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View Diary: Economics Works Backwards Now (192 comments)

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  •  While I'd like to see everybody get a raise (12+ / 0-)

    increasing wages in the present system is self-destructive.

    A simple example: I worked as an engineer at an assembly plant in rural western WI. The union there couldn't negotiate a new contract. Before the contract could be settled, a German family bought the company. They settled the contract with a generous raise. The son of the new owner (family worth was close to $1 billion in 1979) even came to the plant and cooked bratwurst for everyone.

    When offered, I jumped at a promotion and return to the main plant in E WI. What was coming next was obvious. Shortly after settling the contract, they moved all of the production to a different facility in E WI and closed the plant in W WI, laying off about 200 people.

    This was in about 1980. By now the original company has been split up and merged with various competitors globally, and still has a small facility in E WI doing a fraction of the sales volume.

    The more you raise labor costs, the faster you can pay back the capital cost of automating a process or offshoring it.

    I think this diary is exactly correct (especially since it says things I've been saying here almost since I started posting) and a new relationship between citizens, business entities and government needs to be established.

    The old one - where you get your food, clothing and shelter by working for wages - is rapidly deteriorating. We have to either be willing to let a lot of people die or live in misery, or we have to rethink concepts like profits, productivity, property, return on investments and a host of others in ways that benefit everyone.

    If my thought-dreams could be seen, they'd probably put my head in a guillotine

    by badger on Mon Sep 12, 2011 at 09:18:25 PM PDT

    [ Parent ]

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