At Work

The economic system does work 

Unemployment continues to decline albeit modestly and slowly (and recognizing the low participation rate). At the same time there is growing competition for workers which is translating into higher wages simply because employers must compete for workers. What does that tell you? It tells you the system is working as it should even while we wish it would move at a quicker pace.

imageIt tells you something else; the system is not rigged against the middle class. The system, given a fair chance, responds to markets, to demand and to shortages of goods and of workers. What we should be asking is why it has taken seven years to start this process.

If you force changes applicable to only one part of the equation, it doesn’t work. Raising the minimum wage to unreasonable levels for example distorts the system. That is rigging it against the average Joe or Jane.  Just ask the workers at closed Wal-Marts or other smaller businesses trying to cope with local minimum wage laws.

That is not to say that the MW should not be indexed in some manner, which is different from arbitrarily picking $15.00 and imposing it on the system especially on a state by state or even city by city basis.

There are other factors affecting jobs and here again, the progressive solution machine does not get it or explain it.

One word has and will continue to affect jobs; technology. Some jobs are going away and new ones created which is how the system works. New ways of doing things means old ways are obsolete. That should be no surprise to anyone except those who choose to ignore facts and rather find a scapegoat.

Ask the retail clerk if Amazon.com is impacting their sales? Why are there a half-dozen stations in a bank, but only two tellers? Because you use the ATM, and smartphone to conduct your business. Why is the postal service a loser? Because it can’t manage its cost overhead while you send e-mail even greeting cards via the web.

The system will create and reward, at the required level, the jobs it needs and it needs the jobs you create through your demand for goods and services. If you demand more technology, some jobs are going to disappear. So, if you want to save the clerk’s job or get them a raise, just stop buying online; throw away your phone, write more checks.

Now, if you want low prices. That means something else. It means the lowest acceptable provider must be found … no matter where they live or it means profits must decline along with more lost jobs.

That is the world we live in, global economies, instant communications, and amazing technology.

imageWhen a politician tells you he or she can change our economy without considering the above or without consequences, beware. If a politician tends toward isolationism, send him packing. He doesn’t live in the 21st century. If a politician wants more regulation, ask the consequences on economic growth.

Bernie Sanders wants a revolution. What would be revolutionary is some honesty, competence and strategic thinking from politicians.

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4 replies »

  1. As we get closer to a Presidential Election, suddenly roads get improved and long hung up projects get underway causing a tick in employment. Hmm

    Make a positive difference in someone’s life today. Sent via my cell phone – Bill Mitchell On Mar 3, 2016 3:29 AM, “quinnscommentary” wrote:

    > rdquinn posted: “Unemployment continues to decline albeit modestly and > slowly (and recognizing the low participation rate). At the same time there > is growing competition for workers which is translating into higher wages > simply because employers must compete for workers. ” >

    Like

  2. If I stop shopping on line I hurt the people working for those companies, Fedex, UPS and USPS benefit from on line shoppers.
    It does not have to be either or and it does not have to be go from $7.25 to $15 MW in one year. even in Seattle, WA the MW goes up in stages taking 3 to 7 years to reach $15. Depending on number of employees. In 2016 the most any employer is paying is $13. I know Seattle prices I would not want to live there on $13 per hour, even dual income households would be at 77% of the average household income of $70,172 in 2013.

    As wages go up everything adjusts. Also the governments gets more tax revenue as more people have more money to spend.
    Also, one bright spot might be as household incomes go up government benefits like food stamps go down. The MW workers may not like it, but it seems like even when I had 4 children living at home, I always made $50 too much to qualify for Food Stamps.

    I ordered 2 stainless steel Push Ballpoint Pens with 10 refills off ebay from China for $5.83, including shipping. They were in my mail box in 10 days. Savings $30. Excellent quality and I now have a place to order Birthday and Christmas gifts for family and friends that will not break the bank. I love saving money and supporting the global economy.

    As far as saving the clerks job, I refuse to use the self checkout at any store that has them. I was talking with a manager at a Wal-Mart in TX they are not going to be adding anymore self checkouts, too much loss through theft or mistakes.
    Sometimes human nature trumps technology, lol.

    Like

    • You said it all here: ” As wages go up everything adjusts.” So true, and of course that includes prices. So in effect artificially raising the MW gets those people nowhere. Contrary to political rhetoric, getting those adults off MW jobs is the real answer to their growth and the growth of the economy.

      Like

      • Yes, prices might go up a little, but workers will have more money to buy the things they need. If the price of something goes up to much I have the choice not to buy it. Or, look for it on sale at another store.

        Feb jobs picture not as rosy as first thought.

        Most of the jobs that were created were minimum wage earners. In fact, 78 percent of the jobs created were retail trade, teachers, bartenders and waiters that paid the minimum wage. So, of the 242,000 jobs created, 189,000 of them were in the minimum wage ballpark.

        The minimum wage needs to be indexed to inflation, this will push other wages higher and that is what big business is really trying to stop. I made $9.10 per hour loading trucks at Gallo Wine in 1975. Union shop. So no one is going to convince me a minimum wage of $10.50 today is not something that could be paid. Raising the price of a value meal by 50 cents would cover it.

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