Comments about ‘Hard times: Despite record corporate profits, wages are being frozen’

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Published: Friday, March 21 2014 12:00 a.m. MDT

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Roland Kayser
Cottonwood Heights, UT

President Eisenhower once gave a speech in which he stated that the genius of American capitalism was that an average worker could support a family, buy a decent house, and a nice car on his income alone. He also said that the reason for this was that the country's business elite understood that it was in their own best interest to ensure that their workers were prosperous.

He added that the capitalist countries that were ripe for communist takeover where those in which a small group of plutocrats controlled most of the country's wealth while workers remained impoverished.

I'm afraid that our current business elite have forgotten the lessons of Eisenhower's generation and our country is moving closer and closer to the countries Ike described as being susceptible to communist revolution. Although we no longer have to fear communism, it is not possible to sustain a society that is as unequal as ours. Eventually there either comes social disintegration or the advent of a police state.

Mountanman
Hayden, ID

For every job at Walmart they have hundreds of applicants, period!

Open Minded Mormon
Everett, 00

The rich get richer,
the poor are getting poorer.

See the demise of the formally great American Dream.

Welcome to the Gilded Age, Part II.

JoeBlow
Far East USA, SC

"For every job at Walmart they have hundreds of applicants, period!"

Probably true. But that kind of shoots holes in the notion that the poor would rather get handouts than work.

Twin Lights
Louisville, KY

A better indicator for our economy would be that Walmart has to work hard (maybe raise wages or increase benefits) in order to find good workers because the workers have other options.

10CC
Bountiful, UT

If poor Americans get government assistance, it's derided as corrosive to the American work ethic, undermines the American dream.

If Walmart shareholders and upper management get (indirect) government assistance, and somebody reports it, it's called "class warfare".

Mountainman: if hundreds apply for every job at Walmart, and many of these workers still are eligible for food stamps, what does that tell you?

Today we're talking about Walmart workers... if technology proceeds as expected, tomorrow many physicians and other high-end workers will be displaced, and/or the demand for physicians will diminish, as superior diagnostic intelligence is supplied by computers.

My sense is the debate will start to change, at that point. Physicians and lawyers seeing their children with limited career options will have a lot more clout to shape the debate than Walmart workers.

Flashback
Kearns, UT

When we pay sports stars $100 million a year, which is way more than they need to live on, when company CEO's milk the company for more than they are worth, when the children of a company founder make more an more money, it has now turned into an ego thing. We want more money and more power seems to be the refrain.

I don't mind people getting rich because they worked hard and earned it. I do object when it they don't take better care of their employees. If they want to see a resurgence in Labor Unions (something I don't support by the way) then they should take better care of employees.

I'm pretty sure if the Walton's spread a couple of billion a year amongst their employees, everyone, including the company bottom line would benefit. One of the many reasons I refuse to shop at Walmart and Sam's Club.

airnaut
Everett, 00

I refuse to shop at WalMart.

I know it hurts the workers,
but until the top 1% starts paying those who created their massive fortunes,
I will NEVER give them - or the Communists in China they buy from - another American earned penny.

Vanceone
Provo, UT

The solution, of course, is to just confiscate the wealth and distribute it to the poor, right comrades? By force, preferably. How dare someone actually earn money! If we punish all those greedy fat cats, they will all go away! And when we have no rich people, we will all have well paying jobs! From the magical Money machine!

/Progressive democrat mode off.
The real reason companies are hoarding cash? They are terrified of the government. How the heck can you plan to hire new employees when you have no idea how much they will cost; when regulations are imposed on you that tax your entire company (like Obamacare--who in their right mind would hire employee no 50? The regulations, taxes, forms, fees, etc are immense. ) Democrats like to raise taxes on cigarettes, because it discourages smoking. They want to stamp out tobacco use. So they now want to tax success into oblivion, so we won't have that either. You want less income inequality? Stop punishing small business with government.

pragmatistferlife
salt lake city, utah

vanceone, I'm sure if you watch Fox your comment makes sense, but only if you watch Fox and have your "I hate Obama" goggles firmly installed.

The article references a trend from 1965 and 1979. Walmart is simply one small, albeit significant example.

Who would hire employee number fifty? The business owner who has demand that number fifty can fulfill. You all act as though providing health care coverage for an employee will suck out every last penny of profit that employee will produce. Maybe your profit will only be ten cents on the widget sold versus 12 cents, but that's exactly what Eisenhower was talking about.

That kind of thinking and cooperation is what American exceptionalism looks like, and what made America great. Not "oh my" how can I keep my employees to 49 so I don't have to provide health care and still keep my Mercedes lease.

Twin Lights
Louisville, KY

Vanceone,

First, it is not that companies are hoarding cash. It is that compensation ratios are so out of kilter with what we (here in the USA) used to do. See Roland Kayser's post above.

Second, this is not a recent phenomenon. It has taken us a few decades to get here. Not one administration or one party takes the blame.

Third, of course taxes and redistribution are not the right way to grow the economy. However your point about cigarettes is a bit off. Higher taxation on cigarettes has proven an effective deterrent (and puts the tax burden on those who cost us more).

Open Minded Mormon
Everett, 00

IVanceone
Provo, UT
The solution, of course, is to just confiscate the wealth and distribute it to the poor, right comrades? How dare someone actually earn money! If we punish all those greedy fat cats, they will all go away! And when we have no rich people, we will all have well paying jobs! From the magical Money machine!

========

I'm sure those greedy fat cats, loungingg around their pool equipped yachts moored off of Sri Lancha, are all working so SO hard to "earn" that money deposting into their Swiss or Caymen Island taxfree accounts, just "dreaming" about giving their employees an extra .20 an hour raise.

Roland Kayser is right --
Back in the Good 'ol Days --
Back when CEO's "earned" 20:1 vs today's 273:1

Companies had options --
Pay 40% in taxes --
or
Take Tax deductions by investing in things like:
Employee's Education, new Factories and Equipement, training, HealthCare, etc.

Capitalists are motiviated by competition,
So, Companies were offered better and better benefits in addition to wages to "compete" for employees.

In today's race to the bottom,
Americans are competing for jobs against Communist China.

Eisenhower and our Founding Fathers must all be rolling over in their graves.

10CC
Bountiful, UT

Vanceone:

Your argument would make some sense if there were penalties for laying people off.

Businesses hire the number and type of employees they feel will counter their competition, maximize profits. We're seeing ample proof of this.

Here's the proof: If Obamacare was abolished tomorrow, would we see a sudden surge in job openings? Of course not - there has to be product demand.

As we see with Walmart, companies will squeeze their costs (ie, keep a lid on employment and wages) even to the point of seeing their own demand flatten out... like Walmart. A couple of economists studied the employment impact of Walmart and concluded that with their size, they have the ability to impact the lower end of the labor market and impact their own bottom line.

Essentially, if Walmart increased wages by 15%, other retailers would follow suit, and Walmart would see an increase in sales and in profitability.

Instead, Walmart has concluded that their growth lies in other nations. Even with 300 more stores, Walmart's total employment is less than it was before the recession.

Sobering.

FT
salt lake city, UT

Oh, to have a Republican like Teddy Roosevelt back in the WH. Someone to kick corporations in the teeth. Corporations are the new Kings and our goverment has been trained to serve their interests above all others.

Burkean
South Jordan, UT

Ah, the good old standard lefty canards about income inequality and those devious 1%ers.

Since the author goes out of her way to slam Senator Inhofe for coming to conclusions based on his political ideology I'm sure she'll welcome some actual facts into this debate:

There is no economic correlation between income inequality and the upward mobility.
There is no evidence that the rich getting richer is at the expense of the poor staying poor.
In fact someone making more money is an indication that they are providing something of value to people and society (the exception being if you manage to cozy up to government and get the state to funnel money your direction).
Ranting about the gap of income between a minimum wage worker and the CEO us just populist rabble rousing with no basis in actually doing anything meaningful or helpful to upward social and economic mobility.

Roland Kayser
Cottonwood Heights, UT

To Vanceone: Not one poster here has talked about redistributing wealth. They are talking about people who work being able to make enough money to survive. Did Eisenhower force companies to pay middle class wages for routine work? No, he clearly said that they understood that it was in their interest to do so. It still is.

These were not high skill jobs that he was talking about. They required no more education and training than a current WalMart or McDonalds job. Yet they paid a living wage. Unless you think that Dwight Eisenhower was a radical leftist, there is no reason to fear going back to the employment arrangement of his time.

Vanceone
Provo, UT

You guys don't get it, do you? If I have 49 workers, and demand says that I could make and sell 80,000 worth of new product if I hire someone for 50,000--well, logic says I should do it. I'd be making 30,000 more.

But government regulations say that once I hit 50, I will suddenly have to pay 3,000 a worker fee. So the real cost of that new employee is 200,000 now--50 for her, and 150,000 in new fees. For only 80,000 in revenue. Totally not worth it. So I don't hire the employee. Instead, I look to make money another way--productivity.

The regulations are littered with stuff like this. You get punished in myriad ways for being successful. Another example: If I want to start a small company, I better not start in farming--because the regulations are obscene. I can't afford multiple six-digit machines the regulations would force me to have. And certainly no workers to work the machines.

Food for thought: Why do most billionaires favor democrats?

Kent C. DeForrest
Provo, UT

The denial by the Right of the causes of inequality will eventually work to their downfall. But this is a problem that is not new at all. I was writing about it in the mid-1990s. Of course no one paid attention, but the trends were already easily recognizable then. They have merely become impossible to ignore now (except by those who wear blinders).

If you haven't seen the documentary "Inequality for All," featuring former Labor Secretary Robert Reich, you should. It is available on Netflix, or Amazon Prime, or you can even go to your local library like I did and check it out. Reich examines what is happening in America in very clear terms. And it's very entertaining, to boot. Sad, but entertaining. One point made in the documentary is that when wages started to stagnate (in the Reagan years), Americans compensated with women entering the workforce, then by both genders taking on two or three jobs, then by increasing their credit. This ended in 2008 with the crash. Now we have no other option but to watch the standard of living for most Americans decline. Time to wise up before it's too late.

Burkean
South Jordan, UT

The Eisenhower era - and the American economy of the 50's and 60's - was an abberation. Coming out of WWII we were the only fully industrialized nation that hadn't been bombed out by the war.

That's not the world we live in anymore.

Labor has a cost and a value. That's a fact that cannot be changed.

The way out of poverty isn't income redistribution or government programs - it's the same things it's always been and these things still work. And companies like Walmart don't stand in the way of any of this.

JoeBlow
Far East USA, SC

Vanceone,

In years past, most companies offered health insurance as part of the employment package.

Why has that changed? Could it be that the cost of healthcare has skyrocketed?

Why is our deficit skyrocketing? Entitlement spending. Of which over 70% is SS and Medicare.
And it will become unsustainable in future years as more baby boomers retire.

The healthcare system must be changed.

We have 3 choices.
1- cut benefits to age 65 and older
2 - raise taxes to pay the increased costs
3 - try to cut costs.

What else is there?

By any reasonable measure, we have the most expensive healthcare costs in the world. By a long shot.

So, while I am no fan of Obamacare, SOMETHING must be done.

I am open to suggestions, but logic tells me that the GOP staples of Tort reform and reducing regulations will not solve the problem. it may help, but more is needed.

And the GOP has no other ideas.

What do you suggest?

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