Capitalism for the Workers and a New Global Economy

[Misaki]

Let's get this straight: smart people are to blame for high unemployment because they have too much confidence in the current economic system.

The weak labour markets over the past few decades have led to a decreased share of national income going to wages. If, say, the top 20% of income worked half as much, this would instantly eliminate our unemployment problems and give employees enough bargaining power to raise wages for the 150 million workers in the United States by 10%. One person doing this might not have much of an effect, but this is because they would be influencing prices for the entire nation.

If it takes 12 million new job openings to go from 8.3% unemployment to nothing, this means a single new job that is created by employees at a company working less raises everyone's wages by 10%/12,000,000, or 0.000000833%. But since it affects 150 million people, the total increase is 125% of the average wage rate, while the business that does this pays essentially the same rate for the work that is done.

Since flexible work policies attract talent, individual companies have every reason to support this too. The only question is how to get people to work less without changing payroll costs, but this has an easy solution.

Think of what happens when someone works less with the current systems of monthly salaries or hourly wages and overtime. If someone takes a day off with the salary system, they're generally expected to make up for it another time or else it forces someone else to do the extra work. With hourly wages, if someone can't work it might force the company to pay someone else overtime wages and a higher total cost of the work.

A better way is to pay a lower rate for extra amounts of work so people will agree to do it without feeling that the extra income is required, but also use the same lower rate for decreases in the amount of work done. If employee salaries accurately reflect their productivity, then these adjustments exactly balance out and someone won't feel bad if they need to, for example, leave work a few hours early to attend a parent-teacher conference or go to a doctor's appointment.

Neither should they feel bad if they delegate tasks to other people and focus on their key responsibilities, because the system would recognize that no special privilege is involved and fairly decrease their compensation to match the lower contribution to the company.

This would end up helping workers in low-wage countries around the world while harming countries that sell luxury goods to the rich, but this is a feature, not a bug. It would also mean fewer people on food stamps or other types of welfare in the United States, and therefore lower government deficits and inflation, but this is also intended even if some people think that deficits lead to higher growth.

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The above was posted on OWS forums with no reply. Followup message: So no one liked it. What needs to change? Pointing out the current system isn't getting better? Linking to polls that show that most people who would vote for Romney would do so because he isn't Obama?

Maybe showing that the top 20% of income can easily afford to work less and still have a decent standard of living?

“If a designer shoe goes up from $800 to $860, who notices?” said Arnold Aronson, managing director of retail strategies at the consulting firm Kurt Salmon, and the former chairman and chief executive of Saks.

“This group is key because the top 5 percent of income earners accounts for about one-third of spending, and **the top 20 percent accounts for close to 60 percent of spending**,” said Mark Zandi, chief economist of Moody’s Analytics. “That was key to why we suffered such a bad recession — their spending fell very sharply.”

Part of the demand is also driven by the snob factor: at luxury stores, higher prices are often considered a mark of quality.

Most of the 1% work; only 5% of them don't work.

Or maybe the fact that we are just getting stupider as time goes on?

 

[EdwardBaiamonte]

Let's get this straight: smart people are to blame for high unemployment because they have too much confidence in the current economic system.

The weak labour markets over the past few decades have led to a decreased share of national income going to wages. If, say, the top 20% of income worked half as much, this would instantly eliminate our unemployment problems and give employees enough bargaining power to raise wages for the 150 million workers in the United States by 10%. One person doing this might not have much of an effect, but this is because they would be influencing prices for the entire nation.

If it takes 12 million new job openings to go from 8.3% unemployment to nothing, this means a single new job that is created by employees at a company working less raises everyone's wages by 10%/12,000,000, or 0.000000833%. But since it affects 150 million people, the total increase is 125% of the average wage rate, while the business that does this pays essentially the same rate for the work that is done.

Since flexible work policies attract talent, individual companies have every reason to support this too. The only question is how to get people to work less without changing payroll costs, but this has an easy solution.

Think of what happens when someone works less with the current systems of monthly salaries or hourly wages and overtime. If someone takes a day off with the salary system, they're generally expected to make up for it another time or else it forces someone else to do the extra work. With hourly wages, if someone can't work it might force the company to pay someone else overtime wages and a higher total cost of the work.

A better way is to pay a lower rate for extra amounts of work so people will agree to do it without feeling that the extra income is required, but also use the same lower rate for decreases in the amount of work done. If employee salaries accurately reflect their productivity, then these adjustments exactly balance out and someone won't feel bad if they need to, for example, leave work a few hours early to attend a parent-teacher conference or go to a doctor's appointment.

Neither should they feel bad if they delegate tasks to other people and focus on their key responsibilities, because the system would recognize that no special privilege is involved and fairly decrease their compensation to match the lower contribution to the company.

This would end up helping workers in low-wage countries around the world while harming countries that sell luxury goods to the rich, but this is a feature, not a bug. It would also mean fewer people on food stamps or other types of welfare in the United States, and therefore lower government deficits and inflation, but this is also intended even if some people think that deficits lead to higher growth.

Copy and share this message. We create the story.

___

The above was posted on OWS forums with no reply. Followup message: So no one liked it. What needs to change? Pointing out the current system isn't getting better? Linking to polls that show that most people who would vote for Romney would do so because he isn't Obama?

Maybe showing that the top 20% of income can easily afford to work less and still have a decent standard of living?

“If a designer shoe goes up from $800 to $860, who notices?” said Arnold Aronson, managing director of retail strategies at the consulting firm Kurt Salmon, and the former chairman and chief executive of Saks.

“This group is key because the top 5 percent of income earners accounts for about one-third of spending, and **the top 20 percent accounts for close to 60 percent of spending**,” said Mark Zandi, chief economist of Moody’s Analytics. “That was key to why we suffered such a bad recession — their spending fell very sharply.”

Part of the demand is also driven by the snob factor: at luxury stores, higher prices are often considered a mark of quality.

Most of the 1% work; only 5% of them don't work.

Or maybe the fact that we are just getting stupider as time goes on?

what on earth are you talking about???

 

[Misaki]

These might help:
Nonfarm Business Sector: Labor Share (PRS85006173) - FRED - St. Louis Fed
Labor's Share Of National Income Lowest In History - Personal View Talks

Corporate profits are up, as reported by the US Treasury (as a reliable source): Recent U.S. Economic Growth - in Charts

As hopefully everyone knows by now, corporate profits are back up but jobs aren't: The Wageless, Profitable Recovery - NYTimes.com

 

[EdwardBaiamonte]

These might help:

why don't you help by explaining yourself???????????

 

[Moonglow]

you are going way to fast and high for these repubs to stay up.
I think it's a good idea, but corporate America won't.

 

[EdwardBaiamonte]

you are going way to fast and high for these repubs to stay up.
I think it's a good idea, but corporate America won't.

what's the good idea??????????????????????????????/

 

[Plight]

I'm frankly getting sick and tired of this way of thinking, so please take some time to logically think things through, or at least have some knowledge of what you're talking about before posting garbage like this. Corporate profits are up because that's a corporations' job, to make as much profit as they can. The way they make more money is to re-invest their money either into different investments or back into their own company, to make more products and, in turn, to make more money. The reason this is not happening is not because the corporations are greedy (they've been greedy since the beginning of mankind), but because these companies have no confidence in the labor market anymore. Why, you may ask, is this happening now? The answer is simple: too much government involvement from both sides (liberals and puppet republicans).

What has happend is that we've slowly turned into a consumer based economy. When an economy doesnt produce things anymore, and simply spends money on products they can't afford, eventually what happens is credit tightens up, and the economy slows down. That's the definition of a recession. What Washington is NOT letting happen is the for the market to correct itself, and it tries to keep propping it up using QE (quantitative easing), which in turn is leading to the debasing of our dollar. The money that is currently being pumped into the market due to low interest rates, is going into government spending sadly enough (if you remember these low interest rates pumped money into the dot com bubble of the 90s and the housing market from 99-2007). When credit tightens up, eventually these bubbles burst.

This is the reason why school tuition keeps going up. The federal government keeps guaranteeing these ridiculous loans, so schools who also want to profit, knowing the government will guarantee the loans, will keep driving prices higher. This will happen until the diplomas wont be worth the paper theyre written on or the government stops guaranteeing loans and force the schools to drop their prices.

So now, at all time low interest rates, where is the money going? Government!!!

From CNN.com:

Spending: Government spending as a share of the economy has hovered around 24% during the Obama administration, several percentage points higher than under President Bush, according to Congressional Budget Office data. It's also elevated from the historical average of 20.7% over the past 40 years.

From extending unemployment benefits, to expanding medicare and social sucurity, people by definition will abuse these luxuries, and will stop looking for work.

So now you have an economy that makes their people rely on government to protect, and year in and year out has a trade deficit (we are importing a lot more than we are exporting). That's the reason we don't have jobs, becase cronie politicians won't let the market correct itself by letting us going into a real recession. Medicine may taste bad, but we have to swallow it to heal the damage that all this debt financed spending we've gone through in the past 50 years.

 

[EdwardBaiamonte]

That's the reason we don't have jobs, becase cronie politicians won't let the market correct itself by letting us going into a real recession.

yes, the treasonous liberals have given the concept of living within our means a bad name. They call common sense, austerity.

The reality is they lack the IQ to understand how Republican capitalism works so cant possibly understand how liberal interference ruins the economy and how withdrawal of that interference would correct the problem.

 

[uscitizen]

you are going way to fast and high for these repubs to stay up.
I think it's a good idea, but corporate America won't.

what's the good idea??????????????????????????????/

LOL you just proved his point.

 

[Plight]

That's the reason we don't have jobs, becase cronie politicians won't let the market correct itself by letting us going into a real recession.

yes, the treasonous liberals have given the concept of living within our means a bad name. They call common sense, austerity.

The reality is they lack the IQ to understand how Republican capitalism works so cant possibly understand how liberal interference ruins the economy and how withdrawal of that interference would correct the problem.

What amazes me is how they cant just look at California, and not see what they did to get into this mess

 

[EdwardBaiamonte]

That's the reason we don't have jobs, becase cronie politicians won't let the market correct itself by letting us going into a real recession.

yes, the treasonous liberals have given the concept of living within our means a bad name. They call common sense, austerity.

The reality is they lack the IQ to understand how Republican capitalism works so cant possibly understand how liberal interference ruins the economy and how withdrawal of that interference would correct the problem.

What amazes me is how they cant just look at California, and not see what they did to get into this mess

yes or compare Cuba to Florida, or Red China before and after the switch to capitalism. Don't forget, it took us millions of years to get to our Constitution so it should not be surprising that liberals will take us back to the kind of barbarism that was typical throughout human history.

You can look at Africa and be amazed that not one country looks to America and says, hey, here's an idea, let do exactly what they do to the extent possible so we won't all continue to die slowly from disease and starvation. Thats the liberal IQ at work, sadly.

 

[expat_panama]

...say, the top 20% of income worked half as much, this would instantly eliminate our unemployment problems and give employees enough bargaining power to raise wages...

The top 20% includes virtually all people that hire. If they did just half that hiring work, then hiring would be cut by 50%.

 

[antagon]

If, say, the top 20% of income worked half as much, this would instantly eliminate our unemployment problems

How does having divisional VPs golf more often amount to an unemployment cure?

 

[EdwardBaiamonte]

If, say, the top 20% of income worked half as much, this would instantly eliminate our unemployment problems

How does having divisional VPs golf more often amount to an unemployment cure?

Way too stupid!!! That's just what we need!! Top management working less when they are trying to get us out of a depression!!

See why we are positive a liberal will be slow? What other explanation is possible?

 

[antagon]

If, say, the top 20% of income worked half as much, this would instantly eliminate our unemployment problems

How does having divisional VPs golf more often amount to an unemployment cure?

Way too stupid!!! That's just what we need!! Top management working less when they are trying to get us out of a depression!!

See why we are positive a liberal will be slow? What other explanation is possible?

Our friend here is clearly a full-blown commie.