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    Default weekend commentary - Even the NY Times is finally discussing ...


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    God/dess Deogol's Avatar
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    Default Re: weekend commentary - Even the NY Times is finally discussing ...

    So many people are recognizing the pay check doesn't seem to go as far as it once did.

    Now and then some of the old timer's post "Where did the whales go?" This news article answers that question in part. At the end of the month and people divy up the paycheck amongst the $100 cable bill, the $100 telephone/DSL bill, the gas charged on the credit card from the month previous...

    The other answer is - people simply don't make as much money as they once did 20 years ago.

    In the 70's one could walk out of high school and get a living wage job in a factory. These days one is lucky to make it into "Wally World" if it hasn't driven out the other retail stores.

    These days, high income and high education work is being shipped off shores too. Software engineering (though I am seeing some of that come back), computer manufacturing, radiological analysis, research lawyers, junior accounting - all slowly going off to China and India these days.

    Add to that, people these days carry a LOT MORE DEBT than they use to then too. People end up in college a lot longer (the so called "five or six year plan") and then have student loans to cover for the next six or eight years later.

    Don't get me started on people living off of their homes.

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    Banned Melonie's Avatar
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    Default Re: weekend commentary - Even the NY Times is finally discussing ...

    These days one is lucky to make it into "Wally World" if it hasn't driven out the other retail stores.
    ... well in the case of Chicago's new 'mandatory wage' of $10 an hour for 'big box retailer' employees, as referred to in the Times story, 'Wally World" jobs will no longer be an option either within the Chicago city limits. Neither will "Wally World's" discount food, clothing and merchandise pricing, unless city residents want to travel to the nearest "Wally World" in the suburbs. Thus, as was also pointed out in the Times story, voting for the $10 an hour 'mandatory wage' will have the effect of turning $7 an hour jobs that do exist into $10 an hour jobs that don't exist. This will increase unemployment within the city and at the same time raise prices for food, clothing and merchandise which an increasing number of unemployed city residents must now purchase at higher prices from small mom&pop retailers who are exempt from the $10 an hour law.

    In the 70's one could walk out of high school and get a living wage job in a factory ........ high income and high education work is being shipped off shores too. Software engineering (though I am seeing some of that come back), computer manufacturing, radiological analysis, research lawyers, junior accounting - all slowly going off to China and India these days
    At least part of the reason for this is the high (and rapidly increasing) costs of SSI/medicare/medicaid taxes, unemployment insurance and workmen's comp premiums etc. which are charged to employers in the USA but not in China or India to pay for Social Security, medicare&medicaid, welfare checks, unemployment checks & workmen's comp benefits to Americans. Thus by instituting these programs and making benefits so 'generous' vs other parts of the world, and by funding these programs through high taxes on employers and employees alike, the US gov't guaranteed that US labor costs would be much higher than in other parts of the world. Employers then simply began to react on a national scale the same way that 'Wally World' will react on a Chicago city limits scale ... if you escape the high tax/cost jurisdiction you can remain competitive and profitable, and if you stay and pay the high taxes/costs your competitiveness disappears (along with the American jobs your business formerly provided).

    About the only ways that any gov't can make an economy with gov't mandated high taxes / costs / wages sustainable is if it can cut off all transactions with other jurisdictions that it cannot similarly control (i.e. tariffs and trade barriers), or if it can successfully convince other jurisdictions to enact the same high taxes / costs / wages so that the competitive advantage of crossing the border is reduced (i.e. the EU). America has done neither, and in terms of NAFTA and WTO has actually made it illegal to do so in the future.

    some observations 'looking from the outside in' -->

    (snip)"For the fact is that the rich don't have enough money to pay for all of the things that are being demanded from the State [i.e. social benefit programs - sic]. We can see this quite clearly in the US in the way that things like Social Security and Medicare are funded. They are not paid for out of general tax revenues, not funded by the rich paying more than the poor. Quite the contrary, the poor pay more as a portion of their income for them than do the very rich...I doubt whether Bill Gates even notices his FICA deductions while someone on $10 an hour most definitely does, especially as it's the only tax he is paying."(snip)

    Add to that, people these days carry a LOT MORE DEBT than they use to then too ...
    IMHO this stems from two basic factors - lack of 'real world' financial education in the USA outside of a college environment, which allows Americans to be pursuaded into financial commitments without fully understanding their risk factors and downside potential - and an 'entitlement' philosophy among young Americans that their standard of living will always be better than that which their parents enjoyed. Unfortunately, since the 1960's or so, the employer dollar based productivity of American workers has generally not increased and has fallen dramatically in many industries, providing employer incentive to invest capital in automation instead of people within the US, and providing employer incentive to outsource for cheaper labor outside the US when the process can't be easily automated.

    Thus the only way that many Americans today can manage to purchase the things they feel they are 'entitled to' i.e. a house, a car, a widescreen TV, a college education for their children, if they can no longer generate enough after-tax cash flow from available jobs given current employer/ employee tax rates to finance these things directly, is to borrow the money today and worry about how to pay for it tomorrow ! Unfortunately, with rising interest rates and a turnaround in creditworthiness standards on the part of gov't and private financial institutions alike, tomorrow appears to have finally arrived.
    ~
    ~
    Last edited by Melonie; 08-05-2006 at 08:48 AM.

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    Default Re: weekend commentary - Even the NY Times is finally discussing ...

    Quote Originally Posted by Melonie
    ...About the only ways that any gov't can make an economy with gov't mandated high taxes / costs / wages sustainable is if it can cut off all transactions with other jurisdictions that it cannot similarly control (i.e. tariffs and trade barriers), or if it can successfully convince other jurisdictions to enact the same high taxes / costs / wages so that the competitive advantage of crossing the border is reduced (i.e. the EU). America has done neither, and in terms of NAFTA and WTO has actually made it illegal to do so in the future...
    Perhaps I'm completely off-topic here, but I actually believe this is related, if only tangentially, to the above. I heard an interview done with the attorney who has this website one or two months ago. It's an interesting premise, but I doubt the state of California wants any legal precedent of this kind to be set.

    In the interview, and I'm not sure iirc, I think he stated one of the businesses he was suing on behalf of had been owned by one woman...but her business was unable to compete with those companies which hired illegal immigrants. From what I understand, this attorney will be suing using his own money to file the first few test cases. He will be suing for economic harm caused by unfair business practices, and he will be using RICO, to provide for treble potential damages. Here is his website:

    http://illegalemployers.org/index2.html

    I tend to view this as his attempt at forcing certain laws to be obeyed - primarily by becoming something of a "private enforcement agency" regarding those laws which neither the state and/or federal governments actually want to enforce.
    Last edited by PhaedrusZ; 08-05-2006 at 01:15 PM. Reason: typos

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    God/dess Deogol's Avatar
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    Default Re: weekend commentary - Even the NY Times is finally discussing ...

    ^^^ Good idea. Lotta fat pockets out there using illegal labor.

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