Flat Wages for the middle and working class - what to do?

[imagep]

A free market isn't supposed to be "managed"

Who said we have a perfectly free market?

To have an organized and functional market, there has to be rules, thus it's managed. Just like a game of monopoly, or chess, or football.

You really don't economics much do you?

 

[imagep]

My Ideal view of taxation would be a guaranteed preferred tax share of around 10% required for all businesses and self-employ, few tariffs but absolutely zero income or sales tax. So just because you “need” to tax to have a government doesn’t mean you “need” to tax at a crazy high level or in unethical ways like the death tax or forfeiture.

I like your way of thinking.

Directly, the point is clear; but if said billionaire is the direct reason that young working family has the opportunity to grow and make a great life for themselves then daddy government coming in and trying to make fair is most certainly going to hurt the young working family more, on the indirect side as they have less economic protection.

Rich people typically don't create jobs, that's pretty much a myth created by wealth worshipers. Consumers and workers create jobs. Corporations exist to let people pool money together to create large scale businesses. You don't have to be rich to purchase stocks.

By the way, I happen to be what many conservatives would call a "job creator", but without customers and vendors and workers, I would wouldn't have a business. No man is an island.

So I am not allow to direct my own children? My legacy….I think to the dead person legacy is all that matters!

Are we really talking about children? Most people are in their 40's, 50s and 60s before both their parents pass away. If you haven't made it in life by then, then maybe you don't warrant a handout from the government (to the extent that the institution of inheritance is actually government sanctioned and doesn't exist in nature beyond genetics).

Fairness isn't about emotions now?

Who said anything about "fairness"? This is an economic thread, and fairness has little to do with economics. Fair is a great topic for religion or philosophy debates.

 

[Absentglare]

No, "we" do not. Wealth isn't public property, it's not a resource the government dictates where and how it's used. That's never ever a good idea.

I'm not talking about wealth. Wealth isn't a real resource. Coal, cotton, labor; these things are real resources, things that can be converted into productivity. We measure productivity with currency, but currency, itself, is just paper. It only has value based on the goods and services it can buy.

You seem hell bent on the idea that nobody but the wealthy should have meaningful economic influence. That would be extremely bad for economic growth, and the failed policies of round after round of tax cuts have been absolutely underwhelming in terms of economic growth.

 

[Absentglare]

AG Certainly suggested that.

No, i didn't.

If we deficit spend more, that has no direct impact on the wealthy whatsoever. All it would do is give poor people more access to the economy, which would give us more economic growth, less crime, a happier populace, more freedom; basically no downside other than the risk of inflation were conditions to change so dramatically that public deficit spending started to crowd out private investment.

 

[Absentglare]

If you want to reduce investment and possibly even shrink the economy....
but it could be argued that the general welfare optimum might be pushed outward. It depends on the convention you choose to aggregate utility.

The economy is not equal to investment...

More fearmongering about optimizing a single variable in the economy at the expense of all others. The law of partial differential equations is laughing at your attempt at a rebuttal.

 

[iguanaman]

A: Who gives a **** how they "horde" their money, it's theirs, they are welcome to do it.
B: A good portion of their money is invested into the markets.

Read the article. Billionaires are still spooked by the last crash. That $600 million each is besides any market investments. Surely you can see that cutting thier taxes will only leave them more money to hoard and will do nothing to grow the economy as is claimed. At least admit that.

 

[Absentglare]

Like giving all the cars in car dealerships to people? I wonder it all the time yet I fully know it has huge ripples on the whole economy….

No, labor and capital, not finished goods. More like taking all the people who are unemployed, and paying them to do work.

 

[Absentglare]

A free market isn't supposed to be "managed"

This is really the crown jewel of the argument.

You seem to think that no person has the moral and economic authority to change how things are done- and yet you don't seem to realize you're, in fact, claiming that you have the moral and economic authority to determine that the status quo is perfect.

It's like claiming that the best way to drive is with your eyes closed. Even in a self-driving car, that's a bad idea.

 

[iguanaman]

I'm not sure I entirely agree with this. While he did get pretty "creative" with the tax code under the guise of supply side economics, he was also doing a pretty good job at proving MMT and the positive effects of deficit spending. However, what I absolutely HATE about Reagan's legacy is the baseless demonization of the public sector. That crap and this starve the beast mindset started right there. I'm all for a small government, but only as small as it needs to be and not because it's somehow "unnatural" compared to the private sector. We created them both and we can regulate them both to our advantage. I'm quite tired of this utter shlock that one is better than the other.

They do that because the weaker or smaller (they are the same thing) the Govt. the easier it is for the wealthy to control. Making wholesale deregulation and privatization that much easier too. No one has explained to me how it is right for stockholders to profit from increased prison populations for example.

 

[Media_Truth]

Downward pressures compared to the past:
1. Full inclusion of woman to the workforce (increase supply of labour)
2. Automation increasing production power per employee (reducing needs of labour)
3. Foreign trade (eliminating many local industries)
4. Higher specialized training thresholds (can’t just train new employees limiting labour choice)
5. Increased population especially in skilled foreign labour (increase supply of labour)
6. Increase competition (pushing down prices and available customers)

Upward pressures compared to the past:
1. Fast Rate of innovation (many new emerging industries and the rate only seems to be increasing)
2. Increase education have a more broder-minded labour force (adaptability in labour)
3. Availability of advance training (most people can be train in any speciality)
4. Opening of global markets (huge new consumer bases coming aboard)

Feel free to expand upon or talk about any particular area of upward or downward middle class wage pressures.

The next waves of the middle & working class are looking like it going to struggle to buy homes, retire, pay their bills on 40 hour weeks etc.

One major reason for this is wages are not going up like they use to be and buying power is not going up to make up the difference. Youth unemployment and longer required education periods is also leading to later and later entry into the workforce delying everying.

My question is what do you see as the policies (left or right) which will start to see either wages raising or prices dropping to allow for a comfortable middle class?

Greed is what is reducing spending power for the middle class. The 1%ers have taken over America, through their propaganda. They have their man in office to assure that these trends continue. They've invested mightily in the Right-Wing think tanks such as Judicial Watch, to file lawsuit after lawsuit against those opposing their Oligarchy, and smear them into oblivion. They control FOX News, and have brainwashed millions of Americans with their anger-inducing rhetoric, such as the founding and promotion of the Tea Party in 2010-2014. Our forefathers warned of the influence of wealth, and how it can destroy a democracy. We should heed their warnings.

 

[Renae]

No, i didn't.

If we deficit spend more, that has no direct impact on the wealthy whatsoever. All it would do is give poor people more access to the economy, which would give us more economic growth, less crime, a happier populace, more freedom; basically no downside other than the risk of inflation were conditions to change so dramatically that public deficit spending started to crowd out private investment.

I appologize if i misunderstood your position.

 

[Conaeolos]

I like your way of thinking.

Thanks. In that fun world where I don’t need to play in the status quo gets even better as the way I see it the market value of those “tax shares” can serve as the backing of the currency, ending the disastrous effects of fiat or precious-metal currency manipulations overnight and due to the ability to measure direct economic reality in real time allow a constitutional agreed formula instead of daddy government or a banker to produce new money. As such we can distribute new money directly and with 100% equality to every citizen per quarter. A free prosperity cheque per quarter[cept in time of contraction] giving everyone access to the idea of passive income yet still out of the hands of manipulator and the fool hardy. Which then allows the outlawing of fractional reserve banking changing the awful credit markets to a public bond market which opens way better market regulated rates for consumers/busines and a huge stabilizer to the fluctuation of boom and bust. Not to mention natural stimulus during recessions (killing inflation pressure by halting new money plus freeing investment capital and consumption by natural universally accessible lower public bond rates in the open bond market)

Alas though we keep this current system, flooding the money supply, trusting bankers, keeping government the equalizer and basing it all on the total true assumption the economy can continuing growing on an infinite growth curve least good a chuck of every asset transfer to the banks :-(

Rich people typically don't create jobs, that's pretty much a myth created by wealth worshipers. Consumers and workers create jobs. Corporations exist to let people pool money together to create large scale businesses. You don't have to be rich to purchase stocks.

I certainly get your point its an oversimplification. Take an extreme example ~ does a top actor create more jobs than a d rate actor? ~ kind of, not really.

I am not so sure though policies that target the rich don’t also target job creation.

I like this tax example:
Person A has $1,000,000 and invest to an ROI of 10%: taxed based on $100,000
Person B has $100,000 and invest to an ROI of 1000%: taxed based on $1,000,000

Yet who do you think made the ROI on job/opportunity creation verses say rental income?
And that compounds over time, the higher the rate, the higher the penlty. So who are these taxes against? Not all rich just specifically new money "rich"…this is why I think so many in the 1% support high tax policy and many poor people don’t.

By the way, I happen to be what many conservatives would call a "job creator", but without customers and vendors and workers, I would wouldn't have a business. No man is an island.

Great. We need more of us! Tough times ahead.

Are we really talking about children? Most people are in their 40's, 50s and 60s before both their parents pass away. If you haven't made it in life by then, then maybe you don't warrant a handout from the government (to the extent that the institution of inheritance is actually government sanctioned and doesn't exist in nature beyond genetics).

I hope the best for my children (and generations there after) but its hard to succeed, easy to fail and failing sucks, they liek everyone can benefit from a cusion / safety net the same way I need insurance and I don’t trust daddy government one itoa, so daddy me is going to build something that will work! That I assume would hold true to lessor and greater degrees with most parents.

Who said anything about "fairness"? This is an economic thread, and fairness has little to do with economics. Fair is a great topic for religion or philosophy debates.

I believe the original claim was death tax is evil hence the comment. I say not only is it evil. It is worse than high tax as it has a far greater impact on motivation for people looking to improve their station at any level of the economic pyrimid.

 

[Conaeolos]

Our forefathers warned of the influence of wealth, and how it can destroy a democracy. We should heed their warnings.

I don’t share your concerns but will to be happy to exlore if you have some general suggestions of better approches?

They do that because the weaker or smaller (they are the same thing) the Govt. the easier it is for the wealthy to control.

Why would “the wealthy” act as single unit and not have competing interests that check and balance themselves? Do you think they are all related like in the feudal days.

No one has explained to me how it is right for stockholders to profit from increased prison populations for example.

Not the direct point as I don’t have a simple answer to that; but question, aren’t increases in prisons due to an increase in laws? Which falls on the government. It is not like people are doing more wrong today by any measure

 

[PIPEWRENCH]

Why do you care how someone came into legally obtained monies? If I manage to earn a large amount of money, and pass it on to my kids, why is that wrong? The estate tax is one of the most evil taxes on the planet.

Unless you are a government worker and your next raise is determined by how many different ways you can tax the people out of their money.

 

[iguanaman]

I don’t share your concerns but will to be happy to exlore if you have some general suggestions of better approches?


Why would “the wealthy” act as single unit and not have competing interests that check and balance themselves? Do you think they are all related like in the feudal days.


Not the direct point as I don’t have a simple answer to that; but question, aren’t increases in prisons due to an increase in laws? Which falls on the government. It is not like people are doing more wrong today by any measure

First of all in some instances the the prison corporations bribed judges for more prisoners. 2nd we we already have the highest incarceration rate in the world, and 3rd it is just WRONG for someone to profit from imprisoning citizens. What kind of message does that send? What kinds of corruption does that invite and at who's expense?

The better approaches were already in place until Reagan and Bush and now Trump removed them. The purposely impunitive Tax on very high incomes was not to make revenue, it was to discourage the behaviors that helped bring about the Great Recession and encourage growth in both Corporations AND salaries. This "approach" worked to produce the highest wage growth of any middle class anywhere EVER. Because increases in productivity were met with increases in workers wages too instead of being concentrated at the top in the form of multimillion $ salaries for CEO's and management.
And yes many of the wealthy are related by "wealth" and have no problem using their considerable means to consolidate power. That is how Russia is run right now in fact.

 

[iguanaman]

My challenges are inquiry, I am interesting in flushing your idea out. So no need to take any of these questions as hostile.

How would the local companies compete against Asia(others) where there is no chance of overtime hours approaching anything close to what we have here? Overtime is a pretty common practice so it not in an insignificant amount of productivity loss and burden on companies.


Which industries would these be in? Would they aim to be profit neutral or a new government service? Do you think they should get a monopoly in the industry in order to compete or are they just a player in the market? If they take a huge lose one year is that covered by the taxpayer or is the taxpayer only a part-shareholder? Can these public companies fire employees for normal misconduct? Are they forced to hire other undesirables? Do you limit time in the public service or can one spend you whole career in it?


Do you worry in a potential loss of jobs as managerial types especially in small firm hire less low-cost labour to maximize their own salary? Does the rule hold true for contractors (one service I’ve contracted pays their employees as low as $2.75/h as that is good in their country)? Does this apply to local sub-contractors or only labour who meet the definition of an employee? How do you deal with industry that deal in commission or piece work compared to management who are salaried[is it just average]? What kind of penalties do you so for companies found not to be in compliance? How long do they have to adjust if the ratio is distorted?


Do you think a collage education helps most employees be more skilled in the workforce? Do you think education is where our best R&D is coming from?


Does that mean tariffs against Asia/South America? Do you worry about being leapfrogged considering much of the growth is in those regions and many American companies would have to completely restructure or flee?


Does it not seem shortsighted though that “low marginal propensity to consume” people (like myself) are spending less on investment and growth well “high marginal propensity to consume” create all the problem, that is to say, shortsighted to encourage a culture of high consumption low production?

I don’t mean to sound insensitive. I will fully admit I could afford tax hikes with out big impacts on my lifestyle unlike many. My concern is waste…I realize not everyone in my situation is me, but do you really think the alternative use of my investment dollars as tax dollars creates economic prosperity? We are talking governments who collect huge sums of money yet continue to run insane deficits and ridiculous levels of underfunded liabilities. I don’t have a problem with Socialistic dream of Healthcare, Free Education, Universal income, Homes for all etc. the problem becomes in every example these systems are design to fail in the longterm[for short-term benefit]. Look at any current system of single payer — which one running for any length of time isn’t reducing services year on year or has skyrocketing costs? Same for education.

Lowering taxes might not create jobs. It’s obviously not a direct relationship, but one does need to admit that is us wealthy people who are creating the jobs yes?


I originally thought you were joking, but just so you know 100% of my wealth creation is for my children and future grandchildren and if a government takes it away ~ your going to lose rich people in droves or have a real war on your hands. You want to talk motivators, leaving a better world for our child is right near the top!!!

LOL The inheritance tax does not take it all away, it does not even touch the 1st $5 million. If you have much more than that you might think of starting a charity like Bill Gates did.

 

[OpportunityCost]

I think the rise of corporatism and franchise systems has been greatly overlooked. A large part of the reason why smaller areas have suffered so much from the recession is that there aren't as many mom and pops, there are no independent grocers, hardware stores, shoe stores, fewer independent restaurants, dairies, banks, independent manufacturers, etc.

This means that economic activity flows out of the town and the multipliers are used somewhere else. The lifeblood of the town literally goes to a corporate structure rather than being spent within a given town.

 

[Conaeolos]

in some instances the the prison corporations bribed judges for more prisoners.

When judges can be bribed we have a much bigger problem.
So I am going to go on hoping that is not a usual thing.

we we already have the highest incarceration rate in the world

Yes and considering that based on the laws of our government you don’t think the government is the reason for that? Do you think Americans are more criminal then the rest of the world?Justice reform is simple. The laws need to be audited back down to be reasonable, fair and just! (or enforced less lol)

it is just WRONG for someone to profit from imprisoning citizens.

If it not wrong for a prison guard to make a good living than its not wrong for an investor to make money providing a service to the government. In this case incarceration of those the government deems criminals. It is wrong to have so many deem criminals for no just reason. That is not on private prisons but the choices of lawmakers.

If the prive sector ever gets to assign crimnals ~ you better believe I am outraged.

What kinds of corruption does that invite and at who's expense?

I’d actually guess less than a government run system, the market adds an extra layer of accountability to that of government oversight.

The purposely impunitive Tax on very high incomes was not to make revenue, it was to discourage the behaviors that helped bring about the Great Recession

What!?! please expand on your concept ~ you made a big leap.

This "approach" worked to produce the highest wage growth of any middle class anywhere EVER.

If you look at post #1 you can see plenty of reasons that landscape is changing. The point is to explore what to do about it…so feel free to throw in.

increases in productivity were met with increases in workers wages too instead of being concentrated at the top in the form of multimillion $ salaries for CEO's and management.

The global market couldn’t compete with those productivity levels back then so they were consumer cultures which boosted the numbers, now they can…also enter more and more labour growth with population and education…So I agree that equality would be nice, its fall howevr was not caused by someone doing ~ just changes in the good old market. If you feel you know how to shift that trend for the longterm and without a redistrubtion that been shown to make everyone poorer, please share. Alterntively, you are welcome to show why we should choose redistrubtion even if it has a good chance of making everyone poorer.

And yes many of the wealthy are related by "wealth" and have no problem using their considerable means to consolidate power. That is how Russia is run right now in fact.

So you think there is has developed a “noble”/"royal" class in america?

The inheritance tax does not take it all away, it does not even touch the 1st $5 million. If you have much more than that you might think of starting a charity like Bill Gates did.

Even with a cap of 5 million it seems evil and wrong especially since who knows what $5,000,00 will mean when I am close to death and i want it to last generations or at least my daughters lifeitme.

I do run a charity, not Bill/Melinda Gates level but we do well

 

[Conaeolos]

I think the rise of corporatism and franchise systems has been greatly overlooked. A large part of the reason why smaller areas have suffered so much from the recession is that there aren't as many mom and pops, there are no independent grocers, hardware stores, shoe stores, fewer independent restaurants, dairies, banks, independent manufacturers, etc.

This means that economic activity flows out of the town and the multipliers are used somewhere else. The lifeblood of the town literally goes to a corporate structure rather than being spent within a given town.

I see a lot of merit in this observation but price is king and Mom and Pop stores suck at keeping down price in comparison to managed supply chain. Ideas to encourage their recergence?

 

[iguanaman]

When judges can be bribed we have a much bigger problem.
So I am going to go on hoping that is not a usual thing.


Yes and considering that based on the laws of our government you don’t think the government is the reason for that? Do you think Americans are more criminal then the rest of the world?Justice reform is simple. The laws need to be audited back down to be reasonable, fair and just! (or enforced less lol)


If it not wrong for a prison guard to make a good living than its not wrong for an investor to make money providing a service to the government. In this case incarceration of those the government deems criminals. It is wrong to have so many deem criminals for no just reason. That is not on private prisons but the choices of lawmakers.

If the prive sector ever gets to assign crimnals ~ you better believe I am outraged.


I’d actually guess less than a government run system, the market adds an extra layer of accountability to that of government oversight.


What!?! please expand on your concept ~ you made a big leap.


If you look at post #1 you can see plenty of reasons that landscape is changing. The point is to explore what to do about it…so feel free to throw in.


The global market couldn’t compete with those productivity levels back then so they were consumer cultures which boosted the numbers, now they can…also enter more and more labour growth with population and education…So I agree that equality would be nice, its fall howevr was not caused by someone doing ~ just changes in the good old market. If you feel you know how to shift that trend for the longterm and without a redistrubtion that been shown to make everyone poorer, please share. Alterntively, you are welcome to show why we should choose redistrubtion even if it has a good chance of making everyone poorer.


So you think there is has developed a “noble”/"royal" class in america?


Even with a cap of 5 million it seems evil and wrong especially since who knows what $5,000,00 will mean when I am close to death and i want it to last generations or at least my daughters lifeitme.

I do run a charity, not Bill/Melinda Gates level but we do well

Why do you think starting a dynasty of wealth will be good for your children? I can understand wanting them to be secure but after that too much money can be destructive.
I hope it is not like Trumps "charity" where he gives away other peoples money and takes the credit for himself. This is typical of many of the wealthy, I'm afraid.

 

[holbritter]

I see a lot of merit in this observation but price is king and Mom and Pop stores suck at keeping down price in comparison to managed supply chain. Ideas to encourage their recergence?

They cannot keep their prices down and make a profit. The managed supply chain get their products cheaper since they purchase more. The mom and pop stores are not offered that pricing to begin with. They have a much smaller margin to work with.

Holbritter's corner store does not have the purchasing power that Walmart has and cannot sell the same products for the same price as Walmart.

 

[OpportunityCost]

I see a lot of merit in this observation but price is king and Mom and Pop stores suck at keeping down price in comparison to managed supply chain. Ideas to encourage their recergence?

Well, its going to part of future tech. With 3D printers and robots going down in price over and over economy of scale is going to change drastically, because its partly based in logistics, labor, and building resources.

 

[joG]

And there you go....Why is this the only option? Why is it not possible that we are capital heavy and that those resources need to be shifted to demand?? I could easily concede higher taxes on the lower class could lower demand in a case of inflation, or that lower taxes on the upper class could help supply. But why can't the reverse be true???

I think, I said it depends on the convention you choose and used the word "might". That means that it is not the only option. The only question I see in your input is, why you would say in response something anything obliviously false.

 

[joG]

The economy is not equal to investment...

More fearmongering about optimizing a single variable in the economy at the expense of all others. The law of partial differential equations is laughing at your attempt at a rebuttal.

Of course the "economy is not equal to investment". So why even say it? But investment has a place in economics as do the reasons the investment is placed here or there. That is one of the things the study is trying to convey. I thought it did it quite well and there does not seem to be much reason to doubt its general statement, as that is totally consistent with economic theory and had been expected from the beginning. This is only confirmation.

 

[Nuber]

No that is not true

Unproductive debt is a poor choice

Taking on debt to expand a business or start one is potentially productive. A reasonable level of student loan debt for an education that should result in a productive career is a smart choice

Debt to purchase a new 80 inch 4k curved OLED tv is a poor choice. Debt to go on a month long vacation in the tropics is a poor choice

Debt in the US to pay for expensive medical treatment, might not be a choice at all ( debt vs death?

Everything you buy with debt costs more than it would have with cash. You are therefore helping to fund the banking industry. You can still make the choice if you want. In my life I learned at a young age that debt costs money. Once I realized that I was spending tens of thousands of dollars (over time) on interest and credit fees, I stopped being suckered by the banking industry.

I still stand by my statement. Debt is a poor choice (double entendre intended).