Worker Pay is Stagnant -- Economists Blame Robots (cbsnews.com) 182
pgmrdlm writes: American workers are more productive than ever, but their paychecks haven't kept pace. Researchers with the Federal Reserve Bank of San Francisco have identified a culprit: robots. Economists Sylvain Leduc and Zheng Liu theorize that automation is sapping employees' bargaining power, making it harder for them to demand higher wages. Companies across a range of industries increasingly have the option of using technology to handle work formerly done by people, giving employers the upper hand in setting pay. The result -- a widening gulf between wages and productivity. The research may bolster proposals for universal basic income, which is a government cash stipend that typically doesn't come with requirements. Andrew Yang, a Democratic presidential candidate who's running on a platform of giving every American adult $1,000 per month in basic income, tweeted about the economic findings, writing that automation is "making it hard for workers to ask for more."
"We should just give Americans a raise," he wrote. To be sure, automation is leading to massive changes in work that are hitting some industries and workers especially hard, such as lower and middle-skilled workers. For instance, the ranks of office assistants and clerical workers is expected to shrink by 5% through 2026 as offices shift tasks to artificial intelligence and other software, according to the Bureau of Labor Statistics. This could result in a loss of 200,000 jobs.
"We should just give Americans a raise," he wrote. To be sure, automation is leading to massive changes in work that are hitting some industries and workers especially hard, such as lower and middle-skilled workers. For instance, the ranks of office assistants and clerical workers is expected to shrink by 5% through 2026 as offices shift tasks to artificial intelligence and other software, according to the Bureau of Labor Statistics. This could result in a loss of 200,000 jobs.
"X took our jerbs!" (Score:2)
Illegal immigrants did it!
No, wait, China did it!
No, wait, Muslims did it!
No, wait, Robots did it!
They ALL did it; ban anything that moves and let God sort it out!
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The problem is lack of advancement ability.
The traditional road to success, is the guy right out school, get a job in the mail room. Delivering mail to everyone he gets to know all the folks, where he then can get an advancement to a higher level job. and further up until he is the CEO of the company.
Today
There is no mail room, as people are doing most of their work via email. Entry level jobs are located in a particular department, and discouraged from interacting with other units. where we are expected
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I think you're about a third right.
First, the "traditional road to success" you describe is a load of illogical shit. There's 1 CEO and 400 employees. All 400 of those employees aren't going to be able to work their way up the CEO. Not even 40 will be able to break into upper management over their careers. Most people are very comfortable settling into a middle-of-the-road job and staying there for a long time, provided 1) they get incremental raises, and 2) they have a viable retirement strategy.
The issue
Re:"X took our jerbs!" (Score:5, Insightful)
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reality tells us that labor just isn't what it used to be.
Yep, its about 5x more effective based on current numbers.
Re: "X took our jerbs!" (Score:2)
Re:"X took our jerbs!" (Score:4, Interesting)
I think you better ask someone who plays the guitar, or violin, or who eats food, or lives in a house, whether machines make the highest quality products.
Re:"X took our jerbs!" (Score:4)
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Very much so. This is one of the places where my otherwise-beloved Cory Doctorow's post-scarcity future falls down - in both Down and Out in the Magic Kingdom and Walkaway, he posits everything being something that can be made via params that can be stored in a git repo. I don't take issue with the whole premise - because, as an avocational artisan (lutherie, or stringed-instrument-making), what goes into the repo *can* be useful. For example, I create vector plans which translate to GCode or other CAM la
Ask a gamer (Score:2)
Yes, there are some nice custom made instruments, but here's the thing, the stuff made on a CNC is better than a $5k custom made guitar from the 80s (basing this on my guitar playing buddy who's been talking my ear off about what he wants to buy).
We haven't worked out food yet, but there
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Two words: sous vide. That gets a steak right to the edge of readiness, needing only a minute or two of searing, to produce the best steaks ever. :)
And CNC produces good parts but hoomans are still needed for a while.
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It works well for mushrooms and vegetables, they bring their own flavor.
Re: "X took our jerbs!" (Score:2)
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And you can definitely tell which ones have the most machine-made components, too.
"We should just give american's a raise" (Score:2, Insightful)
Awfully nice of him to volunteer other people's money.
Look, it's simple. If one can't perform a function better than a machine, find another function to perform. Robots handle repetitive (often unskilled) tasks quickly, cheaply, and reliably. They are unitaskers. They do one thing. They do it extremely well, the same way, every time. As a human, you are pretty darn adaptable, or at least capable of being so.
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So much fun when sexbots put hookers out of work.
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"They made us too smart, too quick and too many."
When a viable sex-bot can affordably serve as a maid and butler-ette bot, human population will probably begin to decline pretty rapidly.
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The tragedy of this scenario was very nicely detailed in the public service announcement from the Futurama series: I Dated a Robot [theinfosphere.org]
Who's volunteering other people's money? (Score:5, Insightful)
As for it being "their" money, well, did they build the robots? Write the software that makes them tick? How about invent the products they make? How about the roads that drive their goods to market? Or did they educate the people buying their goods? Did they do anything besides get handed a shitload of money from Daddy or from investors that got it from Daddy? No?
If you don't like paying your dues in a club get the frak out of the club. Civilization's a pretty nice club though.
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I agree with you, but if you ask them, they will indeed claim they did everything you wrote. Clearly they are the masters of the universe and therefore directed us commoners to do all those things, otherwise we would be living in huts without the masters total awesomeness to see us to where we are today.
You don't ask the ruling class (Score:4, Interesting)
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If you build me a house and I pay you for it, should you have any rights to it?
Meh, you're full of shit (Score:2, Offtopic)
A few months ago I was going around
I'd like to ask why you're wasting your time on me and your +2
Economists? (Score:3, Insightful)
Chinese pay: 1/6 of U.S. pay. (Score:2)
Manufacturing done in China means less U.S. work. (Score:2)
The average Chinese private-sector worker earns about the same as a cleaner in Thailand. [qz.com]
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In a recent documentary, a Chinese leader said that Chinese are paid one-sixth of the pay of people in the United States.
Well that's true... but it used be something like 30:1. Same shit with India, if you think they're being paid little now you should have seen it 20 years ago. The quality was utter shit but damn was it cheap. But you know what? Practice makes... adequate. You get the foot in the door, get some experience and learn some skills and just like juniors and interns they get ready to move up the food chain. We saw South Korea and Japan do it much earlier, only an idiot thinks that the western world has some kind o
Re:Economists? (Score:5, Insightful)
I blame the schools who have taught Executives, Directors, Etc.. the mantra that increasing Shareholder value always comes first as the singular priority/deciding factor for all decision-making --- which they then use to self-justify even choices which are of greed, cruelty, or of wanton unfairness or disrespect to people in other positions within their organization. who may have earned or be deserving of much more (Usually with cognitive bias towards whatever is narrowly targeted at what's better for a small group of stakeholders over the short term next few months or next year above the long-term outlook of what is best for All an entity's stakeholders in the long run).
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The board rooms are filled with robots. Still blame the robots. :P
Okkay, econ eggheads... (Score:3)
Explain why American wages have been flat since 1973.
Not sure I understand why. In fact I'm convinced we've been robbed of half a century of real wage increases..
Re:Okkay, econ eggheads... (Score:5, Informative)
Explain why American wages have been flat since 1973.
Minimum wage.
All wages are based on minimum wage. You don't have the power to negotiate $15/hr; you have the power to negotiate above minimum wage. If minimum wage is $20/hr, you're going to get like... $30. It's $7, so you get $15.
You might notice that 15 is more than 2*7, but 30 is less than 2*20.
That's because of sag: mean wages and median household incomes both fall when minimum wage falls; they fall more slowly. That means when minimum wage falls compared to per-capita income, mean wage is a larger multiple of minimum wage, but a smaller multiple of per-capita income. Like so [twitter.com].
You can look at indexing minimum wage to inflation versus to per-capita income [twitter.com] to see the dramatic difference. You can also look at the historical level and the level in other countries [twitter.com].
You might notice the actual minimum wage has been in line with inflation, or a cost-of-living adjustment. That means "able to buy the same amount, not more, not less".
Why have wages been in line with inflation, not able to buy more, since 1973?
Re:Okkay, econ eggheads... (Score:5, Insightful)
All wages are based on minimum wage.
Yes, that's why it must be raised [epi.org] if the poor are to claw their way out of poverty.
You might notice the actual minimum wage has been in line with inflation, or a cost-of-living adjustment.
What? No it hasn't. The federal minimum wage hasn't kept up with inflation for five decades [cnbc.com] now.
Re: Okkay, econ eggheads... (Score:2)
Explain Why (Score:3)
Explain why American wages have been flat since 1973.
Not sure I understand why. In fact I'm convinced we've been robbed of half a century of real wage increases..
No one has "robbed" you of anything. The "golden age" of the American worker from post WW II through the end of Vietnam was an illusion propped up by government spending and policy, a prop that couldn't last very long. In the 1950's, 50% of the federal budget went to the Pentagon. All those bombers, ships, and cannons kept industrial production at full peak along with the government stimulated boom in automobiles, refrigerators, TV's etc, almost all of which were produced in the United States because the re
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Why should a house that sold for $40,000 in 1973 now sell for $350,000? Why should a 1966 Corvette cost about $4,295 and a new Chevy Malibu costs EIGHT FUCKING TIMES AS MUCH?
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If you look at the initial price of a Model T and adjust for inflation, it's about the cost of a Ford Focus is today. In reality that Ford Focus could probably be a lot cheaper, but we've decided that safety and environmental regulations are important and those aren't free.
Real estate is also more limited. No one else can
Re:Okkay, econ eggheads... (Score:4, Insightful)
Let me stop you right there. Safety and environmental regulations add an average of $2500 to the price of a car. The average price of a new car is $34,000, so no, that's not why cars today are so much more expensive.
http://www.des.ucdavis.edu/fac... [ucdavis.edu]
The problem is wages have not come close to keeping up with the true rate of inflation (with health care, education, housing and energy included).
Bollocks (Score:2)
There is plenty of work which is not automated or easy to automate.
In fact in the Western world, high chances are if a robot could do the task, a human isn't working on it.
The reason wages have stagnated in the West IMHO is due to two things. The fall from grace of labor unions, and globalization.
Most decent paying jobs most people could do migrated elsewhere and the decent paying jobs which remain are a tiny sliver of that not enough for most people.
They require skills most people do not have, and availabl
Re:Bollocks (Score:4, Interesting)
Yes, it's a coincidence.
It should be noted that gasoline prices today, adjusted for inflation, are about what they were in 1970.
It should also be noted that inflation has averaged less than 4% per year since 1970.
And then there's the fact that cars are, if anything, MORE common than back in 1970. Back then, middle class meant owning a car. Now it generally means owning two cars. Or one car per driver by the time the kids are teenagers....
The math doesn't lie (Score:2)
Government consumes a good chunk of productivity increases, rather than the benefits of more work per worker filtering down, by tying borrowing to GDP, thus incurring new debt whose annual interest payments become functionally permanent.
Workers do more work per hour. Instead of getting the benefits of more of the extra stuff produced, or more money, government spends it.
Re:The math doesn't lie (Score:4, Informative)
If so then that's local taxation, because federal tax receipts as a percent of GDP haven't changed significantly since the 1950s. It cruises around 17% spiking up or down as the economy swings down or up, but generally within 15-20%.
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In the absence of a balanced budget, government spending can easily exceed tax receipts. The federal budget hasn't been balanced for quite some time.
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That happens with businesses as well. Businesses like Ford or GE don't "balance" their budgets in the sense that people who want a federal balanced budget want the government to do it. They, like the government, issue bonds that they have to repay.
The question is, what do you issue the bonds for? It makes perfect sense to "deficit spend" for things like highways and bridges. If you did government accounting the way you did business accounting, you'd have an offsetting asset for the debt liability. It's
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Plus... (Score:3)
AI/Robotics is inherently a deflationary force. Why is any of that news?
Plus, modern automation is different from the industrialization of the past in that instead of being used to make human workers more productive, it's designed to completely eliminate human workers as completely as possible, for maximum cost savings.
Past work technologies were about making you more productive. NEW automation is about getting rid of you.
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We might wipe out a significant portion of people if a plague ends up running rampant. It's definitely a concern.
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Wow, its almost like.. (Score:2)
You could make a chart showing union membership dropping as wage stagnation increases... must be unrelated.
Re:Wow, its almost like.. (Score:4, Informative)
You could make a chart showing union membership dropping as wage stagnation increases... must be unrelated.
Like this one :
http://www.ibew.org/Portals/48... [ibew.org]
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Re:Wow, its almost like.. (Score:4)
Yeah, if only US unions had stayed strong they would have been able to stop globalization and forced Chinese or Vietnamese employees to work for more money.
Right? No. That is a correlation not a causation. Wages are stagnant because the rest of the world is catching up, absorbing all that money that would have gone to increased wages in the US. Do you hate other countries or something?
It's the rental economy, stupid (Score:2)
This has nothing to do with robots unless, of course, you're referring to the mind-numb robots who have no clue how much of their income goes to pay rent on every aspect of their life. You pay a fee every month for things whether you use them or not. Every year, there are more and more rent-seekers around and that rent never goes down. When you start looking at your bills in detail instead of just writing them a check or worse using auto-pay, you realize that you're getting boned all the damn time.
Are corporate profits still on the rise? (Score:5, Interesting)
OK then it isn't the robots.
It's the same thing it's been for the last 40 years : Greed.
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It's almost as if we are taught about:
Virtue and sin
Truth and lies
Good and evil
Only to grow up and think it was all just a fucking fairy tale.
Evil flourishes when good men are lazy and stupid.
I'm not saying that evil/corruption doesn't find its way into all men and all political parties to some degree, very few if any are without fault.
But what I do not understand it how people can be educated and not understand that democrats are by in large for the people ( again not without fault). And republicans are fo
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My bad (Score:2)
Production versus scarcity (Score:2)
Do we want more production, or do we want more scarcity? Of course to keep *your* job you need scarcity. In fact most people can only make money by actively creating scarcity either through the government via legislative action or buy purchasing and monopolizing resources. We need to encourage production not scarcity and then work on the distribution aspect. A job is a form of welfare when that job could have been done by a robot. The only reason the robot isnt doing the job is if the human forces the prod
oligarchs (Score:5, Interesting)
The trend continues today with Trump giving a $1.3T tax break to the rich, increasing the deficit by that much (what happened to the GOP being balanced budget hawks? ya) while corporations use the tax breaks to buy back $.9T in stocks, artificially inflating stock price and enriching ownership without increases in production or capital investment.
Robots?!?... nonsense.
Re:oligarchs (Score:4, Insightful)
BS. It started with globalization. Safe, secure, reliable transportation and shipping. Global banking. The Internet. All that stuff. You can't expect the first world to grow at a crazy rate forever while the rest of the world stagnates. Their standard of living has been rising greatly, and ours has been growing more slowly relative to what it used to.
But I agree we need a rebalancing, tax rates on the upper 10% or so of the income spectrum need to go up, and tax rates on the upper 1% more so. Not the commie socialist 99% nonsense, but a nice little increase. And we need to cut back military spending by about 25% too.
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Robots? (Score:2)
Let's put the blame where it belongs: (Score:2)
I blame the C suite, Ivy League Schools, and MBAs.
Thankfully tariffs are putting the boot right up their rear ends.
Hate him all you want, but the fact that the current president made it expensive to do business in a certain place that rapes the earth, manipulates their currency, rates their citizens on arbitrary Orwellian metrics, and wants to racially subjugate everybody that isn't them is a good thing.
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Hate him all you want, but the fact that the current president made it expensive to do business in a certain place that rapes the earth, manipulates their currency, rates their citizens on arbitrary Orwellian metrics, and wants to racially subjugate everybody that isn't them is a good thing.
You really set that one up for the inevitable "Where, the US tee hee" jokes...
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We need more unions!! (Score:2)
We need more unions!!
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uuhhhhhh (Score:5, Insightful)
"We should just give Americans a raise," he wrote.
Which increases the value of automation.
Here's a counterproposal: tax corporate incomes, not profits. Spend the proceeds on UBI. If they can't make a profit while being taxed on income, they should let someone with a better idea take over.
Or just print the money, with UBI pegged to inflation.
But frankly, taxing corporate incomes is going to be the only reasonable way forwards when all the "workers" are robots or software agents, and not paying income taxes. Taxing robots or software would be dumb, because you'd have to tie that to their productivity somehow and managing that would be a nightmare.
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UBI is inflationary in itself. If you peg it to inflation you create a positive feedback loop.
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UBI is inflationary in itself. If you peg it to inflation you create a positive feedback loop.
That's fine, if it's not the only place you get the money. Steady inflation discourages cash hoarding, which is another way of saying that it encourages investment. It effectively taxes anyone holding US dollars anywhere in the world. For that matter, it also taxes US dollars which have been lost or destroyed. It's only a problem if it happens unpredictably, or so fast that it's inconvenient for others who would otherwise use it as a medium of exchange. So that's a reason not to get all of the money by prin
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Inflation destroys the savings of the middle class.
What savings? What middle class?
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This is insane. There are companies glad to be making a rather small margin by selling a lot, and then there are companies making a bigger margin selling a few. Why should the former company pay more on taxes? Do you have any experience at all running a business?
That's never happening. You'll always need someone servicing the robots, checking them, setting them up, developing them. Yes, people
ANDREW FUCKING YANG (Score:2)
Google Andrew Yang. UBI NOW!
CEO'S (Score:2)
Wage stagnation is nothing new (Score:2)
oh (Score:2)
"We should just give Americans a raise," he wrote.
Oh, is that all ...
You do know that money is just a medium of exchange, right? If you create more money, you've created ... more money. Not more goods and services.
When more money chases the same goods and services, they cost more. It's math.
Economists should blame (Score:2)
Economists should blame globalism. The entire manufacturing capacity of the United States was moved to China over the past 30 years. This created downward pricing pressure on skilled labor and hollowed out the middle class. Look no further than Bubba Clinton, Dubya and Obama to understand why "worker pay is stagnant". And I'm not sure they're "robots".
I live in Australia and I assure you, it's not rob (Score:2)
I mean it's a bit racist to call them robots but no, the cause of wage stagnation here is the mass importation of hundreds of thousands of workers a year.
Drives up housing costs, rent prices and makes public transit terrible.
Great for big business with more customers and employers with more options though!
right... (Score:3)
Researchers with the Federal Reserve Bank of San Francisco have identified a culprit: robots.
Right. Because robots make the salary decisions in HR. Because robots tell the CEO that his HR costs are too high. Because robots send the consultants that always manage to identify job-cutting and saving on salaries as solutions, no matter what the question was.
Because we still haven't figured out how to build a society based on automation. All the profits from it go to the capitalists, not the people. Marx would have a field day. Omg, I said the evil words, come trolls, blast on me. But fact is: If you think that through, society is not sustainable. If every job has been automated, nobody will earn anything anymore. What is your proposal for running a society that way?
Re:"And where is the money going to come from?" (Score:5, Interesting)
Obviously shareholders and our ruling elite would hate it, but.. fun thought experiment.
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It would de-incentivize monopolies and "too big to fail" companies
Its already common for businesses to be organized under multiple corporate entities for various reasons, and if the corporate structure of concentrating operations within a single entity became a tax disadvantage like you suggest, then the people could and would create a different kind of corporate structure for their businesses.
They would just form strategic partnerships by contract with governance authority (but not the revenues or pr
Re:"And where is the money going to come from?" (Score:5, Insightful)
"Its already common for businesses to be organized under multiple corporate entities for various reasons,"
Make that shit illegal
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So an interesting response to an interesting comment. Trying for 3 in a row?
Why not a progressive tax on corporate profits, but linked to market share, not to specific amounts of money. The primary objective would be to keep the markets divided with enough choices to increase freedom, but the secondary objective would be to make companies smaller so the government that has to regulate the companies can be smaller.
Tired of singing the same song, so for now I'll just bid you ADSAuPR, atAJG.
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Its pretty easy to virtue signal with other people's money.
How about you start by actually buying buggy whips and helping the poor whip makers put out of business by automobiles.
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Because there's evidence that for most industries, there is a concrete societal good in corporations being less efficient.
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Because there's evidence that for most industries, there is a concrete societal good in corporations being less efficient.
Do you want them to be inefficient to the extent that 80% of the country has to live on farms to feed the population, or should we go further back?
There is no societal good for holding back progress or the world being less efficient than it otherwise could be. Any job that can be automated should be including mine and yours. If we're having problems finding a new job, then work to eliminate any barriers preventing that. If it turns out that there's absolutely nothing remaining that we're capable of doing
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We don't have enough resources to everyone experiences the leisure everyone wants, but probably we do have enough for what everyone needs.
If we are talking about efficiency then consuming more then you need is sub optional, companies encourage you to consume more then you need even to the point of being bad for you, e.g. smoking, obesity, gaming, drugs. It once you have a basic level of luxury it becomes very expensive to improve your happiness with more stuff.
Our society has the highest level of luxury eve
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Right now, farmers are being paid to the tune of about $25billion of taxpayer money to not grow crops. Does that sound like efficiency to you?
There are currently about 2 million people working in agriculture out of a labor force of 150 million. Do you see what a red herring your "80% of the country has to live on farms" argument is? And outside of making the B
Re:"And where is the money going to come from?" (Score:5, Interesting)
Tax corporate revenue. It's essentially income for a corporation, such as our income is taxed. Shouldn't I be able to deduct my mortgage, car, food, clothes, gasoline, propane, water and electricity bills off as an expenses that I have to have in order to live? Seems fair to me if a corporation can write off every single thing they have to spend money on, why can't I?
I'm missing why corporations are special. If you took away some of these protections, people would still start companies. It's not like everyone would just stop, sit down and die.
But who are we kidding, we all know the real reason why things are the way they are. Things are precisely the way they are because the top assholes (probably less then 100 people) want things this way.
Re:Low wage workers (Score:5, Insightful)
Wages are low globally because ...
Wages are NOT low globally. Globally, wages are higher than ever before in history, and are rising rapidly.
People doing well in today's economy:
1. Rich people in rich countries
2. Rich people in poor countries
3. Poor people in poor countries
People NOT doing well in today's economy:
1. Poor people in rich countries.
If you live in a developed country, you need to learn a skill so you aren't competing with a servo motor or Bangladeshi.
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Yeah, those "poor people" in rich countries and their microwave ovens, refrigerators, TVs, smart phones .....
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Yeah, those "poor people" in rich countries and their microwave ovens, refrigerators, TVs, smart phones .....
A household at the American poverty line is richer than 85% of the world. But poverty is about more than material wealth. It is also about social status and stress.
In poor countries, nearly everyone is poor, so their society is structured to accommodate them, with affordable transportation, housing, and food choices.
Being poor in a rich country is completely different.
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