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The Gilded Age

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Captain Vancouver View Drop Down
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    Posted: 16 May 2014 at 20:17
We've had one already, and now remarkably we seem slated for an episode of deja vu. I wonder sometimes if young people today are going to end up in the streets at some point, attempting to take back the progressive labour and social legislation so hard won in the earlier parts of the 20th century. 

The middle class is shrinking as globalization pushes more industrial work overseas, and in the developed countries, finance and speculation has assumed a much greater proportion of economic activity than before.

Wealth in society has become polarized to an extent similar to the first Gilded Age one hundred years ago. Maybe that's long enough for memories to fade.

".... let’s think about what it means that these 25 men  made a combined $21 billion in 2013. In particular, let’s think about how their good fortune refutes several popular myths about income inequality in America...."


http://www.nytimes.com/2014/05/09/opinion/krugman-now-thats-rich.html
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Post Options Post Options   Thanks (0) Thanks(0)   Quote toyomotor Quote  Post ReplyReply Direct Link To This Post Posted: 17 May 2014 at 08:34
Originally posted by Captain Vancouver Captain Vancouver wrote:

We've had one already, and now remarkably we seem slated for an episode of deja vu. I wonder sometimes if young people today are going to end up in the streets at some point, attempting to take back the progressive labour and social legislation so hard won in the earlier parts of the 20th century. 

The middle class is shrinking as globalization pushes more industrial work overseas, and in the developed countries, finance and speculation has assumed a much greater proportion of economic activity than before.

Wealth in society has become polarized to an extent similar to the first Gilded Age one hundred years ago. Maybe that's long enough for memories to fade.

".... let’s think about what it means that these 25 men  made a combined $21 billion in 2013. In particular, let’s think about how their good fortune refutes several popular myths about income inequality in America...."
I don't know if I've misinterpreted what you're saying here
Quote We've had one already, and now remarkably we seem slated for an episode of deja vu. I wonder sometimes if young people today are going to end up in the streets at some point, attempting to take back the progressive labour and social legislation so hard won in the earlier parts of the 20th century. 
 
Do you mean "take back" or "hand back"? 
 
It seems to me that, Australia for example, has been far too generous in its "progressive labour and social legislation" to the extent that many manufacturing industries are or have closed down operation because the production costs are far too high for the current markets. The overwhelming factor is labour cost, and the circular reaction is unemployment.
 
Quote ".... let’s think about what it means that these 25 men  made a combined $21 billion in 2013. In particular, let’s think about how their good fortune refutes several popular myths about income inequality in America...."
 
I find that CEOs and others being paid millions of dollars per annum, while people are homeless and unemployed, to be a disgraceful example of the gap widening between the rich and the poor.
 
 
 
 


Edited by toyomotor - 25 May 2014 at 03:26
It's not that I was born in Ireland,
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Captain Vancouver Quote  Post ReplyReply Direct Link To This Post Posted: 17 May 2014 at 18:39
Originally posted by toyomotor toyomotor wrote:

 
Do you mean "take back" or "hand back"? 
 
It seems to me that, Australia for example, has been far too generous in its "progressive labour and social legislation" to the extent that many manufacturing industries are or have closed down operation because the production costs are far too high for the current markets. The overwhelming factor is labour cost, and the circular reaction is unemployment.
 

Australia is lucky to have a well functioning social democracy, as it is under assault elsewhere. There is always a bit of a struggle to find the right balance between wages and prices. But I think it safe to say that just about all reputable economists today will state that a healthy middle class is key to an equitable and functional society. Those with a reasonably good income- not too low, not too high- tend to spend their money in the community, on more or less necessary things that tend to promote employment. Groceries, home renos, car repairs,  etc; we can bet that this is where a large proportion of middle class income goes. Those that are too poor simply cannot buy these things, and hence economic activity shrinks. Those with considerably more have already bought all these things, and the remainder of their wealth tends to migrate to the more frivolous, and/or the more speculative, often with little or no redeeming value to a healthy society.

Hard learned lessons came from the great depression of the '30s- society needs to have demand, as well as supply. No incomes means no production. We need intervention to ensure economic growth continues, and does so in healthy ways. That means insuring income support, enough to keep up demand and so production. Unions have been important in the past in keeping this sort of balance, although today they have been virtually emasculated in North America, in all but a few cases, mostly those within government. This is one of the factors in the extreme division of wealth that is still growing wider in N America, and a number of other places in the world. 

One may be tempted to consider wages too high at home when buying a $5 t-shirt made by offshore labour. But lower wages have considerable effects that spiral down through the economy, and eventually affect the underpinnings of democratic  society. That's exactly what is happening today. Ma and Pa Average in Kentucky struggle to survive on Wal Mart wages, while at the same time shoppers there marvel at the super low prices. 

If left to the corporate world, they will simply do whatever brings in the best returns, and do it anywhere in the world that is most cost-efficient. We can get a clear picture of what that would eventually look like, because we have seen it already: the Britain and America of the industrial revolution, the age of Charles Dickens, before the success of the labour struggles of the early 20th century, and the eventual demand for an equitable, middle class society.

The youth of today may have to do it all over again, taking on the likes of the Koch Brothers rather than the robber barons this time.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote toyomotor Quote  Post ReplyReply Direct Link To This Post Posted: 18 May 2014 at 03:43
Surely we must look at the overall effect of industrial and social generosity.
 
When salaries and accompanying work conditions exceed what the industry can pay, the result is unemployment. So those hard core union members, having fought for better pay, shorter hours and longer holidays find themselves unemployed.
 
Only this year, all of Australias automobile manufacturing industry has advised that it will move offshore within about two years. This will have a flow on effect to the car parts and accessories industry-so it's estimated that in excess of an additional 140,000 people will be unemployed. The picture is being reflected in similar industries such as heavy equipment manufacture.
 
In another nonsensical move, the new Australian Government has announced that it will proceed with its pre-election promise of six months Maternity Leave, with pay. We also have a ridiculous Paternity Leave provision. Firstly, the country cannot afford these luxuries, and secondly, the government has not considered the extra expense that employers are put to, and the disruption to the work force-again, all counter productive.
 
Is this common sense? Would it not be more sensible to forego some of these conditions so that employment is more secure?
 
With security of employment, a decrease in unemployment and a stable work force, the country must prosper.
 
 
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Captain Vancouver Quote  Post ReplyReply Direct Link To This Post Posted: 19 May 2014 at 09:44
We have the yin and the yang here toyomotor. Workers get paid, but how much are they worth, to both their company, and also to the larger society? There is always a degree of subjectivity here. In the link given, it is arguable whether the hedge fund managers provided much if anything at all in a way that added value to society, yet claimed an average of about $1 billion each. They simply found a way to tap existing wealth. At the other end of the scale, some work hard but receive little. Union demands can outpace productivity, but corporate demand can cut wages to levels unhealthy for not only the workers involved, but society at large.

Australia has generally higher wages than either Canada or the US, and in the case of the US, definitely more spending on social programs. But you also have a lower unemployment rate. Higher wages don't necessarily create unemployment, nor do low wages guarantee work. Globalization has shifted most manufacturing towards low paid economies, including the auto industry. Insisting that we all compete with the lowest paid workers means a race to the bottom, with a small number of investors, shareholders, and CEOs coming out ahead, and masses of workers loosing out. 

Productivity and wealth have increased enormously in recent years due to technology, but this doesn't translate into jobs. Demanding ever more wage concessions eventually becomes counter-productive, as workers can no longer buy the products produced. Today's lower demand for labour is shrinking middle class incomes, lowering consumption, and causing ever greater polarization of wealth. All that excess money floating around has found its way into real estate and financial markets, helping to blow up the bubbles- and busts- we have seen in recent years. It's not the way to a sustainable economy, or a democratic society.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote toyomotor Quote  Post ReplyReply Direct Link To This Post Posted: 25 May 2014 at 03:38
Captain wrote:
Quote
Productivity and wealth have increased enormously in recent years due to technology, but this doesn't translate into jobs. Demanding ever more wage concessions eventually becomes counter-productive, as workers can no longer buy the products produced. Today's lower demand for labour is shrinking middle class incomes, lowering consumption, and causing ever greater polarization of wealth. All that excess money floating around has found its way into real estate and financial markets, helping to blow up the bubbles- and busts- we have seen in recent years. It's not the way to a sustainable economy, or a democratic society.
 
I agree. But the circular result is that higher wage demands=higher product costs=reduction in market spending=unemployment.
 
The answer could well be price and wages freezes. Counterproductive, maybe, I don't know, but I do know that something must be done to reclaim our share of international markets, and this will probably mean either a freeze on worker entitlements or changes to the Taxation system.
 
I've already made mention of Australias over generous Welfare Entitlements. These also have to be reduced in order to decrease our National Debt-steps are currently being taken by our newly elected government to do just that, but of course, these are being met with outrage by those effected.
 
Perhaps it would be better to put a lid on the astronomical wages paid to CEO's, and put the money into sustainable industry.
 
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Captain Vancouver Quote  Post ReplyReply Direct Link To This Post Posted: 26 May 2014 at 09:08
Given the rules of globalization, developed countries may not be able to compete in some industries, particularly labour intensive ones. Competing with workers being paid $100 or $200 a month is a non-starter. And given the climb up the economic ladder of many developing countries, at some point the more developed world will have to decide if, and if so, how to protect industries and jobs within their own borders, or to just let the chips fall where they may.

The fact is in our increasingly digitized world, there will not be employment, certainly not meaningful employment for all. We can either follow the corporate line that insists the logic of the marketplace will ensure the best outcomes, or start to re-think our ideas on exactly who deserves what. The former policy will tend toward a wrenching readjustment of society, with ultra-rich- like those hedge fund managers, and impoverished service workers hoping to be thrown a  coin for their efforts. The latter might mean more "welfare" benefits, not less.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote toyomotor Quote  Post ReplyReply Direct Link To This Post Posted: 22 Jun 2014 at 03:20
Originally posted by Captain Vancouver Captain Vancouver wrote:

Given the rules of globalization, developed countries may not be able to compete in some industries, particularly labour intensive ones. Competing with workers being paid $100 or $200 a month is a non-starter. And given the climb up the economic ladder of many developing countries, at some point the more developed world will have to decide if, and if so, how to protect industries and jobs within their own borders, or to just let the chips fall where they may.

The fact is in our increasingly digitized world, there will not be employment, certainly not meaningful employment for all. We can either follow the corporate line that insists the logic of the marketplace will ensure the best outcomes, or start to re-think our ideas on exactly who deserves what. The former policy will tend toward a wrenching readjustment of society, with ultra-rich- like those hedge fund managers, and impoverished service workers hoping to be thrown a  coin for their efforts. The latter might mean more "welfare" benefits, not less.
 
Countries cannot continue to support an ever increasing number of non-productive citizens. Some countries make no effort at all.
 
Just how one could decide who deserves what is supposedly enshrined in our Industrial Awards Legislation, which guaruntees worked a specified wage, depending on their skill sets.
 
However, market volatility which has led to industry colsures and unemployment is something to be addressed at the highest government levels. As our Prime Minister said recently, the Age of Entitlement is over. Everyone must pull their weight.
 
Tell that to those who simply refuse to work, or those in American ghettos where there is absolutely no possibility of work.
 
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Captain Vancouver Quote  Post ReplyReply Direct Link To This Post Posted: 22 Jun 2014 at 05:32
Originally posted by toyomotor toyomotor wrote:

Originally posted by Captain Vancouver Captain Vancouver wrote:

Given the rules of globalization, developed countries may not be able to compete in some industries, particularly labour intensive ones. Competing with workers being paid $100 or $200 a month is a non-starter. And given the climb up the economic ladder of many developing countries, at some point the more developed world will have to decide if, and if so, how to protect industries and jobs within their own borders, or to just let the chips fall where they may.

The fact is in our increasingly digitized world, there will not be employment, certainly not meaningful employment for all. We can either follow the corporate line that insists the logic of the marketplace will ensure the best outcomes, or start to re-think our ideas on exactly who deserves what. The former policy will tend toward a wrenching readjustment of society, with ultra-rich- like those hedge fund managers, and impoverished service workers hoping to be thrown a  coin for their efforts. The latter might mean more "welfare" benefits, not less.
 
Countries cannot continue to support an ever increasing number of non-productive citizens. Some countries make no effort at all.

Two small points to ruminate on here toyomotor. One, GDP per capita has continued to climb at a brisk pace in recent years, due to the benefits of computerization, and increasing sophistication of infrastructure, in large measure. In the cold light of mathematics, we have in fact never been in a better position to support the unemployed.

Two, the proportion of the population employed in developed economies has been going down consistently in recent years, despite the prevailing right wing sentiment that has "ended welfare as we know it" in the US, and wrought similar change in other regions.

What can we draw from this? We are getting damned efficient at what we do. We've had experience, and computers are stepping in where we are unsure. We can also make a reasonable assumption that there are not jobs for all that want them. 

A realistic assessment of unemployment in the US today is about 16% of the labour force. That's not government spin, but includes those on the margins not usually picked up. The figure for Canada has been floated at about 14%. In Spain, perhaps as much as 50% of youth are unemployed, including those that have worked their ass off to get degrees or college certificates. 

Are all these folks lazy hippies, that need their ass kicked? And if so, why this sudden epidemic of torpor in the developed world? Or are macroeconomic forces at work here, that are ushering us into a new world paradigm?

Originally posted by toyomotor toyomotor wrote:

 
Just how one could decide who deserves what is supposedly enshrined in our Industrial Awards Legislation, which guaruntees worked a specified wage, depending on their skill sets.
 
However, market volatility which has led to industry colsures and unemployment is something to be addressed at the highest government levels. As our Prime Minister said recently, the Age of Entitlement is over. Everyone must pull their weight.
 
Tell that to those who simply refuse to work, or those in American ghettos where there is absolutely no possibility of work.
 
 

Most people want to pull their weight, including many of those on welfare, such as it is today, despite common mythology that doesn't accept this. The problem today is not about pulling weight, but that the there is not enough meaningful work for those that want it. In places like Canada and W Europe, the work force has never been as educated and employable as it is now. The vast majority want work, and are not happy on a starvation stipend, or living in their parent's basement.

As discussed in other threads, the world is changing, and various factors have made the idea of 100% employment an unrealistic likelihood. Technology has changed. Now we need to change attitudes, and political beliefs.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote toyomotor Quote  Post ReplyReply Direct Link To This Post Posted: 22 Jun 2014 at 06:29
Captain: can't argue with that.
It's not that I was born in Ireland,
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