales start off with "Mr. X had an idea. So he borrowed from his friends/relatives/random people on the street" to get enough capital to start his business. Today it's worth XX billion dollars. Without checking, I'd lay even money that one of the names you could substitute for "X" is Bill Gates.

Actually there is wisdom in it, but you're assuming risk. You have to accept the reality that it's more likely that you'll end up poor (at least for a while) when doing this. However that's not to say that you shouldn't do it. Just when people say "the few hold all of the wealth" they're really discounting the fact that most people who are poor put themselves there, and going to places like payday or title loan shops is a good way to end up there.

Which by the way, notice how those places don't advertise to rich people?

Re:Income inequality has *RISEN* under Obama?!?!?

[Ol Olsoc]

Surely - I have and do. A small example of this is the credit card conundrum. I have two credit cards One that I live on, and one for fuel. Cashback cards. I pay off the bill in full every month, then get cash back at the end of the year.

I do the same thing, but I don't consider it borrowing. If you already have the cash reserves and pay it back before it accrues interest, then you're not the category of person I'm referring to.

It definitely isn't borrowing. They actually are borrowing money from me, and the cashback is the interest they pay me. Oddly enough, at better than bank rates for savings. Hell, better than CD's or most other risk averse investments. And since I have to spend that money anyhow - its tremendously satisfying.

Re:Women+Boomers+Immigrants = "Labor Shortage"

[Anonymous Coward]

The Donor Party liked this because it lowered labor costs. Oh, did I say "Donor"? I meant "Republican".

Right, the largest donors aren't donating to Democrats.

Re: Actual Reason

[Anonymous Coward]

We have a class where we have implemented systems so they have the same income regardless how much wealth they already have, or what they do. It's welfare for these protected people, paid for by the rest of taxpayers.

The result is they don't work, they spend all their income on alcohol instead of a comfortable lifestyle which it could pay for. They also whine all the time about inequality. Why can't their handouts be greater than the average national wage?

And get nothing

[Anonymous Coward]

And you don't even get to marry a little girl, unlike in the past when CUNTS did not rule:

>In the United States, as late as the 1880s most States set the minimum age at 10-12, (in Delaware it was 7 in 1895).[8] Inspired by the "Maiden Tribute" female reformers in the US initiated their own campaign[9] which petitioned legislators to raise the legal minimum age to at least 16, with the ultimate goal to raise the age to 18. The campaign was successful, with almost all states raising the minimum age to 16-18 years by 1920.
Also see: Deuteronomy chapter 22 verses 28-29, hebrew allows men to rape girl children and keep them: thus man + girl is obviously fine. Feminists are commanded to be killed as anyone enticing others to follow another ruler/judge/god is to be killed as-per Deuteronomy. It is wonderful when this happens from time to time: celebrate)

Re: Income inequality has *RISEN* under Obama?!?!

[psmoot]

I can't decide that I want a smaller loan and just move out of my old big one.

Depends on what you used the loan for, doesn't it? If you borrowed to finance consumption (vacation, big screen TV, bling) you're probably stuck. I assume that's what the grandposter and you had in mind.

If you borrowed to invest in a productive asset (e.g. a house which appreciated or a business), you probably can get out. College loans are an interesting corner case. You borrowed to invest in yourself. Hopefully your degree pays a dividend but it's not like you can sell the education and pay off the loan.

Only 60% are working

[tomhath]

The labor force participation rate is at historic lows, thanks in part to Obama easing eligibility rules for disability and expanding unemployment benefits.

Think about how many hours of that 40 hour week go towards carrying people who are living on transfer payments.

Finger pointing

[tomhath]

Everything is new under Obama.

President Truman had it right: "The buck stops here".

Obama has spent his entire administration pointing fingers.

Re: Income inequality has *RISEN* under Obama?!?!

[psmoot]

For example, say I have 100k and am looking for a place to live. In one scenario I put 20% down on a 400k home, pay a bunch of closing costs and such. I'm left with a little leftover. I get a mortgage, build equity. Five or ten years alter I need to sell the house, but the value has fallen 20%. I pay more costs to get the place sold, and if I'm lucky, get 80-100k back.

Other scenario. I pay rent approximate to my mortgage. My 100k is invested, pretty conservatively, let's say it does 4% a year. At the end of the five years I have around 120k.

Clearly there are cases where renting would have turned out better than buying. For most of the 20th and 21st century, housing prices have gone up over the long term. If you held on for at least 7 years, you were very likely to get a positive return. Not always and not everywhere, for sure, but generally a good bet. Similarly, investing our 100k over 7 years in the stock market is almost always a good bet. It's quite rare for the market to be down seven years after you buy even if you buy at a peak.

Here's the thing: if one turns out to be a generally better bet than the other, lots of people will notice, money will slosh around, returns will change, and it'll turn out to be an even bet again. There's never such a thing as easy money just like there aren't $20 bills lying on sidewalks.

...but if we stopped subsidizing the first scenario (mortgage interest deduction, capital gains exeptions, etc) there would be even more scenarios where the renter builds a lot more wealth.

The market corrects for this so it'll mostly be a crap shoot. If we stopped subsidizing home ownership (and as a home owner, I support this idea), home prices would go down (since people can't afford to pay as much). Around here in a normal market, rental prices generally more or less equal the price of owning. When they don't, people flock from the expensive one to the cheap one. I expect the same would happen.

Re: Actual Reason

[khallow]

While the article is correct in pointing out the problem caused by unfair wealth distribution, the cause of the unfair wealth distribution is not China per se

"Unfair" is just a subjective connotation and doesn't belong in an article trying to be serious about economics.

It is the Law of Supply and Demand in action, whenever population grows faster than resource-production.

Resource production is increasing faster than population. And we're seeing the anticipated increase in standard of living and global wealth distribution to a so-called "fairer" scheme. Nice, except that wasn't what you thought was going on, was it?

Anecdote

[fatwilbur]

I had to tell this story, because I see it regularly. I've had some interesting observations on the work culture to two sides of a border, Canada and the US.

I happen to work at a company with subsidiaries on both sides of the border, though it's a Canadian company and head office is in Canada. We have some large offices in southern US, too. I never thought of us (I'm on the Canadian side) as particular hard workers. We get lots of paid vacation, free days off galore, and pretty damn good pay to boot. On a Friday afternoon the office is dead, we do lots of "fun" events, people read newspapers in the morning, and mood is generally pretty relaxed. (though we do have people on call for critical IT support). In other words, there's a good amount of slack and if we have a reason not to be in the office we'll take it.

I would almost say we're pretty lazy - until I see us relative to our US counterparts. There is a just a pervasive culture there of not getting things done. Here, we expect expediency and resolution to problems.. when things were passed to our US offices, it was almost impossible to get them to commit to any dates, which was just standard practice here. Here, there was pressure to have things done quickly, and it is self-created too, this just doesn't exist in the US. Any or no reason at all to avoid a task or simply not following up on things.

I do however consider this might be a southern attitude towards work as well, as most of my interaction is with offices based in the US south (Texas to Florida).

Re:Anecdote

[fluffernutter]

I thought I worked for the same company as you until you said the part about good pay. Also, in the Canadian side of my company there is also the feeling of not getting things done, although one thing is clear about Canadians, they are more forceful about working more hours than they are getting paid for.

Re:Anecdote

[cwsumner]

... (I'm on the Canadian side)... In other words, there's a good amount of slack and if we have a reason not to be in the office we'll take it. ... until I see us relative to our US counterparts. There is a just a pervasive culture there of not getting things done. ... I do however consider this might be a southern attitude towards work as well, as most of my interaction is with offices based in the US south (Texas to Florida).

The Southern companies, I have seen, seemed more like what you describe as Canadian. But it does depend on where in the Southern US that you are talking about. Remember, there are still invading "Yankees" here, from "The War Against the South"! 8-)

Not a zero sum game

[dlenmn]

When I say that, I'm speaking in terms of building your own net worth. Renting a house doesn't do that, instead it adds to somebody else's net worth. Borrowing money and paying interest does the same thing.

You've clearly been successful, but don't ignore opportunity costs and luck. Your house may well have been a good investment, but on average, homes are poor financial investments (although they can be great lifestyle investments). It looks like the Dow Jones went up about 40% between 2011 and 2014, which is a lot more than average home prices increased over the same period. So paying rent on a cheap apartment and investing in stocks could have been a better investment. You may have been able to do better than stocks by borrowing money (getting a mortgage) and then investing the borrowed money (in a house), but realize that leveraged investments are riskier than regular investments. If you bought stocks in 2007, your money would have gone poof. If you bought a house in 2007, your house's value would have gone poof and you would still have owed money on it.

Your language makes it sound like the economy is a zero sum game: building someone else's net worth means destroying your own. That's simply not true. You know from your mortgage that borrowing can be a good investment. The problem is that many people don't know when an investment is bad.

Re: Not a zero sum game

[Proudrooster]

Let's look at the DOW/stock market from 2000 to 2016 compared to real estate and see who wins.

Re:Not a zero sum game

[ArmoredDragon]

Yeah, they are typically a bad investment. I wouldn't have bought this house if I hadn't gotten it so cheap.

Re: Income inequality has *RISEN* under Obama?!?!

[Anonymous Coward]

Pssh, they won't explode. They won't react at all, that would require them to know what logical inconsistency and hypocrisy are, or at a minimum, to care about the truth. They'll happily claim Obama causes global warming on Monday and global warming doesn't exist on Tuesday. Case in point: how many "birthers" support Ted Cruz, a foreign-born presidential contender?

Re:23% growth. Work 30 hours OR Starbucks, Netflix

[Qzukk]

most people decide to work about 40 hours

Takes two to tango. Most employers decide to employ salaried staff full time. Let me know which employers are willing to employ people less than 40 hours (minimum wage shops dropping hours to avoid buying insurance excluded).

Re: Actual Reason

[khallow]

A rather compelling argument has been made that widening income inequality is an inherent result of capitalism.

Which is easily defeated by a consideration of history. Wealth inequality has narrowed under capitalism as well (eg, various times during the Industrial Age when advances in technology were met by uses of that technology).

...as long as the rate of return on capital (r) is greater than the rate of economic growth (g), wealth will tend to concentrate in a minority, and that the inequality r > g always holds over the long term...

This a broken model since it doesn't consider the liquidity or utility of wealth. I call wealth which has a high notational value, but isn't even remotely that valuable in reality (especially in terms of conversion to a liquid form of wealth) "fake wealth". For example, I might have trillions of dollars suposedly = in specialized derivatives. But if that can't be converted to real dollars and used for something, then it's not actually worth trillions of dollars.

This leads to the problem that "r" above is an exaggerated number with little relevance to the real world. You won't care if I decree that every hair on your head is worth a million dollars, unless I begin paying you a million dollars apiece for those hairs. Yet I just created meaningless wealth inequality by my meaningless decree.

This is a real thing because we have a number of cases of trillions of dollars in perceived wealth evaporating overnight. It's a common cause of recessions.

Bottom line is that the growth of liquid wealth is going to be fairly close to economic growth and it can go either way and often does. There's no point to measuring wealth inequality when the wealth being measured is mostly useless.

Re:distribution of wealth and_______

[Anonymous Coward]

Did you ever consider that perhaps one reason for the Great Depression was that in the1920's too much wealth was in too few hands, and too many hands had too little wealth? Or to look at it another way, too many hands had so little wealth that they had no economic margin. One economic hiccup it all crashes.

Re:distribution of wealth and_______

[budgenator]

What your referring to is called the Pareto principle or the 80/20 rule, "roughly 80% of the effects come from 20% of the causes", described by Vilfredo Pareto arround 1900.

At the bottom of the Wealth curve, he wrote, Men and Women starve and children die young. In the broad middle of the curve all is turmoil and motion: people rising and falling, climbing by talent or luck and falling by alcoholism, tuberculosis and other kinds of unfitness. At the very top sit the elite of the elite, who control wealth and power for a time – until they are unseated through revolution or upheaval by a new aristocratic class. There is no progress in human history. Democracy is a fraud. Human nature is primitive, emotional, unyielding. The smarter, abler, stronger, and shrewder take the lion's share. The weak starve, lest society become degenerate: One can, Pareto wrote, 'compare the social body to the human body, which will promptly perish if prevented from eliminating toxins.' Inflammatory stuff – and it burned Pareto's reputation. Benoît Mandelbrot

It's pretty much the way the world works, if 20% had 80% of the wealth and power, then 5% has 64% and 1% has 49%; the numbers are fuzzy as well.

Most wealthy 1%er Families tend to crap-out after 3 generations, so who is in the first percentille tends to change; even the Kenedys have a lot of family members in the 20th now.

Re: Income inequality has *RISEN* under Obama?!?!

[Anonymous Coward]

The "market correction" would most likely wind up making renting more appealing to more people. Fewer people would be able to afford to own. Broadly speaking, that's why those things exist, to make more people owners and fewer people renters.

Re: Income inequality has *RISEN* under Obama?!?!

[thecombatwombat]

I agree with all of that, at least the first part. If you expanded your quote a little bit more, I thought I said as much.

My point was simply that stating that renting is the equivalent to taking on unsecured debt, which seems to be expressing the sentiment that it's always throwing money away, is ridiculous. I'm not claiming anything more than that. You seem to be implying I'm claiming something about one being better than the other overall, and I'm not. Apologies if I'm misinterpreting you, but you seem to be trying to correct me ("Here's the thing . . . ") but I don't see where you disagree with me.

As to the second part, I don't think it would be a crap shoot. Much of the advantages we give buyers in the market only apply to your primary residence. (Such as the exemption from capital gains.) We artificially skew the market towards individual home ownership. It's not just a matter of price correction. If we took them away, it would make a lot less sense for individuals to own. The corrected market would have a lot more investment properties.

Re: Actual Reason

[Anonymous Coward]

A rather compelling argument has been made that widening income inequality is an inherent result of capitalism. The topic is covered in some depth in this book. Borrowing a brief summary from here:

...as long as the rate of return on capital (r) is greater than the rate of economic growth (g), wealth will tend to concentrate in a minority, and that the inequality r > g always holds over the long term...

To what extent this is a problem and what solutions there are can be debated. As long as you avoid debating with those who hold the insane position that all inherent effects of capitalism are good by definition.

This is why there are progressive tax systems. I thought it was obvious, what do you mean "argument has been made"? Was it a mystery why the US has tax brackets??

mention it. In tech? experience,Startups, contract

[raymorris]

If you're in technology a 30-hour week is entirely doable if that's important to you. A lot of places would be glad to save a bit of money. If you've been at your current job for a while, you may have refined your processes such that you can accomplish your primary responsibilities in 30 hours and you spend the rest of your time helping out with secondary things. If so, you can talk to your boss about reducing hours (and pay) to only your main responsibilities. I did this before.

New startups often have a limited budget and limited need for certain expertise. They might very well be interested in a 30-hour dba, security professional, or other specialized person.

Lastly, tech offers an abundance of contract options. Many people work nine months per year. Contracting isn't for everyone, but many people really enjoy it.

People here have to work all the time because...

[BrendaEM]

People here have to work all the time because it's hard to make money working for others, and nothing in our government functions for the poor and middle income brackets.

Re:Income inequality has *RISEN* under Obama?!?!?

[fluffernutter]

The ball has been set in motion, and no president can really tell a large corporation that they will need to stop growing and do more with less. That would be presidential suicide, doesn't matter how good the intentions of the president may be. Look at the uproar over increasing minimum wage, which really amounts to a small hill of beans in the end. Consider the drastic measures that would need to be taken to change the course of the economy. It's simply too late I think. It will take a revolutionary war to change things and I think it is coming.

Popular Quote

[slasher999]

âoeSocialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires.â

I think this sums up why Americans work as hard and long as (many of us still) do.

No, its not because of disparity.

[Anonymous Coward]

Its because automation has made people easier to replace, ergo, people work 40 hours so they don't lose their jobs because they don't want to be the "replaceable" ones.

Life isn't fair

[fluffernutter]

Keynes forgot to calculate the fact that life simply isn't fair. You may be twice important to your company and to your nation that a person was in the 1930's but the people who have been given the keys to the economy will never allow your pay to reflect that. That is a basic tenant that must hold for Keynes prophecy to be true and the current system prevents it from happening. This isn't even about marxism or socialism. Ultimately each and every one of us are twice as important now as a worker was in 1930 but my value will not be realized, ever. All I can do is live my life the best I can and make what I make.

Re:distribution of wealth and_______

[rmdingler]

What your referring to is called the Pareto principle or the 80/20 rule, "roughly 80% of the effects come from 20% of the causes", described by Vilfredo Pareto arround 1900.

At the bottom of the Wealth curve, he wrote, Men and Women starve and children die young. In the broad middle of the curve all is turmoil and motion: people rising and falling, climbing by talent or luck and falling by alcoholism, tuberculosis and other kinds of unfitness. At the very top sit the elite of the elite, who control wealth and power for a time – until they are unseated through revolution or upheaval by a new aristocratic class. There is no progress in human history. Democracy is a fraud. Human nature is primitive, emotional, unyielding. The smarter, abler, stronger, and shrewder take the lion's share. The weak starve, lest society become degenerate: One can, Pareto wrote, 'compare the social body to the human body, which will promptly perish if prevented from eliminating toxins.' Inflammatory stuff – and it burned Pareto's reputation. Benoît Mandelbrot

It's pretty much the way the world works, if 20% had 80% of the wealth and power, then 5% has 64% and 1% has 49%; the numbers are fuzzy as well.

Most wealthy 1%er Families tend to crap-out after 3 generations, so who is in the first percentille tends to change; even the Kenedys have a lot of family members in the 20th now.

+1 That's why I read Slashdot

Re: Income inequality has *RISEN* under Obama?!?!

[mjwx]

If you're renting, you're borrowing a property. It's basically the same as paying interest.

I read your earlier post on the matter to determine what you mean by "same". The answer is no, renting is not the same as borrowing. A loan means you borrow money now in exchange for creating an obligation to pay in the future. Renting usually does not. For example, I might be renting a very expensive apartment in Manhattan today, but I can move out. I can't decide that I want a smaller loan and just move out of my old big one.

This.

I rent because I dont want to live where I am for the rest of my life. This goes double for places where I can work for significantly higher than where I'd like to live such as London. It makes sense to rent in London if you're being paid 4-600 pounds a day and save that money to buy or pay off a house somewhere else.

That being said, paying off a house is not a bad debt as houses typically appreciate. However the GP is right that a lot of people are up to their eyeballs in bad debt. Bad debt are for things that depreciate. In simple terms, debt is acceptable for investments, but unacceptable for consumption. Consumption are things like toys (computers, tablets, jet ski's), cars, groceries and sundries. Generally you're paying interest and fees on things that are losing value or lose all their value when you buy them.

This goes double for people who put everything on their credit cards. Triple for those who think they get anything out of their CC, they dont seem to understand that banks dont do anything for free. Interchange and merchant fees are the things paying for the bonuses, points and cashback schemes and in the end, the merchant passes those fees back to the consumer. It's a negative feedback loop, Derp believes he's winning when he gets 1% "cashback" when the bank is charging the merchant 3% and the merchant raises the prices Derp pays. Even if you pay no interest on a CC, you still have to pay the fees as obscured as they are.

Given how easy it is to rack up massive debt with massive interest and no assets to show for it on credit cards, they are the most dangerous form of credit. I'm continually confounded that people use them so blithely.

Re: Actual Reason

[plopez]

"Wealth inequality has narrowed under capitalism as well "

When capitalism is properly regulated.

You're not nearly cynical enough

[rsilvergun]

Politics were there, but you missed it. We were taught supply rises to meet demand, but we were taught that oversupply was a) good because it always drives prices down and b) self correcting. Neither of these are true of labor. It took two World Wars to pull the country out of recession/depression. We mostly came out of it because we were too busy rebuilding multiple destroyed continents (Europe/Asia).

As for Joe Six pack: He doesn't have a 401k anymore. 30-40 years of stagnant or declining wages means he lives paycheck to paycheck. He works until he drops dead from exhaustion. Like his forefather's did. So much for progress.

Netflix & Starbucks are piddly shit

[rsilvergun]

Skipping A $4 cup of joe and $20 bucks a month on Netflix won't make up for the massive increases to the cost of transportation, food, Cars, Housing and the things in life that really matter. It won't replace the pension your company no longer gives you (and no, a 401k is _not_ a replacement for a pension. If you retire at the wrong time you're fucked).

People didn't choose the 40 hour work week so they could spend an extra $4x30+20 ($140/mo). That's not even $1/hr in their 160 hour work/month. The 40 hour work week was chosen for them. When Bush jr deregulated the commodities market so you could buy pork bellies and the like w/o taking ownership and the price of food jumped 20% in 10 years. When we pulled federal funding for education and the price of a college degree went from $10k to $140k in 20 years. When entry level pay dropped to the level of the 1990s after "free trade" sent good manufacturing jobs to Mexico and killed job saving tariffs.

You live in the world as is, not as you want it to be. With how weakly organized labor is they don't have any say in anything. Workers aren't even a tug boat in a typhoon.

Re:Netflix & Starbucks are piddly shit

[raw-sewage]

Skipping A $4 cup of joe and $20 bucks a month on Netflix won't make up for the massive increases to the cost of transportation, food, Cars, Housing and the things in life that really matter. It won't replace the pension your company no longer gives you (and no, a 401k is _not_ a replacement for a pension. If you retire at the wrong time you're fucked).

There's no shortage of frugality websites out there showing people with modest incomes who are still saving 25% or more of their pay. Or read Your Money or Your Life for inspiration. The Starbucks and cable habits are but one piece of a bigger plan. In general, you trade your time to save money. The reality is it's not just coffee and premium TV service; it's acknowledging that you can be happy even if you're not keeping up with the Jonses. Take that 1950s lifestyle, and live it today. You give up some luxuries, but still live better than most people in the world.

Here's a summary of every frugality plan out there (the secret is you don't get to cherry-pick what you do):

• Keep a budget, or at least track your finances. (I personally recommend GnuCash.)
• Live close to work. Preferably within walking or biking distance. If you can walk or bike, your transportation costs are basically zero.
• Living close to work might entail giving up a big or fancy place. Don't live in the ghetto, but put some effort into finding something low-priced for your area that's still in a safe hood.
• Walking, biking or even public transportation means you don't need to own a car. Ever done the math on what a car really costs? It's not just gas, it's insurance, title, extra taxes in some locales, maintenance, storage/parking... If you absolutely can not live without a car, pay cash for something used with a proven track record, like a Honda Fit with 80k miles on it. And learn to hypermile.
• Buy basic ingredients and make all your own foods. Never (or rarely) eat out. There's no shortage of information out there on how to eat well (healthy, delicious, whatever) on the cheap. Beans and rice are an option for the hardcore, but you don't have to spend too much more to open up a lot of options.
• Flagship cellphones are not allowed, nor are just about any 2-year contract plan. Buy something in the "value" range like the Moto G, or buy used, and get the bare-minimum service you need through an MVNO.
• Cheap entertainment. The library is a great start. If you have an expensive hobby like golf, work part time at a country club or local course to fund it.
• As long as you can live in a safe neighborhood and eat healthy, you should maximize your 401(k) contributions (yes, the full $18k/year). At a minimum, get the full employer match (if there is one), otherwise you're voluntarily working for a discount.
• Once you've maxed out your 401(k) continue to challenge yourself to save even more.

There is of course no shortage of special exceptions that make the above harder or impossible. But for people who are reasonably intelligent, patient, have a good work ethic, and are willing to cut back on all the luxuries of the typical middle class person, wealth isn't too hard to achieve.

I tried to order that somewhat in terms of importance, most important first. Really, I think a lot of people would change their habits if they took the time to track their finances. That's at least half of what Your Money or Your Life is all about, showing you techniques for tracking and evaluating your spending. Rather than say at the end of every month, "Why don't I have any money left?", you start saying things like, "I spent $150 last month on DooDads? I don't even like DooDads that much!" The process of regular spending review should naturally induce better spending habits.

Furthermore, YMOYL talks about calculating your real wage, which is generally (significantly) lo

I call bullshit

[rsilvergun]

Gas is only cheap because the Saudi's are trying to put Shale oil producers out of business. It was $4/gallon until then and the only reason it stopped there is folks were talking about abandoning gas and they got scared.

Rent is climbing rapidly this year. As for houses, that's the suburb effect. Yeah, I can get a 2600 square foot house. With a 3 hour a day commute. If I want a reasonable 30 minute commute I'm looking at 1000 sq ft if I'm lucky, young and rich.

Tune ups were cheap and you could do them yourself. Cars were a _lot_ simpler back then. They also polluted a lot more.

Cable TV doesn't really make my life any better. Americas watch a lot of TV because at the end of a long, shitty day it's all they've got left in them to do.

It's human nature turn a blind eye to the unpleasant realities of life. You've got to justify all the horrible things we do to maintain our meager quality of life in the face of the 1% constant assault. Walmart says it best. You're not destroying Unions and the American Working Class and turning back the clock on 100 years of human progress. You're saving money, living better.

Concentration of wealth and the treadmill ...

[Anonymous Coward]

Companies use modern tools to become more efficient. This lets the same amount of people do more work. If company A uses a tool to become more efficient, company B follows suite. Eventually, more output is the norm rather than the exception. This is a treadmill of ever increasing expectations. When will it end?

Since we're paid for time instead of work accomplished, the expectation is that ever increasing amounts of work are done per employee. All of this drives the cost of labor down, not up.

Apparently, some jackass / cabal hardcoded 40 hours / week into law somewhere ... and it's impossible to change. But you must work. Full time to get anything.

And because workers own nothing ... ownership and the means of production is concentrated in the hands of a few ... so they hoover up any benefits / profits and ... workers get nothing. And secretly, without much safety net workers worry about being sacked.

What if we become so efficient that it's unnecessary to work anymore? Who benefits then, the owners? How will people buy things? You have to give them money to buy products to justify producing them.

The only silver lining is that because a single person can be more efficient, going solo gets easier if you have the stomach for it. Job locking via health insurance and other obstacles are there (... the Marketplace is a giant PITA to deal with) ... but this is achievable now.

   

Re:Concentration of wealth and the treadmill ...

[Anonymous Coward]

Not concentration of wealth, but concentration of ownership.

Workweek should be indexed

[GPS Pilot]

Although much of Keynes work was flawed, he's right about the "workweek." A 40-hour workweek is an entirely arbitrary number, so it makes no sense to cling to it.

Just as it makes sense to index tax brackets to inflation, to prevent bracket creep, it makes sense to index the length of the workweek -- if not to productivity, to something that prevents it from becoming a static, archaic notion.

Re: Income inequality has *RISEN* under Obama?!?!?

[aphelion_rock]

"Everything is new under Obama. Before Obama there was no terrorism, "

9/11 was in the making from Afganistan which was pre Obama

" no debt, "

http://www.factcheck.org/2012/... Long before Obama

"no healthcare premium increases, "

And no healthcare for the poor

"no illegal immigration, "

http://immigration.procon.org/... say no more

"no deadlock in government, "

And no ability to make any changes because of the self interested capitalist groups who are in power.

"no economic downturn, "

GFC started in 2008, Obama took office in 2009

"no corporate welfare, "

Should have let the banks all die

"no cronyism and more."

The US has always had that

Re:Income inequality has *RISEN* under Obama?!?!?

[Khashishi]

Only if the lender uses force (including state force) to recoup a debt. The state should not be helping lenders to recoup debts. Then the legal concept of bankruptcy would be unnecessary. Debtor can just not pay.

Taxes

[approachingZero]

I live in a state with no state income tax, and the Feds took more than 30% of my yearly bonus. I'm thrilled to have a bonus, but I worked hard and it was a kick in the nuts to see that much of it taken. Essentially Americans have to put in a lot of hours just to feed the beast. And the best part is the US still spends about a trillion dollars a year it doesn't have, a luxury I am not afforded and a debt my children will never be able to pay.

Re:Income inequality has *RISEN* under Obama?!?!?

[Perky_Goth]

If people didn't loan, the banks would close the next day and the economy would collapse.
I also find it cute that you think rent is borrowing and yet ignore where the money to buy a home outright comes from.

Re:distribution of wealth and_______

[Anonymous Coward]

That's not true. The concentration of wealth comes and goes with the shifting balance between capital and labor. The globalization of the economy shifted this balance. We've seen this concentration of wealth earlier this century, it went down, it's up now, and can be expected to fluctuate again in the future.

The world did not end before, and it will not end now.

Re: Income inequality has *RISEN* under Obama?!?!?

[ATMAvatar]

The US also had a heavy-handed progressive tax system from FDR until Reagan (at one point the top bracket was taxed at 91%), and we did pretty well. Over time, however, we have made cut after cut in the upper tax bracket and especially capital gains such that the system is now effectively regressive.

Odd that rather than increasing GDP growth year over year like trickle-down economics might tell us, in fact, our GDP growth in the last few years is lower than it was during the 90+% tax years.

Re:Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

Income inequality has risen since at least Reagan, don't act like it's something new.

Income inequality has risen since VHS tapes. Look it up, it's true. So it was either that, or Jimmy Carter's fault.

Correlation does not equal causation!

Pretty straightforward

[Anonymous Coward]

That's about the time labor started losing bargaining power with respect to capital. As a result the gains of productivity haven't been shared in the same ratio as previously.

your own opinions, not your own arithmetic

[raymorris]

You are of course welcome to your own opinions. The ARITHMETIC is that Americans today can afford more "stuff" than they could 50 years ago. Again, the average new house in the 1960s was 1600 square feet. Today, it's 2,600 square feet. Peopl can and do buy more house today than they used to. If you want to complain about the cost of housing that's fine; the fact is houses cost less than they used to (compared to wages).

Same thing for transportation- you can complain if you want. The fact is today's paychecks buy 40% more gas than 50 years ago. That's arithmetic, not opinion.

About $4 coffee vs 20 cent coffee. I was just about broke for many years. I didn't waste a lot of money, it just seemed the money always ran out right about the end of every month. Then I took some classes about money, read some books, and did a budget. In the last ten years, I've gotten pretty comfortable financially. My net worth has increased more than 1000%. One reason for that is that my budget showed how much I was spending on "lattes", on cable channels I never watched, on eating lunch at restaurants, etc. I decided I'd rather retire early with $1.5 million in the bank than drink latte. If you do a proper zero-based budget, you might be surprised at what you find. It's up to you - you can complain, or you can spend a few hours learning how 90% of millionaires become millionaires. Surprisingly, most earned less than $60,000 and the vast majority earned less than $100k. It has a lot to do with Starbucks vs 401k.

Obama took mah brains!

[TapeCutter]

Now he wants mah guns!

Do Americans really work that much?

[hambone142]

There's a large percentage of Americans of working age that don't work at all. Welfare can pay more than minimum wage so the work incentive has been removed for many who know how to play the game.

Also, just because someone is occupying space and time "at work", it doesn't necessarily mean they're working. I became proficient at my job (salaried) and my productivity increased to the point where I could get my tasks completed in 1/2 to 2/3 of the time others did in a long work day. Yes, if there was more to do, I did it. My evaluations were always pretty darned good (electronics engineer for a large company where I actually had to SHOW material results).

I saw a lot of people in "fluff jobs" talk about how hard they were working but in actuality, they often showed no results and wouldn't be missed if they disappeared. Working long hours doesn't necessarily mean getting a lot of stuff done. Some people are inefficient.

Last, as people have mentioned, we have been a rather capitalistic bunch that likes to buy lots of crap and large, expensive items.

The average house of the '50's has nearly doubled in size. We no longer have one phone, one car, one TV.

So, we work to buy more crap and because we've bought more crap, we have to work more. Then we say "gee, both husband and wife have to work so we can afford to live" when in fact, we've become addicted to buying more and more toys.

Me, I've bought my toys and for a long time, I'm pretty happy with what I have. I can go to Fry's Electronics and pirooz the aisles, ready to buy anything interesting but I typically end up leaving without buying anything. I'm happy with my car, my TV, my collection of PCs and all the rest of the stuff (and the stuff is pretty old but again, I'm happy with it).

I'm a bad consumer. Also, I don't have to work anymore because I saved my money when working and lived within my means.

Is that so bad?

Re: Income inequality has *RISEN* under Obama?!?!?

[FlyHelicopters]

(at one point the top bracket was taxed at 91%)

Meh, I see that often, but you have to take into account the whole picture, not just that.

Almost no one paid that, there were far more exemptions and write-offs back then. For example, you used to be able to deduct your interest payments on a car and credits cards, but you can't anymore.

The reality is that the percentage of income that Americans pay to the government has never been higher than it is today.

How did that not happen???!?!?!

[SuperKendall]

as in a "rising tide lifts all boats" kind of way. The problem is, this didn't happen.

Excuse me? The poorest in American live like kings compared to most of those in third world countries. The rising tide in fact gave a HUGE lift to everyone in the US.

To claim otherwise shows breathtaking ignorance of what people live like around the globe. You REALLY need to travel to Africa or parts of South America to understand this.

Re:How did that not happen???!?!?!

[Aristos Mazer]

SuperKendall: Although you are right in absolute numbers -- the tide did raise all boats -- it raised some boat exponentially more than other boats, to such a degree that you now have some people that can essentially ignore periodic economic contractions, while others sink mightily in such times. Xyrus is correct insofar as the amount that the poorest got raised is negligible-to-the-point-of-ignorable compared to the amount the richest got raised. That's pretty much the whole summary of the discoveries compiled by Piketty's book that made such a splash in 2014.

Re:How did that not happen???!?!?!

[SuperKendall]

Who cares if some rose more than others? This obsession over disparity even though everyone it better off, is insane - your solution to destroy all boats and drown everyone. You suck.

The correct question should be

[Anonymous Coward]

Why do Americans think the work so much?

The world isn't just Us and Europe, you know.

Just Be Patient.

[um.yup.]

The economy's just "recovering."

Growth of US leisure time

[TheSync]

"Over the past four decades, depending on which of their measures one uses, the amount of time that working-age Americans are devoting to leisure activities has risen by 4-8 hours a week. (For somebody working 40 hours a week, that is equivalent to 5-10 weeks of extra holiday a year.) Nearly every category of American has more spare time: single or married, with or without children, both men and women. The only twist is that less educated (and thus poorer) Americans have done relatively better than more educated ones (see chart). And that is not just because unemployed high-school drop-outs have more free time on their hands. Less educated Americans with jobs - the overstretched middle class of political lore - do very well."

(From this article in 2006.)

US/EU differences: work regulations

[TheSync]

"Americans average 25.1 working hours per person in working age per week, but the Germans average 18.6 hours. The average American works 46.2 weeks per year, while the French average 40 weeks per year. Why do western Europeans work so much less than Americans? Recent work argues that these differences result from higher European tax rates, but the vast empirical labor supply literature suggests that tax rates can explain only a small amount of the differences in hours between the U.S. and Europe. Another popular view is that these differences are explained by long-standing European "culture," but Europeans worked more than Americans as late as the 1960s. In this paper, we argue that European labor market regulations, advocated by unions in declining European industries who argued "work less, work all" explain the bulk of the difference between the U.S. and Europe. These policies do not seem to have increased employment, but they may have had a more society-wide influence on leisure patterns because of a social multiplier where the returns to leisure increase as more people are taking longer vacations."

Full paper here.

The answer is obvious...

[Rick in China]

Immigrants and H1B Visas, obviously. To many of them, 60 hour work weeks seem like a lot of time off!

Bingo! Spot on. A superrich on this problem ...

[Qbertino]

Essay/Article

TED Talk: Nich Hanauer - The Pitchforks are coming for us.

Re:Income inequality has *RISEN* under Obama?!?!?

[Racerdude]

By your logic then americans "know less shit about finances" that people in most other western countries? Because America leads the the wealth inequality chart by quite a fair margin.

Re: Actual Reason

[khallow]

When capitalism is properly regulated.

It's worth noting here that the current primary factor resulting in increased wealth inequality for the US is a purely non-regulatory one, the addition of several billion new laborers over the past half century to the global trade network. That impairs the wealth gain from labor and doesn't impair the wealth gain from capital - which favors relative wealth gain by the wealthy who are more dependent on capital for their wealth. And regulation has tended to make wealth inequality worse by impairing business from employing US workers.

My view is that the US and the rest of the developed world would be better served by regulation that takes into account the costs on employers.

Re: Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

I think your sarcasm meter is faulty. Please return it for servicing.

Re: Actual Reason

[Anonymous Coward]

... all inherent effects of capitalism are good by definition.

Governments tried this, it was called Mercantilism and didn't go so well. It doesn't take much to see how market deregulation, or lassez-faire capitalism approaches mercantilism. One just has corporations replacing nations, trade treaties replacing imperialism, tax-havens and tax-breaks replacing gold bullion. But a long time ago, a book called "The causes of the wealth of nations" explained how consumers benefited from the profit motive despite the abusive nature of vendors. The author called this indirect benefit "the invisible hand". Of course, he didn't realize that all (abusive) vendors would become faceless corporations, thereby robbing the consumer of any leverage (usually customer loyalty) he had over the vendor.

Re:23% growth. Work 30 hours OR Starbucks, Netflix

[Rande]

Decide? I'd happily work 5 hours less a week (and get paid less pro-rata). But I can't - it's standard hours or nothing.
For minimum wage jobs (or you're female), you can go part-time, but that's 20 hours or less.

Re: Actual Reason

[drsmithy]

So it's based on a false dichotomy fallacy ?

Probably shouldn't be surprising for someone that would obviously see no moral issue in something like good old-fashioned Feudalism, I suppose.

Re: Actual Reason

[drsmithy]

Businesses are not "impaired" from employing US workers. They *choose* not to so as to achieve greater profits.

(Note that this is common issue across the western world as most barriers in place to protect living standards have been torn down in the name of greater profits.)

Re: Income inequality has *RISEN* under Obama?!?!?

[drsmithy]

Sure, but that has been done.... did you not learn anything from history?

Yes. Post-WW2 USA saw the fastest, broadest and greatest increase in wealth and living standards in human history.

Right up until the neoliberals took over in the '70s and started driving taxes down.

The USSR is a perfect example of what happens when you take all wealth from people and give it to the state.

Ah, I see the problem. You have no idea what taxes are for or how they work.

Puritanism

[ThatsNotPudding]

Puritanism pretty much covers all of the sicknesses that define the USA: sexuality (assigned, condemned, controlled, and judged by heterosexual men), employment (you don't have a job (or two, requiring you to use meth to stay awake)? you're a bum), violence (justified only for whites and LEO, but I repeat myself), drugs (have a beer, you pussy. weed? LOSER), holiday time (a day off? well, maybe we don't need you at all, then), religion (screw Separation of Church and State, but lie, cheat, and steal during business hours and only occasionally repenting on Sunday when the NFL isn't on), and politics (I know these billionaires have my best interests at heart).

Looking at the state of things in the harsh, cold light of day, I'm not sure this noble attempt at representational democracy is worth (or even capable of) saving.

Re: Income inequality has *RISEN* under Obama?!?!?

[drsmithy]

The reality is that the percentage of income that Americans pay to the government has never been higher than it is today.

False.

Re:23% growth. Work 30 hours OR Starbucks, Netflix

[drsmithy]

Since 1967, median real income (adjusted for inflation) has increased by 23%.

Indeed. But don't forget that increase stopped sometime in the '70s.

Re: Actual Reason

[khallow]

Businesses are not "impaired" from employing US workers. They *choose* not to so as to achieve greater profits.

You ought to think about what you just said. Reducing profits is the chief form of impairment that a business can experience. And if you reduce profits to the red, then you've destroyed the case for the business.

(Note that this is common issue across the western world as most barriers in place to protect living standards have been torn down in the name of greater profits.)

I'm not saying that all such barriers should be torn down, but severely reducing profits is a very good reason to consider tearing these barriers down.

The thing that is missed here is that reducing profits also reduces living standards. And we can see that living standards are declining despite all the regulation to the contrary. I think it's time to look at what's working and what isn't. My view is that a lot of that regulation is actually very counterproductive, making the situation worse.

Re:Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

I think debt is slavery.

Somewhat. I'd more say that debt which cannot be discharged via bankruptcy is like slavery.

Slavery is Slavery; Debt is an ingenious replacement for the slave driver's whip.
(paraphrased from Amrose Bierce)

Re: Actual Reason

[drsmithy]

You ought to think about what you just said.

I have.

Reducing profits is the chief form of impairment that a business can experience. And if you reduce profits to the red, then you've destroyed the case for the business.

OK. So once we follow your idea and successfully drive wages - ie: costs - down to slightly-more-than zero, who is going to buy the stuff business produces ?

You need to consider that there's a revenues side of the ledger as well as an expenses one.

The thing that is missed here is that reducing profits also reduces living standards.

No it doesn't. An economy running on a razor-thin profit but still producing excess of everything it needed would have high living standards.

And we can see that living standards are declining despite all the regulation to the contrary.

Er, no. Living standards are declining because all the regulations that protected normal people's incomes have been systemically destroyed. That's why real incomes for almost everyone in the US have gone nowhere for thirty-odd years.

I think it's time to look at what's working and what isn't. My view is that a lot of that regulation is actually very counterproductive, making the situation worse.

Everyone knows what works. Post-WW2 USA (until the neoliberals took over in the '70s, brought in the morally bankrupt NAIRU, deregulated everything, started selling off public assets and disassembling the public services - again, a common problem throughout the western world, though some countries had their Reagans and Thatchers much later - here in Australia, for example, we didn't go full retard until the mid-90s) was the quickest and most widespread increase in wealth and living standards in human history. It was a time of increasing real wages, a large and financially secure middle class, relatively high social mobility, large-scale public investment and full employment as a policy goal rather than a bete noir.

Re:Income inequality has *RISEN* under Obama?!?!?

[Cro Magnon]

When somebody takes out a loan, they aren't offered death as an alternative.

Depends on the reason for the loan. Maybe they need it for one of life's necessities, like food, medicine, or the newest iPhone.

Working harder, not smarter.

[Hoxolotl]

From a short analysis over christmas dinner (and drinks) we found out there's a reason United States of America citizens have so few days off and seem to work so many hours: they're actually not working very hard, and when they work very hard they don't seem to go about it in a smart or caring way.

Now before you tear into me let me explain what we found: we were dsicussing design and noticed how American cars were "way too big" as in: who needs 4 tons of steel to lug around a lil' old lady to go to the malll. And we went back and found out that car design in the USA is done by separate, non-communicating teams. the team working on the car-body design has absolutedly no clue how big the engine bay needs to be, the engine team has no clue how well it will be ventilated, and so on and so forth. Basically in the USA, you have one job, you do THAT job, and if you see a colleague about to mess up you either throw them under the bus, or see it as "Not my problem". In Europe teams are ofthen made to work together, this means designs can be optimized and leads to a better overal quality ( ask the Germans). This also means issues get resolved together instead of throwing them over the fence and hoping for "the other guy" to fix it.

This results in meetings where playing the blame game is frowned upon as we don't care whose fault it is as long as the problem gets fixed.

P.S.: if anybody has access to "the red book*" from Shell he'll understand what I mean. *it's a book that refers how many man-hours is needed to do a job for each country, for laying down an airstrip you might need 6 Tanzanians or 3 Senegaleze, or 1 European. Yes the book is kept secret because it's a bit of a hot topic.

P.P.S.: and if you want to know why Americans work so much it's because the work ethos is to work hard, not smart. Just check your own organisation, do they give bonuses for overtime or for meeting targets? Are those targets achievable without overtime? Does loosing your job scare you more than dying 20 years early because of work induced stress? Do you care your female coworkers do not get payed maternity-leave?

The Dutch have an expression for discussions like these, we call it "throwing a single bone into the dog pen". Woof.

Re: Actual Reason

[khallow]

OK. So once we follow your idea and successfully drive wages - ie: costs - down to slightly-more-than zero, who is going to buy the stuff business produces ?

Why would that happen? Is regulation the magic sauce for making sure you don't starve because you forget to ask for a paycheck? This sentiment reminds me of The Incoherence of the Philosophers, a work which among other things proposes that reality itself goes on as it does only because Allah wills it so. So do we have an economy and people getting paid for their work only because the regulators will it so? I'm not feeling it.

You need to consider that there's a revenues side of the ledger as well as an expenses one.

Somewhat lower wages is still better than no wages when it comes to generating revenue, wouldn't you think?

The thing that is missed here is that reducing profits also reduces living standards.

No it doesn't. An economy running on a razor-thin profit but still producing excess of everything it needed would have high living standards.

Here's what's missing: leisure time and spending, risk taking, insurance, research and development, and business expansion. But I'm sure that government will continue to take and squander much more than that razor thin profit margin as is their due.

Er, no. Living standards are declining because all the regulations that protected normal people's incomes have been systemically destroyed. That's why real incomes for almost everyone in the US have gone nowhere for thirty-odd years.

It's a nice story except that it isn't true. The labor regulations haven't changed much; benefits and unemployment regulations haven't changed much; minimum wage is still around; and health care has actually been expanded. What has changed? Well, nothing really. It's just part of the ongoing half century of economic shift to the developing world and growing wage parity between developed and developing worlds.

Everyone knows what works. Post-WW2 USA (until the neoliberals took over in the '70s, brought in the morally bankrupt NAIRU, deregulated everything, started selling off public assets and disassembling the public services - again, a common problem throughout the western world, though some countries had their Reagans and Thatchers much later - here in Australia, for example, we didn't go full retard until the mid-90s) was the quickest and most widespread increase in wealth and living standards in human history. It was a time of increasing real wages, a large and financially secure middle class, relatively high social mobility, large-scale public investment and full employment as a policy goal rather than a bete noir.

In other words, those darn Reagans and Thatchers didn't ban the billions of people who are eating your lunch, labor competition-wise.

And the great incongruity of your post is that the actual quickest and most widespread increase in wealth and living standards in human history happened after the period of time you mention. It is happening now, not in the 1950s. Now is the time of increasing real wages, creation of a global large and financially secure middle, relatively high social mobility, etc. What happened in the developed world then is now happening everywhere. But I guess all those people are kind of hard to see from whatever podunk country you're from.

Not "So Much", but "So Long"

[Jimpqfly]

The title is wrong, because it only refers to a duration (40 hours) and not a work quantity. It should have been "Why Do Americans Work So Long?".

You should check the OECD Stats, where you can find the GDP per hour worked, which should be a better indicator (not perfect, but better)
http://stats.oecd.org/Index.as...

As an example, Norway or Irish people would work less time to generate more GDP, per capita.

Leisure

[GuB-42]

People used to work for basic subsistence, now they work for leisure and non-essentials.
The middle and upper classes could work less, but instead, they prefer to stick to 40 hour weeks and get better leisure, more gadgets, etc... It creates a feedback loop : for example, let's say you want an iPhone, you work maybe 50h to get it, which, in turn give work everyone involved in making and handing you this iPhone.
The iPhone, a non-essential, created work out of thin air. You go for a trip to Hawaii, same thing : you work to pay for your trip, which give work to people who build the plane you are taking, extract and refine the fuel you are using, and all the staff serving you...

Re: Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

I thought it was Bush, but then Obama came along

What do you do for a living? Yes, decide.

[raymorris]

> I'd happily work 5 hours less a week

Okay, what do you do for a living? I'll give you some ideas on how to do that.

> Decide?

Yes, make a friggin decision for yourself, for your own life. You -can- let other people make the decisions for you, which is easier, but of course that way you don't always get your preference. It's a balance with each decision.

> But I can't

If you decide you can't, you're probably right.

10% increase since 1984. 1984: $49K. 2014: $54K.

[raymorris]

> Indeed. But don't forget that increase stopped sometime in the '70s.

Actually almost half of that 23% increase is after 1984.

Here's a chart from the St Louis Federal Reserve for you:
https://research.stlouisfed.or...

Debt

[DarthVain]

You are absolutely correct in that the 1% make all their money on the 99% debt.

However, most of that is in housing. As you say the cost of housing isn't directly proportional to the cost of building a house (though it has increased for the same reason I will list). The demand for housing hasn't increased proportionally. What has increased is the the amount banks are willing to lend to people, and the ratio of debt people are allowed to carry now. If people can't afford to buy a house the cost goes down. Housing is only expensive as the ability to people to pay for it. Thus housing prices has increased. This also has effects an all aspects of housing such as building, for the same reason. They can escalate their costs because houses are "worth" more. In this way the 1% have influenced the market in their favor.

It has gotten so ridiculous I noticed a couple of years ago when I tried to get renovations done. When I got a house I got a very modest (i.e. old and small) "inexpensive" house that was about 100k. I was looking to do an "inexpensive" bathroom renovation of about 10,000$ which is about 1/10 of the cost of my entire home. The problem was no contractor wants to bother with a job like that anymore, so finding someone was very difficult, keeping him more so. The reason is because when your house costs 500-600k, no one blinks an eye spending 20-30k on a bathroom, as that is only 1/20th of the cost of their house, and the perceived increase of X tens of thousands of "value" that adds... So you spend more, acquire more debt, etc... and who wins?

Yes, I think you are right, in the US there is an educational debt crisis coming at some point as you illustrate. There are entire for profit education mills that's soul purpose is to acquire debt. Key is the issue of essentially "free" loans from the US government which you can't even claim bankruptcy to clear (i.e. money in the bank for these "schools"), with the idea of increasing upward mobility and access, but in the end you get a useless degree and debt slavery. This is somewhat unique to the US however I think, whereas the housing issue is ubik. All you have to do is watch those housing or renovation shows, or even just look at housing prices, and ask yourself "what to all these people do for a living to afford that?"...

Re:Debt

[volmtech]

I live in a 35 year old double wide I paid $35,000 35 years ago. 1500 sq ft and I have replaced the roof ,floors, and remolded both bathrooms. I did the work myself for less than $5000.

Twenty years ago I took a job putting in TV cable in a nearby city. I ran cable to the new river front home of Wayne Weaver, owner of the Jacksonville Jaguars NFL team.

One day I was at two near identical new homes in a creek side development. After talking to two men standing in the yard I learned the they where married to sisters who had inherited a large sum of money and decided to move next to each other. Those where two sad, pathetic looking p****y whipped men.

I got tired of busting my hump in rich gated neighborhoods and found other work.

Unions

[DarthVain]

Hence unions. However they have been systematically on the decline. The unions that do exist are more concerned with self preservation that any sort of labour reforms for their workers.

Re:Women+Boomers+Immigrants = "Labor Shortage"

[Anonymous Coward]

The Donor Party liked this because it lowered labor costs. Oh, did I say "Donor"? I meant "Republican".

And Democrats like this because it created a dependent class of loyal democrat voters.

Don't hate the player, hate the game!

[DarthVain]

I've always said, fix the system of political financial contributions, and the rest will probably just work itself out.

Make corporate donations illegal. Limit personal donations to some reasonable index. Make politically lobbying (at least in its current form) illegal. Prevent or provide serious limitations for compensation and positional appointment between politics and corporations (i.e. you don't get a sweetheart job the moment you retire from politics, don't appoint industry shills for government positions).

Do all that, and I would bet a great deal of our current social ills would be solved with in a few years. Though that is a tall order, as the system is already compromised.

Tax

[DarthVain]

I agree.

However one cravat, you have little control over, taxes. When I bought my shitty little house, one of the nice things about it was I also only had about 1200$ a year in tax, which in comparison to some was quite small. Fast forward 10 years later, my tax is now about 2200$ (still a lot less than probably most). In that 10 year period I am pretty sure my salary has not actually increased by 80%.

You can do all the right things, but the amount of things out of your control is astounding. Simple things like bills, everything goes up. Some you can elect not to pay for such as when your internet that used to be 40$ is now faster but also 80$... Other things such as water, electricity, gas, etc... you have much less options should they decide to increase, and they all have, and I would say all faster than my wage is increasing.

Re:Tax

[Hognoxious]

However one cravat

What? I'll read that again.

However one cravat

Yup, you did. Are saying that owning a property can tie you down?

Re:Tax

[DarthVain]

Certainly! :)

"On the Phenomenon of Bullshit Jobs"

[Anonymous Coward]

David Graeber's article "On the Phenomenon of Bullshit Jobs" is excellent.

Re: Income inequality has *RISEN* under Obama?!?!

[Anonymous Coward]

I am glad to live in the North where global warming is a blessing. We use to get a foot of snow by mid-November but now it is days before New Years. It must be my faultering memory. And our degree days are warmer, to the dismay of the energy providers.

robbing their gold has been frowned upon

[DarthVain]

"Since then, conquering other countries and robbing their gold has been frowned upon."

You could probably update your historical synopsis easily by replacing "gold" with "oil".

Now internationally is is all about debt transfer it seems. Here have more debt. A different kind of war perhaps.

Re:Income inequality has *RISEN* under Obama?!?!?

[pnutjam]

There is no such distinction in our legal framework. You cannot create a contract to become a slave (except a debt slave).

The why

[whitroth]

is obvious. Lessee, cut the top income tax rate, to help "Job Creators", who then ship jobs offshore. Then undersize, er, "downsize", and have two people do the job of one.

Meanwhile, starting with Raygun's attack on the Air Traffic Controllers' Union (who was dead right about needing more computerization to deal with the massive increase in air travel), the attack by corporations and the wealthy on unions... and then making us part of management (so we couldn't unionize)[1], and *then* designating us "independent contractors", and so offloading all benefit costs to us, who, of course, can't get anywhere near as good a deal as a large company can.

And too many people here hear the phrase "whatever it takes", and think that means they're Important, rather than what their grandparents would have called it, overworked... and who had unions to fight it.[2]

1. Tell me the difference between an "administrative assistant" and a secretary... other than the former
                  is "salaried", and can be told to work till it's done, where the secretary got paid overtime.
2. How many here haven't used up their paid time off, because work's been so busy?

Too many folks in the US are suckers. The great Green Card scam of Canter and Siegel, in '94, was when they spammed every single one of the nearly 1000 usenet newsgroups (yes, the 'Net existed before the Web). Many of us in those newsgroups were part of a community. The spammers "defense" was that there were no such communities, it was just a marketing opportunity.

And too many of you believe it now. Do you *have* a community, or family, a place you call home? Are you ready to pick up and relocate to somewhere else, that you don't know, because jobs got moved and are thin at the place you call home? (Five times here).

No, you don't have "leverage". If you're posting here, you're not a millionaire, just a pee-on.

                          mark

Re:Income inequality has *RISEN* under Obama?!?!?

[thinkwaitfast]

https://en.wikipedia.org/wiki/...

Re: Income inequality has *RISEN* under Obama?!?!

[lsatenstein]

The USA's saviour is this balding blond guy with tinted hair. You know the one from New York. The one with casino money.

Whats his name again???

Re: Income inequality has *RISEN* under Obama?!?!?

[FlyHelicopters]

Ah, I see the problem. You have no idea what taxes are for or how they work.

No, you don't understand at all...

The post I was responding to said "tax the fuck out of the wealthy so they can't afford to be charitable".

In reply to that post, I was 100% correct. If you take all the money from the wealthy, then you only have poor people left. Government doesn't create an economy or jobs, it just spends other people's money to the poor house.

Looking around the world, every nation that thinks they can take the wealthy's money and hand it out is poor.

Worship of the Almighty Dollar

[Anonymous Coward]

It's become the defacto god of America, to whom all bow and sacrifice themselves (well, except for those damn atheists who just take advantage of everyone else's bowing and sacrificing to gather up all the loot unto themselves).

Re: Income inequality has *RISEN* under Obama?!?!?

[FlyHelicopters]

No, it is completely true, your link doesn't even respond to what I said.

I said that the percentage of INCOME that Americans pay to the government has never been higher, and you responded with a chart comparing gross tax receipts to GROSS DOMESTIC PRODUCT, which is not people's income.

The total percentage of people's income that goes to the government is higher today than at any point in US history.

wages

[Anonymous Coward]

The reason work weeks haven't gotten shorter with increased productivity is that wages haven't risen with increased productivity. So the question is really why hasn't this happened.

Re: Income inequality has *RISEN* under Obama?!?!?

[alva_edison]

For the U.S.A. Local governments employ about 12% of the population, States employ about 4% and the federal government employs about 2%. I count that as 18% of jobs are created by the government.

Re: Income inequality has *RISEN* under Obama?!?!?

[drsmithy]

Tax as a %age of GDP is a fairly widespread way of measuring the tax burden, which today is relatively low.

This and this show the makeup percentage of revenue. Percentage from income taxes looks to have been higher around 2000 and in the '80s.

Your language is deceptive. You are trying to present income taxes today as having dramatically increased or being relatively high when neither of these things are true. As the graphs above show, percentage of revenue from income tax has sat somewhere between 40 and 50% since the '50s.

Re: Income inequality has *RISEN* under Obama?!?!?

[FlyHelicopters]

You would think that, wouldn't you?

Shame you never lived in the USSR where 100% of the jobs were created by the government, since that was such a paradise...

Or I guess you could go visit Cuba today and see how nice that place is...

It is a shame that our education system is so poor, as to produce people like you.

Re: Income inequality has *RISEN* under Obama?!?!?

[drsmithy]

If you take all the money from the wealthy, then you only have poor people left.

Untrue.

Government doesn't create an economy or jobs, it just spends other people's money to the poor house.

Public spending does create an economy and jobs. The obvious example is large-scale infrastructure spending.
Then there's something like public education, which acts as a multiplier by producing an educated and literate society.

Looking around the world, every nation that thinks they can take the wealthy's money and hand it out is poor.

Indeed. The USA, Australia, New Zealand, the UK, Germany, France, Norway, Sweden... Complete basket cases, the lot of them.

Your statement is literally the opposite of reality. Are you a Libertarian ?

Re: Income inequality has *RISEN* under Obama?!?!?

[FlyHelicopters]

Wow, you should really stand up, the point wooshed over your head...

I'd love to help you, but you really need more help than can be had here.

Re: Income inequality has *RISEN* under Obama?!?!?

[drsmithy]

Keep punishing that straw man. You know he loves it !

Re: Actual Reason

[david_thornley]

In the US, real wages have been flat, as has social mobility. US social mobility is well below the mobility in some European countries. It's all well and good that developing countries are getting better standards of living, but the fact that all US productivity gains have gone to the wealthy is still a problem, and the US is seeing a smaller and less secure middle class.

Re: Actual Reason

[drsmithy]

Why would that happen?

Because of people like you.

Even after decades of median wage stagnation in the face enormous productivity increases, a significant shift in GDP share to capital, increasing income and wealth gaps, you're *still* arguing the problem is workers are asking for too much.

Is regulation the magic sauce for making sure you don't starve because you forget to ask for a paycheck?

No, restoring lost bargaining power to labour is the best way of making people wealthier.

Somewhat lower wages is still better than no wages when it comes to generating revenue, wouldn't you think?

Why would employers not hire more people in the face of growing demand ?

Here's what's missing: leisure time and spending, risk taking, insurance, research and development, and business expansion.

Here's what's missing. Any evidence - heck, even some vaguely coherent reasoning - for that claim.

But I'm sure that government will continue to take and squander much more than that razor thin profit margin as is their due.

You are blindly arguing ideology.

It's a nice story except that it isn't true. The labor regulations haven't changed much; benefits and unemployment regulations haven't changed much; minimum wage is still around; and health care has actually been expanded. What has changed?

Lots of things have changed. Union membership has collapsed, immigration - particularly "skilled" immigration - has gone through the roof. Minimum wage has decreased in real terms.

Basically, the bargaining power of labour has been systemically destroyed for decades (again, common problem across most of the western world to some degree).

Well, nothing really. It's just part of the ongoing half century of economic shift to the developing world and growing wage parity between developed and developing worlds.

Which is policy choice. It's unclear why you think the American people should be supporting it. Their Government's responsibility is to them, not the rest of the world.

In other words, those darn Reagans and Thatchers didn't ban the billions of people who are eating your lunch, labor competition-wise.

Yes. Treason, you might say, by putting the desires of a handful of wealthy elites over the prosperity of citizens.

It is happening now, not in the 1950s. Now is the time of increasing real wages, creation of a global large and financially secure middle, relatively high social mobility, etc. What happened in the developed world then is now happening everywhere. But I guess all those people are kind of hard to see from whatever podunk country you're from.

Real wages in the western world have been stagnant or increasing slowly for decades. Most of their middle classes - the ones who weren't nearly wiped out in the GFC - are sitting on paper wealth with massive debt burderns behind it.

Re:Renting and borrowing have important difference

[david_thornley]

You ask why other people don't do what you're doing, and attribute it to stupidity. There may be other reasons. Do you have children? They cost a lot. Have you had a serious medical problem? In general, looking at what most people do and thinking it's because they're stupid means that you don't know what you're talking about, and haven't bothered to find out. It's the equivalent of the God of the Gaps in social commentary.

You made out on the housing market. Not everyone does. If your house went up that much in three years, you were almost certainly surfing a bubble, or you were lucky enough to buy at a low price. Houses are not going to appreciate like that normally. They're usually fairly good investments, but they're very unpredictable, and they're really not liquid if you want to sell out. A similar amount of well-chosen stock may well do better on the average.

Renting is not like borrowing money. It's a way of determining what you're going to pay, while being able to move without difficulty. If you keep buying and selling houses, the realtor cut and other closing expenses are going to eat up all potential profit. If you're renting, you can move around freely.; Renting may well be less expensive than buying a house.

Re:10% increase since 1984. 1984: $49K. 2014: $54K

[drsmithy]

He says posting a graph that starts in 1984.

This paints the picture much better. Hourly compensation increase 1948 - 1973: ~100%. 1973-present: ~10%.

So you're technically right with the claim wages have risen ~20% since 1967. You're just ignoring how much faster it was the twenty years before that and how slow it is in comparison to productivity increases and the income increases of the top few percent.

Lying with statistics at its finest.

Re:23% growth. Work 30 hours OR Starbucks, Netflix

[david_thornley]

"Most people" don't decide to work 40 hours; they take what jobs they can find. I wouldn't mind working a 32-hour week, but it's not an option here.

ignoring double-digit inflation is lying indeed

[raymorris]

Most of the charts on that page ignore inflation, which was over 10% PER YEAR in the 1970s. Lying with statistics indeed.

Re:ignoring double-digit inflation is lying indeed

[drsmithy]

They're using inflation-adjusted ("real") wages.

Re: Actual Reason

[Anonymous Coward]

The Father of Capitalism, Adam Smith, pointed out that the interests of the capitalists are never the same and often opposite of the rest of society. He also pointed out that the capitalists will use every means at their disposal to convince everyone else that their interests are the same as everyone else. And, finally, he pointed out that profits are lowest in rich countries, higher in poor countries, and highest of all in countries racing toward ruin.

He constantly mentioned profits are "reasonable" return on investment and defined that as the same rate as the interest on loans to the government.

National revenue is rents + wages+profits. Therefore, those who earn their living with profits have opposite interests from the other two classes since rents are dependent on wages.

The problem is that the capitalist model is based on the fact that it is most advantageous to invest first in the country in which you live because the rate of return is higher that foreign trade or the carrying trade. However, this model is broken today as money travels instantaneously and modern transportation is very fast compared to the times when it took a long time to transport items and gold and silver had to be transported by sailing ship to pay for things.

The real problem the rich today don't realize is that income inequality is the basis of most revolutions and eventually they will lose everything. Che once noted that the reason Americans weren't ripe for revolution was that the rich shared enough of the wealth with the other classes that they were satisfied. However, that is no longer the case as they take more and more of the wealth.

Re:distribution of wealth and_______

[jwhitener]

The present concentration of wealth is so dire that we run the risk of consolidating the World's power into a few hundred families.

I was under the assumption that current US politics are mainly driven by 400 families. And the US being the most powerful country in the world in terms of influence and military might... the world is already largely governed by a few hundred families.

Those families' influence has always been around, it has just gotten a lot more extreme in the last 40 years.

Re:Income inequality has *RISEN* under Obama?!?!?

[Anonymous Coward]

I agree with most of this, but would quibble with this point:

But, again, in the long-term, it doesn't (mostly) amount to a lot. The drug war isn't a by product of this. General "tough on crime" over-sentencing isn't a by product of this.

For-profit prisons lobbying for harsher sentencing guidelines, even for non-violent offenders (makes their job easier if the inmates aren't as violent on average), definitely contributes to the serious over-incarceration problem the US has.

Why oh why?

[iq145]

https://www.youtube.com/watch?...

you'd think, but 234% real growth? I think not.

[raymorris]

They don't state that they've ignored inflation, so the reader might reasonably assume they're communicating useful (real) numbers. However, they show wage growth of 234%. That's ten times the real (inflation-adjusted) growth. So yeah, they lied to you.

Re:you'd think, but 234% real growth? I think not.

[drsmithy]

However, they show wage growth of 234%. That's ten times the real (inflation-adjusted) growth.

What is the 234% number you are referring to here ?

Re: Income inequality has *RISEN* under Obama?!?!?

[aberglas]

+1

Re: Actual Reason

[khallow]

The Father of Capitalism, Adam Smith, pointed out that the interests of the capitalists are never the same and often opposite of the rest of society. He also pointed out that the capitalists will use every means at their disposal to convince everyone else that their interests are the same as everyone else. And, finally, he pointed out that profits are lowest in rich countries, higher in poor countries, and highest of all in countries racing toward ruin.

So what? Everyone else does that too. Conflict of interest is not a capitalism thing. It is a sentient being thing. It's ridiculous when a basic nature thing gets recast as an imaginary flaw peculiar to capitalism. One might as a result get the impression that you don't have a clue what you are speaking of.

The problem is that the capitalist model is based on the fact that it is most advantageous to invest first in the country in which you live because the rate of return is higher that foreign trade or the carrying trade. However, this model is broken today as money travels instantaneously and modern transportation is very fast compared to the times when it took a long time to transport items and gold and silver had to be transported by sailing ship to pay for things.

Capitalism is not based on that assumption. It is based on private ownership of capital with the trade infrastructure and legal protections that implies.

The real problem the rich today don't realize is that income inequality is the basis of most revolutions and eventually they will lose everything. Che once noted that the reason Americans weren't ripe for revolution was that the rich shared enough of the wealth with the other classes that they were satisfied. However, that is no longer the case as they take more and more of the wealth.

The rich don't "realize" something that isn't true? What a shocker. Every society has income inequality because everyone is not equally competent and skilled, doing the exact same job, and having the exact same luck.

And a Che quote? At least under the Batista regime, they didn't have a massive fraction of their citizens trying to flee the island. It's also worth noting that Che became the new elite once the Communists took over. The Communists might have destroyed the notions of income and wealth in Cuba, but they didn't destroy inequality.

Finally, I can't help but notice that you speak of income inequality not poverty. I think that's telling because poverty is a real problem, income inequality is not. Further, this talk ignores that globally, income and wealth inequality have improved over the past few decades, due in considerable part to widespread adoption of capitalism, such as in China. That's a bit contrary to the narrative, don't you think?

Re: Actual Reason

[khallow]

Why would that happen?

Because of people like you.

The thing you don't get is that employment is a trade. Both sides have to bring something to the table. You aren't entitled to a job. Let's give an example. You wrote elsewhere:

Yes, yes, but then what ? Did they just sit in their warehouse full of goods cackling ?

Of course not. They sold it, at which point they were given money (or if you want to go back four-odd thousand years before money existed, other goods) in exchange, which they then used to fund more production.

Without the consumption - the demand - the whole thing falls apart, because without consumption, production is just a waste of time (and resources).

Well, guess what? Jobs are just like warehouses of goods. If the demand for those jobs isn't there, the jobs aren't there. I find it telling how the parties talking about how economies are about the consumers conveniently forget that employers are consumers of labor. This is a transparent ideological excuse to screw over someone you don't like. Well, my take is different: eat your own dogfood or STFU.

Let's look at some other errors in your current post:

Here's what's missing: leisure time and spending, risk taking, insurance, research and development, and business expansion.

Here's what's missing. Any evidence - heck, even some vaguely coherent reasoning - for that claim.

Where do you think money for those things comes from? Trees? It comes from profits. When you have razor thin profit margins, that's the sort of things which gets lost.

But I'm sure that government will continue to take and squander much more than that razor thin profit margin as is their due. You are blindly arguing ideology.

Walmart had a profit margin of a bit over 3% of revenue in the recent past. California has a sales tax of 7.5% which would apply to almost all Walmart revenue in that state. That's more than double the profits of Walmart right there. And California is notorious for squandering the money it gets. If you look at the map at the bottom of this article you see a lot of states with combined state and local sales tax over 6% (including all ten of the most populous states in the US). And many of those states have a similar reputation for screwing the pooch whenever they get their hands on money.

Well, nothing really. It's just part of the ongoing half century of economic shift to the developing world and growing wage parity between developed and developing worlds.

Which is policy choice. It's unclear why you think the American people should be supporting it. Their Government's responsibility is to them, not the rest of the world.

I think this is like saying its unclear whether the American people should be supporting gravity. The American people don't have a choice. They can't choose for those billions of people to vanish. They can't choose for those billions of people to magically have the same wealth and standard of living as US citizens currently enjoy. This disparity of wealth and cost of labor exists whether you support it or not. It's not policy choice, it's reality.

I notice in a few places you have this delusion that's it just a matter of positive thinking. After all, the very first whine is about how I'm holding us back with my mental failwaves. And it goes all the way to the end with another piteous whine that US citizens can choose via policy to unmake those billions of people who are willing to work for less.

It's time for you to pull your head out of your ass. If your ideas can fail merely because I disagree, then they weren't worth having in the first place. If your ideas can fail merely because reality isn't as you would like, well that's another reason that they aren't worth having.

Re: Actual Reason

[khallow]

In the US, real wages have been flat, as has social mobility. US social mobility is well below the mobility in some European countries. It's all well and good that developing countries are getting better standards of living, but the fact that all US productivity gains have gone to the wealthy is still a problem, and the US is seeing a smaller and less secure middle class.

So what? I don't see this as having an easy or low pain solution. US labor has to take a haircut (which it is a significant part of the way through BTW) because the world isn't perfect. That's the way it is.

Question? Really?

[Anonymous Coward]

The workers haven't seen any of that productivity increase as increased wages. The main reason the average work week dropped was probably the introduction of women to the workforce, who are far more likely to work under 40 hours a week.

Re: Actual Reason

[david_thornley]

The problem is that US capitalists are doing extremely well, while the middle class is shrinking and pay for people outside the 1% or so is flat. If there was any sort of "we're all in this together" feeling, it would help, but there isn't. Why does US labor have to take a haircut while the 1% get lots more money?

Re:Women+Boomers+Immigrants = "Labor Shortage"

[Baldrson]

I stand corrected. Let me rephrase that as "The Stupid Donor Party" since their policies are dominated by their donors in stark contrast to those held by their own base -- policies that are destroying their own base and replacing it with a base they cannot possibly win from the Elect A New People Party -- which has at least an illusion of "consent", however shallow, from its burgeoning base.

Re: Actual Reason

[khallow]

If there was any sort of "we're all in this together" feeling, it would help, but there isn't.

There isn't such a feeling because we aren't all in this together.

Why does US labor have to take a haircut while the 1% get lots more money?

Because you're competing with several billion people who will work for a lot less while the capital of those rich people does not. There's no reason to expect this to be fair. But at the same time, it's not unfair to expect you to adapt to the situation rather than make it worse.

For example, let's say you're the only plumber in a town. You are a paragon of virtue and don't abuse your effective monopoly position and offer prices comparable to neighboring towns which do have more than one plumber.

Then one day, five new plumbers move in and immediately start offering lower and lower prices. It's not fair to you. Nobody else in town has this sort of competition going on. You are losing wealth relative to everyone else who isn't a plumber through no fault of your own. Income inequality increases as a result with six poor plumbers.

At this point, you have a number of choices, all of them bad to some degree. For example, you can attempt to tough it out to be one of the last ones standing, knowing that you'll still have a greatly reduced market share and profit as a result. You can move to a new town and be a plumber there. Or you can abandon plumbing as a career altogether. Maybe you'll try to take a chance and create a new plumbing service that the other plumbers can't match (maybe it'll pay off, maybe it won't)..

There are all ways you could attempt to better your situation. But you could also choose to make the situation worse such as developing a drinking habit.

I believe this is going on at a vast scale in the developed world. There's all this entitled talk about how the rich people owe us a good salary and such. Well, they owe the Indians and the Chinese good salaries too. And good salaries there are much less than good salaries in the developed world.

Bottom line is that developed world labor has to be able to offer something that developing world labor can't offer (and it can be as simple as access to a nice market, though the developing world has nice markets too) or it won't get the work for the pay that is desired. Developed world labor just doesn't have pricing power and won't get it until there is near parity with the developing world (which is improving at a good rate) or until some remarkable advantage is created (I'm not seeing the remarkable advantages in the long run).

You want what rich people have, but you don't have leverage to get it. You're not going to make your situation any better by making it harder for rich people to give you what you want.

Re: Actual Reason

[drsmithy]

The thing you don't get is that employment is a trade.

Now there's some irony.

Well, guess what? Jobs are just like warehouses of goods. If the demand for those jobs isn't there, the jobs aren't there.

Er, yes ? That's kind of the point I've been making over and over again ? The economy is driven by demand and we don't have enough of it because the middle- and lower-classes are being systemically and deliberately impoverished. No demand, no need for production. No need for production, no jobs. No jobs, no money, no demand. Return to step 1 and continue to circle the drain.

I find it telling how the parties talking about how economies are about the consumers conveniently forget that employers are consumers of labor. This is a transparent ideological excuse to screw over someone you don't like.

I have no idea what you're on about.

I am well aware that employers are consumers of labour, it's a fairly key part of my point that Governments of the last thirty-odd years - at the behest of business - have engineered a massive labour surplus, because that surplus is the thing that has facilitated decades of wage stagnation. Scarce labour does not experience wage stagnation because scarce labour has bargaining power in that employment "trade" you mentioned above. That is why professionals have no seen as bad a wage stagnation, because they have retained some bargaining power. It is the same bargaining power business seeks to undermine through "skilled immigration", and why it is always lobbying for more.

Your position is that the reduction in bargaining power of labour is not only unavoidable, but that it is desirable.

I'm not sure who you think is going to get "screwed over" through increased employment, increased real incomes, increased demand, increased productivity and increased living standards. It's true that the handful of people at the top who have been making out like bandits for the last few decades at the cost of everyone else might find their rate of improvement slows down a bit, but that's not "screwing over" in any sense of the term I'm familiar with.

Where do you think money for those things comes from? Trees? It comes from profits. When you have razor thin profit margins, that's the sort of things which gets lost.

No, those things are implicitly included in the "economy running on a razor-thin profit but still producing excess of everything it needs".

Walmart had a profit margin of a bit over 3% of revenue in the recent past. California has a sales tax of 7.5% which would apply to almost all Walmart revenue in that state. That's more than double the profits of Walmart right there. And California is notorious for squandering the money it gets. If you look at the map at the bottom of this article [taxfoundation.org] you see a lot of states with combined state and local sales tax over 6% (including all ten of the most populous states in the US). And many of those states have a similar reputation for screwing the pooch whenever they get their hands on money.

You are blindly arguing ideology (basically, "anything Government does is inherently bad").

I think this is like saying its unclear whether the American people should be supporting gravity. The American people don't have a choice. They can't choose for those billions of people to vanish. They can't choose for those billions of people to magically have the same wealth and standard of living as US citizens currently enjoy. This disparity of wealth and cost of labor exists whether you support it or not. It's not policy choice, it's reality.

Interacting with "those billions of people" - whether to do it at all, and how, is a policy choice. The American Government - representing the will of the American people - decides what is and is not allowed across its borders - real or virtual - from goods, through people, to money. (In reality the American Government doesn't represent the will of the people, it represents the

Re: Actual Reason

[Anonymous Coward]

I believe this is going on at a vast scale in the developed world.

I believe what is happening on a vast scale is governments playing games to better entrench their own power.

Developed countries are more democratic. The biggest threat to the rulers in a democratic country is the Average Joe - labor. They're a huge voting bloc, and they could organize. But in a democratic country you can't just use guns to keep them down. You need to be more subtle. Like, say, hurt their wallet so even if they organize they can't buy a big enough microphone.

Developing countries are not so democratic. They have an easier time keeping the masses in line with guns. The bigger problem is finding a way to whip those masses to be productive, to create wealth for the rulers. In the bad old days you'd send them to war and pillage other countries, but that's somewhat hard these days (maybe if you're ISIS level crazy...). So how about finding developed countries willing to pay for your labor, despite your human rights record?

And so the unholy union came to be. That some (developing world labor, developed world rich) are seeing benefits out of this is secondary to both sides' governments. The smarter ones among them know the government could always change their mind and crack down on them. That's why the rich, despite being beneficiaries of the current status quo, still continue to donate to political campaigns to keep things that way.

Re: Actual Reason

[david_thornley]

You're assuming (a) that the principles of the economy are immutable, (b) that the government needs to stay out of managing the economy even if it hurts hundreds of millions of people, and (c) the people won't revolt at some time. We have had prosperity with a lot less income inequality and higher taxes in the upper brackets, and the prosperity helped most people. As far as the revolt goes, look at the popularity Sanders has picked up. If we elect him President, and vote in a sympathetic Congress, things are going to change, and a lot of people with lots of money will not like it. I'm not saying his policies will be best for the country, but that no other Presidential candidate is as clearly on the side of the people as he is.

Re: Actual Reason

[khallow]

Er, yes ? That's kind of the point I've been making over and over again ? The economy is driven by demand and we don't have enough of it because the middle- and lower-classes are being systemically and deliberately impoverished. No demand, no need for production. No need for production, no jobs. No jobs, no money, no demand. Return to step 1 and continue to circle the drain.

No. Employers are demand too and there's not enough of them either. You only consider certain demand not all demand. The demand model of an economy is inherently flawed because it deliberately excludes employers, a huge category of demand. And the subsequent impairment of society, which you term "circle the drain" is a consequence.

Here's how I see it. In the US, a few years back our overheated real estate market created a massive recession for the entire world. Here was an attempt to create massive consumer demand for US real estate and it failed badly. My view is that we have considerable evidence that consumers just can't consume much more than they are right now. Focusing on consumer demand is a terrible strategy because it does nothing to improve the earning power of those consumers. There's only so much a consumer can consume, even when borrowing everything they can borrow.

Similarly, attempts to increase the standard of living of workers while making their labor less valuable to employers are an ongoing disaster. The contradiction inherently insures it will not work.

The reality is that the west is in an economic malaise because it has chosen to systemically and deliberately undermine its middle- and lower-classes for no reason other than to facilitate a handful of already unimaginably wealthy people sucking up even more wealth. Until wealth and disposable income are returned to them, nothing will improve. Because it literally, cannot.

Then stop enabling that. Your policies are the cause here. Rich people can get wealthier anywhere in the world. Middle and lower-class people can only get wealthier where they live. And the primary means by which those people get wealthier is by labor.

Employment is trade. You have to have something to offer in order to get wages in exchange. The employer is the important part of the economy, not a consumer. The demand of employers is so much more open ended than the demand of people who are capped by their limited earning power.

For example, back in 1950, the effective global economy consisted of North America (excluding Mexico), western Europe, and a little bit of other parts of the world. There was maybe half a billion or so people. Now, that number is something like three to five billion people that are reasonable well connected to the global economy.

There has been a huge increase in labor available to business. Yet we haven't seen a dramatic collapse in developed world wages. That's because a vast amount of new demand for labor has been created throughout the world. And that gives the lie to the claim that "unimaginably wealthy" people are sucking up the wealth. There's a vast amount of improvement in peoples' lives globally. It's just not happening as fast as you would like in the developed world.

So when you propose, once again, screwing over employers because rich people, you are harming the most important part of your economy. Wealth and disposable income "can be returned" to workers. Wealth and disposable income can't be returned to the unemployable unemployed.

Re:Income inequality has *RISEN* under Obama?!?!?

[thoughtlover]

Income inequality has risen since at least Reagan, don't act like it's something new.

It really started with the Gold Reserve Act in 1934 (outlawing private gold possession). The Federal Reserve (and its ensuing policy) and Income Tax didn't help (and are two of the ten planks of the Communist Manifesto), but it started with Nixon lowering the top-earners' taxes --Definitely noted that Reagan lowered them much more than Nixon did, too.

The answer is a question

[thoughtlover]

Why do Americans want so much?

Buddha, Jesus, et al. ilk all knew that material possessions, beyond the necessaries, were nothing but a drag on the human spirit.

I've the belief that many /.ers think the same... that mental strength trumps the physical and is ultimately more important to cultivate --'The pen is mightier than the sword' and all that jazz...

Re: Actual Reason

[drsmithy]

No. Employers are demand too and there's not enough of them either. You only consider certain demand not all demand. The demand model of an economy is inherently flawed because it deliberately excludes employers, a huge category of demand.

How's that ?

Here's how I see it. In the US, a few years back our overheated real estate market created a massive recession for the entire world. Here was an attempt to create massive consumer demand for US real estate and it failed badly.

The product wasn't real estate. It was credit.

My view is that we have considerable evidence that consumers just can't consume much more than they are right now.

Yes. Because they're broke. They're broke because they've suffered decades of policies aimed at suppressing their incomes and are additionally suffering from the debt load taken on to maintain the increase in living standards they had grown to expect from the previous thirty years of progress.

Focusing on consumer demand is a terrible strategy because it does nothing to improve the earning power of those consumers. There's only so much a consumer can consume, even when borrowing everything they can borrow.

The mind-bogglingly issuing of credit over the last few decades and consequent crushing debt load was done to mask wage stagnation. If wages had increased in line with productivity, people wouldn't have needed to borrow to consume because they would have had the real disposable income to consume.

Focusing on consumer demand is the only way to fix the problem because the economy relies on it to function. Ideally, consumer demand is increased through higher real wages and increased productivity, leading to greater disposable incomes.

Similarly, attempts to increase the standard of living of workers while making their labor less valuable to employers are an ongoing disaster. The contradiction inherently insures it will not work.

Yes ? That's the point I've been (repeatedly) making ?

Then stop enabling that. Your policies are the cause here.

No they're not. "My" policies - jobs guarantees, full employment as a policy goal, strong workers rights, strong financial sector regulation, extensive public infrastructure and services, high progressive taxes to control wealth distribution and inflation, liveable welfare, etc, etc - haven't seen light of day since the early '70s. They are the kinds of policies that defined post-WW2 USA - "capitalism's golden age".

The Thatcherites and Reaganites - neoliberals - completely and utterly own today's worldwide economic armageddon. They have been running the world since the mid '70s. They are the ones who have been "attempting to increase the standard of living of workers while making their labor less valuable to employers".

Rich people can get wealthier anywhere in the world. Middle and lower-class people can only get wealthier where they live. And the primary means by which those people get wealthier is by labor.

Yes ? Again, the point I've been making repeatedly ?

Employment is trade. You have to have something to offer in order to get wages in exchange. The employer is the important part of the economy, not a consumer. The demand of employers is so much more open ended than the demand of people who are capped by their limited earning power.

*sigh*

People's "earning power" is limited by what their employers pay, which is a function of their bargaining power with said employer (the "trade"). Since the developed world has pursued thirty-odd years of policy aimed at undermining workers' bargaining power so as to suppress wages, their earning power has been gutted. This is visible in the wage vs profit share of GDP - the former has declined and the latter significantly increased.

The consumer is the critical part of the economy. With nobody to consume business's output, there is nothing for business to do, no point for it to operate.

Consider what would happy if every

Re: Actual Reason

[khallow]

No. Employers are demand too and there's not enough of them either. You only consider certain demand not all demand. The demand model of an economy is inherently flawed because it deliberately excludes employers, a huge category of demand.

How's that ?

By definition and ideological bias.

The product wasn't real estate. It was credit.

Credit doesn't consume in itself, it just makes it a bit easier. And it's worth noting that a lot of people were just find with that credit being used to build a lot of houses and other things. That physical activity generates a lot of economic activity while pure credit would not.

Yes. Because they're broke. They're broke because they've suffered decades of policies aimed at suppressing their incomes and are additionally suffering from the debt load taken on to maintain the increase in living standards they had grown to expect from the previous thirty years of progress.

I agree. I just think it is policies you favor which do that. It's supply and demand for labor. You cripple the demand and then the price of labor, namely, wages and other benefits goes down. Another effect is that if you force employers and employees to vastly overpay for low value benefits (like weak return pensions or greatly overpriced health care), then you shrink the actual benefit that workers get from working.

The number one economic fallacy is that we compare our world to some unattainable goal rather than the alternative choices we could have made. No choice of the past fifty years would allow the US to maintain its relative standard of living and compete on the global labor market at the wage differentials that existed in 1965.

That's because a vast amount of new demand for labor has been created throughout the world. And that gives the lie to the claim that "unimaginably wealthy" people are sucking up the wealth.

It's not a claim, and it's certainly not a lie. It's a fact. The evidence of upwards wealth transfer across the entire world over the last few decades is clear.

And whenever this falsehood rears its head, I point out this graph (see figure 1). It shows the wealthiest indeed increasing their wealth over the recent period 1988-2008. But it also shows two thirds of humanity getting substantial increases in their wealth as well. Just because your policies help the wealthy in your country more than they help you, doesn't mean that others in the world aren't becoming better off through no fault of you.

O.o You cannot be serious.

The US is the poster child for this in the developed world, with most worker's wages there having gone nowhere in real terms for the better part of forty years, the labour share of GDP dropping and the capital share of GDP going through the roof. However, it is a trend that is common across the entire developed world to varying degrees (since they're all basically marching to the same drum).

Name another good or service, for which people pay money, which you can increase the supply by a factor of five to ten without having the price fall through the floor and stay there. Despite your vigorous and reality-free assertion, wages didn't collapse in the US or the rest of the developed world (except for some particularly dysfunctional countries like Greece). That implies that there was a huge amount of demand creation.

I can't remember the exact numbers off the top of my head, but in the '50s a typical CEO earned something like 25x the typical worker's wages. Now it is more like 300x. In what world does that not represent a dramatic collapse in those workers' wages !?

Of course not. Just because someone else is paid more doesn't imply even in the least that you are paid less.

Another way to look at the colossal

Re: Actual Reason

[khallow]

Developed countries are more democratic. The biggest threat to the rulers in a democratic country is the Average Joe - labor. They're a huge voting bloc, and they could organize. But in a democratic country you can't just use guns to keep them down. You need to be more subtle. Like, say, hurt their wallet so even if they organize they can't buy a big enough microphone.

They don't have to be subtle or even have intent. There's plenty of harm you can do just by advocating policies that appear to favor workers like minimum wage, public pensions, inflating demand (and prices) for goods and services that people need, some of the more aggressive pro-labor union policies, hard to fire policies, etc, but which don't create jobs.

Ultimately, lowering demand for labor is what takes away labor's power. A lot of labor policies do just that.

Re: Actual Reason

[khallow]

You're assuming (a) that the principles of the economy are immutable

You're assuming you have a way to change those principles.

(b) that the government needs to stay out of managing the economy even if it hurts hundreds of millions of people

I haven't seen evidence yet that developed world governments are doing positive things for their people via most of their labor and public benefits policies.

and (c) the people won't revolt at some time.

The same goes for any other policies with net negative effect. Revolts are a thing to worry about.

We have had prosperity with a lot less income inequality and higher taxes in the upper brackets, and the prosperity helped most people.

And we had a lot less labor competition from the developing world. Why are things supposed to stay the same in the face of massive change?

As far as the revolt goes, look at the popularity Sanders has picked up. If we elect him President, and vote in a sympathetic Congress, things are going to change, and a lot of people with lots of money will not like it.

A lot of people without money probably aren't going to like the results either, but that's not going to stop them from voting for Sanders. After all, they voted for Obama too and that worked out well.

I'm not saying his policies will be best for the country, but that no other Presidential candidate is as clearly on the side of the people as he is.

I've never been a fan of voting for someone just because they allegedly have good intentions. Those go wrong so easily.

Re: Actual Reason

[drsmithy]

By definition and ideological bias.

Let me put it another way.

How is it that I am only considering "certain demand" ? How is it that "employers are excluded" ?

Credit doesn't consume in itself, it just makes it a bit easier.

Yes it does. That's where speculation and bubbles come from.

And it's worth noting that a lot of people were just find with that credit being used to build a lot of houses and other things. That physical activity generates a lot of economic activity while pure credit would not.

I'm sure the people making a motza out of flipping houses because they were lucking enough to get in early were very happy with it, but it's mostly unproductive activity.

I agree. I just think it is policies you favor which do that.

To reiterate, the policies I favour have barely even been discussed, let alone implemented, for about forty years. They were in place from the end of WW2 to the early '70s. They ended about where that fairly well known divergence between productivity and real wages happens.

It's supply and demand for labor. You cripple the demand and then the price of labor, namely, wages and other benefits goes down.Another effect is that if you force employers and employees to vastly overpay for low value benefits (like weak return pensions or greatly overpriced health care), then you shrink the actual benefit that workers get from working.

The shrinking of the benefit workers get from working is the result of the race-to-the-bottom policymaking endemic to supply-side neoliberalism.

The number one economic fallacy is that we compare our world to some unattainable goal rather than the alternative choices we could have made. No choice of the past fifty years would allow the US to maintain its relative standard of living and compete on the global labor market at the wage differentials that existed in 1965.

The choice to undermine labour absolutely did. It is the foundation on which subsequent growth in inequality and the economic malaise that has come with it was built.

The US doesn't compete in the global labour market. The idea that it could is absurd. The US is an advanced economy that competes on the global product and service market. It's not trying to make a cheaper mousetrap, it's trying to make a better mousetrap.

And whenever this falsehood rears its head, I point out this graph [voxeu.org] (see figure 1). It shows the wealthiest indeed increasing their wealth over the recent period 1988-2008. But it also shows two thirds of humanity getting substantial increases in their wealth as well. Just because your policies help the wealthy in your country more than they help you, doesn't mean that others in the world aren't becoming better off through no fault of you.

Neither the graph, nor your statement, do anything to refute the point.

Here's a simple example.

Let's say at the beginning, the poor have a dollar and the wealthy have ten dollars.
Thanks to productivity increases, after fifty years the poor now have 5 dollars but the wealthy have a hundred dollars.

That's an upwards transfer of wealth. Because the growth in wealth is a result of everyone's productivity increases. If it had been an even transfer of wealth, the poor would have ten dollars and the wealthy would have a hundred dollars. Ie: their growth rates would have been the same.

This is what happend for the first couple of decades after WW2 (in actual fact it was even better - incomes for the working and middle classes grew _faster_ than incomes for the upper classes).

Name another good or service, for which people pay money, which you can increase the supply by a factor of five to ten without having the price fall through the floor and stay there.

Begging the question fallacy.

Despite your vigorous and reality-free assertion, wages didn't collapse in the US or the rest of the developed world (except for some particularly dysfunctional count

Re: Actual Reason

[khallow]

How is it that I am only considering "certain demand" ? How is it that "employers are excluded" ?

[...]

I have no idea what point you're trying to make here. Employers will not produce any more than is demanded of them by consumers. Employers do not employ people out of the goodness of their hearts, as you seem to believe, they employ them to meet a need. If you want to increase employees, or employers - employment - you need to create more consumer demand. Reducing the cost of employees does not improve unemployment in the face of a lack of demand.

There's the answer to your question.

Re: Actual Reason

[werepants]

And the great incongruity of your post is that the actual quickest and most widespread increase in wealth and living standards in human history happened after the period of time you mention. It is happening now, not in the 1950s. Now is the time of increasing real wages, creation of a global large and financially secure middle, relatively high social mobility, etc. What happened in the developed world then is now happening everywhere. But I guess all those people are kind of hard to see from whatever podunk country you're from.

Citation needed. Social mobility is decreasing. Wages are flat for the middle class since the 70's. Your assertions are wrong.

Re: Actual Reason

[khallow]

I'm sorry, but you display profound ignorance and delusion on multiple levels. Most of your post is simply unworthy of a response. Instead, I'll respond to some of the more contradictory elements.

The US doesn't compete in the global labour market. The idea that it could is absurd. The US is an advanced economy that competes on the global product and service market. It's not trying to make a cheaper mousetrap, it's trying to make a better mousetrap.

Later you write:

Restore the bargaining power of labour. Raise minimum wage. Reduce access to cheap labour through immigration. Apply tariffs to equalise costs of foreign-manufactured goods. Employ idle labour in useful work (eg: building/maintaining public infrastructure).

The US doesn't compete in the global labor market, yet you feel the need to reduce access to cheap labor through immigration, apply tariffs to equalize costs of foreign-manufactured goods, and employ idle labor in useful work. But the US doesn't compete in the global labor market and hence, doesn't have a reason for these measures which are all purely protectionist measures for a global labor market.

Credit doesn't consume in itself, it just makes it a bit easier.

Yes it does. That's where speculation and bubbles come from.

Point to the house that has credit as a buyer. Every act of consumption has physical parties involved not some vague economics concept. Whatever you will say to this will just boil down to credit made it easier for the physical party to consume, but credit didn't in itself do the consumption.

My view is that you got what you wanted.

Your view is wrong. I would have been - if I were alive - getting what I wanted for the first couple of decades after WW2. Since then the world has been run by supply-siders, only ever looking at one side of the equation, forever trying to reduce costs through lowering wages, and - giving the benefit of the doubt as I tend to do - simply not understanding that the world is demand-driven.

And here you are again, only ever looking at one side of the equation. The obvious rebuttal is that employers always have attempted to reduce costs through lowering wages. The reason they've failed to reach zero is because employers have to compete to get the labor they need to profit. The more employers looking for employees, the better the deal for workers. That's the supply-demand dynamic that you keep ignoring.

The obvious question here is what changed between the first two decades after the Second World War and the subsequent period leading up to modern times. The obvious answer is that the US didn't have significant labor competition from Europe or Japan prior to 1970. The moment they did, such as when the Japanese automakers made huge end roads into the US auto market after the oil crises of the 1970s, we started seeing pressure on US labor. That happened well before supply side policies were adopted.

The only person in this discussion who thinks "full employment" is somehow at odds with "everyone does useful stuff" is you. Indeed, the whole point of full employment as a policy is to try and ensure "everyone does useful stuff".

Do you ever think about this stuff? I would be just as fully employed digging a ditch with a spoon as I would be building state of the art computers or saving billions of lives with novel advances in medicine. Usefulness of the job is completely unrelated to whether you are employed or not.

I have no idea what maths you're using. But the correct way to look at it is that if worker and CEO wages had both increased at the same rate as productivity - like they did for the first few decades after WW2 - then the relative incomes of workers would not have collapsed and their living standards would have increased at the same rate.

This is dis

Re:Renting and borrowing have important difference

[werepants]

It's not quite that simple, though. Relying on appreciation to make a mortgage pay off isn't investing - it's speculating. Real estate prices can and do go through periods of decline, and so you happened to luck out over the period of your ownership.

Renting out a property also pays you money, but assume that the mortgage just stays even with inflation (I.E. not speculative investment). You get regular monthly payments from people, but you also have to do the work of finding renters, maintaining the property, etc. So you are essentially working a part time job to get that money - maybe you make a great hourly rate, but you are still putting time in.

Over long time periods, it's also generally a depreciating asset - the land may tend to appreciate depending on what the market does, but a 20 year old home right now will be considered outdated if there are no renovations done - so you need periodic infusions of cash and/or labor to maintain the value of the home.

You also have lots of risk... floods, fires, total market upheaval, hail storms wrecking the roof, meth-head renters, etc.

And finally... if you paid cash, you have a ton of capital tied up in that home. You could just as well have that invested in an index fund with an average 8% annual return, or sit it somewhere like REIT funds that would pay a sizable dividend.

So, the point is, you can certainly make money in real estate, but depending on the circumstances it's possible that you could make as much or more in the long term through investment in a low-maintenance index fund, especially if you count the cost of your time investment.

Re: Actual Reason

[khallow]

And the great incongruity of your post is that the actual quickest and most widespread increase in wealth and living standards in human history happened after the period of time you mention. It is happening now, not in the 1950s. Now is the time of increasing real wages, creation of a global large and financially secure middle, relatively high social mobility, etc. What happened in the developed world then is now happening everywhere. But I guess all those people are kind of hard to see from whatever podunk country you're from.

Citation needed. Social mobility is decreasing. Wages are flat for the middle class since the 70's. Your assertions are wrong.

Ah, yes, the magic demand for a link. Here, you go. Figure one is a graph indicating how global wealth by bracket increased over the period 1988-2008. It does show that the wealthiest people in the world did increase their wealth considerably. It also shows the wealth stagnation of the developed world. But it also shows that two thirds of the world saw large increases in their wealth over that period of time.

That's four to five billion current people whose lives were significantly improved over that twenty year period. Meanwhile global population was only about 2.6 billion in 1950.

Re: Actual Reason

[werepants]

Thanks for the link - it is true that this is happening globally. It is also true that social mobility in the U.S. is decreasing, and that middle class wages have been flat for decades.

Re: Actual Reason

[khallow]

There are consequences to bad decisions. For example, there are a number of people here saying they want to force everyone to work less hours a week. That cripples social mobility right there since the opportunity to work to improve one's lot is a big part of social mobility.

Re: Actual Reason

[drsmithy]

The US doesn't compete in the global labor market, yet you feel the need to reduce access to cheap labor through immigration, apply tariffs to equalize costs of foreign-manufactured goods, and employ idle labor in useful work. But the US doesn't compete in the global labor market and hence, doesn't have a reason for these measures which are all purely protectionist measures for a global labor market.

The US does not compete in the global labour market in the sense that it is selling cheaper labour (like, say, China, or India). It can’t sell cheaper labour because it is an advanced country and the costs of maintaining that lifestyle are too high. Unless of course you want to drive down US living standards to the level of China or India (and there are plenty of people who seem to think that’s a good idea - for everyone except themselves, of course).

I would have thought this meaning was obvious from the second part where I said “it’s not trying to make a cheaper mousetrap, it’s trying to make a better mousetrap”. I suppose I could have been more explicit and said ““it’s not trying to make a cheaper mousetrap through reducing input costs, it’s trying to make a better mousetrap”. Would that have helped ?

And here you are again, only ever looking at one side of the equation. The obvious rebuttal is that employers always have attempted to reduce costs through lowering wages.

How is that a rebuttal when I’ve been talking about it throughout this entire discussion ? Of course employers have always attempted to reduce costs through lowering wages. The point I keep making is that allowing them to do it is a policy choice.

The reason they've failed to reach zero is because employers have to compete to get the labor they need to profit. The more employers looking for employees, the better the deal for workers. That's the supply-demand dynamic that you keep ignoring.

Ignoring ? Supply and demand is at the bloody core of everything I’ve written !

The reasons employers haven’t reached zero salaries are because some small protections still exist for workers (mainly the minimum wage, but unions still have some small pockets of presence). Note that businesses are constantly agitating to remove or reduce these protections. We - the entire western world - have an enormous glut of available workers. Were it not for those protections, then the wages of lowest paid probably would be bumping up against zero. Already huge swathes of the population are dependent on welfare for survival because they cannot earn enough to survive on themselves due to a) wage suppression and b) structurally-imposed unemployment.

You write “the more employers looking for employees, the better the deal for workers” as if “employing people” is what businesses are there to do. They are not. Businesses are there to produce stuff and sell it. Having to employ people is simply an inconvenient consequence of producing stuff to sell. They only produce stuff if there is someone on the other side of the equation to consume that stuff. There is a demand shortage because most people are broke. With this stagnating or declining demand, there is no reason for employers to produce more (because why would you produce more than you can sell?), since employers have no need to produce more, they have no need to hire more employees (why would you hire employees if you had nothing for them to do?), since they have no reason to hire more employees, and there is a huge oversupply of employees in the market, there is no competition between employers and therefore, “the deal” is most certainly not getting any better for employees.

If you still think I am not accounting for some aspect of “supply and demand”, then be more specific about what it is and I will try to explain it differently.

The obvious question here is what changed between the first two d

Re: Actual Reason

[drsmithy]

Were it not for those protections, then the wages of lowest paid probably would be bumping up against zero. Already huge swathes of the population are dependent on welfare for survival because they cannot earn enough to survive on themselves due to a) wage suppression and b) structurally-imposed unemployment.

I mean to edit this to say:

In fact, arguably wages are already bumping up against zero. Huge swathes of the population are dependent on welfare for survival because they cannot earn enough to survive on themselves due to a) wage suppression and b) structurally-imposed unemployment.

Re: Actual Reason

[khallow]

The US does not compete in the global labour market in the sense that it is selling cheaper labour (like, say, China, or India). It canâ(TM)t sell cheaper labour because it is an advanced country and the costs of maintaining that lifestyle are too high. Unless of course you want to drive down US living standards to the level of China or India (and there are plenty of people who seem to think thatâ(TM)s a good idea - for everyone except themselves, of course).

Competition isn't competition when the player deliberately plays bad? I don't agree. And I've never said that I want to drive down US living standards. It's just a thing that happens in the presence of superior labor competition.

I would have thought this meaning was obvious from the second part where I said âoeitâ(TM)s not trying to make a cheaper mousetrap, itâ(TM)s trying to make a better mousetrapâ. I suppose I could have been more explicit and said âoeâoeitâ(TM)s not trying to make a cheaper mousetrap through reducing input costs, itâ(TM)s trying to make a better mousetrapâ. Would that have helped ?

No, for two reasons. First, cheaper is an important category of better. Second, China in particular is doing a much better job here than the US is, including a much better job of taking advantage of US R&D.

You write âoethe more employers looking for employees, the better the deal for workersâ as if âoeemploying peopleâ is what businesses are there to do. They are not. Businesses are there to produce stuff and sell it. Having to employ people is simply an inconvenient consequence of producing stuff to sell. They only produce stuff if there is someone on the other side of the equation to consume that stuff. There is a demand shortage because most people are broke. With this stagnating or declining demand, there is no reason for employers to produce more (because why would you produce more than you can sell?), since employers have no need to produce more, they have no need to hire more employees (why would you hire employees if you had nothing for them to do?), since they have no reason to hire more employees, and there is a huge oversupply of employees in the market, there is no competition between employers and therefore, âoethe dealâ is most certainly not getting any better for employees.

They can always sell to markets that aren't as screwed up like China or India. These demand problems don't exist there. There may be a huge oversupply of employees in those markets, but it's getting sopped up. Meanwhile developed world countries like the US seem to try to make people useless.

And I note once again, the ridiculous ideological bias against employers rears its ugly head in your words. You keep harping on how lower wages hampers consumption and hence, economic progress, but you continue to completely ignore that this goes both ways. Increasing the cost of employees to employers also reduces demand for labor and cause all that stuff.

But instead, we're wasting time envying the rich because their wealth increased even faster. There is something profoundly sick with your outlook that you can completely dismiss a huge increase in wealth for poor people because rich people got it even more.

Firstly, itâ(TM)s not envy. Secondly, itâ(TM)s not a huge increase in wealth for the poor, because of inflation. Thirdly, I have in no way dismissed a wealth increase, I have merely pointed out that it has not been evenly distributed, and argue that - absent any actual reason otherwise - it should be.

The obvious actual reason is that capital doesn't have to compete with several billion people.

For example, consider this alternate scenario. The poor and wealthy started as above with a dollar apiece and ten dollars apiece for the wealthy. After

Re: Actual Reason

[drsmithy]

Competition isn't competition when the player deliberately plays bad? I don't agree.

Right. So you’re the kind of guy who would argue there should be no laws against, say, fraud ? Or theft ? You know, "deliberately playing bad" ?

And I've never said that I want to drive down US living standards.

You keep arguing for things that will cause it and against things that will improve it.

No, for two reasons. First, cheaper is an important category of better.

Buying some stolen speakers out of the back of someone’s truck is a lot cheaper than buying them in the store, but it is not “better”.

Second, China in particular is doing a much better job here than the US is, including a much better job of taking advantage of US R&D.

That’s because China doesn’t care about things like pollution or safety.

They can always sell to markets that aren't as screwed up like China or India. These demand problems don't exist there. There may be a huge oversupply of employees in those markets, but it's getting sopped up. Meanwhile developed world countries like the US seem to try to make people useless.

LOL. Actually, genuinely, LOL.

China ? You're serious ? The free-market zealot is idolising *China* ?

Labour in China is “sopped up” by Government employing people (either directly or by proxy) and paid for through massive credit creation. China has tariffs and other regulations on immigration and foreign investment out the wazoo. They manipulate their currency with abandon. They build entire empty cities, for fuck's sake. All that stuff you’ve been arguing for the last few days is “delusional”, they are doing as hard and fast as is humanly possibly (ultimately too hard and too fast - it's probably going to screw them, but it'll be interesting to watch and see if they get away with it).

And I note once again, the ridiculous ideological bias against employers rears its ugly head in your words. You keep harping on how lower wages hampers consumption and hence, economic progress, but you continue to completely ignore that this goes both ways. Increasing the cost of employees to employers also reduces demand for labor and cause all that stuff.

There is no bias against employers and I have not ignored “that it goes both ways”. You either don’t understand what’s being said, or you are too far down your ideological rabbit hole to comprehend anything different.

You could drop the cost of labour to zero tomorrow and it would likely have a negligible effect on unemployment (in the short term, anyway - it would send it through the roof in the long term). Businesses aren’t going to start employing people “just because it’s cheaper”. They’re only going to employ people when the demand for their products or services increases beyond the ability of the existing employees to meet it. The economy is driven by demand. No demand, no need for production. No need for production, no need to hire employees.

If you genuinely think that simply reducing the cost of employees to business will cause them to hire more people, please explain why.

The obvious actual reason is that capital doesn't have to compete with several billion people.

*sigh*

Workers wages aren’t lower simply because they have to compete with other people. They are lower because those other people are systemically cheaper, because they have lower standards of living.

There is no reason CEOs and their ilk are inherently excluded from that, *except* through the protections they get from policy. Ie: it’s a choice.

No, I was speaking of wealth. It sounds like the problem here is that you are zero-sum thinking in a situation where it doesn't apply. In your scenario, you grew the real wealth of your poor by a factor of five, but that wasn't good enough because you also grew the wea

Re: Actual Reason

[werepants]

I agree about the bad decisions... like the lowering of taxes in the 1980's to create both a massive U.S. debt and further concentrating wealth in the hands of the few.

Re: Actual Reason

[khallow]

like the lowering of taxes in the 1980's to create both a massive U.S. debt and further concentrating wealth in the hands of the few.

Both directly and by the spending that wasn't curtailed.

Re: Actual Reason

[Anonymous Coward]

Both directly and by the spending that wasn't curtailed.

Well, the fastest way to curtail spending is to kill a lot of people. Government is trying its best to do that of course, but libertarians keep slowing them down.

distribution my ass. consolidation.

[Anonymous Coward]

failed to allow for the changing consolidation of wealth.

FTFY