Henry Blodget asks why pay people so little?

[Londo_Jowo]

A worker has virtually no negotiating power, unless there is a serious shortage of workers.

The only way to actually negotiate is collectively.

There will never be a shortage of unskilled labor in the US due to the current education system (what ever happened to vocational schools and classes?) and illegal immigration.

Yep, the only way to fix the problem is bring in the unions.

The unions will get the wages increased, take their cut, and the workers will still be poor.

 

[Griffinhart]

I didn't know Henry was still alive. He's been around a long time.

Isn't he only 45? Why wouldn't he still be alive? Though, I am amused by the thought of a guy that commited securities fraud demonizing anyone in financial matters.

 

[manimal]

Take a look at retail wages since 2008. We have hundreds of thousands of people working part time for 9 dollars an hour trying to get by.

Retail used to pay well when it was populated by small companies in many markets. The mega corps pushed the little guys out and decimated wages.


Again its the difference between small business and big business.

 

[Throckmorton]

A few millionaires changes nothing, a drop in the bucket. That's a few million dollars. Giving each and every person that amount would require $315 trillion. Surely you must appreciate the difference.

Does not matter if it's a million or a few thousand, or a hundred bucks. When the floor is raised so are prices. The basic cost of labor changes everything.

I implore you, go ahead and change it in your state. Give them a $1/year increase in minimum wage until poverty is gone. I want to you learn your lesson.

Explain to me how inflation happens if the total amount of money is the same, but income is more evenly distributed.

Let me say this again. Total amount of money is the same.


Explain something else to me. What is the effect on the economy of the top 1% owning such a huge plurality of wealth and earning such a large percentage of total income? The 1% earns 20% of total income. That's a BIG chunk. Does their income not affect inflation?

 

[Phokus]

American companies can pay below poverty level for unskilled labor because the Taxpayer picks up the tab on everything else.

ie: we tax payers pay for food stamps, medicaid,welfare,etc.. so that they can pay shit wages and the difference is picked up by the taxpayer.

more Lemon Socialist policies of the US.

Your post is a hilarious logical fallacy, you think if you removed food stamps and welfare, companies will all of a sudden start paying better wages? You are retarded.

 

[PokerGuy]

Society demands that the human condition be taken into account. Allowing policy to be set by purely market forces is what is stupid. We are not Ferengi.

If society demands such a thing, then society sets the rules for that. You can't expect companies to make decisions counter to their own best interest of their own volition. Blodget is expecting them to just decide on their own to pay more even though they don't have to. That's stupid, as evidenced by the real world.

 

[Throckmorton]

Your post is a hilarious logical fallacy, you think if you removed food stamps and welfare, companies will all of a sudden start paying better wages? You are retarded.

If there were no food stamps and welfare people would riot rather than starve to death.

 

[disappoint]

Other than paying more (a tip, which is a voluntary reward for doing good work), do you just pay more for goods and services than what is charged? No? I didn't think so.

HAHAHA You are so stupid!

 

[PokerGuy]

A worker has virtually no negotiating power, unless there is a serious shortage of workers.

Try negotiating with the cashier the next time you shop at a big box store. It's like that. The only way to actually negotiate is collectively.

Nonsense. As long as there is more than one potential employer, the worker has the option to leave and go work for another employer. Thus, employers have to compete against each other to retain the best workers.

When the economy sucks, employers have more leverage because workers have fewer choices. When the economy booms, workers have more leverage because they have more choices. That's how it goes.

 

[PokerGuy]

HAHAHA You are so stupid!

Brilliant and insightful analysis! Thank you for your contribution! You must be a product of one of those failed educational institutions

 

[disappoint]

Brilliant and insightful analysis! Thank you for your contribution! You must be a product of one of those failed educational institutions

You're the one with the failed logic dumbass.

 

[Throckmorton]

Nonsense. As long as there is more than one potential employer, the worker has the option to leave and go work for another employer. Thus, employers have to compete against each other to retain the best workers.

When the economy sucks, employers have more leverage because workers have fewer choices. When the economy booms, workers have more leverage because they have more choices. That's how it goes.

In theory that's how it works. In reality any bargaining is tilted in the employer's favor. They usually can get rid of one employee, but you need the job to survive.

 

[sm625]

What misguided misinformed nonsense. People are not poor due to the wages they earn. One could live on a dollar a day in food, just google it. All sorts of people are doing it just to see if they can. Now all it takes is a few more dollars a day to get a basic shelter. Clothes can be had very cheaply as long as you stay away from the mall.

Anyone who socks away 50% or more of their earnings can be fairly wealthy after 30 years. Even at $7 an hour @ 32 hrs a week that is still $112 a week or $450 a month of savings. After a year you have $5400. You open up an ameritrade account and you go buy any one of the major top 25 mutual funds, which have returned on average 6% even in this secular bear. So you figure at 6% your 5400 is going to turn into $5700 after a year, in addition to the additional $5400 you added for the 2nd year. So after two years of savings you have about $11200. After 3 years you have about $17200. After 4 years you have about $23600. After 5 years you have $30k. Its just simple math. (My math could be off by as much as 10% so dont bite my head off over it.) Screw the government. Screw 401ks. Screw the fees, the administering, the endless debating. Just take some frickin responsibility for yourself and tell all the vultures in the retirement investment industry to piss off.

But see, the average braindead zombie doesnt want to deal with that. omg working for a living? Savings? Ha! I want it now! Now now now now now. And later too. So instead of saving 30k in 5 years, they are in debt 30k in 5 years. If you actually read this far you know what I am talking about. These people are without hope, wishing uncle sam would help them. And uncle sam will. Uncle sam will help them to the gas chambers because that is the only solution for a bunch of pathetic braindead scum. If you actually study 1930s germany you would see all of this was discussed quite openly. The jews, the gypsies, and what to do about them. I dont expect a repeat of what happened with the jews, but the gypsies, hell yeah its gonna happen again. There are just so many people who are hopelessly dependent on the uncle sugar, and most of these people know that and they just dont give a damn. That is a recipe for some very bad stuff goin down.

 

[ShawnD1]

So non-skilled workers should be paid the same wages as skilled workers???

Using this logic, one shouldn't get an engineering degree and just become a burger flipper at McD's or barista at Starbucks after they graduate from high school instead

Man, I literally did work at McDonalds with an engineering degree. It was that brief period after graduation but before getting a real job.


The Swedes have the right idea. Give people free shit so you don't need to pay them as much. A guy can get $10/h in Sweden and he still has day care for his accidental children and medical care for his accidental grease burns. In 'Merika, liberals want McDonalds and Taco Bell to pay their employees $50,000 so they can afford that stuff. Like seriously, come on guys. That's not realistic. McDonalds should be paying out that much money.

 

[Londo_Jowo]

In theory that's how it works. In reality any bargaining is tilted in the employer's favor. They usually can get rid of one employee, but you need the job to survive.

Maybe that's true in your world, when I took my last position I had 3 companies vying for me. My current employer decided that my skills/years of experience were important enough to beat out the other companies offers by 5% to 10%.

 

[ShawnD1]

If there were no food stamps and welfare people would riot rather than starve to death.

Nope. There was a time when being a serf was the norm. You had to work 12 hour days 7 days per week just to get by. If they didn't riot about it back then, I don't see why they would riot about it now.

Safety nets are not the reason wages are so low. It's just supply and demand. X number of people are available for simple jobs, so the wages go down. Remove all the safety nets and it looks the way America looked maybe 80 years ago - people were still brutally poor. The safety nets do not change the wage.

 

[sm625]

There would be riots for a short time. Then it would stop as people realize that rioting just destroys more wealth. Then people would begin to take an active interest in politics. They would see the lies that the Romnebamas constantly spew. And they would remove them from office. They would claim back their liberty. And they would eventually generate wealth. That is why the elites keep placating with food stamps. It maintains the status quo. It doesnt rock the boat. They are raping the middle class to the tune of something like 3-4% per year. Look at the income inequality charts. They want that to continue. Their mouthpieces, the Romnebamas, all want that to continue, and they will say anything to do it. The think tanks. The foundations. The corporate media. Even the corporations themselves. They all want this evisceration to continue. And so it will. Until the underclass grows so large that the elites are unable to spend their money without risking their lives.

 

[Throckmorton]

What misguided misinformed nonsense. People are not poor due to the wages they earn. One could live on a dollar a day in food, just google it. All sorts of people are doing it just to see if they can. Now all it takes is a few more dollars a day to get a basic shelter. Clothes can be had very cheaply as long as you stay away from the mall.

Anyone who socks away 50% or more of their earnings can be fairly wealthy after 30 years. Even at $7 an hour @ 32 hrs a week that is still $112 a week or $450 a month of savings. After a year you have $5400. You open up an ameritrade account and you go buy any one of the major top 25 mutual funds, which have returned on average 6% even in this secular bear. So you figure at 6% your 5400 is going to turn into $5700 after a year, in addition to the additional $5400 you added for the 2nd year. So after two years of savings you have about $11200. After 3 years you have about $17200. After 4 years you have about $23600. After 5 years you have $30k. Its just simple math. (My math could be off by as much as 10% so dont bite my head off over it.) Screw the government. Screw 401ks. Screw the fees, the administering, the endless debating. Just take some frickin responsibility for yourself and tell all the vultures in the retirement investment industry to piss off.

But see, the average braindead zombie doesnt want to deal with that. omg working for a living? Savings? Ha! I want it now! Now now now now now. And later too. So instead of saving 30k in 5 years, they are in debt 30k in 5 years. If you actually read this far you know what I am talking about. These people are without hope, wishing uncle sam would help them. And uncle sam will. Uncle sam will help them to the gas chambers because that is the only solution for a bunch of pathetic braindead scum. If you actually study 1930s germany you would see all of this was discussed quite openly. The jews, the gypsies, and what to do about them. I dont expect a repeat of what happened with the jews, but the gypsies, hell yeah its gonna happen again. There are just so many people who are hopelessly dependent on the uncle sugar, and most of these people know that and they just dont give a damn. That is a recipe for some very bad stuff goin down.

You seem to be forgetting that it takes money to live... You know, things like rent, utilities, food ($1/day isn't enough).

 

[MovingTarget]

Maybe that's true in your world, when I took my last position I had 3 companies vying for me. My current employer decided that my skills/years of experience were important enough to beat out the other companies offers by 5% to 10%.

Your context is pretty skewed if you think that your experience is in any way applicable to those in unskilled positions like retail or foodservice. You have skills that you can bargain with in a limited employment pool. If you work in foodservice or retail, the only choice you have is 'take it or leave it' knowing full well that the employers down the road offer the exact same deal. You cannot negotiate if you want to eat/live without going to a homeless shelter.

 

[Throckmorton]

McDonald's had a profit of over $10 billion last year. They have 400,000 employees.

If they took half their profits and used it to raise wages instead, the average employee would get an extra $10,000/yr. And McDonald's would still profit $5 billion.

 

[dmcowen674]

WTF?

Quote:
In the US, the poverty line rises or falls every year according to the Consumer Price Index and other factors. In 2006, a single person needed to earn a minimum of $9,800

Even if you live in the most run down dump in a dangerous part of town rent alone is going to take 2/3 of that. Never mind if you want luxuries like electricity, running water or food.

You heard the rich Republicans in here.

Why would you need luxuries like electricity, running water or food?

 

[sm625]

You seem to be forgetting that it takes money to live... You know, things like rent, utilities, food ($1/day isn't enough).

There are plenting of people living in america for under $300 a month, quite comfortably at that. 4 people each paying $200-$250 a month in rent and utilities rents a very decent 3 bedroom home with finished basement in many areas. That leaves $100 for food and basic needs. Does it include gas money? Internet? $18 supreme pizzas? lol hell no but those arent needs. At 32 hours a week at minimum wage, you can save up $30 grand in five years living like that.

That is what people should be doing in their twenties. But of course that isnt what they do. They just feed a huge malinvestment/racket, spending their parents' money to enrich a bunch of corrupt officials and administrators. That is all college is.

 

[ultimatebob]

A color TV? Are you being serious?

Heh... how much is a "color TV" on sale now? $89?

 

[MovingTarget]

Heh... how much is a "color TV" on sale now? $89?

Heh, at some yard sales it is about the cost of a hamburger.

 

[sandorski]

It becomes increasingly clear that those whose answer to Wages is always, "but the Free Market!" have a Feudal Fantasy. If the answer to peoples Low Wage problem is always, "but the Free Market!", the Free Market will cease to exist. People who have no hope for an improved life will invariably do what it takes to restore that hope.