Wages @ MindSay 
money
Yves Smith (http://www.globalstrategywatch.com/independent-insight/990e5c20df26aa346d093495f659e026/) writes, “I've been meaning to discuss how increased income disparity is bad for economic growth, because in the end you wind up with insufficient labor income to fund consumption . . . and too much capital chasing too few investment opportunities. . . . It turns out I was beaten to the punch by nearly 50 years [since]. . . former Fed chairman Marriner Eccles . . . links the consumption shortfall directly to a shift in wealth towards the top. And some of the other patterns of the Twenties, such as debt-fueled growth, are worryingly familiar.” Strange how Robert Reich and other economists should be pointing this out now, especially since the shift in wealth towards the top and debt-fueled growth have been going on for at least three decades. What good are economists who don’t raise policy issues before their disastrous effects happen?
What Fed chairman Eccles described are simple mathematical results. An economy, regardless of the economic theory that governs it, consists of workers employed by enterprises that produce goods and services for sale either domestically or internationally. The value of the products and services sold must equal the sum of the wages paid to workers, the overhead of the enterprises, and their profits. If all the products and services are sold, the sum of the incomes of the buyers must equal or surpass the value of the products and services, for if the sum is less, the products and services could not have been bought (unless the shortfall were met by borrowing), in which case the economy would have to shrink. If the shortfall were met by borrowing, the future incomes of the buyers would have to be sufficient to both buy additional products and services and service the debt. The result is that in the absence of growing wages, buyers will eventually reach a point where they can neither continue their levels of consumption nor service their debt, and the economy ceases to function.
The American economy has been characterized over the past several decades by policies that were bound to produce this result. First American companies shifted a great deal of manufacturing offshore. Second, they created conditions designed to hold down wages. Third, they made borrowing easy but expensive.
The first of these made consumption the economy’s driving force (perhaps 70% of the economy is consumption driven.) If the borrowing had not been made easy, consumption, and the economy as a whole, would have collapsed because of the restraint on wage growth that resulted from the second policy. But given that restraint, the debt assumed by consumers had to eventually reach a level that made it unserviceable. The only possible result of these policies is an economic collapse.
That economists could not have foreseen this consequence is incredible.
© 2008 John Kozy
OK, so I lasted all of 2 weeks at this new job,but I got an interview this past Saturday and then a phone call on Monday to confirm that I got the job! So I went in to new job on Tuesday to fill out paperwork etc.Only there for about 30 minutes. So on Wednesday,19th, I told the boss at 2 week job that I was leaving. I reminded her that I told her I was still interviewing....She wasn't pleased.....I can't work 20 -25 hrs a week at min wage(6.15) even if I get tips. The tips have been horrible anyway. I walked away with just $8 for 3 days..... new job pays 7.25 to start and can work my way up..... Old job said it would be awhile before I could have $7. New job can work 30-35 hrs a week if I want them... still in Coffee serving mode though...... Two week job wasn't half bad, but I needed more hours and pay!Start 26th at new job.....Right after dentist appointment! UGh! Anyway, we will see what goes....
The increase in the minimum, the first in a decade, was approved by a 94-3 vote, capping a nine-day debate over how to balance the wage hike with the needs of businesses that employ low-wage workers.
A top priority of Democrats, the wage hike has both real and symbolic consequences. It would be one of the first major legislative successes of the new Democratic-controlled Congress.
"Passing this wage hike represents a small but necessary step to help lift America's working poor out of the ditches of poverty and onto the road toward economic prosperity," said Sen. Edward Kennedy, D-Mass.
President Bush urged the House to support the measure, including the tax help for small business. He said, "The Senate has taken a step toward helping maintain a strong and dynamic labor market and promoting continued economic growth."
The bill must now be reconciled with the House version passed Jan. 10 that contained no tax provisions. House Democrats have insisted they want a minimum wage bill with no strings attached, though some have conceded the difficulty of passing the legislation in the Senate without tax breaks.
Tonight my host brother got into a half-lighthearted, half-serious argument with his father about where he could get his Master’s in Business Administration. Osama, my host brother, wants to go to London or Manchester for his studies; however, his father said that he would go to Switzerland because they have family there that he could live with. This angered Osama as he told me of his desire to live away from home, a desire that was quite acute on account of his also living at home during college. I later learned that this lack of independence from one’s own family is quite common; although, the reasons for this fact are apparently more than just cultural.
Money is a huge reason for sons staying with their families after college. People do not get either the wages or student loans that Americans receive; therefore, Jordanians in their twenties can not afford (literally) to live away from their parents. My oldest brother, Marwan, is a perfect example. Educated at the highly regarded American University in Beruit, stabiley employed at a graphics design company, 28 years old, Marwan would without question be living on his own if he were an American; however, this is not the case as he lives in Jordan. Because of the low wages, new couples that are married often live in additions to their parents’ homes. Once again, culture may have something to do with this, but it is not the only thing.
On Monday, the local paper ran a story titled Study: Americans Getting More Work, Less Pay. It said, "Wages stopped rising and actually began losing ground starting in 2001, despite continued growth in productivity and corporate profits." It also said, "In 2005, CEO's earned about 262 times more than the average worker, according to EPI data. Forty years ago, that ratio was much smaller, with CEO's earning 24 times more."
What have these thieves done to earn these high salaries? Does anyone care that average hard working Americans are getting stiffed?
The local fishwrap decided to interview some natives to get their opinions on these issues. Here is a quote from a person who is considered a local celebrity. Here is the quote from "Brother" Gary Moses, "I put the job first, whether or not I get paid. If a job calls for working more, that's what you do."
In that case, I've got some work for you to do. Can you please come over and wash my car and wash the dishes? I'll pay you next year. Corporate America must love clowns like these.
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