The way to get to a living wage is by decreasing the cost of living, not by raising wages.
After attending the annual Intercollegiate Studies Institute (ISI) Leadership Conference in Indianapolis, one of the things I thought about was a living wage. The argument by many of the participants was that the best way to lift people out of poverty and provide a living wage was to provide a robust economy — basically, trickle-down economics. Even Thomas Woods' talk, which had a religious character, had this general idea. In fact, when he was asked to reconcile St. Peter's teaching on obedience to the government with disagreement on welfare policy, he largely fumbled the answer, in my opinion. I favor my response to the question.…
Article comments
26 - Maurice
Interesting reading:
Business News
Friday, May 5, 2006
Tresury's Snow says wages not inflation threat
WASHINGTON (Reuters) - U.S. Treasury Secretary John Snow on Friday said he expected wages to rise in the months to come but did not think this would create worrying inflation pressures because of fast growth in worker productivity.
Asked about if there was a risk of larger paychecks sparking a broad rise in prices, Snow told CNBC television: "I don't think so because productivity remains so high ... And as long as productivity remains high, we can have higher wages but not an increase in per unit labor costs."
Kinda reflects what we have been talking about.
27 - Blue Meanie
Yes Maurice, I know what Dave said. And I responded.
As for the "hard limit", for the entire economy, there is no theoretical limit since our currency is by fiat rather than based on some standard banked. Such as gold or wheat. Due to a fiat currency, all kinds of tricks and abuse can be accomplished.
Now, about your statement about the size of the economy between now and 20 years ago; take a look at that ratio and compare it to the debt ratio.
28 - John Bambenek
BM-
I'll put my business experience against yours any day of the week. My first year out of college I made six figures. I was the youngest project manager at Ernst & Young and later at Cap Gemini. If I was still there I'd be an exec now. Your method of argumentation is intellectually lazy. Don't present facts, only provide invective.
Either contribute or shut up.
29 - John Bambenek
What does the debt ratio have to do with anything aside of consumers making choices of how to manage their own money?
Debt isn't randomly assigned based on some Illumnati world conspiracy, people make choices and some take on debt based on those choices.
30 - Blue Meanie
Well John, learn to read, then speak up. If you note above, not only am I attempting to discuss these issues rationally; I also provide my concepts on correction and denote the differences in opposing theories from the macro-economic standpoint.
As for the debt ratio, you are speaking of consumer debt, which is a factor; I was speaking more towards national debt (as part of fiat currency model).
Reading comprehension is your friend.
and to Maurice, thank you for providing the interesting article to read, and for the polite discussion.
31 - Maurice
I think you nailed it, John. At first I thought BM was a Keynesian. Now it looks like he is just out of his league.
Recommend BM read Milton Friedman for easy to understand economics.
32 - Blue Meanie
Well Maurice, seems like you and I hit hte post button at the same time. Read my comment #30 and see if my previous statement makes more sense for you.
Part of the difficulty here is that I do not subscribe to any axiom in the entire "supply sider" economic hypothesis.
Not that it matters, and not that I care a whit as to others opinions about my opinion.
I came here for an argument. Sorry, channeling Monty Python again.
My entire point has been completely proven out merely by the original poster's statement in #28, since it shows his own particular bias towards viewpoint of economic modelling.
It seems that the only one who understood what I was getting at was Dave, and we promptly agreed on the valid issues being discussed.
Again, thank you Maurice, I do appreciate the reading suggestion if not the implications around it, and I do understand quite well what you are driving at. My point is that such practices do not maximize efficiency but rather skew all benefits in a "top heavy" fashion that rather quickly burns out rather than sustains growth and benefits a larger segment of not only people, but the economy as well.
American consumers have been the driving force of the world's economy for quite the while. How much longer can that go on if the very same people are hit with stagnant income growth (after adjustments)? Some would say such is not the case, and that is debateable.
But then we hit the personal debt versus savings numbers as well as the current demographics of the American public. That math is Lamarckian to the point of a Camus prediction.
33 - RedTard
"Recommend BM read Milton Friedman for easy to understand economics."
Why must you be a condescending asshole. Reading others ideas gives you knowledge but it reduces your ability to creatively and openly look at a problem. BM, has a point about bloated CEO compensation pay.
The thing you're acting oblivious to is that the big shareholders are all part of the same wealthy class as the CEO's. They vote each other huge bonuses and get in and out of companies on inside information. Meanwhile, the average shareholder with 200 shares in an IRA has exactly zero control, they're not privy to the inside information and they end up going down with the sinking ship or getting duped by the cooked books into buying overpriced shares.
Unfortunately, that's the best system we have for now. The question is how much corruption are you willing to accept? The pendulum has swung and the farther it goes the more violent the backlash. The sad thing is the wealthy class will simply read about it in the papers or from their yacht in the Pacific, the middle class will end up paying for their transgressions.
34 - RedTard
Corruption is not the rule in Corporate America but there have been way too many exceptions lately.
35 - Blue Meanie
Well said, Red.
Both about corruption not being the rule as well as about the middle class picking up the tab.
36 - Maurice
Did not mean to be condescending. Milton Friedmans book 'Free To Chose' has a chapter explainning how the Federal Reserve came about. Based on BM's comments (non gold standard) I thought this would be an interesting read. Also highly recommend reading Frederic Bastiat.
As I stated your comments seem to come out of the Keynesian model. That is not a good fit for our economy. I reject the idea of zero sum.
The real solution to John's original post IMHO is for workers to make themselves more vaulable. It appears to me that BM is suggesting some sort of wealth transfer.
37 - Blue Meanie
Well Maurice, it appears you are making assumptions with nothing there to substantiate.
I understand you reject the concept of zero sum, and that is a debate in and of itself. As for the history of the Federal Reserve, I know it better than you might imagine, hence my point of a fiat currency.
And no, I am NOT advocating any kind of wealth transfer. What I suggested, as Dave noted, was a more advanced model of profit sharing that gives better rewards to those participating in value added activities(workers), and less insane multiples of average salary voted for CEOs by their buddies on the Board. (Especially since they sit on each other's Boards in order to do this)
I am stating that the worker's efforts ARE more valuable and should be compensated for in a more equitable fashion.
Take a look at Japanese corps , their CEO to average worker compensation ratio, then compare it to the U.S.
Just as an example, and something to think about.
38 - RedTard
That's all interesting background information on economics, but he question at hand is that of CEO pay. It is at a historically high level in relation to worker pay.
There are two proposals being tossed around that are being fought tooth and nail by groups representing the corporate types.
1) Would allow shareholders to nominate board members.
2) Would require CEO pay to be publicly available and approved by the shareholders.
Those are both great proposals and should immediately be approved, unfortunatly, the wealthy run this country and are fairly capable of fending off progress is it might effect their bottom line.
CEO's and the corporate boards they conspire with are more interconected than a backwoods Arkansas family. I don't support workers unionizing and working together to artificially inflate wages, how in the hell can I support rich folks doing the exactl same thing?
39 - Maurice
Thanks for the polite response.
My company has a profit sharing program. We divide 10% of the profit to all employees. Also, our CEO is one of the top ten most efficient according to Forbes.
Neither of these things help poor people. You can't clean toilets and expect doctors wages. The best way people can be paid more is to have a desired skill.
40 - RedTard
Maurice,
You can see it so easy when workers conspire to inflate wages and you rightfully condemn it. Can you not see that wealthy ex-CEO boardmembers (nominated by the new CEO) are doing exactly the same thing?
41 - John Bambenek
The only reason I didn't talk about workers making themselves more valuable is because "someone needs to clean the toilets" so to speak. I'm a big proponent of education but I don't think that gets everyone off the welfare dole. However, lowing the cost-of-living will.
I'm not sure how this is a supply-side solution.
And BM, I can read. Mostly all I see is invective. Maybe there is a point between insults... I'm just not going to waste my time sifting through your trash to find it.