What It Takes to Be in the 1% Around the World

[Mike OReilly]

Originally Posted by Tetepare

A “living wage” implies that the person is working. Even if the politicians removed incentives to offshore production, wage costs will (and have) reach a point where workers are replaced by robots.

I agree (robotics, combined with AI). This is an increasing trend that is going to remove virtually all "jobs" in our economy. And not just blue-collar. Most white-collar jobs are now threatened by AI. This is why we're seeing the development of various forms of a guaranteed income. We are quickly moving to an economy without human jobs.

Remember, a job performs two distinct functions in our economies. A job accomplishes a (hopefully) useful task. It also acts as the primary form of wealth distribution in our society. We've intertwined these two functions, but it doesn't have to be this way.

As more and more necessary tasks are taken over by robotics and AI, we're going to have to find a way to break this linkage. After all, people still need to eat, have a roof, and waste time on forums like CF .

Originally Posted by Tetepare

Of course, if “living wage” is obfuscation for a pure subsidy of the unemployed and unemployable, then that’s just free money. Working is then optional, and there would be (as is now) a lack of workers. That’s just a drain on the economy.

I think you're confusing or conflating two distinct issues. A living wage is exactly that: a minimum wage that results in full timers having an income at or slightly above the poverty level. It is specific to a location.

The "free money" concept is a guaranteed annual income idea that I claim is inevitable.

The phenomena of people not coming back to work is mostly an American one right now. There are multiple reasons, but one clear one is that people have decided that the wages on offer don't match the demands of the job. It's the free market in action; if employers want people to work, they need to match their employment offer with the demands of potential workers.

[goboatingnow]

Originally Posted by dannc

A quick Internet search says that the richest 400 US citizens have a net worth of $3.2 trillion in 2021.

In 2021, the US deficit is $2.8 trillion.

If one taxes 50% of the richest 400 Americans net worth it only reduces the deficit by $1.6 trillion leaving $1.2 trillion. Where does the money come from the following year? Not to mention what that tax would do to the economy and reduce the net worth of a large segment of the US population.

This is deficit is not US Debt which is $29 trillion.

The problem is not tax revenue and how much people are worth, it is the fact the US has been spending more than tax revenue generates. It has been doing this for decades and taking out loans on future generations.

Ike warned us about this in his Farewell speech, i.e., the Military Industrial speech which also talks about the Research Industrial Complex and saddling children and grand children with debt. Funny how the press and politicians never mention Ike's warning about debt and the Research Industrial Complex....

The US cannot tax it's way out of the deficit and debt.

Later,
Dan

States don’t need to pay back debt. They just keep paying the Re finance cost. Why pay back something you create from nothing.

Once you retain confidence in your paper currency you need never actually repay the capital

[AKA-None]

Originally Posted by danstanford

Valid question but if I was that person I would move to a more friendly jurisdiction.

But you only need to move your money not yourself

[danstanford]

Originally Posted by goboatingnow

States don’t need to pay back debt. They just keep paying the Re finance cost. Why pay back something you create from nothing.

Once you retain confidence in your paper currency you need never actually repay the capital

I have heard this in various forms quite a bit and recent history would back up the claim. Looking at circumstances like the Greece debt crisis gives another window into the issues going forward. You still need someone to loan you the money and the cost of money is tied to the risk up until the cost becomes unsustainable or there is not a willing lender.

[boatpoker]

Originally Posted by danstanford

I have heard this in various forms quite a bit and recent history would back up the claim. Looking at circumstances like the Greece debt crisis gives another window into the issues going forward. You still need someone to loan you the money and the cost of money is tied to the risk up until the cost becomes unsustainable or there is not a willing lender.

Cyprus 2013

[danstanford]

Originally Posted by Mike OReilly

I agree (robotics, combined with AI).
The phenomena of people not coming back to work is mostly an American one right now. There are multiple reasons, but one clear one is that people have decided that the wages on offer don't match the demands of the job. It's the free market in action; if employers want people to work, they need to match their employment offer with the demands of potential workers.

Mike, I am not sure how you can possibly reconcile this free market statement with your thoughts on unions and the power you believe they should have. If the market is to be free as you suggest it works perfectly well, and that is precisely what happens in a situation where the employer is free to hire whoever they please. My wage rates are constantly under consideration since I am trying to attract the best talent and to retain the stars on our team at present.

In the news recently in Michigan is the Kellogg plant in Michigan where the strike has gone on so long that the employer has decided to replace the striking staff en masse. Their ability to accomplish this will speak to the free market and the claims of the union there.

[valhalla360]

Originally Posted by wyb2

And fair point. If there was a sudden change in taxes, some people would probably do that. But it’s worth noting that that carries a cost as well, financial and emotional if one has any sentimental attachment to their nation (which I think most people do, even if they like to point out it’s flaws). I suspect fewer would than threaten to. Think of all the liberal Americans who say they will move to Canada if so-and-so is elected president - not many ever do, or even really try.

Sure but the uber rich can justify using their legions of accountants and lawyers to move their wealth overseas...and still live locally in reality.

[Paul L]

Originally Posted by danstanford

Mike, I am not sure how you can possibly reconcile this free market statement with your thoughts on unions and the power you believe they should have. If the market is to be free as you suggest it works perfectly well, and that is precisely what happens in a situation where the employer is free to hire whoever they please. My wage rates are constantly under consideration since I am trying to attract the best talent and to retain the stars on our team at present.

In the news recently in Michigan is the Kellogg plant in Michigan where the strike has gone on so long that the employer has decided to replace the striking staff en masse. Their ability to accomplish this will speak to the free market and the claims of the union there.

Sure, if the Union oversteps their bounds and demands too much and starts to work against the sucess of the company, then the employer is likely to find work arounds. That's a free market.

But to imply that a free market should really be the employer vs the individual employee is not valid in my view. The employer holds the majority of the cards. They know the cost of every other employee in the company, they know the demand for employees going forward, they know the competition,..... The individual employee has none of this info to bargain with. Hence the union.

[Tetepare]

Originally Posted by Mike OReilly

The phenomena of people not coming back to work is mostly an American one right now. There are multiple reasons, but one clear one is that people have decided that the wages on offer don't match the demands of the job. .

That's what we've been told, but I can't reconcile it.

How many people are in a position to elect not to work, for whatever reason? With no income, how are bills paid? Granted, US has given away many thousands per person in COVID subsidies; though it's been impressive "extra" cash it's not enough to float a typical middle class family.

Yes, some long-term subsidized people/groups can survive on the social benefits, and the COVID monies on top of that are further reasons not to work. For example, a NYC Barista would get 75% of pay via unemployment, and COVID money more than makes up the difference.

But I cannot think that the 2020 and 2021 subsidies provide enough money for many people to elect not to work.

[goboatingnow]

But it’s not actually a free market nor should it be.

[valhalla360]

Originally Posted by Paul L

There certainly is some truth to your argument about the Union driving costs too far. But remember every single one of the union contracts were agreed to and signed by corporate management. They contributed just as much to creating an unprofitable environment. Far easier for management to sign the contract and get back to work than to deal with the long term effects of signing it.

If unions operated in a normal capitalist system, I would agree. The problem is govt rules heavily favor the unions, so it's extremely painful to cross a union. Unless it's life or death for the company, they are better off giving in most of the time...

The result is when there is an impasse, what often happens is the company holds the line as best they can ultimately gives in...but when it comes time to make a major change (like refurbish a plant), they simply let that plant die and let the workers go. They may open an overseas plant or move parts of the work to new suppliers who are non-union or overseas. So it can take years before you see the impact of capitalism.

[goboatingnow]

Originally Posted by danstanford

I have heard this in various forms quite a bit and recent history would back up the claim. Looking at circumstances like the Greece debt crisis gives another window into the issues going forward. You still need someone to loan you the money and the cost of money is tied to the risk up until the cost becomes unsustainable or there is not a willing lender.

It’s a paper currency , hence there is no need for a “ lender “ per se. The lender actually gets the money from a central bank to then provide it back to you. It’s a rather contrived system to provide a smoke screen that there isn’t moral hazard.

[valhalla360]

Originally Posted by Mike OReilly

The phenomena of people not coming back to work is mostly an American one right now. There are multiple reasons, but one clear one is that people have decided that the wages on offer don't match the demands of the job. It's the free market in action; if employers want people to work, they need to match their employment offer with the demands of potential workers.

We are regularly told large swaths of the population can't afford a $500 car break down...I seriously doubt they are choosing not to work because the wages don't meet the demands of the job.

It's only when the govt steps in and distorts the market that most people can choose not to work. Initially, there was a 2yr period where easy expanded unemployment benefits were having a big impact and even still there is a huge child tax credit that is coming out as monthly checks...but there is a clear correlation that as the free money has dried up, people have gone back to work.

A large part of those who still have not come back are early retirees...with all the free money, limited opportunities to spend and a pumped up market, if you were in a good position prior to the pandemic, you are probably up 30-50% over the last 2yrs advancing your ability to retire by a few years. Short of a market collapse driving them back to the workforce, we are probably looking at 5-6yrs for labor force to get back to equilibrium.

[Paul L]

Originally Posted by valhalla360

We are regularly told large swaths of the population can't afford a $500 car break down...I seriously doubt they are choosing not to work because the wages don't meet the demands of the job.

It's only when the govt steps in and distorts the market that most people can choose not to work. Initially, there was a 2yr period where easy expanded unemployment benefits were having a big impact and even still there is a huge child tax credit that is coming out as monthly checks...but there is a clear correlation that as the free money has dried up, people have gone back to work.

A large part of those who still have not come back are early retirees...with all the free money, limited opportunities to spend and a pumped up market, if you were in a good position prior to the pandemic, you are probably up 30-50% over the last 2yrs advancing your ability to retire by a few years. Short of a market collapse driving them back to the workforce, we are probably looking at 5-6yrs for labor force to get back to equilibrium.

That's what you would expect, but it has not been that way in actual practice

About half of U.S. states withdrew federal funds for the unemployed months early to encourage out-of-work residents to find a job. But mounting evidence shows that policy gambit hasn't yet paid off.

Twenty-six states announced their intent to end federal pandemic-era benefits starting in May. They officially pulled out in waves over June and July.


UKG, a payroll and time-management firm, found that shifts among hourly workers in those states grew at about half the rate as states that continued the benefit — the opposite trend of what one might expect

https://www.cnbc.com/amp/2021/08/04/...e-to-work.html

[Mike OReilly]

Originally Posted by danstanford

Mike, I am not sure how you can possibly reconcile this free market statement with your thoughts on unions and the power you believe they should have. If the market is to be free as you suggest it works perfectly well, and that is precisely what happens in a situation where the employer is free to hire whoever they please. My wage rates are constantly under consideration since I am trying to attract the best talent and to retain the stars on our team at present.

In the news recently in Michigan is the Kellogg plant in Michigan where the strike has gone on so long that the employer has decided to replace the striking staff en masse. Their ability to accomplish this will speak to the free market and the claims of the union there.

I'm not sure how you can suggest it is somehow un-free market to have workers act collectively. Should they not be free to join together to better balance the power imbalance at the bargaining table?

And I hope you're not suggesting the power balance is somehow equal between the typical business owner vs the individual employee. This is almost never the case, which is exactly why business owners always push for weaker union rules, and always try hard to prevent a union from taking hold.

I'm not suggesting unions are somehow paragons of righteousness and business owners are evil wretches. Neither is true. At the bargaining table it's all about meeting power with power. Unions are simply one way workers can match the power that owners bring.

It's a well established fact that unionized workers generally have higher wages and stronger general benefits and working conditions. Which is why I say, if we really want to address income and wealth inequality in our societies, the best way is to support unionization.

Otherwise, we're left with taxation and other legal interventions as the principle method of redistribution. I think we all agree, this is less desirable.