Quantcast
Opinion

John Hoffmire: When it comes to income inequality, whose wages matter?

Comments

Return To Article
  • Richard1 College Station, TX
    April 28, 2014 7:51 a.m.

    In Daniel Pink’s book, A Whole New Mind, he makes a case that creative and innovative people will be most successful in the near future. He hypothesizes highly technical jobs in the U.S. (engineering, statistics, computer science, etc.) will move overseas for cheaper labor as education opportunities for other countries increase (such as India, China, etc.). We are already beginning to see this. Consequently, this article is a good reminder that the only truly constant thing in this world is change. To be successful, we need to be willing to adapt and improve our skill sets and work to help others to do so. We must now ask ourselves how we can best provide training for those whose jobs are moving overseas. Any ideas?

  • Mike Richards South Jordan, Utah
    April 28, 2014 7:59 a.m.

    Does lower wages offset lower prices for a few items? If 100% of our wages go towards food, shelter and medicine, how much is left to buy that bargain? When the government takes the lion's share through direct and indirect taxes, what is left? Many of us do not realize that they should be paying the ObamaCare penalty tax right now. They won't have to report that tax until we file next year, but it is silently stripping them of their wealth. Most aren't even aware that that penalty is growing every day and that they won't have the money to pay for it when it is due - after the elections are over, after they could have fired everyone who voted for it.

    Business is in business to make a profit. We have jobs to make a profit. We work to take care of our family, yet there are many who tell us that the business owner, the one who took all the risks, should forget about making a profit.

    Regulations have driven jobs offshore. Unions have driven jobs offshore.

  • 10CC Bountiful, UT
    April 28, 2014 8:03 a.m.

    Accelerated technological displacement will make the exodus of high paying manufacturing jobs in the US look like a Kindergarten birthday party.

    The Chief Medical Information Officer at Kaiser Permanente - a very large hospital chain based in California - says that 80% of what is currently performed by people in healthcare will be done by technology within the next 10 years.

    Much like the loss of manufacturing jobs, these jobs will not be coming back, and the jobs that evolve or replace lost healthcare jobs will not cover the loss/decline in salaries and associated economic impact.

    The good news is that healthcare costs may be coming down - the bad news is that the overall employment landscape will continue moving toward short term positions that less & less resemble a "career".

    Perhaps as the children of attorneys and physicians see blunted career opportunities will we start to have a meaningful discussion about the direction of our economic evolution, and as Mary Barker posed the question, "Does the Economy Serve Us or Do We Serve the Economy?"

  • 2 bits Cottonwood Heights, UT
    April 28, 2014 8:55 a.m.

    I don't compare my income with anybody else... that's not where happiness comes from. That just breeds envy.

    Real happiness comes from "contentment". And contentment comes from being happy with what you have (regardless of what somebody else has).

    As Dave Ramsey says... Basing your happiness on "wealth"... or what you have compared to what somebody else has... is a bully that draws a line and says, "cross this line and you will be happy". But when you cross that line, you observe that there's ANOTHER person who has more than you have (inequity) and you are unhappy again. And it goes on and on and you will never be happy.

    Some of the poorest people I know are also the happiest people I know... it's not because they don't have needs... it's because they have learned to be content with what they have. And realize that focusing on the inevitable inequity in life, or continually struggling to cross that line, or to catch up with the Joneses... is not happiness.. it's just a mirage and they already have everything they need for true happiness...

  • KDave Moab, UT
    April 28, 2014 8:55 a.m.

    It is easy to blame our loss of manufacturing jobs on wages, but with a few exceptions it is not true, The top reasons for the loss of manufacturing to other countries are high taxes, Govt. regulations, union regulations, and lawyers suing for every little thing. Level the playing field and these jobs will come back.

  • ordinaryfolks seattle, WA
    April 28, 2014 9:19 a.m.

    It did not take long for someone to blame Obamacare for the de-industrialization of the country. Is there no end to these ridiculous assertions?

    Obamacare only just kicked in.

    The de-industrialization of America began with the Reagan presidency. It became acceptable to export jobs to foreign countries, and it became acceptable to hide profits offshore. It became acceptable to squeeze money from workers. Henry Ford knew better. He paid wages that could allow a ONE EARNER family to be able to afford his cars. The Walton clan in Arkansas allow their employees to have food drives for one another as they can not afford to live on their salaries (and they get food stamps and Medicaid as well - talk about corporate welfare!).

    Germany is a large industrialize country which still manages to keep it industrial base and maintain its status as a first world democracy with large social benefits for the average working citizen. Seems to me we ought to follow their example, rather than maintaining our current devolution to a failed economic state.

  • Hawkeye79 Iowa City, IA
    April 28, 2014 10:22 a.m.

    Hi ordinaryfolks,

    Are you really advocating that we follow Germany's example and abolish our minimum wage altogether?

  • airnaut Everett, 00
    April 28, 2014 10:34 a.m.

    I suppose that all depends on who you ask:

    1. The Billionaire playboy who has everything, can buy Congressmen, but will never enough.
    or
    2. The Single Mother or 4 consumer, working 3 part-time jobs to feed her young family...and only has one vote every 2 years.

  • marxist Salt Lake City, UT
    April 28, 2014 11:11 a.m.

    The writer is not familiar with the work of Karl Marx. In Marx's schema what has happened is this: capitalism has achieved a degree of efficiency in the use of labor such that it simply does not need as much labor. So labor is in trouble, but eventually capital will be in a bind because profits for the most part come from the use of labor. In Marx's view the whole system comes down in a duel barreled crisis of collapsed employment and collapsed profits. FYI and for your consideration.

    To the writer: take a class in Marxian economics.

  • Roland Kayser Cottonwood Heights, UT
    April 28, 2014 11:27 a.m.

    What happens when most jobs have been outsourced or automated and the majority of our citizens can no longer earn enough to live on? That's where we're headed so we should start thinking about our options.

  • airnaut Everett, 00
    April 28, 2014 11:35 a.m.

    KDave
    Moab, UT
    It is easy to blame our loss of manufacturing jobs on wages, but with a few exceptions it is not true, The top reasons for the loss of manufacturing to other countries are high taxes, Govt. regulations, union regulations, and lawyers suing for every little thing. Level the playing field and these jobs will come back.

    8:55 a.m. April 28, 2014

    =======

    If what you say is true --

    How do you explain Germany, England, France, Israel, Canada, and Japan?

    America's Lawyers would be the only odd-man out from your list.

  • Brer Rabbit Spanish Fork, UT
    April 28, 2014 12:03 p.m.

    Yes millions of jobs are being lost to globalization, but other factors are also at work causing unemployment, which causes stagnant or declining wages. Millions of American jobs have also been lost to 1) Mechanization 2) Automation 3) Fewer military personnel needed 4) Women flooding the labor market at all levels, finally 5) Flooding the U.S. labor market with cheap immigrant labor at not only the unskilled low income levels but also the STEM jobs.

    Low wages and income inequality cannot be discussed without understanding that wages are a product of supply and demand. As long as the labor supply is much greater than demand, unemployment will cause wage stagnation or even declining wages, all to the benefit of the wealthy upper class at the expense of middle and lower income workers.

    The wealthy benefit from cheap immigrant labor in their yards and homes, but also at their businesses, either as owner or investors. The only real way to reduce the labor surplus and tighten the labor market is to reduce or stop the flood of cheap immigrant labor. Yes more jobs are created with immigrant labor, but not nearly enough to reduce the overall surplus.

  • 2 bits Cottonwood Heights, UT
    April 28, 2014 12:39 p.m.

    @marxist,
    Take a class in free-market economics.

    Owners and operators of businesses in a free-market economy have an interest in keeping their labor and materials expenses as low as possible (because they have to stay price competitive to stay in business). But contrary to your assumptions... they do NOT want everybody to be in poverty (not even their employees).

    Logic:
    -If everybody's poor... they can't afford to buy their products. If EVERYBODY's rich.. they can afford to buy MORE of their widgets. Even Mr Ford (who was an avid free-market capitalist) realized this.

    -Unhappy employees are not as productive as happy workers. The employer must balance this. He wants productive workers... so SMART employers know it's in his own interest to make sure they are as happy as possible (even Mr Ford realized this).

    So while keeping labor costs low is important (so they can compete on price and stay in business)... capitalists also realize they need a happy/productive workforce and are NOT motivated to keep everybody as poor and miserable as possible (governments benefit from everybody being poor, not businessmen).

    Poor people can't buy their products...

  • marxist Salt Lake City, UT
    April 28, 2014 1:39 p.m.

    @2 bit "Take a class in free-market economics.

    Owners and operators of businesses in a free-market economy have an interest in keeping their labor and materials expenses as low as possible (because they have to stay price competitive to stay in business). But contrary to your assumptions... they do NOT want everybody to be in poverty (not even their employees)."

    I have - many. As to the owners, the poverty status of their employees is beyond their concern. Owners will pay dirt cheap wages if they can get it - witness the labor conditions in Bangledesh making U.S. destined products.

  • marxist Salt Lake City, UT
    April 28, 2014 1:49 p.m.

    re: 2 bits "capitalists also realize they need a happy/productive workforce and are NOT motivated to keep everybody as poor and miserable as possible "

    No, capitalists are motivated to render profits as high as possible. So said the late great monetarist Milton Friedman.

  • GaryO Virginia Beach, VA
    April 28, 2014 2:45 p.m.

    Hey Kdave -

    "It is easy to blame our loss of manufacturing jobs on wages, but with a few exceptions it is not true . . . "

    You have GOT to be kidding!

    If skilled Mexican workers can produce a quality product at five dollars an hour, how many companies are going to want to pay their American counterparts twenty dollars an hour?

    Yes, wages are THE major determining factor for why companies relocate their manufacturing to other countries.

    By the way, it was Republicans who fought tooth and nail for NAFTA.

    Why? Because businesses could produce goods more cheaply with cheap foreign labor.

  • 2 bits Cottonwood Heights, UT
    April 28, 2014 3:16 p.m.

    marxist,
    Capitalists are motivated to render profits as high as possible, no doubt. But smart ones realize the way to do that is to have happy-productive employees who love their work. And for EVERYBODY to be prosperous (so they can afford to buy your products or services).

    A businessman in a population where everybody but him is poor, and nobody has any disposable income... doesn't have many customers and goes out of business.... Capitalists don't want everybody poor.... that just puts himself out of business... He wants everybody to be prosperous. So they can buy his stuff...

    ==

    Do capitalists really like it when everybody's poor... unemployed... on bare survival income provided by public assistance? No... they can't buy your stuff...

    Marxists and Progressives (like Saul Alinsky) LOVE it when the majority are unemployed and on public assistance... means majority has to vote for you or lose everything...

    Google Saul Alinsky "Rules for Radicals"... and his plan in the 1960s... get so many people on public assistance that you can manipulate them and overwhelm the system and collapse the government.. Convince the majority they can't survive without government assistance... and they will beg for Marxism...

  • airnaut Everett, 00
    April 28, 2014 3:27 p.m.

    Gaddianton plan for taking over the world...

    1. Outlaw the Unions - Check
    2. Out Source without wildcat stikes - Check
    3. Eliminate wage increase for jobs that must remain in the U.S. -- Check and mate.

    Game over.
    Tie for 1st place -- American Corporate Capitalists,
    and the Communist Chinese they invested everything in.

    American citizens -- dead last, and still holding the bill.

  • 2 bits Cottonwood Heights, UT
    April 28, 2014 4:00 p.m.

    @GaryO
    Virginia Beach,

    Re: "it was Republicans who fought tooth and nail for NAFTA"...

    ===

    Not totally true.

    Google "The Making of NAFTA: How the Deal was Done" by Bruce Nissen

    Some powerful politicians on both sides and in all 3 nations fought for NAFTA. Reagan wanted it, but Clinton passed it and signed it into law.

    Many "Republicans" wanted it... Many "Conservatives" fought against it... Remember... they're not the same thing.

    Many Democrats wanted it as well.

    Wikipedia says, "With much consideration and emotional discussion, the House of Representatives approved NAFTA on November 17, 1993, 234-200. The agreement's supporters included 132 Republicans and 102 Democrats. NAFTA passed the Senate 61-38. Senate supporters were 34 Republicans and 27 Democrats. Clinton signed it into law on December 8, 1993; it went into effect on January 1, 1994"...

    So quite obviously it was not passed only by Republicans (as you asserted)... So pinning it just on Republicans... is not intellectually honest.

  • 10CC Bountiful, UT
    April 28, 2014 8:48 p.m.

    2 Bits:

    I realize you may be at your posting limit for this article, so I won't pose questions you may not be able to respond to.

    I think many capitalists certainly would prefer to have a society of happy, prosperous people who make up a robust domestic market for their products. I see no reason to think they would wish otherwise.

    However, their most immediate concern is to match or beat their competition and maximize their profits. If domestic aggregate demand for their products is stagnant or falls, they will seek other markets for growth.

    As high-minded as capitalists may (or may not) be, they are constrained by their immediate economic pressures. Henry Ford paid his workers 2.5 times the going rate because he wanted to catalyze the market for cars. In today's economy, what employer would be foolish enough to repeat that act? They would be hammered by their board and ruthlessly attacked by the competition.

    Certainly, it would be nice to have a company of say 1000 happy, productive, positive employees. But if you can make more money by having 25 very smart people and more technology, you do it.

  • GaryO Virginia Beach, VA
    April 28, 2014 9:37 p.m.

    Hey 2 bits -

    I never asserted that NAFTA was " passed only by Republicans."

    NAFTA was passed though as a response to Conservative pressure for cheap foreign labor.

  • marxist Salt Lake City, UT
    April 29, 2014 6:48 a.m.

    Regarding what capitalists want for common folk, Marx understood that when one becomes an employee of another, the former can no longer be seen by the latter as a full fledged human being.

    An example? Maybe Michael Moore's best was his first "Roger and Me." It's about Roger Smith's shuttering GMC in Flint. Moore's point was not that Smith was a jerk (he wasn't by all accounts), but rather it was that Smith simply could not perceive the citizens of Flint and what he had done to them by shutting down GMC. Get a copy and watch it!

  • happy2bhere clearfield, UT
    April 29, 2014 7:57 a.m.

    Stats pretty much show, that if there has been any recovery in jobs in this economy, the job creation has been low wage ones. And the higher wage ones lost have not been replaced. Is this going to be sold to the American people as the "new normal?" I sure hope the collective American memory is not so short as to accept that new normal. If not then maybe the next elections will give the Republicans the same opportunity to make changes that they gave Obama, Pelosi, and Reid back in 2008.

  • ordinaryfolks seattle, WA
    April 29, 2014 8:26 a.m.

    When most people talk about Capitalists, they conjure up the mental image of the nice man who started a business on Main Street USA, and made a modest success of it.

    Capitalism in the US is not like that. The system is dominated by corporate interests, whose interests are not those of his neighbors in his community. Corporate America is run for the benefit of an increasing smaller number of individuals that reap excessive rewards for their ability to manipulate the government and their shareholders. Their ability to influence is unprecedented in our national history. The make the rules, the break the rules, and no one can change this system.

    The Walton clan is the finest example of this available. Their workers are subsidized by tax paying America. Their immense wealth was not created by them, but given to them by their father. They lavishly spend on politics to bend the government to their will. And an increasingly poor America is finding out you can not even afford to shop there (sales are stagnant).

  • a bit of reality Shawnee Mission, KS
    April 29, 2014 9:22 a.m.

    @ 2 bits:

    Karl Marx’s arguments don't hinge on whether the folks in the rich class are nice and want everybody to be prosperous. Rather, they focus on the realities of how free market forces naturally cause wealth to concentrate in the hands of the few. In the same way that wealthy people create jobs for the poor, the working poor are the people who create the fortunes of the wealthy.

    In the 1950's, the American economic system featured strong unions, a strong middle class, a top marginal income rate of 91%, and balanced budgets. We’ve replaced that system for one with a shrinking middle class, high budget deficits, low tax rates for the ultra-wealthy, workers fall further and further behind, high unemployment, and the top 1% getting ever higher incomes and ever more wealth.

    If our concentration of wealth resembles that of a third-world country, should we be surprised that our unemployment rate resembles that of a third-world country as well?

  • JoeCapitalist2 Orem, UT
    April 29, 2014 9:28 a.m.

    ordinaryfolks: "When most people talk about Capitalists, they conjure up the mental image of the nice man who started a business on Main Street USA, and made a modest success of it. Capitalism in the US is not like that..."

    There are huge corporations that do bad things, but the vast majority of capitalist are small businessmen and women. Whenever the political progressives in this country want to "stick it to the rich", they pull out the corporate fat-cats and say that we need to tax and regulate them until it hurts.

    Unfortunately, those people are largely immune from all the new government control. Their armies of lawyers and lobbyists make sure that the new bureaucracy does not touch them. Instead the small guy gets saddled with all the new government red tape.

    Every time some progressive says "let's reign in corporations", what he is really saying is "let's make sure nobody is able to compete with them".

  • vern001 Castle Rock, CO
    April 29, 2014 10:16 a.m.

    If what the author says is true--namely, that we have lost jobs which will never come back--then we, as a nation, need to accept that high unemployment will be with us forever.

    So, do we accept that we will have millions of unemployed Americans living on the fringe of society who, after losing their unemployment benefits, are going to be living like paupers, or do we come up with some sort of safety net to support them and help them?

    Our economy is increasingly moving towards one of haves and have nots. The haves include the 55 employees of Whataspp, which was just purchased by Facebook for $16 billion despite having no profits. The have nots are those whose jobs have become redundant because of technology and outsourcing.

    As a nation, we need to decide whether we value the latter as well and what kind of a life we want for them.

  • Kent C. DeForrest Provo, UT
    April 29, 2014 10:53 a.m.

    Let's be very clear about the effects of replacing high-wage workers with either low-wage foreigners or technology. Either simply reduces the labor factor in the profit equation, thus increasing the amount that is shifted into the hands of the owners and executives. The net result, regardless of the cost of clothing, is that more and more money is accumulating in the hands of a few, and the consumer classes have less and less with which to buy the consumer products that corporations need to sell in order to stay in business. This is a formula that cannot create a sustainable economy. In other words, business owners and executives, in the pursuit of almighty profit, are actually performing a slow-motion act of hara-kiri.

  • Redshirt1701 Deep Space 9, Ut
    April 29, 2014 12:25 p.m.

    To "airnaut" how does outlawing unions help the Gadiantons? The Gadiantons cannot exist where there is not a governing structure. If anything getting rid of unions will HELP rid us of Gadiantons. Just look at the UAW leaders. They earn $400,000, and have a staff of 31 earning more than $200,000 each. All from people earning on average around $56,000/yr. It seems like the Gadiantons run the Unions. Just look at how they have pushed to make it easier for unions to force themselves on businesses.

    To "ordinaryfolks" but most business owners are nice guys who care about their employees and their communities. In today's paper there is an article about the Larry H. Miller employees volunteering. Larry H. Miller was known for being generous to his employees and the community. I have worked for a man who started a company and he cared for his employees and their families.

    The fact is that most business owners are nice guys that take care of their employees.

  • kiddsport Fairview, UT
    April 29, 2014 2:56 p.m.

    @Marxist- next time you take a course in free-market capitalism, make sure it's not taught by a fellow Marxist. Not sure how many of those you might find in your ivory tower universities, though. The Marxist misunderstanding of where wealth is created has its roots in envy, the yang of greed's yin. Wealth is created when an individual takes a risk or invests capital where others will not. Those who invest or risk little or nothing, such as a worker for hire, should not expect great returns.
    Income inequality will always exist as long as there is wide variability in effort and risk invested by individuals.
    Painting corporate America as greedy fat-cats is like comparing anyone who is obese to Michael Moore. Most people would reject that type of characterization. Bureau of Labor Statistics indicates small businesses make up the vast majority of "corporate" America. What hurts them most are over-regulation, high (and uncertain) taxes, and, of course, global competition, where foreign companies are in large part subsidized or protected by their governments. We don't help ourselves by being protectionist ourselves or by allowing foreign trading partners to "cheat" on their agreements with us.

  • Screwdriver Casa Grande, AZ
    April 29, 2014 6:45 p.m.

    That jobs have left the country is not the fault of the government regulations or wages. Simply the lack of regulations and decent wages in other countries and our lack of protectionism for our jobs.

    China, now there's a country that protects it's interests with import restrictions. They are doing pretty well with it.

  • cmsense Kaysville, UT
    April 30, 2014 6:16 a.m.

    @ Mike Richards

    Our 17 trillion in debt is not due to Obamacare. Its main provisions are just being enacted this year. For those who choose (yes, you have freedom to choose) not enroll in health insurance you will have a tax penalty of $98 or 1% of your income which is to offset the risk that individual's lack of insurance puts on the health system, because we will not as a society turn that individual away if he gets cancer or has a severe accident that racks up tens of thousands of dollars that he then stiffs the hospital out of when he has to file for bankruptcy because he can't work either because he is too sick, too poor or too ill etc.

    The unfunded Iraq war had far less return on investment than Obamacare ever will. We are still paying the interest on the trillions of debt that war left us with. The medicare prescription drug benefit was rolled out without any attempt to pay for it at all. Medicare itself is far more costly and unfunded than obamacare ever was. There is a lot to gripe about, but Obamacare is not the socialist evil you think it is.

  • Redshirt1701 Deep Space 9, Ut
    April 30, 2014 10:08 a.m.

    To "cmsense" and now under Obamacare that person who has to " file for bankruptcy because he can't work either because he is too sick, too poor or too ill etc." will still file for bankruptcy because they do not have the money to pay for the deductable. So, rather than paying once for their care we get to pay twice after they file for bankruptcy becuase they racked up medical bills.

    If Iraq was unfunded, how is it that the military could afford to be over there? How is it that it received funding every year from Congress. The facts show that the Iraq war was funded. Plus, since when do we look for a ROI on a war? How do you measure freedome, or how much is freedom worth? I am sure that there are a lot of Kurds that would disagree with your statements.

  • use the noodle Casa Grande, AZ
    April 30, 2014 4:57 p.m.

    The world has never had the level of greed actualized as it does now. Fiat currency, oppressed foreign workers and unlimited near free capital for the capitalist class all make it easier than ever to take the benefits of other people's labor.

    Before these tools of labor theft, it was a lot harder to control others and keep them in servitude.

  • cmsense Kaysville, UT
    April 30, 2014 8:22 p.m.

    @ Redshirt

    Exactly, we pay for it either way ( unpaid hospital bills) but there will be a lot less people filing for bankruptcy with a 5k or 10K out of pocket maximum than an unlimited no insurance plan.

    Yes, there were defense appropraitions for the Iraq war, but they were paid for with printed money and will be paid for by our grandchildren. If you will remember, Bush cut taxes for capital gains etc and the debt soared, but the Buffets (Warren and Jimmy) got to keep more. Rather than unfunded, we could say its unpaid for just like the rest of the 17 trillion.

    I'm sure the Kurds were quite happy with the blood and treasure we spent fighting the enemy of Iran. I'm sure the Ayatola was also quite happy. It was sold as a fight to get rid of weapons of mass destruction of which there was none found ie Big blunder.

  • RedShirt USS Enterprise, UT
    May 1, 2014 8:18 a.m.

    To "cmsense" I don't think you read things right. We pay TWICE for the care of the poor. That means that we pay first for their insurance then we pay again when they go to the hospital.

    According to CNN "Medical bills prompt more than 60 percent of U.S. bankruptcies" 92% of all people who file for bankruptcy had debts more than $5000. Of those 78% had insurance and still had medical bills totalling more than $17,000. The uninsured filed bankruptcy with nearly $27,000 in debt. The $10,000 difference is LESS than the cost of insurance for a year. So again, it is cheaper to NOT insure the poor.

    If the goal is to get care to the poor, then the government should set up clinics to give them care NOT insurance. Insurance does not provide care.

    So you agree that Iraq was paid for on the national Credit card. You should also realize that Obamacare will also be paid for on that same credit card since the CBO has pointed out that it will add to the national debt.