The future of the North American economy

[SimpleDon]

If you do a bit of searching you'll find articles here and there which mention that some of the poorest of North American populations are also some of the wealthiest on a global scale. And so as various companies become increasingly global, workers willing to work for a lower wage are taking a bite out of cash flow in North America. This is also coupled with increasing automation, where low skilled workers just aren't as necessary for low-skilled work.

So when politicians talk about 'creating jobs' there seems to be something a little misleading going on. We're talking about creating jobs for people who no longer have any useful skills, or who otherwise aren't willing to use those skills for a wage that companies are willing to pay. And so if this is the route we're taking, trying to desperately grasp onto a declining manufacturing sector, our economy and quality of life can't do anything but decline in reference to recent decades.

So what's the way forward? How do we allow people to live prosperous lives, when many of them are no longer able to do useful work?

Like all things in the world there is nothing new about the economic situation that we are facing. It is nothing more than the continuation of the track that we have been on for more than two hundred years.

We should solve the problems resulting from the increasing industrial productivity the same way that we, for example, handled the mechanization of farming. We went from 90% of the workers employed in farming to 2% in about 80 years. We absorbed the displaced agricultural workers into the growing industrial economy.

But this is not the only thing that we did. We shortened the work week. We restricted the workforce, by outlawing child labor. We introduced the idea of retirement for the masses. We encouraged labor unions to level the playing field for the workers in wage negotiations. We instituted the minimum wage. We increased the years of schooling required, this was necessary to meet the requirements of industrialization but it also reduced the workforce. We introduced vacations and increased the number of holidays. We improved workplace conditions, forcing the owners to spend money on something that didn't increase production and profits. We introduced branding and other measures to make products more than just commodities, which reduced the the effectiveness of supply and demand to set prices and increased profits and to allow competition based on innovation instead of price.

We should just do the same.

Obviously we can't rely on industrialization any more. We have to come up with a different purpose to absorb the excess number of workers. But we are already transitioning from an industrial economy to a service economy. I would propose that we should now work to improve the quality of life of the vast majority of Americans, not just the top 10% of earners.

We also need a basis for the economy other than simple consumption. So we need to define an improvement in the quality of life that doesn't involve increases in consumption. That will in fact reduce the conspicuous consumption of the 10%. I can think of some. Shorter workweek, more vacation. Only one parent having to work in the family. One spouse raising the children. More time with the family, less time working.

This requires a more egarian distribution of the surplus that the highly productivity industrial plant is creating right now.

There is a way to short circuit this discussion. The Republican party is the conservative party. By definition conservatives are always wrong when it comes to the problems that we face as a nation. All that we have to do is to take every economic point in their party platform, and do just the opposite of what they propose. Simple.

 

[James Brown]

I'm curious how many in this thread feel that they are being overpaid for a meaningless job.

 

[rousseau]

I'm curious how many in this thread feel that they are being overpaid for a meaningless job.

I don't know how I feel about the phrase 'meaningless job'. Any job is by definition needed for something, even if it's far removed from direct agricultural production, which is what I presume most mean by 'useful'.

In a complex economy, with complex goods and services, you have people doing niche things, but few of those positions are completely dispensable.

 

[barbos]

I'm curious how many in this thread feel that they are being overpaid for a meaningless job.

I don't know how I feel about the phrase 'meaningless job'. Any job is by definition needed for something, even if it's far removed from direct agricultural production, which is what I presume most mean by 'useful'.

In a complex economy, with complex goods and services, you have people doing niche things, but few of those positions are completely dispensable.

Would you call a job at Trump University meaningful? Or even some administrative job at actual university, seriously why the fuck percentage of administrative jobs constantly increases? Or stock market job? what is the meaning of that? What about telemarketing?
Insurance? the ones which find the way to screw you with medical bills and such, do you call it meaningful?

You go to a doctor and he does some procedure which name is not on the list of the procedures they will pay, so they make you pay. Next time the same thing happens but you are smarter this time and ask doctor to put something which they would sure pay, even so it is most likely more expensive and it works. Where is the meaning in that?

 

[DrZoidberg]

If you do a bit of searching you'll find articles here and there which mention that some of the poorest of North American populations are also some of the wealthiest on a global scale. And so as various companies become increasingly global, workers willing to work for a lower wage are taking a bite out of cash flow in North America. This is also coupled with increasing automation, where low skilled workers just aren't as necessary for low-skilled work.

So when politicians talk about 'creating jobs' there seems to be something a little misleading going on. We're talking about creating jobs for people who no longer have any useful skills, or who otherwise aren't willing to use those skills for a wage that companies are willing to pay. And so if this is the route we're taking, trying to desperately grasp onto a declining manufacturing sector, our economy and quality of life can't do anything but decline in reference to recent decades.

So what's the way forward? How do we allow people to live prosperous lives, when many of them are no longer able to do useful work?

When politicians talk about creating jobs they're not actually going to create jobs. In the common vernacular it is called "talking shit". It's just something they all say. They have no control over the jobs market. At best they can try to fuck it up as little as possible. That's the best they can do.

 

[DrZoidberg]

I'm curious how many in this thread feel that they are being overpaid for a meaningless job.

In my last salary negotiation my (old) boss asked me what I think a fair salary for my work is. Big mistake from her side. I told her that I didn't think that anybody in the IT industry had made a fair salary since the 90'ies. We're all grotesquely over-paid. I told her that I'm just trying to get what I can. I told her to try to give me more money than what any IT head-hunters might offer the coming year. As it turned out she low balled it and hey presto, I'm working somewhere else. Yes, still over-paid.

I think life as a whole is meaningless. A job neither adds nor detracts from that meaninglessness.

So yes on both accounts.

 

[rousseau]

I don't know how I feel about the phrase 'meaningless job'. Any job is by definition needed for something, even if it's far removed from direct agricultural production, which is what I presume most mean by 'useful'.

In a complex economy, with complex goods and services, you have people doing niche things, but few of those positions are completely dispensable.

Would you call a job at Trump University meaningful? Or even some administrative job at actual university, seriously why the fuck percentage of administrative jobs constantly increases? Or stock market job? what is the meaning of that? What about telemarketing?
Insurance? the ones which find the way to screw you with medical bills and such, do you call it meaningful?

You go to a doctor and he does some procedure which name is not on the list of the procedures they will pay, so they make you pay. Next time the same thing happens but you are smarter this time and ask doctor to put something which they would sure pay, even so it is most likely more expensive and it works. Where is the meaning in that?

I guess my point isn't that jobs are meaningful from an existential sense, but that jobs by definition produce profit, and in that sense they usually exist for a reason.

What would the world look like without these jobs? I agree that it's a nice idea, but I really have no idea.

 

[SimpleDon]

Universal basic income is not communism.

Everyone owning the production means, in equal parts, is.

I did not claim it was. But you are wrong anyway,. What you described is a defining part of socialism.
Defining part of communism is bolded part

a theory or system of social organization in which all property is owned by the community and each person contributes and receives according to their ability and needs.

For the most part we are already there.

The quote is not completely correct. It is "each person contributes according to their abilities, and receives according to their needs."

In other words people aren't paid based on their abilities. And people are provided with their needs. We are nowhere near this and are in fact moving further from it.

And Marxism abolished the concept of capital. We are constantly elevating the importance of capital. That is the whole idea behind supply side economics, that supply, capital, is more important to the economy than demand, labor wages.

Both are extremes and both are wrong.

 

[SimpleDon]

For the time being the US is borrowing to finance wars, healthcare and its infrastructure. People are still buying bonds but there would be a point where some of these need to be cashed in. If this is en masse then the US will face a serious crash which will affect the rest of the world

Over the last thirty five years the main reason that we have had budget deficits is to finance tax cuts for the wealthy. We say that we want tax cuts for the wealthy to make more money available for investment. We cut the taxes, which increases the deficit. Which means that we have to sell bonds to finance the deficit. And where does the money come from to buy the government bonds? It comes from the money in the economy available for investment.

This clearly is a zero sum game for the economy and the nation, the only ones who come out ahead are the wealthy who get the tax cuts.

And yet this makes sense to conservatives. Why?

 

[barbos]

I did not claim it was. But you are wrong anyway,. What you described is a defining part of socialism.
Defining part of communism is bolded part

a theory or system of social organization in which all property is owned by the community and each person contributes and receives according to their ability and needs.

For the most part we are already there.

The quote is not completely correct. It is "each person contributes according to their abilities, and receives according to their needs."

In other words people aren't paid based on their abilities. And people are provided with their needs. We are nowhere near this and are in fact moving further from it.

I mean that we are potentially there. As I have already posited most of the jobs have very little to do with increasing of quality of life. We can have 20 hour work week right now, and without any decline in quality of life, in fact there will be increase.

And Marxism abolished the concept of capital. We are constantly elevating the importance of capital. That is the whole idea behind supply side economics, that supply, capital, is more important to the economy than demand, labor wages.

Both are extremes and both are wrong.

I think Marxism is outdated and so is capitalism.

 

[barbos]

Would you call a job at Trump University meaningful? Or even some administrative job at actual university, seriously why the fuck percentage of administrative jobs constantly increases? Or stock market job? what is the meaning of that? What about telemarketing?
Insurance? the ones which find the way to screw you with medical bills and such, do you call it meaningful?

You go to a doctor and he does some procedure which name is not on the list of the procedures they will pay, so they make you pay. Next time the same thing happens but you are smarter this time and ask doctor to put something which they would sure pay, even so it is most likely more expensive and it works. Where is the meaning in that?

I guess my point isn't that jobs are meaningful from an existential sense, but that jobs by definition produce profit, and in that sense they usually exist for a reason.

What would the world look like without these jobs? I agree that it's a nice idea, but I really have no idea.

If your profit is somebody's loss then it's not a profit. I don't dispute that that these jobs exist for a reason, but that reason is crappy system where people are forced to work meaningless jobs in order to support themselves.

 

[ZiprHead]

https://www.washingtonpost.com/news/wonk/wp/2016/12/04/democrats-can-look-forward-to-the-coming-republican-era-being-a-disaster-for-republican-voters/?tid=pm_pop&utm_term=.f28180caea48

"Under Trump, red states are finally going to be able to turn themselves into poor, unhealthy paradises"

 

[SimpleDon]

Manufacturing Matters… But It’s the Jobs That Count - ewp-420.pdf
Asian Development Bank - Working Paper Series #410, November 2014

The abstract:


In the paper:

The second finding is a clear confirmation of H1, i.e., manufacturing employment shares have declined over time. This is apparent from the decline in the peak employment share expected by a typical economy as well as the negative and statistically significant derivatives of the shares with respect to the year (not shown—any positive coefficients on the year are more than compensated by the negative coefficients on the interaction between the year and log per capita GDP).

Third, the results also confirm H2, i.e., manufacturing employment peaks at lower levels of per capita income over time. The coefficient on the interaction between per capita GDP and income is negative and highly significant, and (in regression 5) the income level of peak manufacturing employment fell from $33,994 in 1970, to $9,576 in 2010. Thus, de-industrialization sets in sooner than in the past.

That paper made no mention of automation or robotics, however. It's very evident that automation is getting better and better, and making more and more human workers unnecessary.

It isn't just automation. It is more efficient manufacturing processes that reduce waste and consumption. But mainly it is returns to scale. Industrialization in a developing country starts out in small scale, manpower intensive enterprises. Over time these are replaced by fewer large more mechanized enterprises.

Automation is still primarily introduced not to replace humans but to improve the quality of the product. Mechanization of physical and repetitive tasks is what is replacing workers.

But whatever, it doesn't matter, we are replacing workers with capital by buying machines. Workers are losing their jobs to greater productivity.

But this isn't new, it has been happening throughout the industrial revolution. And it has not even been accelerating. If anything it has slowed recently.

And it isn't even because of the much discussed, so-called failure of education, a concept not supported by any concrete data. In fact, we are by any measure better educated today relative to the needs of the economy and constantly improving. A cynic would say that the idea that our education system is failing has more to do with trying to break the teachers' unions, to shift the costs of education from the state to the individual and to privatize education than it does with the reality of it.

The problem that we have is that we decided that all of the rewards of the productivity gains should go to profits and none to wages. Before we divided the productivity gains equally between profits and wages.

The problem with exclusively rewarding profits is the money from the productivity gains effectively leaves the economy and goes into savings. Savings is good for the individual but bad for the overall economy. It is called the paradox of thrift. Money in saving accounts, in stocks or in Treasury bills is money not circulating in the economy.

Money paid as wages does circulate in the economy and does boost it. It boosts demand and provides the incentives needed to invest.

It is the next phase of automation that will test our current policy of throwing away the workers displaced by greater productivity and using its rewards to only increase profits. That is, the automation that will replace management and professionals. Today automation is deciding who is worthy to be given a loan, negotiating car prices, selling us consumer goods, setting insurance premiums, trading stocks, helping to make medical diagnoses, handling customers' questions and complaints, forming sales strategies, and a multitude of other tasks.

In the future automation will replace more and more professionals and management types. These jobs will disappear like the manufacturing jobs did for us. Income share of the economy will drop and the capital share, profit, will increase. Income inequality will get worse and demand will fall reducing or eliminating the growth in the economy making matters even worse.

 

[Loren Pechtel]

The problem that we have is that we decided that all of the rewards of the productivity gains should go to profits and none to wages. Before we divided the productivity gains equally between profits and wages.

No. We have not "decided" this, it's a simple reaction to the market forces--the productivity gains are going to those who enabled the productivity gains: the companies that invested in the automation.

Money paid as wages does circulate in the economy and does boost it. It boosts demand and provides the incentives needed to invest.

Fixed.

It is the next phase of automation that will test our current policy of throwing away the workers displaced by greater productivity and using its rewards to only increase profits. That is, the automation that will replace management and professionals. Today automation is deciding who is worthy to be given a loan, negotiating car prices, selling us consumer goods, setting insurance premiums, trading stocks, helping to make medical diagnoses, handling customers' questions and complaints, forming sales strategies, and a multitude of other tasks.

In the future automation will replace more and more professionals and management types. These jobs will disappear like the manufacturing jobs did for us. Income share of the economy will drop and the capital share, profit, will increase. Income inequality will get worse and demand will fall reducing or eliminating the growth in the economy making matters even worse.

In time this will become a serious issue. We haven't reached that point yet.

 

[barbos]

No. We have not "decided" this, it's a simple reaction to the market forces--the productivity gains are going to those who enabled the productivity gains: the companies that invested in the automation shameless outsourcing.

Fixed for you. That's not to say that automation is not going to be a bigger problem. It's just most of the current super-profits are linked to outsourcing.

 

[Loren Pechtel]

No. We have not "decided" this, it's a simple reaction to the market forces--the productivity gains are going to those who enabled the productivity gains: the companies that invested in the automation shameless outsourcing.

Fixed for you. That's not to say that automation is not going to be a bigger problem. It's just most of the current super-profits are linked to outsourcing.

No, you don't understand the reality. Far more jobs have been lost to automation than to outsourcing.

 

[DrZoidberg]

Fixed for you. That's not to say that automation is not going to be a bigger problem. It's just most of the current super-profits are linked to outsourcing.

No, you don't understand the reality. Far more jobs have been lost to automation than to outsourcing.

Stop saying jobs lost. The value isn't the job. The value is the value. Jobs is just shit we need to do to get the value. An automated job still produces the same value. An automated job is the same value with no work needed. That is a good thing. Nothing has been lost.

Outsourcing is similar. Country A has capital. Country B doesn't. Country A rearranges their work force so that their are less unskilled labor. Country B does that instead. Both are winners.

There is more added value in country A after both outsourcing and automation. Both are only a boon to country A.

Getting rich isn't about working harder. It's about being smart. USA is richer than ever because of both automation and outsourcing.

What USA should do isn't to keep jobs in USA. That's like making yourself poorer on purpose for no reason. What they should do is to figure out how to tax the 1% and distribute that added wealth to everybody.

Reality is reality. You can't fight the market. The market is going to do what it's going to do. We have to adapt.

 

[KeepTalking]

I'm curious how many in this thread feel that they are being overpaid for a meaningless job.

In my last salary negotiation my (old) boss asked me what I think a fair salary for my work is. Big mistake from her side. I told her that I didn't think that anybody in the IT industry had made a fair salary since the 90'ies. We're all grotesquely over-paid. I told her that I'm just trying to get what I can. I told her to try to give me more money than what any IT head-hunters might offer the coming year. As it turned out she low balled it and hey presto, I'm working somewhere else. Yes, still over-paid.

I think life as a whole is meaningless. A job neither adds nor detracts from that meaninglessness.

So yes on both accounts.

I was about to make a similar comment, that I feel I am overpaid, but that my job is not meaningless, and I am looking forward to being even more overpaid in the near future, given the headhunters who have been seeking me out recently, and the salary ranges they have been tossing out. I don't actually feel, like you, that life is meaningless, but I do feel that we give meaning to our own lives. I enjoy the challenge that programming often offers, and as a result I often find myself enjoying my job. Enjoying life is what gives life meaning for me, so my job does provide some meaning in that regard. But yeah, I'm still overpaid, and enjoying every penny of it.

 

[DrZoidberg]

In my last salary negotiation my (old) boss asked me what I think a fair salary for my work is. Big mistake from her side. I told her that I didn't think that anybody in the IT industry had made a fair salary since the 90'ies. We're all grotesquely over-paid. I told her that I'm just trying to get what I can. I told her to try to give me more money than what any IT head-hunters might offer the coming year. As it turned out she low balled it and hey presto, I'm working somewhere else. Yes, still over-paid.

I think life as a whole is meaningless. A job neither adds nor detracts from that meaninglessness.

So yes on both accounts.

I was about to make a similar comment, that I feel I am overpaid, but that my job is not meaningless, and I am looking forward to being even more overpaid in the near future, given the headhunters who have been seeking me out recently, and the salary ranges they have been tossing out. I don't actually feel, like you, that life is meaningless, but I do feel that we give meaning to our own lives. I enjoy the challenge that programming often offers, and as a result I often find myself enjoying my job. Enjoying life is what gives life meaning for me, so my job does provide some meaning in that regard. But yeah, I'm still overpaid, and enjoying every penny of it.

I enjoy my work. I certainly feel that it gives my life meaning. But I was thinking about meaning in the wider sense. I don't think there is any meaning to life that we don't give it ourselves. Which means mady-upy.

 

[rousseau]

I guess my point isn't that jobs are meaningful from an existential sense, but that jobs by definition produce profit, and in that sense they usually exist for a reason.

What would the world look like without these jobs? I agree that it's a nice idea, but I really have no idea.

If your profit is somebody's loss then it's not a profit. I don't dispute that that these jobs exist for a reason, but that reason is crappy system where people are forced to work meaningless jobs in order to support themselves.

Maybe that's an emergent property of a system that resists some unrealistic perception of 'perfect'.

How do we create business without exploitation? How do we even begin to define what type of business is exploitative or not?