- 27 Jun 2020 22:07
#15103246
One of the hallmarks of a so-called "Third World" country is a low unemployment rate, but also widespread poverty and low wages. This is exactly the trend that appears to be happening in the U.S.
There is plenty of work to be done, but the wages for most of this work is low.
In economic terms, when we talk about the demand for labor we have to qualify it, it can't just be simply summed up as a quantity. Simple example: One business might be seeking a CEO who will be paid $1 million dollars a year; another business may be seeking 50 menial workers who will earn only $20,000 a year. In terms of plain numerical quantity, the demand is the same. But when we look closer, the quality of that labor demand is very different.
This is what is happening in the U.S. labor market; the overall demand for labor isn't changing so much as the quality of that demand is changing.
Why is this happening? Well, in simple terms, the population of the U.S. has rapidly increased within the last 30 years. The labor demand in the economy has been transformed. The same amount of money (or purchasing power, rather) is being spread amongst more workers. The supply of labor has basically outstripped demand. Adding more jobs for more people is not the difficult part, the question is what type of jobs are those going to be? I might see my doctor more often if he cut his fees in half. I might eat out more if fast food workers wages went down (even lower than they already are) and that hamburger became 25% less expensive. Basically what I am trying to say is this: It's easy to find more work for all these additional people, but it's not going to pay well. Or they will have to struggle harder to earn the same amount of money that a lower level job would have paid them in the past. That is exactly what we see happening in the U.S. job market.
When you have more people in the economy, that means more consumers. But if each consumer has less money, that is going to mean the supply-demand curve is going to look different. More workers will be demanded, but only at a lower price.
All these people are going to need services, but each consumer does not have a lot of money to spend. That both means they will not be able to afford all the services they need, and that the type of service jobs created will be low-paying. Whereas one nurse in the past might have been paid $60,000 a year, now you will have two nurses each earning $30,000. More work, lower pay for the same amount of work.
We keep hearing about the "dire shortage" of skilled workers in the country. Well, what are these jobs actually paying? You have a lot of people now who need healthcare services, for example. But when you are looking for skilled workers, ones who went through years of school and training, often at considerable expense to themselves, that skilled labor is going to cost money. You're not going to find any nurse willing to work for $25,000not in America at least. Although there are plenty of filipino nurses who would work for that amountand that is exactly who many U.S. hospitals have been bringing in to do the work.
This is the point it has come to, many Americans are no longer able to afford services and products from U.S. workers. Well, if so many Americans cannot afford American prices, what has America basically become then?
Answer: a Third World country.
A Third World population can only afford Third World prices.
Look at the countries with the highest standards of living: Norway and Switzerland. Consumer prices are high, but the high incomes there more than make up for the high costs of living. Efficiency and lower prices are important, but trying to put all the focus on cutting costs is a race to the bottom. What you get is a Walmart-type economy. With Walmart-type jobs.
Walmart was able to thrive off the abundant supply of cheap labor. A big corporation like Walmart simply wouldn't have been possible in the 70's, the business model would not have been feasible.
A typical Third World country has a small upper class, and lower class of rural peasants and urban poor. Well, what do we see in America? There has been a hollowing out of the Middle class. With the cost of labor going down, the "owning class" has been able to keep more, and with the shortage of housing in many parts of the country and rents being driven up, the ones who own have just been able to extract more wealth.
What else do we see in a Third World country? Domestic servants and food vendors on the streets. Well, domestic servants have already become commonplace in many upper-middle class households. I went to an upscale community in the middle of the day and I saw an army of Mexican domestic laborersthe men were all landscape gardeners and the women all maids and house cleaners. You can be sure none of these people actually lived in this community. Would these households have been able to afford all this domestic labor 40 years ago, when the relative cost of menial labor was much higher than it is now? Unlikely. This was an upper-middle class community of professionals, for the most part, we're not talking about ultra-wealthy gigantic mansions.
I predict in the future we're going to see a lot more food carts on the streets. Oh, don't get me wrong, food carts are wonderful. Street food adds so much the culture and makes things kind of touristy. But think about where tourists typically go and see all this street food. Mexico, Thailand. Cheap and tasty food is nice, but it's a different story I'm sure if you're actually the one on the other side of the counter serving it, because that's the best type of livelihood you're able to make for yourself.
Should we be at all concerned about this sort of trend towards Third World status?
What are we doing to try to stop it?
Third World status has other implications as well... more crime, likely more violence, widespread corruption. It's all a parcel deal. Maybe political instability, as well. There are many things that people in safe civilized developed countries take for granted that people in Third World countries do not have.
In a recently released report, the Social Security Administration provides annual income data on an individual basis. Are you ready for this?
In 2014 38% of all American workers made less than $20,000; 51% made less than $30,000; 63% made less than $40,000; and 72% made less than $50,000.
Note that these declines have occurred during an alleged six-year economic recovery from 2009 to the current time, and during a period when the labor force was shrinking due to a sustained decline in the labor force participation rate. On April 3, 2015 the US Bureau of Labor Statistics announced that 93,175,000 Americans of working age are not in the work force, a historical record.
The promised better jobs that the "New Economy" would create to replace the jobs gifted to foreigners have never appeared. Instead, the economy creates lowly-paid part-time jobs, such as waitresses, bartenders, retail clerks, and ambulatory health care services, while full-time jobs with benefits continue to shrink as a percentage of total jobs.
These part-time jobs do not provide enough income to form a household. Consequently, as a Federal Reserve study reports, Nationally, nearly half of 25-year-olds lived with their parents in 2012-2013, up from just over 25% in 1999.
When half of 25-year olds cannot form households, the market for houses and home furnishings collapses.
http://www.paulcraigroberts.org/2015/10 ... g-roberts/
Since 2013, the federal reserve board has conducted a survey to "monitor the financial and economic status of American consumers".
49 percent of part-time workers would prefer to work more hours at their current wage, for example. But the answer to one question was astonishing. The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400. In other words, nearly half of American households are not financially prepared for an unexpected expense.
Many Middle-Class Americans Are Living Paycheck to Paycheck
http://www.theatlantic.com/magazine/arc ... me/476415/
There is plenty of work to be done, but the wages for most of this work is low.
In economic terms, when we talk about the demand for labor we have to qualify it, it can't just be simply summed up as a quantity. Simple example: One business might be seeking a CEO who will be paid $1 million dollars a year; another business may be seeking 50 menial workers who will earn only $20,000 a year. In terms of plain numerical quantity, the demand is the same. But when we look closer, the quality of that labor demand is very different.
This is what is happening in the U.S. labor market; the overall demand for labor isn't changing so much as the quality of that demand is changing.
Why is this happening? Well, in simple terms, the population of the U.S. has rapidly increased within the last 30 years. The labor demand in the economy has been transformed. The same amount of money (or purchasing power, rather) is being spread amongst more workers. The supply of labor has basically outstripped demand. Adding more jobs for more people is not the difficult part, the question is what type of jobs are those going to be? I might see my doctor more often if he cut his fees in half. I might eat out more if fast food workers wages went down (even lower than they already are) and that hamburger became 25% less expensive. Basically what I am trying to say is this: It's easy to find more work for all these additional people, but it's not going to pay well. Or they will have to struggle harder to earn the same amount of money that a lower level job would have paid them in the past. That is exactly what we see happening in the U.S. job market.
When you have more people in the economy, that means more consumers. But if each consumer has less money, that is going to mean the supply-demand curve is going to look different. More workers will be demanded, but only at a lower price.
All these people are going to need services, but each consumer does not have a lot of money to spend. That both means they will not be able to afford all the services they need, and that the type of service jobs created will be low-paying. Whereas one nurse in the past might have been paid $60,000 a year, now you will have two nurses each earning $30,000. More work, lower pay for the same amount of work.
We keep hearing about the "dire shortage" of skilled workers in the country. Well, what are these jobs actually paying? You have a lot of people now who need healthcare services, for example. But when you are looking for skilled workers, ones who went through years of school and training, often at considerable expense to themselves, that skilled labor is going to cost money. You're not going to find any nurse willing to work for $25,000not in America at least. Although there are plenty of filipino nurses who would work for that amountand that is exactly who many U.S. hospitals have been bringing in to do the work.
This is the point it has come to, many Americans are no longer able to afford services and products from U.S. workers. Well, if so many Americans cannot afford American prices, what has America basically become then?
Answer: a Third World country.
A Third World population can only afford Third World prices.
Look at the countries with the highest standards of living: Norway and Switzerland. Consumer prices are high, but the high incomes there more than make up for the high costs of living. Efficiency and lower prices are important, but trying to put all the focus on cutting costs is a race to the bottom. What you get is a Walmart-type economy. With Walmart-type jobs.
Walmart was able to thrive off the abundant supply of cheap labor. A big corporation like Walmart simply wouldn't have been possible in the 70's, the business model would not have been feasible.
A typical Third World country has a small upper class, and lower class of rural peasants and urban poor. Well, what do we see in America? There has been a hollowing out of the Middle class. With the cost of labor going down, the "owning class" has been able to keep more, and with the shortage of housing in many parts of the country and rents being driven up, the ones who own have just been able to extract more wealth.
What else do we see in a Third World country? Domestic servants and food vendors on the streets. Well, domestic servants have already become commonplace in many upper-middle class households. I went to an upscale community in the middle of the day and I saw an army of Mexican domestic laborersthe men were all landscape gardeners and the women all maids and house cleaners. You can be sure none of these people actually lived in this community. Would these households have been able to afford all this domestic labor 40 years ago, when the relative cost of menial labor was much higher than it is now? Unlikely. This was an upper-middle class community of professionals, for the most part, we're not talking about ultra-wealthy gigantic mansions.
I predict in the future we're going to see a lot more food carts on the streets. Oh, don't get me wrong, food carts are wonderful. Street food adds so much the culture and makes things kind of touristy. But think about where tourists typically go and see all this street food. Mexico, Thailand. Cheap and tasty food is nice, but it's a different story I'm sure if you're actually the one on the other side of the counter serving it, because that's the best type of livelihood you're able to make for yourself.
Should we be at all concerned about this sort of trend towards Third World status?
What are we doing to try to stop it?
Third World status has other implications as well... more crime, likely more violence, widespread corruption. It's all a parcel deal. Maybe political instability, as well. There are many things that people in safe civilized developed countries take for granted that people in Third World countries do not have.
In a recently released report, the Social Security Administration provides annual income data on an individual basis. Are you ready for this?
In 2014 38% of all American workers made less than $20,000; 51% made less than $30,000; 63% made less than $40,000; and 72% made less than $50,000.
Note that these declines have occurred during an alleged six-year economic recovery from 2009 to the current time, and during a period when the labor force was shrinking due to a sustained decline in the labor force participation rate. On April 3, 2015 the US Bureau of Labor Statistics announced that 93,175,000 Americans of working age are not in the work force, a historical record.
The promised better jobs that the "New Economy" would create to replace the jobs gifted to foreigners have never appeared. Instead, the economy creates lowly-paid part-time jobs, such as waitresses, bartenders, retail clerks, and ambulatory health care services, while full-time jobs with benefits continue to shrink as a percentage of total jobs.
These part-time jobs do not provide enough income to form a household. Consequently, as a Federal Reserve study reports, Nationally, nearly half of 25-year-olds lived with their parents in 2012-2013, up from just over 25% in 1999.
When half of 25-year olds cannot form households, the market for houses and home furnishings collapses.
http://www.paulcraigroberts.org/2015/10 ... g-roberts/
Since 2013, the federal reserve board has conducted a survey to "monitor the financial and economic status of American consumers".
49 percent of part-time workers would prefer to work more hours at their current wage, for example. But the answer to one question was astonishing. The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400. In other words, nearly half of American households are not financially prepared for an unexpected expense.
Many Middle-Class Americans Are Living Paycheck to Paycheck
http://www.theatlantic.com/magazine/arc ... me/476415/
- By Unthinking Majority
- By ingliz
- By wat0n