More downward pressure on global wages could backfire...

[Engineer]

http://news.yahoo.com/analysis-more-pressure-global-wages-could-backfire-055703302--sector.html

LONDON (Reuters) - If rising income gaps are at least partly responsible for the global credit crisis, governments and companies should be wary of squeezing wages yet again to help rebuild their finances.

In the long buildup to the global financial crisis, households took on debt to offset the gradual fall in their incomes and consumption relative to the more wealthy.

But as they'll get little or no help from easy credit today, driving wages down even more risks a cratering of household consumption and a severe test of social cohesion.

A renewed public focus on decades of widening wealth and wage inequality in the United States, Britain and other developed and developing economies has been one of the most durable legacies of the five-year-old credit crisis.

Work by Nobel Laureate Joseph Stiglitz' on the 1 percent of U.S. super-rich, "Occupy" protest movements around the world and electoral swings to the left have all spotlighted what business, finance or government elites now realize they can't ignore.

While the share of U.S. gross domestic product going to wages and salaries has fallen 10 percentage points to about 43 percent since 1970, the slice going to companies in after-tax profits has surged, doubling to 12 percent since 2005 in what HSBC described as "one of the most chilling charts in finance."

I've said it for years. We have replaced good paying, wealth building middle class jobs with lower wages, debt and now tax cuts (to supplement income). The credit cards are running out, both personal and government and the foundation is giving way. It's only a matter of time. The great service economy experiment ....heh.

Want to fix all of our problems.....fix this one and it will take care of itself. Until then, enjoy the free fall....

Question to those at the top who are cutting those 99% at the bottom....Who is going to buy your shit once the wages AND credit cards (both personal and government) are cut off? Short term gain....long term collapse.

 

[Double Trouble]

That's nice and all, but I don't see what the fix is. What can you do that will somehow keep the middle class jobs here?

 

[Engineer]

That's nice and all, but I don't see what the fix is. What can you do that will somehow keep the middle class jobs here?

You might be right....I don't think you can fix "greed".....at least until enough civil unrest and finally revolution occur (not saying that this is going to happen quickly or even happen but we certainly are on a collision course with it). Every 50 years or so, the reset button has to be hit in the US to move forward. it's about that time.

 

[Matt1970]

While the share of U.S. gross domestic product going to wages and salaries has fallen 10 percentage points to about 43 percent since 1970

HEY!!! Someone got it right. What I have been sayong all along and coincides right with the start of our massive trade deficits.

That's nice and all, but I don't see what the fix is. What can you do that will somehow keep the middle class jobs here?

I think it really is this simple, quit buying foreign crap. Keep the money here in the US. Our massive trade deficits are the equivalent of trying to pour water into a bucket at 1 gallon per minute while the bucket has a hole in the bottom that leaks 1.2 gallons per minute.

 

[Engineer]

HEY!!! Someone got it right. What I have been sayong all along and coincides right with the start of our massive trade deficits.



I think it really is this simple, quit buying foreign crap. Keep the money here in the US. Our massive trade deficits are the equivalent of trying to pour water into a bucket at 1 gallon per minute while the bucket has a hole in the bottom that leaks 1.2 gallons per minute.

The only way you're going to get people who have lower wages to quit buying cheaper stuff is to quit importing the cheaper stuff. Not going to happen. Short sighted people (at top and bottom).

 

[Pr0d1gy]

Wow, some common sense and poignant intelligence in this forum? Nice thread Engi. Have fun getting group trolled by the right wing asshats.

 

[dmcowen674]

More downward pressure on global wages could backfire...

http://news.yahoo.com/analysis-more-pressure-global-wages-could-backfire-055703302--sector.html


I've said it for years. We have replaced good paying, wealth building middle class jobs with lower wages, debt and now tax cuts (to supplement income). The credit cards are running out, both personal and government and the foundation is giving way. It's only a matter of time. The great service economy experiment ....heh.

Want to fix all of our problems.....fix this one and it will take care of itself. Until then, enjoy the free fall....

Question to those at the top who are cutting those 99% at the bottom....Who is going to buy your shit once the wages AND credit cards (both personal and government) are cut off? Short term gain....long term collapse.

The real backfire will be when the massing start going after the 1%.

It's coming.

 

[nehalem256]

I said 10 years ago that the trade deficit and service economy was unworkable.

How are we going to keep buying stuff from other countries when our economy is essentially based on giving each other hair cuts?

 

[soulcougher73]

The real backfire will be when the massing start going after the 1%.

It's coming.

I dont like to think that we would let our society get to that point, but sadly, i honestly think we are headed there. And i see bloodshed if we dont do something to right the ship and correct the income inequalities in this country.

Get middle class booming again paying very decent wages to live off of and we will buy shit. Trust me.

 

[Gonad the Barbarian]

That's nice and all, but I don't see what the fix is. What can you do that will somehow keep the middle class jobs here?

Trade regulations and barriers. It's what was keeping them here before. Production costs would rise (of course they would, as labor wages would be higher) but that wouldn't necessarily equate to proportionally higher prices (just outsourcing hasn't lowered product prices enough to offset the wage depression).

 

[WhipperSnapper]

That's nice and all, but I don't see what the fix is. What can you do that will somehow keep the middle class jobs here?

Have you ever heard of something called a tariff? How about an import ban?

How about a ban on all immigration and foreign work visas, such as the H-1B and L-1?

 

[Jhhnn]

That's nice and all, but I don't see what the fix is. What can you do that will somehow keep the middle class jobs here?

We have to look deeper, create a paradigm shift in the way we view ownership, and how much concentration of ownership we'll allow.

The end game state of Financialized Capitalism is Oligarchy, protests from the political Right not withstanding. We're living it and witnessing it, if we cast aside the illusions of Right Wing propaganda.

Millions of underwater homeowners think they own their own home, when all they own is debt. They think they own their clothes, their furniture, their electronics, their stuff, when it becomes obsolete or wears out faster than they pay off the debt used to acquire it.

Real ownership lies elsewhere, highly concentrated in the hands of a very, very few people. They own the future work output of indebted middle class people, charge interest as they collect it. They also own the means whereby middle class people perform work to get money to pay for it all.

The only way that the middle class can assert ownership over any of it is through govt, and taxes, which is why the ownership class attempts to hobble & discredit egalitarian democracy at every turn. In the conventional sense, they already own govt, but only if we continue to think inside the box they provide.

We likely will, until some even greater economic catastrophe unfolds, at which point we may wake up.

 

[tommo123]

never understood why unions can't work together and do mass (as in 10s of millions of people) strikes. imagine half the country not turning up to work on a monday. that might get the govs attention. give them their demands by sunday eve or else a mon-wed strike. then a full weeks strike.

the economy would hit hard and the gov would have to respond. the arab spring happened - why can't we 1st worlders use twitter/facebook to organise our own revolt?

 

[PokerGuy]

never understood why unions can't work together and do mass (as in 10s of millions of people) strikes. imagine half the country not turning up to work on a monday. that might get the govs attention. give them their demands by sunday eve or else a mon-wed strike. then a full weeks strike.

the economy would hit hard and the gov would have to respond. the arab spring happened - why can't we 1st worlders use twitter/facebook to organise our own revolt?

hahahahahahahahahah

You're a funny guy. With unions representing vastly different workers, what exactly would their "demands" be? And from whom? Less than 12% of workers are union anyway. Comrade, your dreams of a collectivist labor paradise will have to wait

 

[rudder]

Millions of underwater homeowners think they own their own home, when all they own is debt. They think they own their clothes, their furniture, their electronics, their stuff, when it becomes obsolete or wears out faster than they pay off the debt used to acquire it.

Whose fault is this? People retire poor because they take a 30+ year mortgage on a bigger house than they can afford. Even if they are only paying 4%.... not good in terms of savings.

Now you can scrimp and save to put 20% down on a house. Buy something more reasonable and have it paid off in 10-15 years. After its paid off... you can pay yourself the mortgage the remaining 15 years.

After 30 years who is better off? Same with any other type of purchase on credit. Who is to blame? The creditor who puts the offer out there or the consumer who doesn't mind giving their hard earned cash to the creditors.

 

[Genx87]

We live in a global economy. We have to deal with globalized labor. It is imo out of our hands. Erecting a wall around the country will only be a barrier to being a competitive economy long term. It will raise prices for not only goods but also labor. Eventually that would bite us right in the ass worse than this issue of having our unskilled workers competing with foreign unskilled workers.

 

[Jimzz]

^^
My wife and I agree 100% on the whole 30 year thing. We will pay our house off in less than 10years and that includes putting 150k-ish in the remodel and addition. Sooner we pay off the housie sooner we can REALLY think of retiring.


But in the topic of wages people need to look in the mirror. You want cheaper things so places like wal-mart pay less but still make billions yet the emoplyees don't earn enough to buy what you/your company does/makes then you don't have enopugh to keep spending as much and then taxs have to go up as all those wal-mart type employees are now on Gov aid so you have even less and on and on...

Want to keep your wages up and protect your job, buy more american goods and support the people that support you.

 

[Texashiker]

I've said it for years. We have replaced good paying, wealth building middle class jobs with lower wages, debt and now tax cuts (to supplement income). The credit cards are running out, both personal and government and the foundation is giving way. It's only a matter of time. The great service economy experiment ....heh.

In 1987 I went to work for a certain welding shop. At the time, the top pay was 3.23 times minimum wage.

In 2004, that same welding shop had a top pay of around 1.87 times minimum wage.

In 1987 dollars, that would have been like taking a $3 an hour cut in pay, but the cut in pay was spread out over 17 years.

Once you figure in inflation, those workers are making about half today, as compared to what they were making in the late 1980 and early 1990s.

But yet somehow we are supposed to be in a recovery?

The US will not be in a full recovery until free trade comes to an end and our factories come back.

 

[Pr0d1gy]

never understood why unions can't work together and do mass (as in 10s of millions of people) strikes. imagine half the country not turning up to work on a monday. that might get the govs attention. give them their demands by sunday eve or else a mon-wed strike. then a full weeks strike.

the economy would hit hard and the gov would have to respond. the arab spring happened - why can't we 1st worlders use twitter/facebook to organise our own revolt?

You should research the Flint Sit-Down Strike. These workers banded together to fight the poor treatment they received and it worked. From it, they built one of the greatest middle class communities the world has known. Unfortunately, while the common man seems to improve and grow more educated and less ignorant with each passing generation, it seems the view at the top remains ignorant and stale.

Great post Jhhnn, debt is the new method of enslaving people you have trained to believe they are free. Why are houses and cars priced at 20, 100, or 1,000 times more than a similar piece from just a few decades ago? So that the people in charge can connect a funnel to your wallet for years and decades.

rudder, people have no choice. The other choice is to move into lower class neighborhoods where the kids would face a much more difficult, and harmful life. Thus, people who are trying to do the right thing for their kids take huge risks and go into contracts that last most of their lifetimes, which is great for the mortgage owners because many times they can collect money for years and years and then pull the plug down the road to regain that property at their leisure.

Unethical business practices are never the consumer's fault, and outsourcing jobs and gambling on other peoples' debt is nothing but unethical behavior designed to regain ownership of the property that the "peasants" think are theirs.

We live in a global economy. We have to deal with globalized labor. It is imo out of our hands. Erecting a wall around the country will only be a barrier to being a competitive economy long term. It will raise prices for not only goods but also labor. Eventually that would bite us right in the ass worse than this issue of having our unskilled workers competing with foreign unskilled workers.

This is the great lie the slave masters are selling the "peasants" these days.

 

[Acanthus]

That's nice and all, but I don't see what the fix is. What can you do that will somehow keep the middle class jobs here?

Tax imports from nations that have a gross mistreatment of their workforce.

Businesses are circumventing our labor laws by going to nations that don't have them. En masse this is clearly damaging the standard of living in developed nations.

Make it unprofitable to do so.

 

[Engineer]

Want to keep your wages up and protect your job, buy more american goods and support the people that support you.

Have we gone so far now that you cannot find the products. Entire industries have now been wiped out and will not be able to return because nobody here knows the process well enough to simply bring it back. Free trade wouldn't be an issue if it were truly "Fair Trade" but it's not and it isn't going to be.

To those that say simply suck it up and it's a global economy....just remember that when you complain about the 47% not paying federal taxes or asking for more government services (welfare, healthcare, etc). It all stems from the wage loss of previous decades that continues to drive us ALL down, and if you think you're immune to it, you would be wrong. When the general wage base goes down, it effects you and most of you don't even realize it.

As Zebo says....cheap is more expensive.

 

[peonyu]

Have you ever heard of something called a tariff? How about an import ban?

How about a ban on all immigration and foreign work visas, such as the H-1B and L-1?

Both Dems and Republicans foster outsourcing, if both parties were not for it then something would have been done about it by now. Both parties also enable illegal aliens to be here by twiddling their thumbs and ignoring the issue...Stopping immigration ? Both parties would laugh at that idea, and the few politicians who would agree its a good idea would be labeled "Racists" in the press the next day and their careers ruined. In short none of that is going to happen.

 

[OverVolt]

Clearly a sign of massive inflation.

 

[Ausm]

http://news.yahoo.com/analysis-more-pressure-global-wages-could-backfire-055703302--sector.html



I've said it for years. We have replaced good paying, wealth building middle class jobs with lower wages, debt and now tax cuts (to supplement income). The credit cards are running out, both personal and government and the foundation is giving way. It's only a matter of time. The great service economy experiment ....heh.

Want to fix all of our problems.....fix this one and it will take care of itself. Until then, enjoy the free fall....

Question to those at the top who are cutting those 99% at the bottom....Who is going to buy your shit once the wages AND credit cards (both personal and government) are cut off? Short term gain....long term collapse.

Sounds like a Republicon Utopia.

 

[Ausm]

Both Dems and Republicans foster outsourcing, if both parties were not for it then something would have been done about it by now. Both parties also enable illegal aliens to be here by twiddling their thumbs and ignoring the issue...Stopping immigration ? Both parties would laugh at that idea, and the few politicians who would agree its a good idea would be labeled "Racists" in the press the next day and their careers ruined. In short none of that is going to happen.

I beg to differ....

http://www.woodcountydemocrats.com/...took-office&catid=53:press-releases&Itemid=96

Here’s just a short list of some of the bills that Republicans have blocked, or attempted to block, since Obama became President:

Tax on Companies that ship jobs overseas- A bill that would have eliminated a tax break that companies get when they ship jobs overseas. Republicans blocked this, allowing companies to keep the tax break they receive when they ship jobs to other countries.