Posts Tagged ‘productivity’

15 dollars

People earning the federal minimum wage of $7.25 aren’t going out to eat at restaurants because they can’t afford to do so. That’s pretty much true for those who make higher state minimum wages of nine and ten dollars an hours. These people are not taking yoga, piano, or karate lessons. They don’t belong to gyms, and they don’t take part in yoga classes. They purchase few if any new books, and buy clothes at second hand stores, like the local Goodwill. They don’t buy flowers for their mother’s on mother’s day. They’re not purchasing new computers, cameras, tables, chairs, carpets, washing machines, dryers, I-phones, cars, organic food, or houses. They’re not buying a lot of other things.

What good are these people to the economy, other than to provide rich people with cheap labor? Like the idle rich, minimum wage workers barely stimulate demand for goods and services.

What do low wages have to do to with rich people? Low wages boost profits. As a consequence of that, corporate dividends and share prices go up. People who earn less than $100,000 a year own hardly any shares of corporations. The primary beneficiaries of people working at minimum wages go primarily to the rich.

If you raise the minimum wage to $15 an hour, the people who benefit from this raise will be buying a lot of the things listed above and more, even a house in Detroit, Michigan, and elsewhere, as well.

And all of a sudden, not just large businesses, but small businesses thrive because demand for goods and services is stronger.

Studies over the last fifteen years show that the idea that high wages weakens employment is a myth.

There are two fundamental laws of capitalism. One is something about supply and demand, which is often rigged in favor of those who believe and act upon the golden rule; he who has the gold makes the rules. The other rule, which Henry Ford (the founder of the Ford Motor Company) believed was simple: When people have more money, businesses have more customers, and need more workers.

This explains why the current economic expansion is the worst since the Great Depression in virtually every category having to do with jobs, wages, GNP, and the things that are important to 99 percent of the US population.

Currently, 1 percent of the population has rigged the economic and political games over the last thirty-five years to the point where they have received a legislatively determined 95 percent of all income growth since 2009, the most ever on record. Worse yet, the rich steal 37 percent of all income produced in the United States nowadays, and that figure is growing, and with no end in sight. Rich parasites will soon be larger in terms of total income than their hosts, the 99 percent.

Ever wonder why the economy under President Jimmy Carter produced more jobs, raised wages, and had greater GNP growth on average than any year of the last fifteen with an economy that was ½ the size of today, and with a population that was 60 percent the size of today? The answer is simple.

Back then, the rich only stole 8 percent of the annual income produced in the United States. That means the rest of us earned 92 percent of all the income created in the USA, which meant demand for goods and services was far more plentiful then than today, job growth was greater, and wages for the 99 percent also rose. Under Carter, the economy created 225,000 jobs a month. Over the last fifteen years, 90,000 has been hailed as an outstanding achievement by President George W. Bush, as well as President Obama.

Something clearly is out of whack with the economy, and yes, most of it has to do with the massive corruption of the US government that was unleashed by the Reagan tax cuts. But if income can be massively redistributed from the 99 to the 1 percent, as it has been for the last thirty-five years, then the government can act to redistribute it back to where it belongs, and all for the good of the economy. This can partially be achieved by raising the minimum wage to $15 an hour by 2017.

And don’t tell me corporate America doesn’t have the money. Currently, they’re sitting on 7-8 trillion dollars inside the US, while holding another 7-8 trillion outside the US, because the demand for goods and services is so low they have no reason to invest it in new plant and equipment so as to increase production, which would require workers.

You can go back 150 years and literally find the same people shouting over and over again on behalf of their rich patrons saying the same thing, “If people on the bottom get paid more, it will be bad for them, and they will lose their jobs.” That’s just a polite way of saying, “My patrons and I are rich, you’re poor, and my boss and I want to keep it that way. And besides, it’s good for Wall Street.”

The fact that corporations are sitting on trillions upon trillions of dollars because demand is slack shows the opposite is true. Every one of those trillions of dollars could be used to create jobs if only the demand was there. The years between President Franklin Roosevelt and Ronald Reagan also show the same thing.

If you pay people more, they will purchase more, and everybody will be better off, not just a few politically powerful people. Those trillions of dollars will be used to invest in the production of goods and services. Those trillions also show that US corporations are quite capable of paying their employees more, and not just the already rich CEOs.

That’s why it’s long past time to raise the minimum wage to $15 an hour. Besides, if the minimum wage had kept up with productivity (or real inflation) over the last 56 years, the US federal minimum wage would be nearly twenty dollars an hour.

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A new study by the Economic Policy Institute (EPI), called Manufacturing Job Loss: Trade, Not Productivity, Is the Culprit, shows how the corporate propaganda machine has continued to lie to us. The not so free press continues to tell us that automation has cost the US jobs, and that’s the big reason why US job growth is so historically slow nowadays, and wages/benefits have gone down for the last thirty years.

As I’ve pointed out in the past, those claims are out and out lies, and the reporters and editors making these claims are liars. Check out the following links from this blog: Five Graphs that Will Make Your Blood Boiland JOBS: The Largest US Export Product.

According to the EPI study, “The United States lost 5 million manufacturing jobs between January 2000 and December 2014. There is a widespread misperception that rapid productivity growth is the primary cause of continuing manufacturing job losses over the past 15 years. Instead, as this report shows, job losses can be traced to growing trade deficits in manufacturing products prior to the Great Recession and then the massive output collapse during the Great Recession.

Specifically, between 2000 and 2007, growing trade deficits in manufactured goods led to the loss of 3.6 million manufacturing jobs in that period. Between 2007 and 2009, the massive collapse in overall U.S. output hit manufacturing particularly hard (real manufacturing output fell 10.3 percent between 2007 and 2009). This collapse was followed by the slowest recovery in domestic manufacturing output in more than 60 years. Reasonably strong GDP growth over the past five years has not been sufficient to counter these trends; only about 900,000 of the 2.3 million manufacturing jobs lost during the Great Recession have been recovered. In addition, resurgence of the U.S. trade deficit in manufactured goods since 2009 has hurt the recovery of manufacturing output and employment.

In short, the collapse in demand during the Great Recession and ensuing glacial recovery was responsible for most or all of the 1.4 million net manufacturing jobs lost between 2007 and 2014. Between 2007 and 2014, productivity growth slowed noticeably, and manufacturing output experienced no net, real growth.”

There are a few things the EPI study doesn’t mention.

  1. The report didn’t mention that US corporations are the biggest, and perhaps only, cause of the US trade deficit. When a US company ships jobs overseas, to say China, and then exports the products created overseas to the US, that adds to the trade deficit. Think of Apple Inc., Microsoft, Dell Computers, Nike, and thousands of other US corporations that produce their products in China, Pakistan, India, Indonesia, Mexico, etc…, and then export them into the US. When was the last time you purchased a Chinese smart phone. Along with US businesses, their chinese contractors and subcontractors manufacture them for US corporations.
  2. The EPI report also didn’t mention that international income redistribution scams, politely called international trade agreements, are also the primary, though not the only, conduit through which income is redistributed from the 99 to the 1 percent in the USA. When a job is created by a US company abroad, or exported from the US, the difference between the old wages and the new lower wages goes straight into the pockets of the super wealthy via higher corporate profits, roaring dividends and surging share prices.
  3. Largely because of trade agreements, the 1 percent steal 37 percent of all income created in the USA, compared to 8 percent in 1980.
  4. Notice in the graph above that this redistribution of income since 1980 has coincided with the loss of US manufacturing jobs. Duh!
  5. Those jobs supported millions of other jobs as well, such as local restaurant workers, accountants, auto salesmen, not to mention they provided the tax dollars for schools, infrastructure, police, fire, and social security nets. Those jobs don’t pay the taxes they used to because they’re not in the US anymore.
  6. The demand for goods and services by the 99 percent has been curtailed due to the exportation of jobs, so manufacturing employment, as well as employment throughout the US, is the worst since the Great Depression.
  7. The trade deficit hurts social security because when the rich are literally the only beneficiaries of trade scams and they don’t pay into the social security trust fund after the first $118,000 of yearly income. Meanwhile, the people who lost their jobs and whose incomes have been redistributed to the 1 percent are no longer paying into the system.
  8. Wages have dropped, in large part, because so many jobs have been exported overseas. According to the Federal Reserve, nearly 28 million jobs were exported from the US from 1990 to 2010.
  9. International income redistribution scams pave the legal way for jobs to be exported from the US to lesser paying nations, but they also pave the legal route for US corporations to create jobs overseas that they would otherwise have been created in the USA, meaning the job losses created by trade are understated by a hefty margin. When a job is exported to China by a US business, and the product of that job is sold in China, or exported to nations other than the USA, then it’s not statistically visible that this exported job has added to the trade deficit, even though US exports are lower than if the job still remained in the US. Under such circumstances, US exports are lower, which raises the trade deficit, increases income and wealth inequality, decimates our tax bases, and weakens social security, but it pushes the stock markets higher.
  10. The Chinese government requires US companies to partner with Chinese companies, and share technology to boot, in order to sell products in China. Boeing has exported thousands of jobs to China because of this partnership clause that otherwise would have been in the USA.

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The United States has the highest productivity in the world per worker. So why do K-12 students need to take standardized tests if the US educational system is already producing the world’s most productive workers? The answer is simple.

Everyone of those tests administered to students represents corporate profits, since such publishing giants as Pearson and McGraw-Hill manufacture these tests. These tests and testing materials increase their profits at the expense of students, teachers, parents, public education and taxpayers. The money and time it takes for students, parents and teachers to prepare for the tests go straight into the pockets of the 1 percent.

These tests are an income redistribution scam perpetuated by the 1 percent and forced on the 99 percent by legislators corrupted by the money of the 1 percent. Otherwise, the tests are valueless, and in fact, since they take so much time from real studies to prepare for them, they have a negative value for the 99 percent. They take away from playtime, from music, from the arts, from wood and metal classes, and force students to take an overabundance of math and writing classes which most will never use.

And that’s why the public students of the USA are the most tested in the world; Profits!

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From the Economic Policy Institute:

“The vast majority of Americans primarily rely on their earnings from work—not investment income, not government support payments—to get by. That’s why we can’t address inequality without addressing wages. And what has been happening to wages is not pretty. The pay of most workers has been stuck for decades even though productivity and earnings at the top are escalating. Between 1979 and 2013, productivity grew eight times faster than median worker pay. Americans are working harder, more productively, and with more education than ever, but are treading water, as an enormous and ever-increasing share of income growth goes to corporate profits and executive pay. Just in the last decade—between 2002 and 2013—inflation-adjusted wages were stagnant or fell for the bottom 70 percent of wage earners. This widespread wage stagnation, which afflicts even the college-educated, hurts economic growth, curtails the aspirations of lower-income families, and constricts middle-class incomes.

The central economic policy issue today is the challenge of generating broad-based wage growth. Broad-based wage growth is the key to addressing income inequality, ensuring social mobility, reducing poverty, boosting middle-class incomes, and enjoying stable economic growth.”

These are brave and accurate economic words from the Economic Policy Institute (EPI), but dealing with these matters is a political problem, which is how income has been redistributed from the 99 to the 1 percent during the last thirty-four years.

It’s also a misinformation challenge as the corporate press dutifully lies to us about how our income and health is being redistributed from the 99 to the 1 percent, but that’s another story.

Free trade treaties are written and approved by congress and the president with an eye toward jacking up the profits reaped by major corporations (which are tools through which the 1 percent redistribute income and wealth from the 99 to the 1 percent), and for shipping jobs overseas.

The primary US export is American jobs. The difference between the old and higher US wages and the new lower overseas wages is redistributed to the 1 percent via higher profits, surging share prices, and mounting dividends. The rich get richer, while the middle class sees a reduction in jobs, pay, tax revenues for schools, fire, police, road maintenance, and more, and all of that “more” is negative, for the 99 percent.

Currently, the Obama regime is negotiating the Trans Pacific Partnership (TPP), the largest income redistribution treaty of all time, and it’s being negotiated with an eye toward exactly that. Obama is being helped by the entire Republican Party, and many Wall Street Democrats such as Senator Ron Wyden, an always loyal and corrupt servant of the 1 percent.

Don’t believe me? Check out the video below.

The point here is the challenge of meeting the needs of the nation, of creating US economic vitality, as EPI pointed out above, is an issue of money in politics because with such obvious economic decline as experienced by most of the 99 percent during the last 34 years, President Obama (along with the help of key Republicans and Democrats in congress) is planning on doing the same old thing in ramming the TPP through congress.

Albert Einstein reportedly said the definition of insanity is “doing the same thing over and over again, and expecting different results.”

Obama and the congress people who support the TPP are not insane, nor are they stupid, they’ve merely been corrupted by big money, such as Wall Street and the Koch Brothers.

And that’s the big challenge facing the 99 percent today, because money in politics is precisely why the government has been redistributing you and your children’s future, as well as your income, and tax dollars to the 1 percent over and over again for thirty-four disastrous years.

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“BERTRAND RUSSELL, the English philosopher, was not a fan of work. In his 1932 essay, “In Praise of Idleness”, he reckoned that if society were better managed the average person would only need to work four hours a day. Such a small working day would “entitle a man to the necessities and elementary comforts of life.” The rest of the day could be devoted to the pursuit of science, painting and writing.”

Russell thought that technological advancement could free people from toil. John Maynard Keynes sounded a similar idea in a 1930 essay, “Economic possibilities for our grandchildren,” in which he reckoned people might need work no more than 15 hours per week by 2030. But over 80 years after these speculations people seem to be working harder than ever. The Financial Times reports today that Workaholics Anonymous groups are taking off. Over the summer Bank of America faced intense criticism after a Stakhanovite intern died.

There is, of course, considerable truth to what Bertrand and Keynes said. For example, if wages had kept up with productivity growth since 1960, the federal minimum wage would be around $18 an hour, and much higher if things such as food and energy were included in the official inflation rate. Food has jumped perhaps 20 percent per year since President Obama took office, at least by some estimates.

A lot of people throughout the nation would be able to live on working only four to five hours a day or less if productivity and wages had been linked. Instead, productivity has been linked with share prices, dividends and corporate profits via federal legislation, and from which the rich primarily benefit. Free trade agreements, such as the looming Trans Pacific Partnership, the largest “free income redistribution from the 99 to the 1 percent treaty” of all time, which is also known as NAFTA on steroids, is being pushed by Obama and Wall Street Senator Ron Wyden. The latter has a history of voting 100 percent of the time on legislation that redistributes income from the 99 to the 1 percent.

It is because of Wyden’s work in the US house and senate, as well as many others, that the 99 percent in the US are working more and earning less, rather than working less and earning more. They have to support the rich and their campaign contributions and other perks the 1 percent provide the Wall Street senator. Wyden’s work is why there is such a massive financial inequality in the US. US citizens, because of Wyden, are something of a host, while Wyden’s favorite legislative beneficiaries (the 1 percent) are the parasites, in an ever increasing unequal society.

Thank you Wall Street Senator Ron Wyden, at least from Wall Street’s point of view.

Notice that US citizens are working less nowadays than in 1990. However, part of that might be due to the weakness of the economy, and the overall higher unemployment in 2012 relative to 1990. Ergo, there are less hours to work nowadays than 22 years earlier. And don’t forget, when inflation is factored in, we’re earning less now than then. The difference in real wages from what they were and what they should be has been redistributed from the 99 to the 1 percent via federal legislation, such as free trade treaties.

Check out the link below for more on the story.

Working Hours; Get a life–The Economist

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In Sunday’s paper, The New York Times stunningly devoted its entire editorial space to a thorough analysis and endorsement of raising the national minimum wage to $10.10. Titled “The Case for a Higher Minimum Wage,” the editorial said, “The political posturing over raising the minimum wage sometimes obscures the huge and growing number of low-wage workers it would affect. But the results of the wage debate are clear. Decades of research, facts and evidence show that increasing the minimum wage is vital to the economic security of tens of millions of Americans, and would be good for the weak economy.”

That’s absolutely true. Raising the minimum wage to $10.10 an hour would be good for the economy. However, raising it to $18.28 an hour would massively strengthen the economy by pushing the demand for goods and services into high gear. That’s what creates jobs and raises wages.

The economy can easily afford this, since raising the minimum wage that high would simply be tying it to the rate of productivity growth, which you can see from the graph below. Even by arch conservative logic, raising it that high would be great for the economy since everything in that sphere of supposed logic says that wages should grow with productivity, and it can’t possibly be inflationary since by conservative logic inflation is only caused by an increase in the supply of money.

By the way, the difference between the $18.28 and the current $7.25 per hour minimum wage (11.03 per hour) has been redistributed from the 99 to the 1 percent via the political power of the 1 percent. They’ve used this ill gotten money to redistribute more money from the 99 to the 1 percent, purchased free trade treaties in the halls of congress and the white house so they can ship our jobs overseas, bought privatizations scams, corrupted our federal and state and local governments, raised the prices that we pay for goods and services in violation of the Sherman Anti-Trust Act and paid government officials to look the other way. That’s weakened our tax bases, stolen money from our schools, robbed the elderly of their social safety nets, and destroyed 30 American million jobs since 1990. The list goes on and on, and the one thing this list shows is that the 1 percent have been to the 99 percent as parasites are unto their hosts. That’s all the Koch brothers and their parasitic ilk are.

The New York Times editorial is the link below.

The Case for Raising the Minimum Wage–The New York Times

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Good question! Why ain’t there no jobs? Let’s see? Wall Street, corporate CEO’s and other rich folks took a bunch and shipped them away, thanks to free trade treaties. But there’s still a ton of jobs in the United States! Right? You can bet your house on that! Oh, my bad. Everybody already did that and they lost their home equity to the rich. On the other hand, we’re all working more and earning less. That’s great for increasing the nation’s productivity, but all the benefits from working more and earning less have gone to the wealthy, mostly via higher corporate profits, rising dividends and enhanced share prices.

That’s why the stock market is such a good way of gauging how well the economy is doing. When it goes up, the 99 percent is worse off, when it goes down, it’s often because the 99 percent is doing a little better. Click on the link below and see how bad working folks have it. That’s why the economy is a rigged game. The results were fixed by your legislators and corporate bigwigs a long time ago.

12 charts from Mother Jones magazine that will make your blood boil

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