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 We've all heard the economists and "serious people" telling us how awful the minimum wage law is, and how bad it is for the economy. What we haven't heard much is the real world economic consequences of very low wages.

  I'm not talking tragic individual tales of people simply not making it (which are normally portrayed by "serious people" as either personal failures or unavoidable "collateral damage" in a capitalist economy).
   What I am talking about is what widespread low wages do to a nation's economy.

  But first you have to understand what the code words mean.

 The first code word you have to understand is "competitive", as in competitive wages.

 "Retailing is the most competitive industry out there, and we do pay competitive wages," Duke told Doctoroff, according to Business Insider,
 The Duke in this quote is CEO Mike Duke of Walmart. Competitive is a good sounding word, but what does it mean in this context?
   To understand that all you need to do is look at this article title in Forbes magazine. Taiwan Becomes More Competitive As Wages Go Down.

  Simply put "competitive" means "low wages" when you are talking to economists. So now you won't be confused.

When the Serious People get what they want

  Supposedly, when a nation becomes "competitive" there are lots of jobs, everyone is working, and life is good.
   But is that true?

  I work in the Peace Corps in the Dominican Republic, so unlike a lot of people in The States, I keep an eye out for Dominican news. Just a few days ago, the IMF released a report that I found interesting.

 International Monetary Fund (IMF) specialists suggest higher wages than the alternative income in the Dominican Republic, to motivate people to join the workforce, and take measures to raise productivity "to make jobs attractive to potential employees."
 Imagine that! Higher wages to increase the number of people in the workforce. The exact opposite conclusion to what the "serious people" are telling us in The States.
   You don't hear much from economists in America about the problem of labor force participation, but you should.

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  If people are dropping out of the labor force then they aren't increasing the GDP, they aren't paying taxes, they aren't increasing productivity. It's a huge problem. It's even a bigger problem than people counted as unemployed, but something few are talking about.
   And why would people be dropping out of the workforce? Could "competitive" wages have something to do with it?

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   If "competitive" wages are the reason people aren't entering the labor force in the Dominican Republic, why wouldn't that also be true for The States?  The IMF seems to think so.

 The policy challenge is clear: how to entice those workers into jobs? More specifically, how can their market productivity be increased so that they command higher wages, which would in turn raise incentives for labor force participation?
 Productivity has long been the measuring stick for efficiency in the labor force, while labor unions have been demonized by economists and "serious people" for being an enemy of productivity. In fact, the opposite is true.
 There is a common myth that unions hurt productivity, supposedly because they impose work rules that make their employers less efficient. The evidence from industrial relations studies does not support this myth. A broad study of the economics literature found “a positive association [of unions on productivity] is established for the United States in general and for U.S. manufacturing” in particular (Doucouliagos and Laroche 2003, 1).1 And as the second chart below reveals, international comparisons suggest that high productivity and very high union density are entirely compatible.
    The dramatic drop in unionization in the United States from 1979 to 2005 did not lead to faster productivity growth than in the seven largest European countries with union density greater than 60%. In fact, those countries’ average annual labor productivity growth of 1.7% equaled productivity growth in the United States. Output per hour worked is higher in the Netherlands, France, and Belgium,2 where more than 80% of employees have union contracts (compared to the United States’ 12% unionization).
    If Congress is concerned about protecting middle-class incomes, it should pass measures to facilitate union organizing and collective bargaining coverage, including the Employee Free Choice Act. There is no reason to fear that higher rates of unionization will impede efficiency or labor productivity.
 So unions and their demands for higher wages don't hurt productivity, but they do hurt "competitiveness" (now that you know what "competitive" actually means).

   I should note here that people in the Dominican Republic without work have one advantage on Americans: there is a sense of community here. People take care of one another. They want to share what little they have.
   Thus it is very rare to see homeless people in the DR, even if the homes are just shacks.
    There is none of this worship of the "rugged individual" that is so common in America.

 If you go further into this report, you find more similarities to the situation in the United States.

In summary, making workers “more productive” by raising education levels may not be a solution, at least in the short to medium term. Moreover, while raising education levels is certainly important, recent increases have not been associated with relatively higher employment levels in high-productivity industries, as better educated workers have been absorbed mostly by low-skill occupations and sectors.
 The solution to unemployment and "competitive" wages that politicians normally pitch is more job training and education. However, recent college graduates are discovering that they could be trained for jobs that simply don't exist.
 About 1.5 million, or 53.6 percent, of bachelor's degree-holders under the age of 25 last year were jobless or underemployed, the highest share in at least 11 years.
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  There are other similarities in this report as well.

 The share of selfemployment in total employment increased from 34 percent in 1991 to about 43 percent in 2011, leading to measured increases in informality under a “productivity-based” definition (Figure 13).
 I've seen what is known as "self-employed" in the DR (ej. motoconcho drivers), and it pays almost nothing. However, it does help mask just how high the unemployment rate is here.
   Speaking of which, it makes one wonder how much of this is true in America.

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  Finally, there is one other similarity worth noting.

 Earnings of high-skill workers grew fast in the late 1990s, but have stagnated since 2003 after a sharp downward adjustment during the banking crisis; a puzzling phenomenon that deserves further future investigation
For those of you who are unfamiliar with the events, Banco Intercontinental went bust in 2003 after the CEOs committed massive fraud. Instead of letting the capitalist system flush things out, all the investors were bailed out at taxpayer expense, and no one of importance ever went to jail. Since then wages in the economy have stagnated despite GDP growth.
   Does this sound vaguely familiar to you? It should. The economists and "serious people" suggested the same thing for us.
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Comment Preferences

  •  There you go again. (18+ / 0-)

    Confusing pragmatists and other "serious people" with the kind of "realists" who base their ideas on, you know, "reality".

    The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

    by Words In Action on Sun Feb 17, 2013 at 08:12:11 AM PST

  •  In a nutshell: (17+ / 0-)
    Raising the minimum wage reduces the welfare rolls.
    So simple, even a conservative could understand it.

    "What could BPossibly go wrong??" -RLMiller "God is just pretend." - eru

    by nosleep4u on Sun Feb 17, 2013 at 08:18:41 AM PST

  •  It makes sense (20+ / 0-)

    When we are closer to full employment at good living wages, people contribute more to the govt. in the form of taxes and more to the economy in the form of disposable income.

    The more wages are suppressed and the more that work is outsourced, the less money there is available to enter the economic stream thus further depressing the economy.  This is also why austerity has had such a tragic effect on the economies of the countries in which it has been imposed.

    Further, the three greatest contributors to the significant rise in the national debt have been the Bush tax cuts, the two unfunded wars, and the current despressed economy which is largely characterized by both unemployment and under employment.  If we get people back to work at full time, good paying jobs, then we have done much to solve the so-called "debt crisis."

    "Growing up is for those who don't have the guts not to. Grow wise, grow loving, grow compassionate, but why grow up?" - Fiddlegirl

    by gulfgal98 on Sun Feb 17, 2013 at 08:26:30 AM PST

    •  PS (13+ / 0-)

      Keep these diaries coming.  Your diaries are always very well sourced and equally well written.  Tipped and recommended, as always.

      "Growing up is for those who don't have the guts not to. Grow wise, grow loving, grow compassionate, but why grow up?" - Fiddlegirl

      by gulfgal98 on Sun Feb 17, 2013 at 08:28:47 AM PST

      [ Parent ]

    •  There Isn't a Nation Here. This is a Region, (8+ / 0-)

      a location for parts of the global economy. Economic efficiency is the goal, not anything related to groups of occupants here or there.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Sun Feb 17, 2013 at 08:33:35 AM PST

      [ Parent ]

      •  Understood (7+ / 0-)

        Globalism has destroyed national boundaries, and austerity continues to exaccerbate it.  However, govts. do have means by which to recover some of our economy lost to cheaper wages in third world countries.  But depressing wages here is not one of them. It is insane that many of the most profitable companies are not only not paying any taxes here but some are actually receiving tax rebates while our own citizens are struggling. Perhaps it is time to look at ways the govt. can recover some of the lost revenues from global corporations and promote jobs back here.

        "Growing up is for those who don't have the guts not to. Grow wise, grow loving, grow compassionate, but why grow up?" - Fiddlegirl

        by gulfgal98 on Sun Feb 17, 2013 at 09:35:13 AM PST

        [ Parent ]

        •  Re (0+ / 0-)
          It is insane that many of the most profitable companies are not only not paying any taxes here but some are actually receiving tax rebates while our own citizens are struggling.
          All of their employees pay federal, state, and local taxes, do they not?

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sun Feb 17, 2013 at 10:47:59 AM PST

          [ Parent ]

          •  You hit the nail on the head! An ordinary worker (7+ / 0-)

            pays, and does not get subsidized; a company pays nothing, destroys jobs and communities (and thus taxpayers) here and gets subsidized to do so, plus laws to turn what an ordinary person would find taxable income into non-taxable.

            You couldn't have said it better.


            We live in a nation where doctors destroy health; lawyers, justice; universities, knowledge; governments, freedom; the press, information; religion, morals; and our banks destroy the economy. -- Chris Hedges

            by Jim P on Sun Feb 17, 2013 at 11:26:09 AM PST

            [ Parent ]

            •  Huh (0+ / 0-)

              The corporation ultimately pays all the taxes, whether directly or indirectly.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sun Feb 17, 2013 at 11:37:51 AM PST

              [ Parent ]

              •  Huh. The Corporation is One Person. (4+ / 0-)
                Recommended by:
                gjohnsit, gulfgal98, badger, elwior

                The employees are other persons. Those persons pay taxes (until their jobs are off-shored), but the Corporate Person pays diddly, and gets subsidies to kill of the taxpaying workers.

                If you want to say the employees have nothing at all to do with generating the money by which the Corporation pays them wages... well, you've created a startlingly original economic theory. But then one wonders why the Corporation bothers with employees at all since the money just magically appears in their accounts.


                We live in a nation where doctors destroy health; lawyers, justice; universities, knowledge; governments, freedom; the press, information; religion, morals; and our banks destroy the economy. -- Chris Hedges

                by Jim P on Sun Feb 17, 2013 at 11:43:13 AM PST

                [ Parent ]

                •  And then, what when robots replace workers, (1+ / 0-)
                  Recommended by:
                  lostinamerica

                  as is a trend endorsed recently by so many in the business community. They'll pay the robots nothing, and still the Corporations won't have to pay taxes?

                  Because...?


                  We live in a nation where doctors destroy health; lawyers, justice; universities, knowledge; governments, freedom; the press, information; religion, morals; and our banks destroy the economy. -- Chris Hedges

                  by Jim P on Sun Feb 17, 2013 at 12:44:45 PM PST

                  [ Parent ]

              •  The corporations and the employees are (6+ / 0-)

                different entities.
                   If you've ever had your wages cut while the companies profits went up then you would understand.

                ¡Cállate o despertarás la izquierda! - protest sign in Spain

                by gjohnsit on Sun Feb 17, 2013 at 11:46:44 AM PST

                [ Parent ]

                •  Doesn't matter (0+ / 0-)

                  All money, from wages to taxes, comes from your local corporation. Without it you don't have a government, wages, education, health care, or anything.

                  (-5.50,-6.67): Left Libertarian
                  Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                  by Sparhawk on Sun Feb 17, 2013 at 12:03:44 PM PST

                  [ Parent ]

                  •  Ah!! I get it - employees are just leaches upon (3+ / 0-)
                    Recommended by:
                    gjohnsit, Jim P, lostinamerica

                    the corporations because we expect to be paid for our labor.  It is with those wages we demand that taxes are paid, therefore the corporations are actually paying the taxes not us lowly employees.  The wages they pay us is in fact the tax they pay.

                    •  Re (0+ / 0-)

                      Employees aren't leeches. Why would you think I think that? You do a job, and are paid to do that job. It's fair and a good deal for both parties.

                      It is with those wages we demand that taxes are paid, therefore the corporations are actually paying the taxes not us lowly employees.
                      How much in taxes would you be able to pay without your "friendly" neighborhood corporation available? The answer is zero. The corporation is the source of all funds to a locality, whether it directly pays taxes or it pays salaries that are taxed.

                      (-5.50,-6.67): Left Libertarian
                      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                      by Sparhawk on Sun Feb 17, 2013 at 04:14:24 PM PST

                      [ Parent ]

                      •  So, we gotta do whatever the corps say to do or (1+ / 0-)
                        Recommended by:
                        lostinamerica

                        die??  Accept wages that won't meet our needs??  Accept working conditions that would be harmful to our health??  Not able to move to better jobs because we owe company x for the 'loans' they gave us to shop in their company run grocery store, or care at their medical clinic??  That's a dictatorship of unelected organizations.  I'd rather go back to subsistence farming and barter than live in a 'company' town, cause their history isn't all that pretty.

                  •  Excuse me?!? (2+ / 0-)
                    Recommended by:
                    Azazello, Jim P

                    First of all, corporate employment does not equal total employment. Not even close. More people are employed in small business, large private businesses, or self-employed, than are employed by corporations.
                       So your statement by just that is false.

                     Secondly, even if your statement was anywhere close to being true (and it isn't), you would still be turning most economic theories about the source of wealth upon its head.
                       Basically you are embracing the most right-wing economic theories.

                    ¡Cállate o despertarás la izquierda! - protest sign in Spain

                    by gjohnsit on Sun Feb 17, 2013 at 01:36:07 PM PST

                    [ Parent ]

                    •  Re (1+ / 0-)
                      Recommended by:
                      MGross
                      First of all, corporate employment does not equal total employment. Not even close. More people are employed in small business, large private businesses, or self-employed, than are employed by corporations.
                      "Small" business is primarily restaurants, caterers, wedding services, etc that subsist off the presence of a large corporation in the area.

                      Your other points are true, but irrelevant. All that matters is: who is exporting goods and services out of your locality? The export business is the thing that drives everything. It might be, on occasion, someone self-employed (telecommuting is big), but at the end of the day, the export businesses (of whatever kind they are) are what drives your local economy. If they go away, your economy vanishes.

                      Secondly, even if your statement was anywhere close to being true (and it isn't), you would still be turning most economic theories about the source of wealth upon its head.
                      Uhh, how's that? Wealth is made by people who grow, mine, or manufacture something. Everything else is ancillary activity. For a small town, it's typically going to be 1-2 factories that power the whole thing. It's your export business that matters. Nothing else.

                      You can not grow an economy on health care, education, infrastructure spending, or any such activity. Those activities may be necessary, but they are support activities that help drive the real wealth creation: making things of value for which other people are willing to trade other items of value.

                      (-5.50,-6.67): Left Libertarian
                      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                      by Sparhawk on Sun Feb 17, 2013 at 04:22:43 PM PST

                      [ Parent ]

                  •  That's insane. (2+ / 0-)
                    Recommended by:
                    gjohnsit, sunny skies

                    Whenever there are people there is government of some sort, whether or not there are corporations. Corporations are creations of the government, not the other way around. In the first years of this country there were only farmers and small businesses, corporations were created for specific projects and did not live forever. You may worship them as benevolent societies and the providers of all that is good,
                    I do not.

                    The free market is not the solution, the free market is the problem.

                    by Azazello on Sun Feb 17, 2013 at 01:44:04 PM PST

                    [ Parent ]

                    •  Re (1+ / 0-)
                      Recommended by:
                      Azazello

                      You're being hung up on my use of the word "corporation". Maybe I should substitute "wealth generating entity". A farmer, machinist, all count.

                      What matters is that your export business is everything. That's what runs your town, keeps the lights on, food on the table, local government and schools running, etc.

                      Whether it's a big corporation or a farm (or farm collective), or a mine or what have you, it's the stuff that you export that matters. No export means no town.

                      (-5.50,-6.67): Left Libertarian
                      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                      by Sparhawk on Sun Feb 17, 2013 at 04:26:40 PM PST

                      [ Parent ]

                  •  That sure is a viewpoint (2+ / 0-)
                    Recommended by:
                    lostinamerica, gjohnsit

                    makes me wonder how humanity survived before the rise of the corporation. Note that I'm not asking for a value judgment on "how well" society ran or whether ultra-wealthy folks were "happier back then." Your statement, that without local corporations "you don't have...anything," is so utterly ridiculous that I am actually glad you made it.

                    Thanks for a great afternoon's entertainment. The dawn of history up through the Dutch East India Company thanks you too.

            •  Our governmental entities are all corporations. (2+ / 0-)
              Recommended by:
              elwior, side pocket

              Thus the membership has natural sympathies with private corporations. Not to mention that private corporations are creatures (by charter) of the public corporations.
              Because the members of the public corporations are precluded from engaging in certain actions (self-serving, power enhancing), they have grown accustomed to relying on the private corporations to do favors for them, including promoting their tenure in office.
              It is a dishonest stance and they need to be called on it. We hire them to work for us, for them to cater to cronies is corrupt.
              The Tea Party got that right. What they got wrong was in which direction the force field flows.

              We organize governments to deliver services and prevent abuse.

              by hannah on Sun Feb 17, 2013 at 11:40:08 AM PST

              [ Parent ]

          •  So we socialize the tax (0+ / 0-)

            but privatize the tax rebate now?

  •  And shared. (4+ / 0-)
    Recommended by:
    gjohnsit, ozsea1, elwior, gulfgal98

    "Let us never forget that doing the impossible is the history of this nation....It's how we are as Americans...It's how this country was built"- Michelle Obama

    by blueoregon on Sun Feb 17, 2013 at 08:33:25 AM PST

  •  One form of self-employed is the hidden economy (13+ / 0-)

    When wages in the open labor market become too low it will tend to push some into working in a shadow economy.

    One where they get money in hand for labor performed. With the wages never reported, tracked.

    This is only worth the while of participants because, in the short run, they might net more per hour than would come from available low $ minimum wage work. In the longer run this is bad for such shadow self-employment, less set aside through FICA and similar taxes for retirement, disability.

    It is also bad for society as a whole in both the short and longer run. Lost revenues, a heavily marginalized segment of the labor force and a tendency to skirt full economic participation, all in the name of survival.

    No blame is assigned by me on such self-employed, moonlighters and the like - but the corrosive effect on them and society of their path to hand-to-mouth survival is real. Just ask Italy.

    •  Factor in the erosion of respect for (5+ / 0-)

      authority and how that undermines a nation as well.


      We live in a nation where doctors destroy health; lawyers, justice; universities, knowledge; governments, freedom; the press, information; religion, morals; and our banks destroy the economy. -- Chris Hedges

      by Jim P on Sun Feb 17, 2013 at 11:27:33 AM PST

      [ Parent ]

    •  Yep. (0+ / 0-)

      People wonder why anyone would go to work in illegal trade (i.e. selling drugs), but when the other option is a dead-end, minimum-wage job, it's not difficult to figure out why it happens.

      28, white male, TX-26 (current), TN-09 (born), TN-08 (where parents live now)

      by TDDVandy on Sun Feb 17, 2013 at 12:16:04 PM PST

      [ Parent ]

      •  Many of the illegal "trades" (0+ / 0-)

        drug dealing, illegal betting, etc. are actually the "purest" capitlaist enterprises out there -total devotion to risk/reward, no "dependence" on government subsidies, pure profit motive, etc., external "philanthropy" directed to secure corporate position, ruthless devotion to protection of market share and profits

        Patriotism is supporting your country all the time, and your government when it deserves it - Samuel Clemens

        by tjlord on Sun Feb 17, 2013 at 01:38:21 PM PST

        [ Parent ]

    •  Isn't that a symptom of too high a min wage? (0+ / 0-)
      One where they get money in hand for labor performed. With the wages never reported, tracked.
      This seems like it would be more related to a higher minimum wage (It's illegal to offer under minimum wage) or due to the cost of entitlement deductions (SS, Medicare, etc) than because wages weren't high enough.
  •  The High Cost of Low Wages (9+ / 0-)

    This is a bit dated. It was published in the Harvard Business Review back in 2006, but I think it is still valid.

    In 2006, Costco average wage was $17 per hour and Wal-Mart's average was $10.11 per hour. Sam's Club does not publish average wages, but Costco generated $21,805 in U.S. operating profit per hourly employee, compared with $11,615 at Sam’s Club (owned by Wal-Mart). Their employees know the stock and care about their jobs. They stay there for years. They can afford to buy the stuff they sell.

    Costco’s practices are clearly more expensive, but they have an offsetting cost-containment effect: Turnover is unusually low, at 17% overall and just 6% after one year’s employment. In contrast, turnover at Wal-Mart is 44% a year, close to the industry average. In skilled and semi-skilled jobs, the fully loaded cost of replacing a worker who leaves (excluding lost productivity) is typically 1.5 to 2.5 times the worker’s annual salary. To be conservative, let’s assume that the total cost of replacing an hourly employee at Costco or Sam’s Club is only 60% of his or her annual salary. If a Costco employee quits, the cost of replacing him or her is therefore $21,216. If a Sam’s Club employee leaves, the cost is $12,617. At first glance, it may seem that the low-wage approach at Sam’s Club would result in lower turnover costs. But if its turnover rate is the same as Wal-Mart’s, Sam’s Club loses more than twice as many people as Costco does: 44% versus 17%. By this calculation, the total annual cost to Costco of employee churn is $244 million, whereas the total annual cost to Sam’s Club is $612 million. That’s $5,274 per Sam’s Club employee, versus $3,628 per Costco employee.

    In return for its generous wages and benefits, Costco gets one of the most loyal and productive workforces in all of retailing, and, probably not coincidentally, the lowest shrinkage (employee theft) figures in the industry.

    It is possible to read the history of this country as one long struggle to extend the liberties established in our Constitution to everyone in America. - Molly Ivins

    by se portland on Sun Feb 17, 2013 at 09:30:50 AM PST

  •  This seems way too simplistic: (2+ / 0-)
    Recommended by:
    Sparhawk, elwior
    Simply put "competitive" means "low wages" when you are talking to economists. So now you won't be confused.
    Competition is a duality. In manufacturing, for example, there is competition for labor, raw materials, sales, and logistics, among others. It's perfectly conceivable that obtaining a competitive advantage in one or the other of these might drive up the costs in that area, but result in an overall competitive advantage for the product.

    If there is a surplus of labor, it hardly seems surprising that labor costs would go down as some will be willing to work for less than they might otherwise.

    Subsidies have a role as well. Various assistance programs subsidize labor, price supports subsidize raw materials, tax credits subsidize sales (e.g. electric vehicles), and so on. It seems a little artificial not to include them in the conversation.

    •  I have a theory that a lot of... (0+ / 0-)

      ...our economic issues are population issues in disguise.

      The bad employment and wage situation in the US is a screaming neon sign that we have more people than we need. A smaller population would result in higher wages, because there would not be all the extra desperate people to drive wages down, particularly for unskilled or semi-skilled workers.

      Additionally, there would be far less competition for scarce medical and education resources, and far more payoff for investments in these services.

      Of course, the comment is purely academic at this point: there is no practical way to take advantage of the theory even if true, other than that people perhaps should avoid having many children, and should heavily invest in the education of the ones that they do have. In the meantime, we have to look at how best to care for the current population.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sun Feb 17, 2013 at 11:09:14 AM PST

      [ Parent ]

      •  I don't agree at all (4+ / 0-)
        Recommended by:
        badger, gulfgal98, Azazello, WheninRome

        More population also means more consumer demand.
        In fact, any nation not currently undergoing a civil war, but with high birth rates, usually has fairly high economic growth rates.

          The problem happens when the manufacturing sector gets shipped overseas and the country stops making anything.

        ¡Cállate o despertarás la izquierda! - protest sign in Spain

        by gjohnsit on Sun Feb 17, 2013 at 11:51:47 AM PST

        [ Parent ]

        •  Disagree... i think consumer demand is worthless (0+ / 0-)

          Consumption is what you do after you've produced something of value. More mouths to feed that don't produce much cannot help you.

          Economic strength comes from making stuff, not consuming stuff.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sun Feb 17, 2013 at 11:55:53 AM PST

          [ Parent ]

          •  Then you reject Keynesiasm (2+ / 0-)
            Recommended by:
            gulfgal98, lostinamerica

            You reject his economic law that demand creates supply.

            ¡Cállate o despertarás la izquierda! - protest sign in Spain

            by gjohnsit on Sun Feb 17, 2013 at 11:58:51 AM PST

            [ Parent ]

            •   I guess so (0+ / 0-)

              Keynesianism is a bad joke that requires you to believe patently ridiculous things.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sun Feb 17, 2013 at 12:05:23 PM PST

              [ Parent ]

              •  Such as: (0+ / 0-)

                It's better to have more mouths to feed than less, especially if those mouths don't produce anything of value.

                (-5.50,-6.67): Left Libertarian
                Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                by Sparhawk on Sun Feb 17, 2013 at 12:18:11 PM PST

                [ Parent ]

                •  So we should just 'dispose' of those that can't (1+ / 0-)
                  Recommended by:
                  lostinamerica

                  produce for the corporations??

                  •  Why would you think I think that (0+ / 0-)

                    I'm talking about the math here.

                    (-5.50,-6.67): Left Libertarian
                    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                    by Sparhawk on Sun Feb 17, 2013 at 12:34:42 PM PST

                    [ Parent ]

                    •  asdf (2+ / 0-)
                      Recommended by:
                      WheninRome, lostinamerica

                      "Keynesianism is a bad joke that requires you to believe patently ridiculous things."

                      "Such as:"

                      "It's better to have more mouths to feed than less, especially if those mouths don't produce anything of value."

                      That says if you can't produce, you have no reason to live.

                      •  No, it doesn't (0+ / 0-)

                        The ethics of how we deal with people who cannot or will not produce are not relevant here. There are many possible solutions depending on your political perspective. However, the tautology remains true: those who cannot produce, cannot produce.

                        (-5.50,-6.67): Left Libertarian
                        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                        by Sparhawk on Sun Feb 17, 2013 at 12:53:24 PM PST

                        [ Parent ]

                    •  No, you aren't (1+ / 0-)
                      Recommended by:
                      lostinamerica
                      I'm talking about the math here
                       Keynes used math. Lots of it. You are using opinions here.

                      ¡Cállate o despertarás la izquierda! - protest sign in Spain

                      by gjohnsit on Sun Feb 17, 2013 at 01:42:55 PM PST

                      [ Parent ]

                      •  And yet (0+ / 0-)

                        All this math requires you at the end of the day to believe patently ridiculous things, like having a lot of consumers around who don't produce is a good thing, or massive budget deficits are good, and so on.

                        It sounds good because it's a justification to use government resources to redirect wealth to the poor and middle class. Just like rich people think tax cuts for the 'job creators' is a good idea.

                        Everyone has their myths to justify directing resources to themselves.

                        (-5.50,-6.67): Left Libertarian
                        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                        by Sparhawk on Sun Feb 17, 2013 at 02:09:19 PM PST

                        [ Parent ]

                        •  Which just proves you don't know Keynes (1+ / 0-)
                          Recommended by:
                          lostinamerica
                          All this math requires you at the end of the day to believe patently ridiculous things, like having a lot of consumers around who don't produce is a good thing, or massive budget deficits are good, and so on.
                           Neither of those things are what Keynes said/proved.
                             What you've done is read what a misinformed or partially informed right-winger gave as an opinion.

                          ¡Cállate o despertarás la izquierda! - protest sign in Spain

                          by gjohnsit on Sun Feb 17, 2013 at 02:19:58 PM PST

                          [ Parent ]

                          •  These are all my own opinions (0+ / 0-)

                            They are no more influenced by 'right wingers' than yours are influenced by 'left wingers'. Like I said, I don't buy Keynesian theories because sooner or later you're asked to believe ridiculous things supported by (IMO) questionable math.

                            (-5.50,-6.67): Left Libertarian
                            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                            by Sparhawk on Sun Feb 17, 2013 at 02:37:23 PM PST

                            [ Parent ]

                          •  More is the pity (1+ / 0-)
                            Recommended by:
                            lostinamerica

                            I was giving you an out. Because you are making statements, statements that right-wingers love to make, that are simply untrue.

                            ¡Cállate o despertarás la izquierda! - protest sign in Spain

                            by gjohnsit on Sun Feb 17, 2013 at 02:52:05 PM PST

                            [ Parent ]

                          •  I don't need an out (0+ / 0-)

                            My opinions are obvious common sense, whereas when Keynesian ideas are put under the microscope they devolve into gobbledygook and 'math'.

                            And again, this has little to do with political positions (right vs left). You can be a left winger who believes that Keynesian economics is voodoo. It's not logically inconsistent.

                            (-5.50,-6.67): Left Libertarian
                            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                            by Sparhawk on Sun Feb 17, 2013 at 02:58:09 PM PST

                            [ Parent ]

              •  What have you been reading? (3+ / 0-)
                Recommended by:
                WheninRome, Azazello, lostinamerica

                It's seems obvious that you've been reading too many right-wing economic sites, and not enough basic economic theory.
                   Keynes was a genius. Most of his theories are undeniable facts put into easy to understand math.
                Most of the negative stuff the right-wingers attribute to him, are actually bastardizations of his theories.
                  The same is true of Marx.

                  It's like what right-wingers think Adam Smith said
                 rather than the more progressive stuff he actually did say.

                  It's obvious that you need to stop reading so many interpretations of people and start reading more of what they actually said.

                ¡Cállate o despertarás la izquierda! - protest sign in Spain

                by gjohnsit on Sun Feb 17, 2013 at 01:41:47 PM PST

                [ Parent ]

          •  Huh? (3+ / 0-)
            Recommended by:
            gjohnsit, WheninRome, lostinamerica
            Economic strength comes from making stuff, not consuming stuff.
            You can make all the stuff you want, but if there is no demand for your product or service, then cost is not being recovered because you cannot sell it.  Demand creates supply, not vice versa.

            "Growing up is for those who don't have the guts not to. Grow wise, grow loving, grow compassionate, but why grow up?" - Fiddlegirl

            by gulfgal98 on Sun Feb 17, 2013 at 12:14:26 PM PST

            [ Parent ]

            •  Only if the people you are selling to (0+ / 0-)

              Have made their own item of value in exchange. If not, they have nothing to offer you.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sun Feb 17, 2013 at 12:26:53 PM PST

              [ Parent ]

            •  Re: (3+ / 0-)
              Recommended by:
              Azazello, gulfgal98, lostinamerica
               Demand creates supply, not vice versa
              For hundreds of years economists believed that supply created demand (Say's Law). It wasn't until Keynes proved otherwise (with math) that this theory was finally abandoned by everyone except for supply-side economists.

              ¡Cállate o despertarás la izquierda! - protest sign in Spain

              by gjohnsit on Sun Feb 17, 2013 at 01:45:39 PM PST

              [ Parent ]

    •  Isn't the labor surplus artificially created? (6+ / 0-)

      By shipping US jobs overseas to slave wage paying third world countries?

      American workers are forced to compete with foreign labor whose wages are artificially suppressed by alliances between foreign governments and their corporations.  Add to that the issues with currency manipulation, etc.

      There are far too many "outside controls" that keep labor costs artificially low, none of which have to do with a free market.

      Democratic Leaders must be very clear they stand with the working class of our country. Democrats must hold the line in demanding that deficit reduction is done fairly -- not on the backs of the elderly, the sick, children and the poor.

      by Betty Pinson on Sun Feb 17, 2013 at 11:34:01 AM PST

      [ Parent ]

      •  But of course. In terms of globalization, labor (0+ / 0-)

        costs are seeking the path of least resistance. Why this should be unexpected is unclear. Just as food price volatility because of ethanol subsidies should also be unsurprising. In today's world, the best example of a nation committing ritual suicide in the name of ideology is Egypt.

        To your point re labor costs, as long as global folk strive for upward mobility, it will always be thus. The breaking point is at quality. Remember when, in the 50s and 60s 'Made in Japan' or 'Made in Mexico' was a source of laughter? Today, not so much. Governments may be good for a kick-start, and some nurturing, but if they try to move on to central planning, they come face to face with The Peter Principle. Again, see Japan, with China getting an introduction to Peter.

        •  It's artificial, its manipulation (0+ / 0-)

          Governments and the corporations they control in third world nations conspire to keep wages low.

          That's not free market, no matter how you try to spin it.

          Democratic Leaders must be very clear they stand with the working class of our country. Democrats must hold the line in demanding that deficit reduction is done fairly -- not on the backs of the elderly, the sick, children and the poor.

          by Betty Pinson on Mon Feb 18, 2013 at 10:07:37 AM PST

          [ Parent ]

  •  You're right. The lingo is determinative. (3+ / 0-)
    Recommended by:
    elwior, gjohnsit, WheninRome

    The Cons come equipped with a world view which considers it appropriate for humans to either kill each other off or exercise dominion. Domination is kinder/gentler than just killing competitors/contestants off. It's also, in the long run, more beneficial to exploit people than to rub them out, especially if you're a person who's got few practical talents that would help him survive.
    I think the Cons' big secret is that they are fairly incompetent and, if they can't exact sustenance from their more clever brothers, they're sunk. Further, I suspect it is this sinking feeling which accounts for the deep sense of insecurity and fear they feel.
    I used to think that the fear was manufactured, but I now think it is real. McCain, for example, does seem haunted by the fact that he's crashed four planes and that he can't remember how many houses his wife has bought him. So, he resorts to bluster to cover up his deficits. Generous people admire his plunk.

    But, the real problem we have is that we have given management positions to people who don't know how. So, instead of managing our currency, they resort to rationing, constantly fearful of running out. That we can't run out of dollars simply doesn't register. Moreover, that rationing always leads to other people hoarding also hasn't registered.
    We need to call the sequester what it is--rationing and make the point that Richard Nixon already proved that doesn't work. You don't get a stable economy by threatening people with starvation.

    We organize governments to deliver services and prevent abuse.

    by hannah on Sun Feb 17, 2013 at 11:28:57 AM PST

  •  This sounds a little too (0+ / 0-)

    right wing for me, "to motivate people to join the workforce"  and how to "entice those workers into jobs". So essentially you are saying that wages are too low for us to get off our collective asses and take a job, wanting to stay on unemployment and milk the system until we feel the pay is worth more than what we feel we are entitled to. That sounds like right wing BS to me. Forget that jobs simply aren't there at all, let alone for lousy pay. This just reinforces the RW clabber about us being lazy and wanting to suck the government teat.

    •  No, this is beyond partisan politics (3+ / 0-)
      Recommended by:
      nchristine, WheninRome, lostinamerica

      We are talking about wages being depressed so low that it isn't worth the effort.
         It's a rational choice. Once you depress wages to a certain point, and then you subtract the cost of commuting to the job and the opportunity costs (such as time you could spend doing something you love, or with someone you love) then the reward simply isn't there.
         That's the case in the DR today for many working age people.

        This is starting to be the case in America (where the cost of living is much higher).
         They've won, and they don't like the results.

      ¡Cállate o despertarás la izquierda! - protest sign in Spain

      by gjohnsit on Sun Feb 17, 2013 at 11:57:14 AM PST

      [ Parent ]

    •  Actually, no (2+ / 0-)
      Recommended by:
      nchristine, gjohnsit

      This is the counter to right-wing BS.  Right-wing BS is that people aren't working because they're "lazy."  But the truth is that if your complaint is about people "milking the system," then the solution is not to make the social safety net go away; it's to make working worth their while.  If you can't find anybody to fill a job, then the natural response should be to increase wages, not to sit there and bitch about people being lazy.

      28, white male, TX-26 (current), TN-09 (born), TN-08 (where parents live now)

      by TDDVandy on Sun Feb 17, 2013 at 12:12:24 PM PST

      [ Parent ]

  •  Labor productivity and Unions (0+ / 0-)

    The particular analysis by the EPI is based on cherry-picking and an unusual metric (they concentrated on growth rather than bottom-line numbers, and for a specific, oddly-chosen period.)

    If you look at current Productivity Numbers you'll see that the US significantly outperforms France, Belgium, and the Netherlands these days.

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