Let’s do something about this

This video seems to be everywhere. It needs to be everywhere.

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If you’re wondering about the validity of the numbers cited — if the situation is as massively skewed as the video portrays, then let me assure you the numbers check out. The facts are factual. The video is true.

This viral video is right,” Ezra Klein writes, giving it the Wonk Seal of Approval. “We need to worry about wealth inequality,” Klein says.

Well, yes, we need to “worry” about this. But worry isn’t really a substantial response, and a substantial response is what is needed here.

Just consider all the breath and ink and time wasted fretting over budget deficits and the clumsy, crude responses to deficit-panic, like “sequestration.” Then watch that video again, or look at the graph below. The massive concentration of wealth they illustrate tells you all you need to know about those deficits — that most of the wealth is piling up beyond the reach of taxation. More and more of our allegedly “runaway spending” is flowing to the 1 percent,  while less and less of our revenue is being supplied by the 1 percent.

That’s an unsustainable situation and an unsustainable trend. It calls for a response.

It requires a policy response — steps that citizens must demand and elected officials must implement. It also calls for a moral response — this is something that prophets, preachers and pundits need to be condemning. And it calls for a cultural response — from storytellers, artists, songwriters, jesters and clowns.

We’ll return to this later, but here let’s just make this an open thread to discuss potential responses — “if … then” responses. Consider that video above to be the “whereas” of our resolution. Given what that “whereas” clause tells us, what should be included in the “therefore be it resolved” section of our resolution?

Worry is appropriate but inadequate. What should we try to do about this? What can be done?

  • Consumer Unit 5012

     I was just thinking about how Wall Street needs to be destroyed.

    When a corporation goes public-traded, its driving motivation changes from ‘survive, make goods/services’ to ‘MAXIMIZE SHAREHOLDER VALUE’.  And the price of stock has only a vague relationship to the actual health of the company, but it’s the driving motivator behind every decision the CEO makes.  So stock corporations are legally REQUIRED to act like greed-crazed psychopaths.

  • Consumer Unit 5012

     Why am I even doing a doctorate, again?

    You like college, maybe?

    Which reminds me, I was talking to two people I know who could get PhDs, but decided not to go for them for fear that having one would make it _harder_ to find a job.

    So this is what it feels like to live in a declining empire….

  • AnonymousSam

    I can definitely believe that. Every job application I’ve ever turned in that actually got a response in rejection was, in summary, “You’re overqualified.”

  • http://blog.trenchcoatsoft.com Ross

    Huh. That’s strange. Where I live, the Wal-Mart closes at 11 and all the grocery stores are 24-hour.

  • EllieMurasaki

    Good point. In my immediate area, the Walmart’s the 24-hr place. Well, that and a couple gas station convenience stores.

  • AnonymousSam

    The Safeway in my neighborhood is open 24 hours too. It all depends on how much money they think they can make by staying open that long. Ours gets away with it by having two or three employees run the entire store all night.

    (And by “entire” I do mean “the ENTIRE” store. They do cleaning, stocking, cash registers and customer service desk.)

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Frankly, if it wasn’t for that about half my income is considered tax-free under current Canadian tax law, and that I can claim a disability credit against the other half, I’d be all like that overturning-the-table “fuck this shit” meme.

  • Madhabmatics

     Same here, it’s a 30 minute drive just to get to the Walmart. Everywhere else closes at 8:00.

  • Madhabmatics

     DISQUS apparently ate my post, but this happens to me all the time too. I’ve literally had people crumble up and throw away my resume in front of me because “lol college boy you’d get a better offer and quit in a week.”

  • other lori

    *Why am I even doing a doctorate, again?*

    Hopefully not for the money.

  • P J Evans

     The only people I’ve seen quit (or get fired) in a week were (a) really not good at their job or (b) teenagers in their first job. (I’ve seen college graduates who would have trouble reasoning their way out of a wet paper bag, too.)

  • Madhabmatics

     That doesn’t stop it from being a widely held myth. I had an interview for a secretary job just a few weeks ago and one of the first questions they asked was “How do we know that you aren’t going to get a job offer to be a teacher a month in and quit for a better job? You are overqualified.”

    I don’t know why you are trying to take a dig at me over this

  • EllieMurasaki

    My reading of PJ is that the dig is at the people who think you quitting in a week to take a better offer is plausible.

  • Madhabmatics

     I may be misreading the “I’ve seen college graduates who would have trouble reasoning their way out of a wet paper bag” comment.

  • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

     Thank you for clarifying.

  • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

    If your market wage is a “starvation wage”, you would certainly become unemployed if a “living wage” was required.

  • EllieMurasaki

    Do you seriously not see the problem with requiring people to earn a maximum of *not enough to pay all three of food, rent, and transportation*? Never mind all the nonessentials such as toilet paper, clothes, and health care…

  • AnonaMiss

     

    If your market wage is a “starvation wage”, you would
    certainly become unemployed if a “living wage” was
    required.

    /facepalm

    OK let’s describe this in market terms

    Corporation
    A makes $100m gross. $20m of that is profit, which is paid out to high
    management and shareholders. Of the remaining $80m, $10m goes to paying
    starvation wages to the required employees. The company already runs on a
    skeleton crew, after decades of streamlining to eke out as much as
    profit as they can manage.

    The government
    doubles the minimum wage. Assume for the purposes of
    this exercise that none of the jobs are outsourceable.

    Is
    Corporation A going to fire half of its workforce, in order to keep its
    personnel expenses even? No! It’s already running on a
    skeleton crew. If it loses any more employees, it will be unable to
    function anymore and produce its goods/services. It will pay its
    employees out of what were formerly profits. Shareholders and high-level
    executives will be annoyed, but the low-level employees will no longer be starving. Which is rather more important.

    Corporation
    A’s profits will go down, yes; but as you might have heard,
    corporate profits recently reached an all-time high
    in the US. So I’m not super worried about the major corporations.

  • Kirala

     Yeah, my school system fired a bunch of people a few years back when the budget was cut “to save money”. Funnily enough, they had to recreate those positions the following year – because those positions were needed. It ended up costing the system many experienced, formerly loyal teachers for whom this was the last straw. (It can be so hard convincing someone you’ve fired to come back.)

    But they don’t add extra positions when the budget increases. They add shiny iPads for executive staff. Teaching positions are added when there are 45 students to one teacher. Janitorial positions are added when the trash is overflowing. Secretarial positions are added… actually, pretty much never. It’s one secretary per school, period.

    … Okay, there are plans to use the iPads in ways that might mean it’s a wise investment rather than a luxury. But the point is, the money goes to labor if and only if circumstances demand, not because circumstances allow.

  • http://blog.trenchcoatsoft.com Ross

    Then how did you get the job in the first place?

    Employers don’t employ people out of the goodness of their hearts. THey employ them because they need the job done. If they can do without you, they’ll fire you now rather than pay you a starvation wage.

    Employers already don’t employ any more people than the absolute minimum number of people required to do the work they have. If they fired all their underpayed employees, the work would not get done.  If they could do the work without those people, they wouldn’t have hired them in the first place.

    Businesses don’t say “Well, I only need 100 employees, but I’ll hire 150 and pay that last 50 of them less than a living wage,” they say “I only need 100 employees, so I’ll hire 100 employees and see if I can get away with paying them less than a living wage.”

  • arcseconds

    Yes indeed.

    However, while not universal in the sense that everyone is really greedy, it does seem universal in the sense that there’s always going to be a few individuals around that are going to do their best to climb any ladder that happens to be around.

    That can be minimized by having it run against social expectations (rather than kind of with social expectations).  The impact can be minimized by getting rid of ladders or reducing their height. 

    Also, corporations are functionally limitlessly greedy.

    But here’s the rub.   Hobbes’s best argument for the state of nature being all against all is not that everyone is naturally inclined to gain as much power as they can for its own sake, but rather in a condition where it’s reasonable to believe that at least some people really are out to get you, you need to acquire power simply for your own protection.

    Which I think is somewhat similar to the situation we’re in.  Society allows corporations to practically do as they please, which means we get hammered.   We are going to have to seek power to change this, and this is inevitably going to be attractive to people who want power and control.

    That’s always been a problem for political movements. 

  • depizan

    If your market wage is a “starvation wage”, you would certainly become unemployed if a “living wage” was required.
    Huh.  So that would magically eliminate the need for food service workers, janitors, retail sales associates, warehouse workers, day care workers, etc, etc?  I wonder how restaurants, retail outlets, and all would work then?  Or would they all just close their doors, leaving us in a world without those services?

    Or, far more likely, they’d suck it up and pay their staff a little more.  Would some people be laid off?  Possibly.  Though most minimum wage employers get by on having as few employees as possible already, so I suspect most people would remain employed.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Ottawa imposes strict conditions on Air Canada pension plan reprieve

    This is actually rather surprising, but nice. The federal government has set ground rules:

    - Executive pay is limited under these rules
    - The company is blocked from paying dividends

    So Air Canada has to actually put profits into the pension plan, not try to use the deferral so the executives can strip the company’s assets for their own benefit. (by limiting exec pay and blocking dividends, the government has prevented the two easiest ways to strip-mine the company for a quickie golden parachute)

    Too bad this is on the scale of “man bites dog” in the rarity of a government actually forcing a company to do right by the people it employs.

  • arcseconds

    Well, I guess what I’d ask is who are you doing this for, and what benefits are they getting, or are you expecting them to get?

    Also, how much does the benefit depend on just you doing it, and how much depends on large numbers of people doing it?

    I mean, you say ‘sacrificing’, which suggests that you’re doing it for other people, but you also say ‘benefit me more than what we have’, so it sounds like it’s largely about benefiting you? But then you say ‘benefit us individually’ which suggests collective action.

    If it’s mainly about benefiting you personally and you expect that your actions (alongside those with whom you are coöperating) are enough to secure those benefits to a substantial degree, then ‘investing’ sounds like a better term than ‘sacrificing’.  If you gain net benefits from this immediately (I mean, some of it sounds fun!) then maybe it’s more that on a day-to-day level, it’s the best way to spend your time.

    But if that’s the case, then what you’re offering EllieMurasaki is kind of prudential advice — their life will go better, you think, if they do things your way, but we’ve already heard they don’t agree that this is the best way of spending their time and money for them.

    (You’re not so insistent that your was is best any more, so I don’t want to harp on about this, but I’m still trying to work out why you’re recommending what you’re recommending. )

    If it’s more in the nature of that this is the best way of improving society, and you’re encouraging people to take a hit for the sake of that aim,  then I think that’s very much open to question, along the lines I’ve already suggested.  It does practically nothing to address the systemic issues.

  • arcseconds

      When you talk about shopping “wherever is convenient and cheapest, and spend the time and money you save by doing that on political action”, you are, I think, making it harder on yourself because some businesses will use a portion of every dollar you spend with them will use it to fight you politically. How do you get around that?

    OK, let’s say I have the option of buying a book from an independent bookstore for £15, or the same book from a faceless multinational online bookstore for £11.

    Let’s assume that the faceless multinational online bookstore doesn’t treat their workers very well, and donates a substantial portion of their profits to the Eternal Servitude Party.

    Let’s also say it will take me an hour to travel to the independent bookstore and pick it up and get back.  (Maybe your actual bookstore delivers, but I want to show how convenience can factor into this.)

    I’m going to donate any time and money saved to the All Manner of Good Things Society, which does all manner of good things for ordinary people, including protecting their working rights, and fighting the Eternal Servitude Party.

    Let’s assume that I already donate £5 a week and 1 hour’s work, just so I don’t seem like a tight bastard.

    case 1: I buy from Faceless Multinational Books.

    I save £4, and an hour, which I donate to AMGTS. Let’s value my volunteer work at a paltry £5/hour.  AMGTS therefore gets £19.

    How much does the Eternal Servitude Party get? Well, how much profit do Faceless Multinational make? Not much, I presume, because they keep their profit margins very small, which is how they can undercut everyone else, and make money off the volumen.  Let’s say they make £1 profit.  I think that’s on the high side, but nevermind.  Let’s say they donate a mammoth 50% of their profits to the Eternal Servitude party.  So the Eternal Servitude Party is £0.5 up on the deal.

    case 2: I buy from the independent bookstore.
    This might look like the forces of evil get nothing, and the forces of good get nothing extra.  

    But that’s not necessarily true, because we’re worried about what the supply chain might do with their money.

    OK, let’s assume that the bookstore owner is a generous filthy pinko like me, and donates half their profits from the sale to AMGTS.   Let’s say their costs end up being the same as FM Books, i.e. £10. So they donate £2.5 to AMGTS for a total of £11.5 to go towards good things.

    But they’re buying from Big Publishers and Distributors, Inc, who aren’t much better than FM Books. BPD also donates half of their profits to the Eternal Servitude party.  Let’s say they make considerably less profit than FM Books for some reason, and say it’s £0.5, so the ES party gets £0.25.

    I’ve made some fairly generous assumptions here that weight it in favour of shoping at the local business (I’m assuming a very generous business owner, and that FM Books is also very generous towards Servitude to make it particularly undesirable to shop with them).   I’m also not weighting my time very highly, so that hour I save just gets AMGTS whatever they could pay someone something like minimum wage to perform.

    But AMGTS still does very well out of the deal.  They get £8 more if I shop with Faceless Multinational.  Eternal Servitude only get £0.25 more that way.  If you were a general at war and you saw something that would benefit your enemy a little bit, but benefitted you 32× as much, you should definitely take it!

    If everyone in town who shops local because they think it’s better for their communities decided to shop with evil-but-cheap companies instead and donate the difference, you can see that the local AMGTS branch could become very well-funded.

    It’s also worth pointing out that if you’ve got special skills to offer AMGTS, the situation tips even more in favour of doing whatever you can to save time so you’ve got more time to donate.  A laywer doing pro-bono work for the forces of good, insofar as they’re interested in getting the greatest utility bang for their buck, should be really interested in saving as much time as possible to free up as much time for that work as they can.  

    OK, so it’s a cartoony example I’m essentially just making up as I go, and the real world is messier than this. Perhaps it’s better that your local stores survives than the local AMGTS does well. On the other hand, if AMGTS wins and you end up with Sweden+ at the end of 20 years, a few local businesses is a small price to pay.

     All the same, I don’t think this is all that unrealistic, and it should serve to show that even if you and I are both reasonable people with similar goals, there’s not necessarily an obvious best strategy for how we spend our time.

  • http://www.aeryllou.tumblr.com/ Aeryl

     I love how this whole argument is going on while Costco is posting record profits and bragging about how well it pays its employees.

    There is nothing more expensive to any company than a disgruntled employee.

  • depizan

    Yet, strangely, Costco is one of the few places that actually seems to realize this.

    Though I do feel good about shopping at Costco when I can.

  • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

     It wouldn’t eliminate the need; it would just lower their number. Restrictions on labor and capital flow prevent single market wages from becoming universal.

  • http://www.aeryllou.tumblr.com/ Aeryl

     And again, what evidence do you have for this other than citing ideas from your butt? 

    San Francisco has a living wage higher than the rest of the US and a lower unemployment rate, though according to you, they shouldn’t.

    Costco is posting profits in average of $10,000 per employee, over Walmart’s average of $7400, even though Costco pays an average salary of $45,000/yr, provide health insurance and is unionized.  HOW?? 

  • depizan

    Restrictions on labor and capital flow prevent single market wages from becoming universal.
    What does this sentence mean in English?

  • http://dpolicar.livejournal.com/ Dave

     

    What does this sentence mean in English?

    FWIW, I understood it to mean that because people and stuff can’t move from place to place without transport/opportunity costs and other “friction”, they cost different things from place to place.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    That’s actually true.

    What Empoletus is getting at is that governments which keep people from easily entering or leaving the country, as well as keeping money from easily entering or leaving the country, can change the market for capital and labor to its advantage.

    Of course for folks like Empoletus that’s BAD, because it means intefering with the almighty free market in the form of immigration quotas, a minimum wage, requirement to report $10000+ of currency in or out, transfer taxes on money moving in and out, and so forth.

  • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

     All my remarks on prices and price controls are with an implied or explicit “all things being equal”. All things are never equal.

  • EllieMurasaki

    In other words, all your remarks are wrong. Or, at best, rough approximations of reality that may be vastly different from reality depending on the variables you haven’t taken into account.

    Why are you making your remarks, then?

  • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

    It is legitimate to say “all things being equal, smoking increases one’s risk of lung cancer” when this is, at best, a rough approximation of reality that may be vastly different from reality depending on variables not taken into account.

  • EllieMurasaki

    You say that as though these things are equivalent somehow. How do you come by that impression?

  • EllieMurasaki

    Wait, no, I think I understand. Paying one’s employees shit increases one’s likelihood of high profits, and the fact that Costco makes better profits than Walmart while paying its employees more is an outlier, just as someone who smokes a pack a day and never develops respiratory problems is an outlier.

    Do I have it right?

  • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

     This is one of the few comments I have seen here that actually try to make sense. However, it must be remembered that it is not the rate of profit that matters to a business, but total profit in units of currency. Thus, if there is incentive for Corporation A to expand production by hiring more workers (which there probably is, if people who cannot afford its products exist), it would probably do so.
    Also, a minimum wage might make Corporation A less competitive globally.

  • EllieMurasaki

    So what is your explanation for Costco making more profit per employee than Walmart while paying considerably more wages per employee than Walmart?

  • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

    Yes.

  • EllieMurasaki

    The thing is, they’re still not equivalent. We know the mechanism by which cigarette smoke causes respiratory problems. By what mechanism does paying starvation wages increase societal benefit, unless societal benefit is measured solely in terms of the bank account balances of the richest single percentage point (or tenth of a percentage point) of society’s members? To whom the good of people, y’know, starving, while there’s more than enough resources to make sure everyone’s fed?

  • EllieMurasaki

    Something I’m curious about, Enopoletus:

    For what reason does or should one work? Is it solely for individual benefit, or for one’s household’s benefit, or for one’s society’s benefit, or two of the three, or all three? If only one or two, which ones? How do you define the benefit(s) in question?

  • http://www.aeryllou.tumblr.com/ Aeryl

     OK then, so we can both agree that you are here talking out your ass about “hypotheticals” when there are actual consequences to the bullshit your spouting in the lives in actual people.  

    Yes, things are not equal.  Know why?  That runaway income inequality you’re SO unconcerned about.  The regulatory capture by the FIRE industries, allowing them to run amok playing Monopoly with OUR pensions, OUR safety nets, OUR infrastructure repairs, OUR educations.  The rightward drift of both political parties that now makes Richard fucking Nixon more liberal than our “Mooslim Soshalist” president. 
     

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    You know, isn’t Henry Ford anecdotally said to have decided to pay Ford workers high wages for the time on the grounds that he needed somebody other than a handful of rich people to buy the cars they were making?

  • EllieMurasaki

    He is said to have said that, yes, and I am inclined to believe he did in fact say it. Made him a rich man, too.

  • EllieMurasaki

    Know what, who cares if he said it. He did it: https://en.wikipedia.org/wiki/Henry_Ford#Labor_philosophy and all its citations.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Yeah, I know about the history – it’s just that some things like that are so popularly told and retold that they shift in the retelling. Wanted to make sure I wasn’t saying something different. :)

    Kalecki is an interesting figure in economics. He did an analysis of fixed capital investment and spending, and came to a conclusion, rather aptly summed up colloquially as:

    “The workers spend what they get and the capitalists get what they spend”.

    In effect, wages and capital spending form the two halves of a whole.

    He even predicted that Keynesian economic management by itself would not persist permanently. Krugman, another Keynesian, has since written how it has become clear that the slowdown in productivity since 1973 and wage stagnation since then were both the result of deliberate political decisions to favor rentiers over workers – in effect the very capture of government by business interests predicted by Kalecki so long ago.

  • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

    http://en.wikipedia.org/wiki/Ceteris_paribus
    Learn to understand phrases in their context before typing comments showing your misunderstanding of them. Do you deny that single variables are important?
    I have never called Obama a Muslim, and if he is a socialist, he has certainly acted like a reluctant one.

  • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

    Here is a good collection of posts on the minimum wage: http://consultingbyrpm.com/blog/2013/03/great-posts-on-the-minimum-wage.html
    Robert P. Murphy is the author of the Best Economic History Book Ever (The PIG to the Great Depression).

  • http://www.aeryllou.tumblr.com/ Aeryl

     Oh, I understood your context, I was doing this thing, called “a play on words”, because the whole conversation with you started because you stated your unconcern over inequality. 

    And I’m glad you’ve never called Obama a Muslim and understand he is not a socialist, because I was being facetious, demonstrating the cognitive dissonance exemplified by many people who share your positions.  If the shoe doesn’t fit you stop trying to wear it. 


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