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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.
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.
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.
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.
(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.
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?
Yes, the Chinese and a few wealthy Americans are colluding to fuck over all other Americans.
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.
Seastead this.
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.
You know it's time for the next revolution when your rulers' names end with roman numerals.
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.
15% of the US trade deficit with China is dur to WalMart ALONE! So yes.
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.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
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.
Do not look at laser with remaining good eye.
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 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.
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.
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
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
You can't handle the truth.
> 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.
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.
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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.
"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."