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View Diary: Where Adam Smith Was Wrong (121 comments)

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  •  from the point of view... (1+ / 0-)
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    Saint Jimmy

    of a US citizen actualy attempting to live off $10 an hour, I'd call it a problem. Sure, i might live better than starving children in somalia, and I'm sure I don't work as hard as people in chinese sweat shops, but in the midwestern american economy with all its requisite living expenses, I am just scraping by, living paycheck to paycheck and worring if Ill make rent next month.

    I won't say that I'm entitled to better, but I will damn well declare that Americans can do better. My parents are exemplary of the American dream, they started with nothing, worked hard and are now retired and living thier personal dream. I do not see that ever happening for me. The options are no longer there. They have been removed, sacrificed on the altar of stock price and shareholder profits.

    We had it better once, when Americans made things. When we did industry and did it well. This does not "entitle" us to continued prosperity, but it tells me that it is possible for us to earn it. If we can insource jobs and grow the middle class, maybe my kids will have a crack at dream like my parents did, and that I increasingly feel is lost of me and my generation.

    "There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible." - Henry Ford

    by sixeight120bpm on Wed Jan 11, 2012 at 11:19:18 AM PST

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    •  This isn't about stock price and shareholder (0+ / 0-)

      profits. This is about whether or not Americans should be entitled to do relatively simple jobs that someone else somewhere else in the world can and will do for much lower compensation.

      We did have it better once because we built up our domestic economy, often at the expense of other economies around the world. And we didn't let foreign people participate in our system, often because the costs of trade were too great, but those costs aren't there anymore. The world is becoming one market - one economic system in which everyone is on equal footing. If Americans want to maintain their place at the top of the economic pyramid, they need to provide services the world desires above all others. And manufacturing work isn't that. Nor is being a waiter or receptionist or retail associate or cashier or most of the common jobs Americans now perform.

      America's chance for remaining more prosperous than other countries is to leverage our wealth to achieve high levels of applicable education. That's our shot at a sustainable competitive advantage in the world. And individuals who don't take advantage of our educational systems will see the jobs they do become commodity labor, where the lowest wage wins. It's not pleasant, but this is the cold economics of it.

      •  take advantage of our educational system? (2+ / 0-)
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        IreGyre, Saint Jimmy

        The one with skyrocketing tuition that requires people to bury themselves in debt before they even get out into the workforce? We need to see some serious reforms to our educational system before "taking advantage of education" because a serious option for a lot of people.

        Even a degree is not a gaurantee of a well paying job in these times. It is disturbingly easy to find case after case of people who followed the rules, went to college after high school, took on the debt because conventional wisdom said a high paying job would be waiting for them on the other side. But there wasn't, not they are underemployed and crushed under debt. this is far too common.

        And don't even THINK about getting back into school if you'v been out in the world for awhile and had to take on non-educational debt.

        I understand what you are saying with regard to labor as a commodity, and I believe you have hilighted the problem in labeling it AS a commodity. Should not the workers who generate the wealth be entitled to a fair share of the companies earnings? We used to think so. in the 50s and 60s, CEO pay was only about 30 times average employee pay. now it has ballooned to 300 times employee pay, while employees have seen thier wages stagnate. Profits are being made, The people doing the work just aren't seeing thier cut. Specificaly because labor is now seen as a comidity. That needs to be corrected somehow. There are several interesting solutions in this thread as to how to encourage that.

        "There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible." - Henry Ford

        by sixeight120bpm on Wed Jan 11, 2012 at 12:31:17 PM PST

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        •  Yes, the one with rising tuition (0+ / 0-)

          And you don't have to bury yourself with debt. You can go to the best state school for like $12k a year (in my state) plus housing, which you can probably pay for with a part-time job. You can easily leave undergrad with less than $60k in student debt. At 6.8% interest (which is higher than you'll probably get), you're talking about $400/month in payments. If you get an art degree, that's probably not worth it, but if you get an engineering degree, that's absolutely worth it.

          As for going back to school, I'm in graduate school right now. With an auto loan and a mortgage. Yeah, you have to be responsible with your finances to get people to lend to you, but that should be something we're doing anyway.

          Why should people doing the same job over time have their real wages rise? That makes no sense to me. The profits go to the people who take risks and innovate or engineer changes in the way we do things that make them better in some way. The guy loading the same potato chip bags into the same box shouldn't see his real wages increase over time. It's the same job. The price of that labor is at real equilibrium. The only labor seen as a commodity is the labor anyone can do. The stuff that's hard to do is where the profits are going. And for the most part, that's how it should be. Now, I would argue that C-level compensation is probably higher than is needed for incentivizing, and probably more compensation should go to mid- or senior level operations managers or the ownership stake, but that's another discussion.

          •  Wow. How naive. How old are you? 12? (0+ / 0-)

            These are the days of swine and poses.

            by Saint Jimmy on Wed Jan 11, 2012 at 06:41:21 PM PST

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            •  nah, he's not 12 (0+ / 0-)

              he's an academic. the world looks very different from those lofty heights. bbrown is clearly intelligent and well informed, but I think his arguments are based on theory, rather than actual experience living in the recession. Its easy to lose touch when you're not in the muck. You forget how hard it can be to get out.

              "There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible." - Henry Ford

              by sixeight120bpm on Wed Jan 11, 2012 at 07:26:27 PM PST

              [ Parent ]

            •  Care to actually refute or argue againt any of it, (0+ / 0-)

              rather than the tried-and-true ad hominem?

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