Comments about ‘John Hoffmire: When it comes to income inequality, whose wages matter?’

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Published: Monday, April 28 2014 9:49 a.m. MDT

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Richard1
College Station, TX

In Daniel Pink’s book, A Whole New Mind, he makes a case that creative and innovative people will be most successful in the near future. He hypothesizes highly technical jobs in the U.S. (engineering, statistics, computer science, etc.) will move overseas for cheaper labor as education opportunities for other countries increase (such as India, China, etc.). We are already beginning to see this. Consequently, this article is a good reminder that the only truly constant thing in this world is change. To be successful, we need to be willing to adapt and improve our skill sets and work to help others to do so. We must now ask ourselves how we can best provide training for those whose jobs are moving overseas. Any ideas?

Mike Richards
South Jordan, Utah

Does lower wages offset lower prices for a few items? If 100% of our wages go towards food, shelter and medicine, how much is left to buy that bargain? When the government takes the lion's share through direct and indirect taxes, what is left? Many of us do not realize that they should be paying the ObamaCare penalty tax right now. They won't have to report that tax until we file next year, but it is silently stripping them of their wealth. Most aren't even aware that that penalty is growing every day and that they won't have the money to pay for it when it is due - after the elections are over, after they could have fired everyone who voted for it.

Business is in business to make a profit. We have jobs to make a profit. We work to take care of our family, yet there are many who tell us that the business owner, the one who took all the risks, should forget about making a profit.

Regulations have driven jobs offshore. Unions have driven jobs offshore.

10CC
Bountiful, UT

Accelerated technological displacement will make the exodus of high paying manufacturing jobs in the US look like a Kindergarten birthday party.

The Chief Medical Information Officer at Kaiser Permanente - a very large hospital chain based in California - says that 80% of what is currently performed by people in healthcare will be done by technology within the next 10 years.

Much like the loss of manufacturing jobs, these jobs will not be coming back, and the jobs that evolve or replace lost healthcare jobs will not cover the loss/decline in salaries and associated economic impact.

The good news is that healthcare costs may be coming down - the bad news is that the overall employment landscape will continue moving toward short term positions that less & less resemble a "career".

Perhaps as the children of attorneys and physicians see blunted career opportunities will we start to have a meaningful discussion about the direction of our economic evolution, and as Mary Barker posed the question, "Does the Economy Serve Us or Do We Serve the Economy?"

2 bits
Cottonwood Heights, UT

I don't compare my income with anybody else... that's not where happiness comes from. That just breeds envy.

Real happiness comes from "contentment". And contentment comes from being happy with what you have (regardless of what somebody else has).

As Dave Ramsey says... Basing your happiness on "wealth"... or what you have compared to what somebody else has... is a bully that draws a line and says, "cross this line and you will be happy". But when you cross that line, you observe that there's ANOTHER person who has more than you have (inequity) and you are unhappy again. And it goes on and on and you will never be happy.

Some of the poorest people I know are also the happiest people I know... it's not because they don't have needs... it's because they have learned to be content with what they have. And realize that focusing on the inevitable inequity in life, or continually struggling to cross that line, or to catch up with the Joneses... is not happiness.. it's just a mirage and they already have everything they need for true happiness...

KDave
Moab, UT

It is easy to blame our loss of manufacturing jobs on wages, but with a few exceptions it is not true, The top reasons for the loss of manufacturing to other countries are high taxes, Govt. regulations, union regulations, and lawyers suing for every little thing. Level the playing field and these jobs will come back.

ordinaryfolks
seattle, WA

It did not take long for someone to blame Obamacare for the de-industrialization of the country. Is there no end to these ridiculous assertions?

Obamacare only just kicked in.

The de-industrialization of America began with the Reagan presidency. It became acceptable to export jobs to foreign countries, and it became acceptable to hide profits offshore. It became acceptable to squeeze money from workers. Henry Ford knew better. He paid wages that could allow a ONE EARNER family to be able to afford his cars. The Walton clan in Arkansas allow their employees to have food drives for one another as they can not afford to live on their salaries (and they get food stamps and Medicaid as well - talk about corporate welfare!).

Germany is a large industrialize country which still manages to keep it industrial base and maintain its status as a first world democracy with large social benefits for the average working citizen. Seems to me we ought to follow their example, rather than maintaining our current devolution to a failed economic state.

Hawkeye79
Iowa City, IA

Hi ordinaryfolks,

Are you really advocating that we follow Germany's example and abolish our minimum wage altogether?

airnaut
Everett, 00

I suppose that all depends on who you ask:

1. The Billionaire playboy who has everything, can buy Congressmen, but will never enough.
or
2. The Single Mother or 4 consumer, working 3 part-time jobs to feed her young family...and only has one vote every 2 years.

marxist
Salt Lake City, UT

The writer is not familiar with the work of Karl Marx. In Marx's schema what has happened is this: capitalism has achieved a degree of efficiency in the use of labor such that it simply does not need as much labor. So labor is in trouble, but eventually capital will be in a bind because profits for the most part come from the use of labor. In Marx's view the whole system comes down in a duel barreled crisis of collapsed employment and collapsed profits. FYI and for your consideration.

To the writer: take a class in Marxian economics.

Roland Kayser
Cottonwood Heights, UT

What happens when most jobs have been outsourced or automated and the majority of our citizens can no longer earn enough to live on? That's where we're headed so we should start thinking about our options.

airnaut
Everett, 00

KDave
Moab, UT
It is easy to blame our loss of manufacturing jobs on wages, but with a few exceptions it is not true, The top reasons for the loss of manufacturing to other countries are high taxes, Govt. regulations, union regulations, and lawyers suing for every little thing. Level the playing field and these jobs will come back.

8:55 a.m. April 28, 2014

=======

If what you say is true --

How do you explain Germany, England, France, Israel, Canada, and Japan?

America's Lawyers would be the only odd-man out from your list.

Brer Rabbit
Spanish Fork, UT

Yes millions of jobs are being lost to globalization, but other factors are also at work causing unemployment, which causes stagnant or declining wages. Millions of American jobs have also been lost to 1) Mechanization 2) Automation 3) Fewer military personnel needed 4) Women flooding the labor market at all levels, finally 5) Flooding the U.S. labor market with cheap immigrant labor at not only the unskilled low income levels but also the STEM jobs.

Low wages and income inequality cannot be discussed without understanding that wages are a product of supply and demand. As long as the labor supply is much greater than demand, unemployment will cause wage stagnation or even declining wages, all to the benefit of the wealthy upper class at the expense of middle and lower income workers.

The wealthy benefit from cheap immigrant labor in their yards and homes, but also at their businesses, either as owner or investors. The only real way to reduce the labor surplus and tighten the labor market is to reduce or stop the flood of cheap immigrant labor. Yes more jobs are created with immigrant labor, but not nearly enough to reduce the overall surplus.

2 bits
Cottonwood Heights, UT

@marxist,
Take a class in free-market economics.

Owners and operators of businesses in a free-market economy have an interest in keeping their labor and materials expenses as low as possible (because they have to stay price competitive to stay in business). But contrary to your assumptions... they do NOT want everybody to be in poverty (not even their employees).

Logic:
-If everybody's poor... they can't afford to buy their products. If EVERYBODY's rich.. they can afford to buy MORE of their widgets. Even Mr Ford (who was an avid free-market capitalist) realized this.

-Unhappy employees are not as productive as happy workers. The employer must balance this. He wants productive workers... so SMART employers know it's in his own interest to make sure they are as happy as possible (even Mr Ford realized this).

So while keeping labor costs low is important (so they can compete on price and stay in business)... capitalists also realize they need a happy/productive workforce and are NOT motivated to keep everybody as poor and miserable as possible (governments benefit from everybody being poor, not businessmen).

Poor people can't buy their products...

marxist
Salt Lake City, UT

@2 bit "Take a class in free-market economics.

Owners and operators of businesses in a free-market economy have an interest in keeping their labor and materials expenses as low as possible (because they have to stay price competitive to stay in business). But contrary to your assumptions... they do NOT want everybody to be in poverty (not even their employees)."

I have - many. As to the owners, the poverty status of their employees is beyond their concern. Owners will pay dirt cheap wages if they can get it - witness the labor conditions in Bangledesh making U.S. destined products.

marxist
Salt Lake City, UT

re: 2 bits "capitalists also realize they need a happy/productive workforce and are NOT motivated to keep everybody as poor and miserable as possible "

No, capitalists are motivated to render profits as high as possible. So said the late great monetarist Milton Friedman.

GaryO
Virginia Beach, VA

Hey Kdave -

"It is easy to blame our loss of manufacturing jobs on wages, but with a few exceptions it is not true . . . "

You have GOT to be kidding!

If skilled Mexican workers can produce a quality product at five dollars an hour, how many companies are going to want to pay their American counterparts twenty dollars an hour?

Yes, wages are THE major determining factor for why companies relocate their manufacturing to other countries.

By the way, it was Republicans who fought tooth and nail for NAFTA.

Why? Because businesses could produce goods more cheaply with cheap foreign labor.

2 bits
Cottonwood Heights, UT

marxist,
Capitalists are motivated to render profits as high as possible, no doubt. But smart ones realize the way to do that is to have happy-productive employees who love their work. And for EVERYBODY to be prosperous (so they can afford to buy your products or services).

A businessman in a population where everybody but him is poor, and nobody has any disposable income... doesn't have many customers and goes out of business.... Capitalists don't want everybody poor.... that just puts himself out of business... He wants everybody to be prosperous. So they can buy his stuff...

==

Do capitalists really like it when everybody's poor... unemployed... on bare survival income provided by public assistance? No... they can't buy your stuff...

Marxists and Progressives (like Saul Alinsky) LOVE it when the majority are unemployed and on public assistance... means majority has to vote for you or lose everything...

Google Saul Alinsky "Rules for Radicals"... and his plan in the 1960s... get so many people on public assistance that you can manipulate them and overwhelm the system and collapse the government.. Convince the majority they can't survive without government assistance... and they will beg for Marxism...

airnaut
Everett, 00

Gaddianton plan for taking over the world...

1. Outlaw the Unions - Check
2. Out Source without wildcat stikes - Check
3. Eliminate wage increase for jobs that must remain in the U.S. -- Check and mate.

Game over.
Tie for 1st place -- American Corporate Capitalists,
and the Communist Chinese they invested everything in.

American citizens -- dead last, and still holding the bill.

2 bits
Cottonwood Heights, UT

@GaryO
Virginia Beach,

Re: "it was Republicans who fought tooth and nail for NAFTA"...

===

Not totally true.

Google "The Making of NAFTA: How the Deal was Done" by Bruce Nissen

Some powerful politicians on both sides and in all 3 nations fought for NAFTA. Reagan wanted it, but Clinton passed it and signed it into law.

Many "Republicans" wanted it... Many "Conservatives" fought against it... Remember... they're not the same thing.

Many Democrats wanted it as well.

Wikipedia says, "With much consideration and emotional discussion, the House of Representatives approved NAFTA on November 17, 1993, 234-200. The agreement's supporters included 132 Republicans and 102 Democrats. NAFTA passed the Senate 61-38. Senate supporters were 34 Republicans and 27 Democrats. Clinton signed it into law on December 8, 1993; it went into effect on January 1, 1994"...

So quite obviously it was not passed only by Republicans (as you asserted)... So pinning it just on Republicans... is not intellectually honest.

10CC
Bountiful, UT

2 Bits:

I realize you may be at your posting limit for this article, so I won't pose questions you may not be able to respond to.

I think many capitalists certainly would prefer to have a society of happy, prosperous people who make up a robust domestic market for their products. I see no reason to think they would wish otherwise.

However, their most immediate concern is to match or beat their competition and maximize their profits. If domestic aggregate demand for their products is stagnant or falls, they will seek other markets for growth.

As high-minded as capitalists may (or may not) be, they are constrained by their immediate economic pressures. Henry Ford paid his workers 2.5 times the going rate because he wanted to catalyze the market for cars. In today's economy, what employer would be foolish enough to repeat that act? They would be hammered by their board and ruthlessly attacked by the competition.

Certainly, it would be nice to have a company of say 1000 happy, productive, positive employees. But if you can make more money by having 25 very smart people and more technology, you do it.

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