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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.
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.
Income inequality has risen since at least Reagan, don't act like it's something new.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
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!
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
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.
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.
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.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
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.
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.
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.
http://alternatives.rzero.com/
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.)
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!"
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.
Ideology: A tool used primarily to avoid the bother of thinking.