The true cost of Low Wages. Who is really to blame.

a reply to: mOjOm

I think the solution will come from the problem. You fire everyone and put robots doing the same things. Who´s and with what money those "made by a robot" products are going to be purchased?

Solution:

Make the transition as fast as possible, tax the corporations, give that money to the consumers, they will spend it on the made by robots products and everything keeps rolling.

I say, this is a step into the communism, or a form of it, I see no problem with that since I see no reason for luxury in life but this is what it is and the world will probably be a better place. But some commercial agreements like tpp tipp and so on must be called off or heavily revised for the transition or this will cause major unemployment waves and most likely violent rioting against governments and corporations.

a reply to: WanderingNomadd

it's called piecework I believe....
and it usually doesn't work out too well for the average employee.

a reply to: seasonal


On these threads we here a lot about increases wages as part of a solution. We must remember that costs of living are associated with wages in important ways. Location, flow, quality, performance.

Note the often jacked up and unrealistic prices around tourist traps. Or "name brand" often without much justification. Thats why one finds certainly name brands selling, even in economically weak areas, for prices that are unbelievable......because folks are paying.

The wage end of the economy is another story.

I keep seeing references to Keynesian economics. I don't think, from reading these references, those referencing fully understand the concept behind Keynesian theory.

Classical economic theory limits governmental interaction with the economy. It essentially states that the market is self-correcting and interference in the marketplace should be limited to extreme circumstances. Keynesian theory says that the government has a duty to monitor and control the economy.

There are two times to control the economy: when it grows too fast, and when it grows too slowly. Under Keynesian theory, there are two ways the government can slow a too-rapidly growing economy: decrease government spending and increase taxes. Of those two, the most efficient method is to increase taxes. If the economy is growing too slowly, there are two ways government can increase growth: lower taxes or increase spending. Of these, the most efficient method is to increase spending.

The math works.

But from a practical perspective, this means taxes are increased whenever there is a boom in the economy and governmental spending is increased whenever the economy slows. Never are taxes decreased, and never is spending decreased. It's not hard to see the result: all spending is eventually governmental and all wages are taxed at 100%. This extension has never been tested before now, save in a few short-lived communistic economies. Even those were not a true test, because they became communistic overnight instead of incrementally as Keynesian theory proposes.

Our present problems are not because we need Keynesian economics, but because we have been using Keynesian economics.

I have made the statement many times that Capitalism is like an Irish potatoe... dull, bland, and boring. Socialism is like salt... corrosive. But sprinkle a little salt on that fried potatoe and you get French fries! Delicious, mouth-watering, exciting French fries!

You need both Capitalism and the right amount of Socialism to make things work.

The same thinking goes for Classical and Keynesian economics. You need both, in the right amount. The ultimate solution would be that taxes are collected and saved during booming economic years, then used during lean times to repair infrastructure or fund start-ups. Spending should fluctuate in both directions, as should taxation. The overall purpose is not for the government to become business (as it has today) but for it to provide a fertile climate for business. The problem with implementing this is that it requires a bit of patience and self-restraint. Our politicians show the exact opposite of these traits, as does our population. "I want more and I want it NOW!"

Keynesian theory gave us more and it gave it to us when we wanted it. But Keynesian theory also gave us debt, high taxes, and a climate unsuitable for business. Bed - made - sleep.

We are approaching the end of our experiment. This discussion is proof of that. We have the results of our experiment: high taxes, overbearing regulation, few jobs, fewer productive jobs, a massive economic imbalance, growing poverty, astronomical entitlement programs, and increasing civil unrest. We have done something that no other country in the history of the world has ever done: we have simultaneously created the same conditions that led to the War of Northern Aggression (Civil War for the Yankees), the French Revolution, the fall of Communist Russia, World War II, and the collapse of the British pound... heaven only knows where we will go from here, but it's a safe bet it won't be pretty.

We might have one chance left... might. But the only way to take that chance involves tremendous self-sacrifice, and to be honest, I don't think we have it in us.

TheRedneck

a reply to: Puppylove

I find myself with the need to apologize to you as well. Not for anything that I have done but for your belief that communism works. You see, it would IF people were not involved. So maybe when the machines take over you will then get your Utopian world where everyone is equal (all in poverty but equal).

No there are not unlimited jobs out there to move up to. That is why the people who work harder and do better move up and get the better jobs, while those that are content with their station in life as well as those who like to complain and do nothing about it remain where they are. Is the system completely fair? No, there will always be corruption as well as 'the good ole boy system' (which has skruud me over several times).

It is not a perfect system by any means, but it is currently the best option.

And if there were more jobs than people willing to fill them, there would be zero complaints about illegal aliens taking jobs. (But that's a whole different topic).

a reply to: TheRedneck

Well the obvious way, even though most would not admit it at this point to bring about a fix to these problems is threefold.

1) as you say, a compromise between capitalism and socialism (which I do not see working unfortunately because it still requires people to be in charge).
2) Take the government out of the loop (i.e. eliminate the welfare state and other superfluous government programs & yes that includes decreasing the military by about 50-75%).
3) Eliminate unneeded taxes (this includes ALL taxes other than those on goods, and those should be limited).

a reply to: JDeLattre89

Now, given the responses in this thread, what would you estimate to be the probability that any one of those three points could be implemented?

TheRedneck

a reply to: TheRedneck

0%

well there is probably some minuscule fraction but is highly improbably (maybe 1 in 5,000,000,000)

a reply to: CrapAsUsual

The nature of the corporations will change as the nature of the society will change. They have no option to accept the violent taxes or there will be no money for their customers to buy their products. Today a factory worker in china earns, lets say, 3 usd/h in america lets say 10 usd/h in the future a robot will cost the same everywhere, and will receive the same everywhere. But producing what for who? For the unemployed? No, people must have money to buy things so there is where the minimum basic income thing comes in. A different economy, a different world. That´s what will start to happen in the next 5 to 10 years. In 20 years we will be well into a new age of civilisation.

Not true. The nature of corporations will always remain the same, to make money (or whatever the form of currency is, because it translates to power).

They provide the services that are needed at the time for the profit that is available. So by this recollection, the machine economy will simply transfer the society back to pre-industrial state because people can no longer afford and no longer deem that they need the modern conveniences.

a reply to: WanderingNomadd

Then explain the explosion in the costs of living compared to 1968? Wages have decreased in value since then yet the cost of living, such as products, have risen greatly. If wages have decreased since 1968 why have'nt prices? The facts; Wages have decreased, the economy has increased greatly, prices have increased, how is this any different to what you "Assume" will happen if minimum wage was increased.

The problem is that CoL (Cost of Living) steadily increases at between 3-5% a year, while wages fluctuate between rising and falling but mostly staying stagnant. Once prices go up, they do not come back down no matter what CoL does.

The possible solution for this is . . .wait for it . . . a minimum wage increase. Not a huge one as everyone is demanding (to a 'living wage') but rather a small one to keep up with CoL. This would be done by increasing MW by 1/2 of the CoL increase each year and matching it once every 5yrs. This would keep things competitive while at the same time keeping the workers afloat as well.

That is indeed logical and fair. The problem then becomes regulating the percentile return for the employee, so basically the minimum wage.

But; you would then have to redefine what the minimum wage is, because many people would not accept this system. There are too many people who would prefer to do as little as possible and still get paid the same no matter what.

a reply to: CrapAsUsual

I think the solution will come from the problem. You fire everyone and put robots doing the same things. Who´s and with what money those "made by a robot" products are going to be purchased? Solution: Make the transition as fast as possible, tax the corporations, give that money to the consumers, they will spend it on the made by robots products and everything keeps rolling. I say, this is a step into the communism, or a form of it, I see no problem with that since I see no reason for luxury in life but this is what it is and the world will probably be a better place. But some commercial agreements like tpp tipp and so on must be called off or heavily revised for the transition or this will cause major unemployment waves and most likely violent rioting against governments and corporations.

No, this is not a step to communism, it is communism. The corporations would become the ruling class under your proposal, and everyone else would become their serfs. Welcome back to the days of 'the company store'.

a reply to: JDeLattre89

The %1 already owns 24% of all income, and 50% of ALL stocks and bonds and those are 2012 numbers. We are on the very last edge before we are serfs, some would argue we already are. There is a reason the media will not talk about this inequality and it is $. "They" hold almost all the cards including the media.

Boils down to the rules or laws have been tweaked for 100 years to funnel wealth to the wealthy, and we are seeing a snow ball effect. Everything we do from here out is very temporary to keep the serfs calm til the fireworks start. That is unless we are separated by color, dems, repubs, religion etc.

Separating makes swashing groups so much easier. Cause this group is anti-this or pro that and it's going to get ya. Just look at how we group low income "people" into an almost despised and unwashed group of dumb burger flippers. I have worked with a huge # of these people and they want the same thing you do. To say they are lazy or unmotivated is dismissive and easy. Sure in a given # of workers you have a % that are bad, but for the most part they could handle higher paying jobs,your job, but your ass is in that slot, for now.

All this doesn't matter cause the $ isn't going to anyone but the top players in this economy, and I'd say their opinion of sharing productivity gains is well documented.

a reply to: JDeLattre89

Its not fully communist because you still have private property. In communism you can´t. And if a communist system emerges from this robot revolution it will not be a Communist system like the one we had in the USSR, Cuba and so on, it will have fundamental aspects of those experiments but will have new things and also things from the previous capitalist system. Beyond this we will ave to think about anarchist systems because in fact automation and AI can reach every aspect of human life, including government and public services. We just don´t know how yet.

The most fundamental decision to be taken in those times will be how many humans should the system have?

I think it makes no sense to have machines doing men work if then there is no one to buy those goods. Machines are not consumers of goods, only energy and spare parts, for now. And having no customers will not satisfy corporate greed. so as long as the system provides growth for the economy and the corporations, of course, they will be happy to pay huge taxes or participate on whatever mechanism that fits their sales.

I foresee a standardisation of things too. We won´t need 10 brands of cars, we just need a car to go from A to B so car corporations will merge into one. No problems with monopoly laws because operational costs of for a given good segment will be the same for all corporations, consumer income will be the same and the consequence will be all buying the same things, the supply will adapt to this and suppliers will merge. Its more efficient for them. 1 ceo instead of 10, one R&D instead of 10 and so on.

Think about cars, think about everything.

Will the robots bring the end of the consumer economy?

In time it may.

originally posted by: JDeLattre89
a reply to: CrapAsUsual

The nature of the corporations will change as the nature of the society will change. They have no option to accept the violent taxes or there will be no money for their customers to buy their products. Today a factory worker in china earns, lets say, 3 usd/h in america lets say 10 usd/h in the future a robot will cost the same everywhere, and will receive the same everywhere. But producing what for who? For the unemployed? No, people must have money to buy things so there is where the minimum basic income thing comes in. A different economy, a different world. That´s what will start to happen in the next 5 to 10 years. In 20 years we will be well into a new age of civilisation.

Not true. The nature of corporations will always remain the same, to make money (or whatever the form of currency is, because it translates to power).

They provide the services that are needed at the time for the profit that is available. So by this recollection, the machine economy will simply transfer the society back to pre-industrial state because people can no longer afford and no longer deem that they need the modern conveniences.

All right and they will make money the same way they did before just what they added to the profit for replacing people with robots will flow to people by a different way.

They must make money but to make money they must have customers with money.

originally posted by: atrollstalker
Here's the deal. Corporation are not necessarily greedy just keep the poor folks down. Corporation has shares of stock. Shares of stock are sold to individuals and companies. Those individuals have take their OWN money and invested in the corporations. The corporations use that money to make more money and then pay the investors for using their money. Those "evil" corporations are probably made of some of your mom and pop's money which is helping them to retire. Most retirement accounts in this country are funded by corporations returning money on people's investments. It is called investment in their future.

Gotta go.

Shareholders want higher dividends. A corporation can either increase market share (dream), be able to increase prices and profit margins or reduce overheads in the former of property leases and tax, employee wages and local taxes. Guess which ones are the easiest? Whenever that liberal city council thinks that increasing property taxes is going to aid in wealth redistribution is only risking losing tenants.

a reply to: JDeLattre89

well they could go even further and start purchasing people's debt, since they have no money to pay it off, and then you work for whoever owns your debt till you pay it off, which you will never do, so welcome to the new form of slavery!

we're screwed...

A couple weeks ago I was watching old Tom and Jerry cartoons. In one of them Tom falls in love with some other cat and ruins himself financially to impress her. In this cartoon they show the contract Tom signs, it's something like 15% interest on a 20 year loan, many penalties and virtual slavery. I got to thinking about it afterwards and realized that loans for low income folks for cars, homes, credit, etc are on even worse terms than this cartoon contract from the 40's was... and that was basically the worst possible terms the animators could envision.

Edit: Here's the cartoon
www.youtube.com...

a reply to: dawnstar

Either way if in debt, you work for who holds the note, unless you plan on not paying. But working directly for a corporation that owns your dept would be a nightmare that would be ripe with abuse, and more profit.

a reply to: dawnstar

That´s not a new form of slavery. That´s the old form of slavery as practiced for thousands of years. Human trafficking still relies on that kind of system.

And in several countries is still practiced exactly as 1000 years ago.

Here's an informative video on the wealth gap. Really brings home the scam the wealthy has pulled over on the everyone else.