President Eisenhower once gave a speech in which he stated that the genius of
American capitalism was that an average worker could support a family, buy a
decent house, and a nice car on his income alone. He also said that the reason
for this was that the country's business elite understood that it was in
their own best interest to ensure that their workers were prosperous.He added that the capitalist countries that were ripe for communist takeover
where those in which a small group of plutocrats controlled most of the
country's wealth while workers remained impoverished. I'm
afraid that our current business elite have forgotten the lessons of
Eisenhower's generation and our country is moving closer and closer to the
countries Ike described as being susceptible to communist revolution. Although
we no longer have to fear communism, it is not possible to sustain a society
that is as unequal as ours. Eventually there either comes social disintegration
or the advent of a police state.
For every job at Walmart they have hundreds of applicants, period!
The rich get richer, the poor are getting poorer.See the
demise of the formally great American Dream.Welcome to the Gilded
Age, Part II.
"For every job at Walmart they have hundreds of applicants, period!"Probably true. But that kind of shoots holes in the notion that the
poor would rather get handouts than work.
A better indicator for our economy would be that Walmart has to work hard (maybe
raise wages or increase benefits) in order to find good workers because the
workers have other options.
If poor Americans get government assistance, it's derided as corrosive to
the American work ethic, undermines the American dream.If Walmart
shareholders and upper management get (indirect) government assistance, and
somebody reports it, it's called "class warfare".Mountainman: if hundreds apply for every job at Walmart, and many of these
workers still are eligible for food stamps, what does that tell you?Today we're talking about Walmart workers... if technology proceeds as
expected, tomorrow many physicians and other high-end workers will be displaced,
and/or the demand for physicians will diminish, as superior diagnostic
intelligence is supplied by computers. My sense is the debate will
start to change, at that point. Physicians and lawyers seeing their children
with limited career options will have a lot more clout to shape the debate than
When we pay sports stars $100 million a year, which is way more than they need
to live on, when company CEO's milk the company for more than they are
worth, when the children of a company founder make more an more money, it has
now turned into an ego thing. We want more money and more power seems to be the
refrain.I don't mind people getting rich because they worked
hard and earned it. I do object when it they don't take better care of
their employees. If they want to see a resurgence in Labor Unions (something I
don't support by the way) then they should take better care of
employees.I'm pretty sure if the Walton's spread a couple
of billion a year amongst their employees, everyone, including the company
bottom line would benefit. One of the many reasons I refuse to shop at Walmart
and Sam's Club.
I refuse to shop at WalMart.I know it hurts the workers, but
until the top 1% starts paying those who created their massive fortunes, I
will NEVER give them - or the Communists in China they buy from - another
American earned penny.
The solution, of course, is to just confiscate the wealth and distribute it to
the poor, right comrades? By force, preferably. How dare someone actually earn
money! If we punish all those greedy fat cats, they will all go away! And when
we have no rich people, we will all have well paying jobs! From the magical
Money machine!/Progressive democrat mode off. The real reason
companies are hoarding cash? They are terrified of the government. How the heck
can you plan to hire new employees when you have no idea how much they will
cost; when regulations are imposed on you that tax your entire company (like
Obamacare--who in their right mind would hire employee no 50? The regulations,
taxes, forms, fees, etc are immense. ) Democrats like to raise taxes on
cigarettes, because it discourages smoking. They want to stamp out tobacco use.
So they now want to tax success into oblivion, so we won't have that
either. You want less income inequality? Stop punishing small business with
vanceone, I'm sure if you watch Fox your comment makes sense, but only if
you watch Fox and have your "I hate Obama" goggles firmly installed.
The article references a trend from 1965 and 1979. Walmart is
simply one small, albeit significant example.Who would hire employee
number fifty? The business owner who has demand that number fifty can fulfill.
You all act as though providing health care coverage for an employee will suck
out every last penny of profit that employee will produce. Maybe your profit
will only be ten cents on the widget sold versus 12 cents, but that's
exactly what Eisenhower was talking about.That kind of thinking and
cooperation is what American exceptionalism looks like, and what made America
great. Not "oh my" how can I keep my employees to 49 so I don't
have to provide health care and still keep my Mercedes lease.
Vanceone,First, it is not that companies are hoarding cash. It is
that compensation ratios are so out of kilter with what we (here in the USA)
used to do. See Roland Kayser's post above.Second, this is not
a recent phenomenon. It has taken us a few decades to get here. Not one
administration or one party takes the blame.Third, of course taxes
and redistribution are not the right way to grow the economy. However your
point about cigarettes is a bit off. Higher taxation on cigarettes has proven
an effective deterrent (and puts the tax burden on those who cost us more).
IVanceoneProvo, UTThe solution, of course, is to just confiscate the
wealth and distribute it to the poor, right comrades? How dare someone actually
earn money! If we punish all those greedy fat cats, they will all go away! And
when we have no rich people, we will all have well paying jobs! From the magical
Money machine!======== I'm sure those greedy fat
cats, loungingg around their pool equipped yachts moored off of Sri Lancha, are
all working so SO hard to "earn" that money deposting into their Swiss
or Caymen Island taxfree accounts, just "dreaming" about giving their
employees an extra .20 an hour raise.Roland Kayser is right -- Back in the Good 'ol Days -- Back when CEO's "earned"
20:1 vs today's 273:1 Companies had options -- Pay 40% in
taxes -- orTake Tax deductions by investing in things like:Employee's Education, new Factories and Equipement, training, HealthCare,
etc.Capitalists are motiviated by competition, So, Companies
were offered better and better benefits in addition to wages to
"compete" for employees.In today's race to the bottom,
Americans are competing for jobs against Communist China.Eisenhower and our Founding Fathers must all be rolling over in their graves.
Vanceone:Your argument would make some sense if there were penalties
for laying people off.Businesses hire the number and type of
employees they feel will counter their competition, maximize profits.
We're seeing ample proof of this.Here's the proof: If
Obamacare was abolished tomorrow, would we see a sudden surge in job openings?
Of course not - there has to be product demand.As we see with
Walmart, companies will squeeze their costs (ie, keep a lid on employment and
wages) even to the point of seeing their own demand flatten out... like Walmart.
A couple of economists studied the employment impact of Walmart and concluded
that with their size, they have the ability to impact the lower end of the labor
market and impact their own bottom line.Essentially, if Walmart
increased wages by 15%, other retailers would follow suit, and Walmart would see
an increase in sales and in profitability.Instead, Walmart has
concluded that their growth lies in other nations. Even with 300 more stores,
Walmart's total employment is less than it was before the recession. Sobering.
Oh, to have a Republican like Teddy Roosevelt back in the WH. Someone to kick
corporations in the teeth. Corporations are the new Kings and our goverment
has been trained to serve their interests above all others.
Ah, the good old standard lefty canards about income inequality and those
devious 1%ers.Since the author goes out of her way to slam Senator
Inhofe for coming to conclusions based on his political ideology I'm sure
she'll welcome some actual facts into this debate:There is no
economic correlation between income inequality and the upward mobility.There is no evidence that the rich getting richer is at the expense of the
poor staying poor.In fact someone making more money is an indication that
they are providing something of value to people and society (the exception being
if you manage to cozy up to government and get the state to funnel money your
direction).Ranting about the gap of income between a minimum wage worker
and the CEO us just populist rabble rousing with no basis in actually doing
anything meaningful or helpful to upward social and economic mobility.
To Vanceone: Not one poster here has talked about redistributing wealth. They
are talking about people who work being able to make enough money to survive.
Did Eisenhower force companies to pay middle class wages for routine work? No,
he clearly said that they understood that it was in their interest to do so. It
still is. These were not high skill jobs that he was talking about.
They required no more education and training than a current WalMart or McDonalds
job. Yet they paid a living wage. Unless you think that Dwight Eisenhower was a
radical leftist, there is no reason to fear going back to the employment
arrangement of his time.
You guys don't get it, do you? If I have 49 workers, and demand says that
I could make and sell 80,000 worth of new product if I hire someone for
50,000--well, logic says I should do it. I'd be making 30,000 more. But government regulations say that once I hit 50, I will suddenly have
to pay 3,000 a worker fee. So the real cost of that new employee is 200,000
now--50 for her, and 150,000 in new fees. For only 80,000 in revenue. Totally
not worth it. So I don't hire the employee. Instead, I look to make money
another way--productivity. The regulations are littered with stuff
like this. You get punished in myriad ways for being successful. Another
example: If I want to start a small company, I better not start in
farming--because the regulations are obscene. I can't afford multiple
six-digit machines the regulations would force me to have. And certainly no
workers to work the machines. Food for thought: Why do most
billionaires favor democrats?
The denial by the Right of the causes of inequality will eventually work to
their downfall. But this is a problem that is not new at all. I was writing
about it in the mid-1990s. Of course no one paid attention, but the trends were
already easily recognizable then. They have merely become impossible to ignore
now (except by those who wear blinders).If you haven't seen the
documentary "Inequality for All," featuring former Labor Secretary
Robert Reich, you should. It is available on Netflix, or Amazon Prime, or you
can even go to your local library like I did and check it out. Reich examines
what is happening in America in very clear terms. And it's very
entertaining, to boot. Sad, but entertaining. One point made in the documentary
is that when wages started to stagnate (in the Reagan years), Americans
compensated with women entering the workforce, then by both genders taking on
two or three jobs, then by increasing their credit. This ended in 2008 with the
crash. Now we have no other option but to watch the standard of living for most
Americans decline. Time to wise up before it's too late.
The Eisenhower era - and the American economy of the 50's and 60's -
was an abberation. Coming out of WWII we were the only fully industrialized
nation that hadn't been bombed out by the war.That's not
the world we live in anymore.Labor has a cost and a value.
That's a fact that cannot be changed.The way out of poverty
isn't income redistribution or government programs - it's the same
things it's always been and these things still work. And companies like
Walmart don't stand in the way of any of this.
Vanceone,In years past, most companies offered health insurance as
part of the employment package.Why has that changed? Could it be
that the cost of healthcare has skyrocketed?Why is our deficit
skyrocketing? Entitlement spending. Of which over 70% is SS and Medicare.And it will become unsustainable in future years as more baby boomers
retire.The healthcare system must be changed. We have 3
choices.1- cut benefits to age 65 and older2 - raise taxes to pay
the increased costs3 - try to cut costs.What else is there?By any reasonable measure, we have the most expensive healthcare costs
in the world. By a long shot.So, while I am no fan of Obamacare,
SOMETHING must be done. I am open to suggestions, but logic tells
me that the GOP staples of Tort reform and reducing regulations will not solve
the problem. it may help, but more is needed.And the GOP has no
other ideas.What do you suggest?
Vanceone - "The real reason companies are hoarding cash? They are terrified
of the government."Well, absolutely, and who can blame them?The economic bubble created by the GW administration popped with a
sickening pfffft that caused many businesses to go under and others to just
barely hang on.Businesses are gun shy and afraid to go out on a limb
and invest. Memories of government-promoted over-exuberance during the GW Bush
admnistration and the consequent economic disaster are all too vivid.And you speak of wealth redistribution . . . Well if you read the article and
other comments, you can see that wealth has been continuously redistributed from
the middle class to the already wealthy since the early 1980's.I would like to see that wealth un-redistributed back to the middle class and
the poor.Reagnomics has proven itself to be a resounding failure for
middle class America.We need to get the tax rate for the highest
earners back where they should be. During the Eisenhower administration, the
nominal tax rate for the highest earners was over 90%. We fought the cold war,
built the interstate highway system, and still balanced the budget because we
had adequate REVENUE.
$22 minimum wage?So you will pay $50 for a happy meal?
@Vanceone. The formula for the tax on workers greater than 50, assuming the
company doesnt provide insurance, is typically $2000 per employee. However the
first 30 employees are exempt so the company would be taxed $2000 for 20
employees not 50.I am wondering in this political environment if any
meaningful solution could actually happen.
The problem with Robert Reich's ideas is that they've been tried for a
long time in Europe and they don't work. Yes, the income gap between the
ultra-rich and the poor is smaller but that doesn't mean the poor have more
economic opportunity. It just means their rich are poorer and the poor are
none-the-better for it.
BurkeanI understand about the aberration of WWII. Yet Asian and
European companies have a CEO to worker ratio much lower than ours and compete
quite successfully in the international marketplace. Why can it work for them
and not for us (even though it once did).Value (of labor or any
other item) is ALWAYS through the lens of the purchaser. Value varies. It is
not intrinsic or immutable. The marketplace for labor has changed in the USA
and the perceived value of labor. Some forces certainly have entered that were
not here prior. But Asia and Europe are not immune.We need to do
some better analysis. The effects of a long-term impoverished working class
does not bode well for a nation.
So many of you commenting blame American Liberals and Progressives as the cause
of this nation's ills. The facts paint a different picture.Face
it folks, the underlying cause to most of America's problems is American
"Conservatism," a regressive, knee-jerk, emotion-based, simple-minded
system of governance. I'm not suggesting that all Conservatives are the
same. Under the umbrella of American "Conservatism" are a whole lot of
people who absolutely hate government of any kind. And it should not
be surprising to any of us that electing government-hating politicians into
office can only result in terrible governance . . . which it does.Plutocrats have a stranglehold on the Republican Party, and they have deftly
propagandized a good portion of the American electorate (i.e., Republicans) into
believing that giving the wealthy even more money at the expense of everybody
else is good governance.Republicans still admire Ronald Reagan, the
Alzheimer's riddled President who plied his acting craft to the the benefit
of plutocrats by delivering apparently heartfelt renderings of scripted
performances. Limbaugh and Hannity laud each other as Great Americans, and many
"Christians" despise the poor. That's Modern "Conservatism"
The change started in the mid seventies when Executives decided on a new way to
make workers think they were getting treated fairly. Basically they said that
everyone would get a raise or increase in benefits based on the same percentage
point. So Joe in Assembly who made $10,000/yr got a 5% raise or
$500/yr. Pete in Engineering made $20,000/yr and got a 5% raise or
$1,000/yr.Jeff the Sales Manager who made $60,000/yr also got $5% or
$3,000/yr.And Ed the President made $100,000/yr and got 5% or $5,000/yr.
Then when the second year 5% raises were figured Joe got 5% of his
now $10,500/yr or $525/yr while Ed got 5% of his now $105,000/yr or $5250/yr.
And by year 6 Joe is making $12,763.28 while Ed is making $127,628 so the
difference in their 5% raise will now be $5743 instead of the original $4500. If
the 5% raises continue over a 36 year career Ed will be getting a raise equal to
Joe's salary in the 36th year.
BurkeanSouth Jordan, UT$22 minimum wage?So you will pay
$50 for a happy meal?10:44 a.m. March 21, 2014=======
If it take 2 hours to make a Happy Meal, Then you are not only
a lousy Fast Food resuraant, But you deserve to be out of business![FYI - a happy meal takes less than 60 seconds to put together. Going
from $7.25 to $22.00 an hour increase labor cost goes from .12 cents to .35
cents. The additional $45 you are suggesting will happen would of course then
go onto the Billionaires who have already been keeping the profits.]
techpubs,If you inflate each salary at 5% compounded annually, the
ratios do not change.In year 36 Ed (President) makes $551,602. Joe
(Assembly) makes $55,160. The ratios are the same as they were in year 1. Ed
still makes precisely 10 times what Joe does.Did I miss something?
The only thing that will bring back the proper balance between wages and profits
is the restoration of the proper market for labor. Business interests have
cheated the American worker by flooding the market with foreign labor. The
prevailing opinion that we have a free market, government cannot force business
to share properly and as we have seen, government cannot bribe business to hire
people at proper wages. We need a new employer on the scene and took
up the slack in the labor market. Barring some kind of miracle, only the
government itself could do that kind of mass action. The government should
hire every unemployed worker at a proper salary. Doing so would end
unemployment and its undesirable effects and costs. The cost of the
unemployed is being paid by the American taxpayers in general when it should be
paid for by the business activity of businesses in the USA. By further
manipulations by business to lower wages, business is stealing more of the
employed worker's money to care for the unemployed. So, to restore the
cost of people to where it belongs a tax would be placed on all American
Businessmen make their business decisions on the amount of profit, not on how
efficiently they made the profit nor how many people contributed nor the margin
of profit. A million dollars profit spends just the same if it takes 1 employ
to make it or 1,000,000 employs. The wages paid for labor has little
to do with the value of the labor. Wages are paid to workers according to the
supply and demand for workers. If we add a million doctors to the medical
industry, the cost of hiring a doctor would go way down. If we reduce the
number of doctors the cost of hiring a doctor would go way up. In either case
the qualifications of doctors might be the same and the value of fixing a broken
finger the same also.
Nice op-ed piece, and a lot of interesting comments. The author could have made
her point if she had included some footnotes for all her statistics. She said
average wages climbed 5% since 1979. When I also graduated in the 1970s, minimum
wage was around $2.30; was it possibly between $2-$4 by 1979? Now, the minimum
wage is what, $7.50? She made good points, but with confusing statistics like
that, she decimated her credibility. Perhaps with inflation? Who knows. Too bad,
because we could agree with a lot of her points. She definitely should have
included some sources for her "information".Has anyone ever
considered the income redistribution that is going on? That a lot of income that
should go to the workers actually producing goods goes into the hands of a very
few? Nobody recognizes that as income redistribution? And those folks seem to
control legislators, tax subsidies, and a lot more? I believe we should abandon
the one-sided discussion of income redistribution.
Walmart had a food drive last Thanksgiving for its employees. It was a success.
We should be grateful that the retail giant sees that its employees need help
and can encourage others to help them. That's what makes America great!We're a very generous nation. I think Walmart could partner with
food pantries and other social services to encourage more community involvement
to give to their employees. Think of it as communities "giving
back" to all those Walmart employees who work hard to allow us to buy stuff
cheap from China.
We could raise the minimum wage say a buck an hour. It has been awhile.
Also, some families have two worker's who both qualify for healthcare
benefits. Currently, you have to choose one or the other, and the one you
don't choose the employer keeps the money they would of kicked in to
subsidize it. Why not give employees the option of taking that money in wages
or say retirement benefits, if they can prove they have health insurance through
their spouse. Since "non profits" get huge tax advantages and
should be for the public good and we would hope their directors would work more
out of altruism than greed, it seems reasonable their directors or CEO's
shouldn't make a killing especially when they ask for donations. How about
such a rule (it has to be as simple as possible) as they can't make more
than the President of the United States, or 15xs the poverty rate for a family
of 4 (24Kx15), or 10x's the average wage of their workers. For
100% private companies no regulations of wages are needed.
"Walmart had a food drive last Thanksgiving for its employees."I would not fault anyone for trying to help.The theme of your
posts is that Walmart is encouraging others others in the community to help the
Walmart employees.But, isn't it just a bit sad that people who
are employed by one of the largest corporations in the world have trouble
putting food on their table?The CEO of walmart makes an hourly wage
comparable to what his new employees make in a year.
Mountman:I don't really see hundreds of applicants for a single
job at Wal-Mart as a good thing. It suggests a lot of unemployment and
underemployment. I don't see them paying pittance wages because hundreds
of applicants applying as a good thing either. If most of these jobs are adults
trying to feed their families on these wages, I don't see this as a good
thing. If most of these jobs are so low paying that these adults with families
have to get government subsidies to basically survive, I don't see that as
a good thing either. I also don't see as a good thing agreeing too much
with the Senator of Vermont (Bernie Sanders) who has said it is time to stop
subsidizing Wal-Mart.I do believe in responsible capitalism. I
wonder if any Wal-Mart would go out of business if it raised its wages of its
lowest paying employees to $10 an hour. I doubt it. But I think they could get
happier, more productive employees that might have some more cash to spend in
our economy which helps us all.
I don't see anyone addressing the real cause of low stagnant wages. Wages
like anything else are a product of supply and demand. Wages especially at the
lower levels are stuck because of a large surplus of labor. Not hard to
understand.The cause of this labor surplus has been increasing for
several generations. The causes are: 1) Mechanization, 2) Automation, 3)
Globalization with millions of factory jobs off-shored to cheap labor countries,
and 4)Allowing a flood of legal and illegal labor into the United States in
competition with America workers for both low and middle income jobs.The world economics has dramatically and become more global the past two
decades. Not much can be done about jobs lost to 1-3 from above, but it is not
necessary to flood the labor markets with cheap immigrant labor, which is
causing depressed wages and high unemployment.Those who claim to
want to improve wages, especially at low income levels, but still support
amnesty, legalization, more visas, or even the presently high number of visas
and illegal workers are a big part of the problem. Reduce immigrant labor and
wages will increase, as the labor market tightens.
I'm sure the Lord wants 80% of his blessings to go to 1% of his children.
Walmart has 100's of applicants for every position. Because
nobody wants to work in America anymore we're told, we're just
takers.Please take half of my $15,000 a year Walmart job in taxes so
I can sleep better at night Mitt Romney.
I wonder if the CEO:worker ratio in America is so high because corporations are
so much bigger now than they were in 1965. Merger fever has been intense for
decades. How many major banks existed in 1965 than we have today?
Most of are missing a very important reason Walmart exists. It provides less
expensive goods that poor people could not access otherwise. There is a reason
poor people do not often shop at Nordstrom.
GaryO,I agree with pretty much everything you said, except for the
reason businesses are hoarding money. They do so not because they are afraid of
government. They do so because there is insufficient demand for them to invest
in increased production. This is a result of falling wages for the lower and
middle classes. The upper crust doesn't consume proporationately to their
income. This is made clear in "Inequality for All" by business tycoon
Nick Hanauer.Burkean,Reich's ideas have not been
tried in Europe. And if you think Europe is such a failure, you've never
lived in Germany, as I have. They'd never trade their economic system for
ours.Those of you who seem to think we have too much government need
to read David Korten's "When Corporations Rule the World." This is
why we're in the predicament we are. And what other entity has the clout to
break corporations' stranglehold on our future, except government? If
government would do its job, we might someday be free again. I'm afraid,
though, that the corporate system will probably have to collapse under the
weight of its own excesses and self-centeredness.