What about the lack of competition in the corporate market? Every industry is seemingly run by an oligopoly of 5-7 at most.

So you make computer chips? You can work at Intel or AMD? So you make cars? You can work at one of about 7 companies? You do anything related to airlines? There were a couple of mergers in the last year to get the domestic number down to, I believe, 5 and in each part of the reasoning was to eliminate competition and raise prices. Rental cars, hotels, and tons of other industries are the same way.

Even something mostly local like groceries are dominated by only a couple of major players in each market now whereas there was a more realistic "true capitalist" competition before.

Those are the exact same pressures as a union exerts, only on the other side of the table. I know that the giant multi-national company I work for could pretty much have used "be glad you have a job" as their slogan for the last couple of years and few are any different.

So let's not pretend like supply and demand are some sacrosanct moral right and wrong that will fix what ails you. If you're Intel, you just cut crooked deals with OEMs because no one else would dare challenge you. If you're Microsoft, you leverage your monopoly in one industry to squash competitors in others. If you're in the financial industry- well, I think we all know at least a sliver of how crooked most of that is after the last few years. How are those natural market pressures?

If you don't pay higher wages, you're not going to go out of business because that's not the only ball in play or the only factor because, we aren't in a true capitalistic market.

SI

This totally reminds me of the excuse CEOs and companies use for sending jobs over seas. The excuse is usually, "We can't find enough skilled labor to fill the positions" which really translates to (in my opinion): "We can't find enough skilled labor to work for the obscenely low wages we want to pay them".

Then switch industries or learn a new trade! When a job becomes popular, more folks flood it, and competition for jobs goes up, not employees. When a job is less popular, competition for jobs goes down, and competition for employees goes up. And when competition for employees goes up, compensation and benefits go up. It's been happening for a long time. Folks need to stop acting like just because they learned a skill they are entitled to massive compensation for it and should be able to do it forever. Our economy changes, and if you aren't willing to change, you WILL be left behind.

And how well did unions (which is what this topic was about) help with that? Those are cases where international trade agreements need to step in, and in some cases (like the Nike sweatshops or the Apple Foxconn issues) consumer backlash against the companies themselves, but also note that some of those jobs are on their way back because the labor wasn't quite skilled enough for it.

I seems weird to me that otherwise sensible people are convinced that unions are necessary while so many of us live fine without them.

And to be honest, even if you're willing, you may still be left behind. As efficiencies increase, the need for bodies decreases unless there's an increase in demand that more than compensates.

One of the things that the recent economic problems seems to have forced many owners/operators to learn is how to be more efficient. That's great for them, not so good for would-be employees who haven't positioned themselves to be among the most valuable assets of an employers. And I'm not even arguing that as always being easy to do either.

Of course I'm sitting here in a town where even secretaries & receptionists routinely have 4 yr degrees, but supply exceeding demand seems to be a fact of life just about everywhere.

Speaking from my own experience with unions when I worked for the phone company...they did very very little to curb it. I don't know if that was because they couldn't or wouldn't though.

The problem is multifold in my opinion. The first and biggest problem in my opinion is that the union/management relationship is always way more adversarial than what it needs to be. Usually, both sides want policies that are not beneficial to any party. Both sides also are too short sighted to see that these polices set up future labor problems. So what happens is, the company tries to implement polices that will do whatever they can to circumvent the collective bargaining agreement and the unions will do whatever they can to antagonize the company. Both are dumb for doing this.

Another problem with employers wanting cheaper labor or sending jobs over seas (again the short sightedness) is, with less people making the higher wages, there's less consumers that can afford their expensive products. Less people buying their expensive products, the less profits. They are shooting themselves in the foot. If no one can afford to buy that 800 dollar tv anymore, what are they going to do? Sell it for 300? I doubt it.

Both unions and companies need to realize that there's a balance that can be achieved, but, again, both are too short sighted to do it. There's nothing wrong with a company wanting to increase profits, likewise, there's nothing wrong with its employees wanting to benefit from their hard work to want a piece of that pie. The CEOs or board of directors didn't do all the work after all.

Another big problem that I have with unions is, they cater to the lowest common denominator of employee. If an employee is shit, get rid of them. No, instead, they protect the shit employee tooth and nail. As an organization, I would want to keep the best and unions fail miserably, time after time at this.

Don't get me wrong, there is definitely still a need for represented labor in certain fields, not all though. It would help both union and management if they would dump their early 1900s mentalities regarding each other, to achieve a more harmonious working environment that benefits all parties.

That's a bit of a flawed theory, tho.


So, I work for a large IT company that laid off a lot of people last year. One of the guys was like "If you lay off, say, 30000 people, who is going to buy your computers?" Well, easy- the other 299,970,000 people in this country. And it doesn't cost 30000 * wage, let's say 50000 = 150M per year to keep them as customers.

It's short sighted for the US because it just continues to bring the standard of living down for everyone. But if you're an individual company- even one as big as, say, WalMart- you laying off or lowering wages just on your people isn't going to have the much of an effect on your customer pool.

SI

The real problem is the stock markets. You not only need to show a profit, you need to show a bigger profit than in the past, and you need to exceed the analysts' expectations. Being a strong company isn't enough, you need to be meeting Wall Streets' expectations or face shareholder lawsuits. Share price drives a lot of really poor corporate decisions.

I can see it being flawed, but, the line I was going with and then failed to expand on was, if more and more companies followed that line of thinking, it would snow ball into a situation where I believe that could happen. Fortunately, that has not happened and I don't know if it will ever happen.

You bring up a good point about lowering the standard of living. If the standard of living is lowered, then costs have to go down or no one can afford to buy anything. Very true, lower wages or laying off people isn't going to affect your customer pool, unless those layoffs and lower wage employees somehow adversely affect your product and now no one wants to buy it. Heck, laying off employees usually raises the stock of publicly traded companies. So, there's always some benefit to layoffs.

Well, we are gradually lowering our standard of living and that's going to keep the market shrinking- it's just more gradual, tho. It *is* happening, however

SI

Is this tied with the stagnation of wages? At least for me personally, mine have not. I just don't know enough about this area other than I know that wages for non upper management have been flat for a long long time now. I don't think 'non upper management' is even the right term to be using though.

Given the disincentive Wisconsin is giving math and science majors to be teachers, I imagine the next bit of legislation will be to give automatic science credentials to english teachers because they teach "Inherit the Wind"

Where the market is shrinking "here" and the standard of living is lowering, it grows elsewhere and is raising the standard of living.

This might be the greatest gesture of humanitarianism the world has ever seen if it were purposeful.

I don't think it's the only problem, but in general I agree.

How about the top 1%?

Looks like the top 1% and the top 20% are the only groups where their wages have increased. All the others aren't just stagnant, they are receding.

What I wonder is how related those things are. Maybe what our top 1% does is a lot more competitive internationally then what our bottom 99% does. If we somehow "punish" that top 1% in the wallet it doesn't necessary follow that everyone else in this country is somehow magically better off. At least someone's income is going up, and the tax revenue from that group can obviously benefit the country as a whole. (sometimes that disparity is equated with today's tax rates - but I really don't think a return to "Clinton-era tax rates" suddenly flattens those charts - though it may be an appropriate way to respond to them). I'd be more worried if that top class's income was flat as well, or decreasing. The disparity itself, isolated, isn't a problem. It's a global economy. I'm sure there's a pretty big disparity between the Russian top 1% and the American bottom 50%, but I'm not sure that alone really tells us anything good or bad.

Not knowing the source of their income, that is hard to say if they are more competitive or not. I don't think taxing them more is going to magically raise the income of the lower 99% since taxes go to the government, not the citizens paychecks. If that's what you meant by punish them.

If I'm reading the chart correctly, during the Clinton years, that top 1% had one of its biggest up spikes, nosed dived during the dot com bust and has been swinging upwards again since around 2003.

I just don't know. It seems like there should be an easy solution, but, I honestly don't know.

Well, that is the thing. Pretty much once other world economies started getting on track post-WW2, we were bound to start lowering our standard of living. There was just no way to ever top the results of "Being the only working First World Infrastructure in the world" so it had to decline.

SI

I'm not sure what I mean by punish, but wealth disparity is obviously this huge issue for some, and I'm not sure what could even been done to "correct" it. Taxing them wouldn't be enough (unless we're talking stevebollea-level wealth re-distrbution/revolution type stuff). Limiting CEO pay I guess (but the top 1% of American households includes a lot of people - it's a group far broader than corporate CEOs, certainly).

Thinking about that stuff makes me wonder if or why such disparity is such a bad thing to begin with, if there's no clear fixed amount of money in the U.S. that we're dividing up, which is the case. Are things more just and better if CEO jobs got outsourced and we had fewer millionaires in the U.S?

I totally agree with you on this. I hate to play the 'fair game', but the only thing that comes to mind is, I think it's more than fair if employees got a bigger share of a company's success. Especially since they are usually the ones that bear the brunt of a company's failure.

I don't disagree - but how is that measured? I know that 40 years ago, my middle-income white collar job would have gotten me a much bigger house. But I sometimes still feel like a king with the technology at my disposal. I have a lot more access to varied foods and can afford to eat pretty much whatever I want. I probably save a lot less than my counterpart 40 years ago would...but I think our retirements would be pretty similar, financially speaking (the goal would be to have pretty much the same lifestyle we had while working). And I probably travel a lot more often for leisure than he did. Maybe the biggest difference would be that the 40-years-ago me would die with a lot more money to pass on to his kids.

It's not something that should or can be solved overnight. A progressive tax structure will help as well as some upward force on wages to balance the strong downward force from management. Lobbying reform and campaign finance reform would also help a lot over time as the goodies corporations currently get would be less of an overt payoff for campaign help. HCR will help too as the burdens of medical costs hit lower income brackets harder.

I'm not looking to take all the money from the rich, but I do think the purchasing power of the middle class is declining and that's a serious long term problem for the economy.

But instead we're going

As an employer, I couldn't disagree more. The incredibly vast majority of employees are so immediately replaceable that it's laughable, and their replacement value is usually pretty low.

Bingo. The rest of the world learned how to assemble things & we are surprised that this impacted us. The biggest thing the disparity in income(and the percent of increase) tells me is the following 5 things:

1) Our 1% was "skilled" enough to invest & keep themselves above inevitable global competitors by simply choosing to use the same cheaper labor that the competitor would have used to make the better, cheaper, product. Thus, they remain atop the global norm.

2) Our top 20% is along for the ride with the top 1% because they were also "skilled" enough to see the writing on the wall and find their niche and stay above the global norm.

3) Our bottom 60% of the workforce did not have any unique skills or characteristics which translated to a global advantage in the marketplace. Thus, their income has (and will continue to) fall inline with the global norm.

4) Inflation has, and continues to be, the unassuming thorn of the lower income class and the way that they are brought closer to the global norm without realizing it. It never appears obvious, but it appears. The more money you print & put into circulation, the larger the pool of money for the top 1% to make investments in order to gain more of it. Inflation for the lower 60% (maybe more like the lower 20-40% perhaps) doesn't rear its head typically by getting actual pay cuts or no raise annual reviews...it occurs by layoffs and outsourcing of their jobs and then having to return to work in a completely different trade or line of work(and all that goes with starting over).

5) I'd submit that the accumulation of wealth by the top 1% does trickle down to the top 20% but not much further. This is because...again...the lower 60% has no unique brand of skills to bring to the table outside of simply being born in this country.

I think this also highlights that the idea of "country" and "homeland" are dated ideals(generally speaking) of the lower-income class as well. The top 1% income class has more in common with the top 1% from Dubai then they do with the bottom 20% of this country. Fortunately or unfortunately, that is how I see things and I dont see (or know) how they get better for people that do not embrace the need to progress in their skills & talents in a competitive fashion.

Well, that's where good managers come into play. They should know who is and who isn't contributing. I see nothing wrong with rewarding the contributors and getting rid of the ones that don't.

My line of work isn't unionised - but I'm fortunate because its a very skilled job and sufficiently niche that there is a very limited supply of people who can undertake it even within the software industry.

HOWEVER this isn't about 'sod you jack, I'm ok' - to me its whats best for society. I've got a job I love however I can't exist comfortably without the garbage men picking up my rubbish and the chap at Walmart who helps round up the trolleys - I believe in protecting them and ensuring they can live productive lives .... so yeah I'm in support of unions.

Just because 'you' might be able to exist comfortably without unions doesn't mean everyone can, not everyone has the skillset or ability to learn and adapt that you might have - don't condemn them to a worse existance than should be possible just on the basis of making a faceless corporation a larger profit.

In twenty years time I honestly expect at least 20% if not more of the population to be routinely unemployed - not because they're lazy or unflexible but because there will be fewer jobs available because of advances in automation.

Look around you now, the garbage cans on my street are now picked up by the trucks rather than people thats jobs gone, in a lot of shops there are now automated 'self service' checkouts - thats jobs gone ....

This is only going to accelerate as technology progresses, society needs to get used to the fact and adapt to things.

(if any of you are comic junkies read from of the 'Mega City One' stuff in 2000 AD from the 1980's ... its got some interesting takes on this sort of thing in it)

Which is why I think the entire concept of "college for everybody" is simply another unnecessary tool of inflation which only benefits the very skilled & talented.

These same secretaries paid into a system that, while it may have educated & broadened their knowledge base, gave them skills they simply did not need in order to function in society.

And it begs the (rhetorical...not specifically to you JimGA) question in my mind...who benefits by providing education that isn't needed?

I agree & disagree here. I think you're underestimating just how many people could stop working tomorrow & live extremely well for the rest of their years. These people, while not likely to stop working altogether, will likely move into very cushioned & inefficient roles at some point.

Sure, there will be less menial labor jobs to do...but some will become more skilled (i.e. somebody has to fix the machine now, others will monitor the distributed network of machines, etc.) but certainly some will not have the skills to offer a service. That's why I think we'll see perhaps a slight uptick in unemployment avg compared to the past 20 years. But I think we would see a global revolution if Western societies started sustaining 25% or more unemployment. Society (as we Westerners know it) will break down with that level, imho.

That would be the folks in what I sometimes call the education cabal.

The thing about those charts is they don't reflect the mobility between the various income groups. Folks move up and down among those bands with regularity here. Many are stuck, but there are also plenty of stories of folks going from the poorhouse to the mansion, and vice-versa. I'd love to see some charts laying that out. Folks that adapt can ride the curve up, and those expecting to be handed a living tend to ride it back down.

Obama is suck a failure. I wish there was a moderate party that believed in small government. I could be republican if it were not for the religious aspect.

Well, and the fact that they've proven to not be quite as small government as we were led to believe.

Seriously - how many people do you know who are able to do this who aren't near retirement already? ... heck a lot of 'retired' people I know in America are still working part-time not to keep active but because they need to.

I think that this sort of thing will be partially automated with many machines being picked up automatically and swapped out for a working one when they fail. Its likely repairs won't happen and broken machines scrapped.

If you doubt this is applicable - look at the videos online showing googles cars driving in complex situations, navigation of a store and picking up a unit/till/whatever is far simpler in terms of reaction times etc. than driving a car.

I think society will either have to change (away from capitalism) or indeed its likely that there will be a very real resentment to the priviledged .... time will tell.

PING: Libertarian Stampede ;)

Economy isn't the only place. Stringent population controls are another option. Then again, my money is still on a plague with about 30-40% global fatality rate "correcting the problem"

SI

I'm talking about the higher income classes that run companies and would generally be the people deciding how many workers will be employed and what their own role/job functions will be.

These same people (imo) will disengage from the day to day operations of their business and thus delegate more of that to their senior management. In this way, trickle down job responsibilities will mean more work for the people who are not as wealthy (or at all). If there is one thing I have noticed with wealthy, high income people...its that they do NOT tend to enjoy stagnant lives if the proposition is "live an interesting and fulfilling life by continuing to make investments (in society) in other ways" vs. "count the beans and make sure none are missing".

Somebody always has to "make the maker" and all of the service, software, and oversight support that goes with it. Unless you are suggesting we're heading towards the Terminator world where machines build other machines for their own agendas.

I disagree capitalism is the problem to be corrected but yes, time will definitely tell.

But as we progress the number of people required to perform those tasks should become fewer & fewer, at least if we're advancing our skill/capability to make Machine X

Who knows what the future will bring. In the 50s, everyone thought that our jobs were going to be replaced by machines. They were, but nobody could have imagined the millions of new jobs subsequently created in fields like IT. I think it's a little short-sighted to assume that everything in the world will be exactly the same in 50 years except that they'll be more robots doing stuff. Maybe they'll be millions of jobs created in some field we cannot currently comprehend, maybe the idea that every adult human has to have a job will be considered antiquated, maybe everyone will work fewer hours, maybe (probably) we'll have some type of serious war/disease/environmental catastrophe that sets everything back quite a bit and will require more work.

But it'd be equally short-sighted to work from the assumption that the magic employee-need unicorn will drop down from the sky to create millions of jobs in a new niche either.

Could it happen? Sure. But it's not something I'm inclined to count on for discussion purposes either.

Actually, I think realizing the future will be different in ways we can't currently comprehend is the opposite of short-sighted. I also included in that post the possibility that "jobs" might not be considered this gold-like resource that everyone is entitled to, or that concept of a "job" might be entirely different then some location to drive to for 8 hours a day to do stuff. Things will be different, somehow, for better or worse. It will not be 2011 + more robots. Analyzing future labor markets (i.e., long-term future) strictly in terms of our current society and way of life looks silly (though it would look even more silly to someone looking back from the future at such things). And that "magical employee-need unicorn" has actually dropped down continuously over the history of humanity, not out of magic, but out of the technological evolution of people and its constantly changing needs and ways of life and population trends. Look at the types of jobs people had in the 1850s, say (when women didn't even work in close to the numbers they do now). Almost everything people did to "earn a living" is obsolete, or has been completely changed by technological advancement, changing society, or shifts in population demographics. But I'm sure many of them imagined a 1900s that looked exactly like their world, except with rocket ships and some robots. They were way off. I don't think any of them thought of the internet.

And if robots are able to do everything a human does, negating our ability to have to work, that changes our societies in ways so dramatically, that worrying about "employment rates" at that point is incredibly short-sighted. Capitalism would be obsolete. Why would we even want jobs? Society (or the robots) would have to utilize a new way to divide property, food, and other resources (which, with the help of robots, might all be in infinite supply - and if they're not, we're going to need people, doing jobs, to create better robots.). If we really reached the point of robot slaves and human masters, I'd say that'd pretty much be utopia (but of course, since we're humans, it won't quite go like that - we'd either fight over the robot slaves, or the robot slaves would revolt - shit will go down. We won't necessary have our 9-to-5 "job" at the office, but shit will keep us busy.)

All for this. I'm sure Obama is evaluating options for what else we can do for them, hope the US public donates generously. Really sad, the lives lost will be horrendous. I don't know the reprucussions or downstream effects that this will cause but an opportunity for US-Japan to strengthen ties.

(Those nuclear reactors worry me also).

U.S. mobilizes to get assistance to quake-ravaged Japan - CNN.com

Libya doesn't seem to be going very well. Europe and US seem to have the wait-and-see calculus right now. I don't think the US should be driving, Europe should be taking lead on this (e.g. sounds familiar, like Bosnia?).

+1

I have no doubt fear mongering is part of the equation, as it is for anything any policial party ever wants to do (wage wars, give taxpayer money to banks and telecom companies). But this is the stuff that annoys me:

As Sen. Al Franken (D-Minn.) pointed out in a little-noticed but powerful speech on the economy in December, “during the past 20 years, 56 percent of all income growth went to the top 1 percent of households. Even more unbelievably, a third of all income growth went to just the top one-tenth of 1 percent.” Some people are definitely not broke, yet we can’t even think about raising their taxes.

There is not an X amount of income growth that is dispersed amongst people in a specific country. Every dollar earned by someone doesn't necessarily rob it from someone else in the same country. If the top 1% wasn't as successful as it is, it doesn't follow that that success would magically stay in America and transfer to blue collar workers somehow. If they get can off that myth and this class warfare stuff I'd be on board with a lot of the other points they're making. Franken and a lot of others like him are just pandering for votes (after all, it's a pretty good strategy to appeal to 99% of the population and convince them that they're great, they're fantastic, they're entitled to so much more just for existing, but that the REAL problem is just 1% of the people who aren't voting for him anyway.)

Edit: He throws in something about higher taxes at the end, but I don't see that as the real spirit of his messages. He's not arguing that taxes should be higher, and that such a thing is a good solution and wouldn't hurt economic growth too much. He's pointing out how much money some people have, and urging us to be upset about that. The argument against substantial tax hikes is the impact they'll have on the economy NOT that they'll make rich people go broke or something. So all this top 1% stuff isn't really responsive to the issue at all. Is has nothing to do with the impact of taxes on an economy and what tax rates should be, etc. (because, as I've said, higher tax rates are not going to impact wealth disparity to any noticeable degree - I mean, isn't that what people who want higher taxes are always telling us -that it won't impact things like economic growth, people's income ect, it will just provide more revenue for the government and everything else will go on just fine.). It's just extra stuff thrown in for emotional effect

But wasn't Reagan's "trickle down" economic plan supposed to do just that, spread the income growth down the chain? Bush Sr. has been proven right when he called that "voodoo economics" back in the 1980 presidential campaign. There is ample proof that the trickle down was a mirage, when such a disproportional amount of the growth went to such a miniscule number of recipients.

I'm not talking about tricke down or economic theories. What's the professed goal here - higher taxes to better fund government, right? What does that have to do with a portion of our population doing well in an international economy? People earning more money provides more tax revenue, and that's fantastic. And I don't have a problem with higher taxes. But the success of those people, and their INCOME, is not the huge travesty that Franken ect constantly try to frame it. Our best and brightest, our people succeeding in the international economy is one of the things our county has going for it. Our country is not better off if the rich earn half as much money and make all those welath disparity charts look "better", in fact, we'd be a lot more screwed because that'd be a shitload less tax revenue.

Dola: I guess my point is, in an international economy, if you're just one country, what do you do to make some people (the bottom 99%) earn more money, and make some people (the top 1%) earn less money (not taxation, I'm talking about income), and second and more importantly - why in the HELL would you want to do such a thing?

Sure, tax the rich more, tax everyone more, I don't see that as a huge problem. What would be a huge problem is if we actually (god forbid) "solve" this "wealth disparity" issue. I'd love to see some politican just argue: "we have a funding issue, we need to tax more, our tax increases need to be gradual and focussed, and we need to do a much better job of being accountable for that money and spending it in a more responsible manner". Instead, it always just goes back to the "top 1%", and ideas of "fairness," that normal people who do normal things should make an amount of money closer to this group of other people, who make way too much money. I don't see that at what we should be so concerned about, and it's always the rallying cry.

But you can't separate the issues. Tax rates and economic policy have a direct impact at income across all levels. You seem to want to isolate income as not being affected by any outside variables when that just isn't the case.

I don't see Franken's argument as the rich make too much money and need to be taken down a notch, to the detriment of the economy as a whole in the form of lower overall tax base. Here's my (admittedly overly simplified) take:

There are two potential results of a set of tax and policy proposals.

One set of proposals results in the following income distribution for 1000 people:
1 person making $100,000,000
2 people making $25,000,000
7 people making $10,000,000
10 people making $1,000,000
40 people making $500,000
240 people making $100,000
500 people making $50,000
200 people making $25,000

Another set of proposals results in the following income distribution for 1000 people:
1 person making $90,000,000
2 people making $22,500,000
8 people making $9,250,000
13 people making $975,000
43 people making $480,000
253 people making $105,000
520 people making $60,000
160 people making $30,000