My standard of living has been increasing actually - along with the country as a whole.
http://www.csmonitor.com/Business/2011/1019/A-long-steep-drop-for-Americans-standard-of-living
Yours may have increased,but you're wrong about the whole country.(USA that is)
Do you know how many decades people have made that argument and been wrong?
Once again, assuming you're right. And it depends on which country you live in.
http://www.nytimes.com/2013/09/19/business/americas-sinking-middle-class.html?_r=0
NYTimes
So either we define the middle class down a couple of notches or we acknowledge that the middle class isn’t in the middle anymore..
What happens to those people? They learn a new skill doing something that isn't so easily replaced by machines. That's exactly how the economy is supposed to work. That's how economies stay efficient and productive. That's how companies and nations stay competitive. Not by maintaining every job that isn't useful or efficient and sandbagging the economy, but by restructuring toward productivity.
That's my point. What jobs aren't easily replaced by machines?
Welfare of course shouldn't exist and doesn't work. Anyone who is unemployable should be covered by private charity, not the taxpayers.
There's no difference between private charity and welfare, except for where the money comes from in the first place.
The company can't do that for the same reason your company can't do that to you and mine can't do that to me - people will take their services elsewhere to companies that will pay them more. This is how economics works - your services are valuable, more valuable most likely than minimum wage. If your company starts ticking you off by under paying you, you'll leave and nobody will want to or be competently capable of replacing you. This is why the vast majority of the people in the workforce make far more than minimum wage. It's not charity on the part of the company.
This is how it works when supply of work exceeds demand. However, when unemployment is over a certain level, every new job pays minimum wage.
Interesting thing, though. Know why those shanties are there just a stone's throw away from modern commercial developments?
Money.
Squatters don't become squatters overnight. And certainly not due to the movement of money in banks. They become squatters because they can make more money scrounging for garbage in the city or begging for coin than they can get farming.
It's ugly, but they're there because there's so much excess money in the system that they can live there.
Do you have any evidence of that?
I'll give you an example. The company I worked for in the summer makes protective rainwear for a variety of industries. The old method of cutting the fabric was to have someone get on top of a huge table on their hands and knees and use a paper stencil to cut out the shapes of fabric to be sewn into garments. This was a huge bottleneck, there was only so much space in the plant and only so much fabric could be cut in a day without sacrificing quality, and usually it was the limiting factor in production.
About 10 years ago, that process was replaced with an automated cutting machine that uses computer design plans to cut the fabric. This means that someone now works for the company designing the plans that the machine uses to cut the fabric. This means that because of the increased efficiency (the computer doesn't make mistakes), the company has hired more and more sewers, welders, and other production workers. This means that the company can create more specialized garments, which means more R&D, marketing, and sales people hired.
This increased efficiency also means that the companies they sell to can get their products cheaper. Fishermen, power companies, and oil companies can all get their products cheaper from this company than they could in the past which allows them to lower their costs to offer products cheaper.
There's more to it than jobs in a vacuum. What you're missing with this example is that the increase in toothbrush production (or rainwear from my example) means that more and more deliveries are made, which impacts the shipping industry, increased volume means meeting the demand of more customers in different markets, which in the case of this industry means more sales guys (which means more company cars to buy). It means more marketing material, more production workers, more outside consulting, maintenance workers for the machines, higher volume of fabric purchased, and most importantly lower costs for customers which allows the company to remain competitive.
Think bigger. Think about what less production costs means for everyone else in the economy.
If this were an open system, you'd be right, but it's not. It's a closed system, which as well as including your fabric company, fabrics companies all over the world are in the system as well. What happens to the other companies, either they invest and so compete on a somewhat equal footing or they go bust.
This is an article which I think covers most of what myself and Rallywagon have been trying to convey. With links !
http://www.forbes.com/sites/igorgreenwald/2013/01/07/is-capitalism-dying/
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Capitalism has been the dominant economic system in the Western world for, give or take, 400 years. And in that virtual eye blink in the grander scheme of things it has produced more wealth than all the prior economic systems put together.
It’s also lifted hundreds of millions out of poverty, educated billions and may—heck, let’s just stipulate will—one day cure cancer.
But nothing—not even the bestest thing ever—lasts forever. Stuff happens. Things change. Systems work until they don’t.
How close is capitalism to the end of its useful life? What comes next? And can we even have an intelligent discussion about any of it without getting bogged down in mutually hostile definitions?
Because capitalism has become one of those trigger words (like terrorism) that ignites strong emotions and ends up meaning whatever we want it to mean.
So then: If you believe capitalism is the system elaborated in the collective workings of Ayn Rand or equate Europe with socialism in the manner of a recent presidential candidate, then of course your capitalism isn’t dying because it’s never existed except as fiction or faith. Sorry for wasting your time.
The rest of us can, I hope, agree that modern capitalism is a more complicated beast requiring some degree of regulation and calibration to people’s non-financial preferences (clean air and such.)
And if the aggregate goal of human striving isn’t merely to maximize aggregate profit but to achieve a measure of happiness and sustainability for the vast majority, well then, perhaps we have a problem. Several problems in fact.
And by “we,” I mean the parties to advanced corporate capitalism as practiced most freely in the US. The Chinese, Russian and French varieties are hardly better, but neither are they global models others emulate. Scandinavia, Switzerland, Germany, Singapore and South Korea are another matter and we have a lot to learn from their success.
But back to US-style capitalism and its problems. One is the
tragedy of the commons and the related issue of negative
externalities. Carbon pollution and antibiotic resistance are just two public problems exacerbated by the private pursuit of maximum profit. Corporations are notoriously poor minders of the public interest when it’s in conflict with their bottom line.
Big corporations now wield unprecedented political and economic power. A few have ridden the shift toward online commerce to superpower status. Many more have profited by replacing expensive US labor with cheaper overseas workers and
software. The end result is that the
inequality of wealth and income has grown dramatically not just among households but also across the divide separating large corporations from small businesses.
Studies have shown that inequality saps growth. Combine an unequal playing field with political control over the institutions meant to level it and you get a stagnant, sclerotic economy that wastes potential and allows select politically connected participants to extract unjustified
rents. And the thing is, we got here almost unnoticeably, by the natural accretion of small competitive advantages over time.
So now we have the most powerful and cohesive organizations on Earth devoted to the pursuit of profit above all else and frequently at the expense of public interest. And their unprecedented wealth threatens to neuter democratic checks on their behavior. In theory, corporations are still responsible to their shareholders. In practice, they’re beholden to no one but boards of directors handpicked by senior managers.
Free markets respond to supply and demand, and in the US the ready alternatives to domestic labor have placed it in an especially poor bargaining position relative to capital. It’s possible the trend will slow as outsourcing wanes. In 14th century Europe, the bubonic plague temporarily boosted wages and reduced agricultural rents. Barring a similar game-changer, it’s hard to be optimistic about the spending power of workers who double as consumers.
So how can we wonder if the economic system is dying when its standard-bearers have never been stronger?
Because the system depends on level, transparent markets to work well, whereas the growing power and wealth disparities it is generating pretty much guarantee the opposite.
Which leads us back to those other countries where the economic system doesn’t seem headed for the same existential crisis.
One thing they all have in common is that their income inequality, as measured by the
Gini coefficient, is
well below that of the US. In fact, the Scandinavian and German-speaking countries that consistently score well on a variety of business and quality-of-life surveys have some of the lowest inequality scores among
developed nations. Not coincidentally, social mobility in those economies has clearly
surpassed that in the US, so that the Danish Dream and the German Dream are now much more credible than what’s on offer in America.
It’s a cultural thing, insofar as culture is what seems to restrain Nordic and Teutonic capital and allied politicians from the sort of economic overreach now underway in the US. As Sweden’s center-right Prime Minister Frederik Reinfeldt told
Bloomberg News in 2011,
“A good society does not have huge differences. If you build trust among people, and I think you need that, then they shouldn’t get far apart from another.”
Sweden has high marginal tax rates but also lots of affluence and private enterprise, tightly regulated banks and a budget that was in surplus as recently as 2011. National debt stands at just 38% of GDP, in contrast with more than 100% in the US.
No country is perfect, and the US has many strengths.
But striking a balance in politics and economics doesn’t seem to be one of them any longer.
As capitalism enriches capital
at the expense of labor and Wall Street at the expense of Main Street
the winners are busily erecting anticompetitive toll gates all across the economic landscape, be they in the form of lower borrowing costs enjoyed by the still-too-big-to-fail banks or the higher health insurance premiums facing small businesses.
This is not a recipe for long-term economic success. If capitalism means lots of private ownership and fair, transparent markets, then its future remains bright. But if a zero-sum, winner-take-all struggle for leverage is the name of the game, those games seldom conclude as the winners might hope.
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Too often, public interest becomes just another common to be
grazed. Witness the
spiral in privately set health insurance costs, the unindicted co-conspirator in the recent loss of so many jobs and the primary cause of future federal deficits. It’s an industry fattened by the tax deduction on employer-purchased plans and one notorious for exploiting the relatively inelastic demand for health coverage. The rule in healthcare is, those with the greater market weight make the rules and set the rates. Which is why hospital systems can often
double the fees charged by the private physician practices they acquire. In other industries, antitrust regulators would be all over abuses of market power, but the health industry hides in a forest of self-serving rules and ineffective regulation.
Also, and I know this will also come as a shock, but corporations habitually lie when doing so furthers commercial interests.
So the health industry will cite medical advances to explain soaring costs, rather than anticompetitive and discriminatory practices. The tobacco industry used to shout from the rooftops that smoking is a harmless hobby. Energy giants sponsored studies questioning the science behind global warming.
Corporations lie more convincingly than individuals. They have the resources to hire experts and lobbyists. They can buy any overt advertising they might require from wholly-owned media subsidiaries.
In the US today corporations buy the Congress that writes the laws, subverting that check on their ambitions.
