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dreamdancer

Restore the Basic Bargain

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beginning with the minimum wage...

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For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling.

That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.

Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day – three times what the typical factory employee earned at the time. The Wall Street Journal termed his action “an economic crime.”

But Ford knew it was a cunning business move. The higher wage turned Ford’s auto workers into customers who could afford to buy Model T’s. In two years Ford’s profits more than doubled.

That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago.

The basic bargain is over – not only at Ford but all over the American economy.

New data from the Commerce Department shows employee pay is now down to the smallest share of the economy since the government began collecting wage and salary data in 1929.

Meanwhile, corporate profits now constitute the largest share of the economy since 1929.

1929, by the way, was the year of the Great Crash that ushered in the Great Depression.



http://www.commondreams.org/view/2011/11/30-2
stay away from moving propellers - they bite
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The Wisdom of Brak: Brak's Definition of Love

"You know love is a happy time. All throughout the universe.
It's when the male part of the species goes to the female part of the species and says:

"Hey, do you want to go on a date?" And then she would say: "Why yes, I'd like to go on a date." ... If you're LUCKY!-

And then you go to a restaurant, and she gets something called "a salad."

And then he gets a big piece of beef, that he eats.

And that to me ladies and gentlemen, is LOVE.

Kinda makes you cry, doesn't it?"

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In other words, we’re in trouble because the basic bargain has been broken.

Yet incredibly, some politicians think the best way to restart the nation’s job engine is to make corporations even more profitable and the rich even richer – reducing corporate taxes; cutting back on regulations protecting public health, worker safety, the environment, and small investors; and slashing taxes on the very rich.

These same politicians think average workers should have even less money in their pockets. They don’t want to extend the payroll tax cut or unemployment benefits. And they want to make it harder for workers to form unions.

These politicians have reality upside down.

Corporations don’t need more money. They have so much money right now they don’t even know what to do with all of it. They’re even buying back their own shares of stock. This is a bonanza for CEOs whose pay is tied to stock prices and it increases the wealth of other shareholders. But it doesn’t create a single new job and it doesn’t raise the wages of a single employee.

Nor do the wealthiest Americans need more money. The top 1 percent is already taking in more than 20 percent of total income — the highest since the 1920s.



http://www.commondreams.org/view/2011/11/30-2
stay away from moving propellers - they bite
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We’re in a vicious cycle. The only way out of it is to put more money into the pockets of average Americans. That means extending the payroll tax cut. And extending unemployment benefits.

Don’t stop there. Create a WPA to get the long-term unemployed back to work. And a Civilian Conservation Corp to create jobs for young people.

Hire teachers for classrooms now overcrowded, and pay them enough to attract people who are talented as well as dedicated. Rebuild our pot-holed highways. Create a world-class infrastructure.

Pay for this by hiking taxes on millionaires.

A basic bargain was once at the heart of the American economy. It recognized that average workers are also consumers and that their paychecks keep the economy going.

We can’t have a healthy economy until that bargain is restored.



http://www.commondreams.org/view/2011/11/30-2
stay away from moving propellers - they bite
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>Back in 1914, Henry Ford announced he was paying workers on his Model T assembly
> line $5 a day – three times what the typical factory employee earned at the time. The
>Wall Street Journal termed his action “an economic crime.”

Yep. And why could he afford to do that? Because he eliminated 90% of the jobs on the assembly line through automation, and could afford to pay top-1% wages to those lucky few who remained.

Cool to see you finally realizing that that's a good thing.

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>Back in 1914, Henry Ford announced he was paying workers on his Model T assembly
> line $5 a day – three times what the typical factory employee earned at the time. The
>Wall Street Journal termed his action “an economic crime.”

Yep. And why could he afford to do that? Because he eliminated 90% of the jobs on the assembly line through automation, and could afford to pay top-1% wages to those lucky few who remained.

Cool to see you finally realizing that that's a good thing.



excuse me - i'm the one who got banned for advocating just such a thing and calling those who disagreed 'luddites'.

keep up billvon...
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>Back in 1914, Henry Ford announced he was paying workers on his Model T assembly
> line $5 a day – three times what the typical factory employee earned at the time. The
>Wall Street Journal termed his action “an economic crime.”

Yep. And why could he afford to do that? Because he eliminated 90% of the jobs on the assembly line through automation, and could afford to pay top-1% wages to those lucky few who remained.

Cool to see you finally realizing that that's a good thing.



He's right, Bill. This is no different than him celebrating the firing of grocery store cashiers. Though I still haven't figured out why he favors lower employment at the same time he advocates higher wages.

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>raising the minimum wage will help rebalance the economy . . .

True. You could raise the minimum wage through government intervention so everyone makes at least a million a year, for example. We could pay for it by taxes on people who make a million dollars a year.

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you really don't learn do you billvon...

meanwhile i didn't realise calling someone a 'luddite' was such a serious offence. now, do you agree with ford - or the 'luddite' camp...
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raising the minimum wage will help rebalance the economy - you say it will raise unemployment. i disagree...



well the two examples we've specifically talked about- Ford pays more, but replaces 10 workers with 1, and the recent checkout clerks - replace 4 people with 1, maybe pay more. These clearly increase unemployment.

Ford's time was one with two world wars, few working women, and a Great Depression. Our time has yet to be written, but there's no reason to think that "saved" money will quickly translate into work for the displaced checkers.

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raising the minimum wage will help rebalance the economy - you say it will raise unemployment. i disagree...



well the two examples we've specifically talked about- Ford pays more, but replaces 10 workers with 1, and the recent checkout clerks - replace 4 people with 1, maybe pay more. These clearly increase unemployment.

Ford's time was one with two world wars, few working women, and a Great Depression. Our time has yet to be written, but there's no reason to think that "saved" money will quickly translate into work for the displaced checkers.



so ford didn't hugely increase productivity through mass production - he merely 'increased unemployment'. methinks your analysis needs more work...
stay away from moving propellers - they bite
blue skies from thai sky adventures
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raising the minimum wage will help rebalance the economy - you say it will raise unemployment. i disagree...



Hmm, lets see, a Small Business Owner has enough money to pay two employees $10 an hour, gets forced to pay $15 and hour, but gets non new funds for it, yep one gets let go, or is now unemployed.

Still happening here, we just had a farewell for two folks who at midnight tonight are unemployed. Revenues got reduced, 20% cut from the GOV (Tough call but the right call), salaries got reduced, but we could not go deep enough to keep ALL the jobs. Same effect as raising pay with out raising revenue.

Matt
An Instructors first concern is student safety.
So, start being safe, first!!!

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>so ford didn't hugely increase productivity through mass production - he merely
>'increased unemployment'.

He did both. He made more cars with fewer people. If that trend continues, eventually very few people will make a LOT of money and be super productive - and the rest will go the way of those other factory workers that Ford did not employ.

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raising the minimum wage will help rebalance the economy - you say it will raise unemployment. i disagree...



well the two examples we've specifically talked about- Ford pays more, but replaces 10 workers with 1, and the recent checkout clerks - replace 4 people with 1, maybe pay more. These clearly increase unemployment.

Ford's time was one with two world wars, few working women, and a Great Depression. Our time has yet to be written, but there's no reason to think that "saved" money will quickly translate into work for the displaced checkers.



so ford didn't hugely increase productivity through mass production - he merely 'increased unemployment'. methinks your analysis needs more work...



Ford increased production through assembly line techniques, that resulted in the ability to mass produce a product. The Technique resulted in allowing him to not employ as many workers and reduce over head and increase profits for his business and its investors.

Matt
An Instructors first concern is student safety.
So, start being safe, first!!!

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Ford increased production through assembly line techniques, that resulted in the ability to mass produce a product. The Technique resulted in allowing him to not employ as many workers and reduce over head and increase profits for his business and its investors.



Claiming the substantial technology improvements in manufacturing substantially provided an edge for a single company to outperform its competitors is absolute heresy. Logic and truth is not allowed in this church.

Please stick with the unsubstantiated theory that raising the minimum wage in a single company is a good example of how that same action will work when forced on ALL companies in the world at the same time. Despite the fact that doing so on everybody results in no specific advantage to any of the companies. Despite common sense. Despite any economic benefit.

It's essentially a request to print vast amounts of cash for no reason other than to devalue the dollar significantly.

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

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>so ford didn't hugely increase productivity through mass production - he merely
>'increased unemployment'.

He did both. He made more cars with fewer people. If that trend continues, eventually very few people will make a LOT of money and be super productive - and the rest will go the way of those other factory workers that Ford did not employ.



seems to me you're argueing against the nature of the modern economy - growth is gained through increased productivity. you seem to be argueing for the 'luddite' camp. please make yourself clear. was ford right or wrong?

in your analogy there will be no-one able to buy the cars as the majority will be unemployed. the system will then crash presumably (you tell me)...
stay away from moving propellers - they bite
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It's essentially a request to print vast amounts of cash for no reason other than to devalue the dollar significantly.



In all fairness, a devaluation of the US Dollar is exactly what the US needs to deal with their debt load.

However, raising minimum wage is not the way to go about it.

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growth is gained through increased productivity...



absolutely true


however, you are not making that case - you are making the case that increased wages will increase productivity - which is only true on a preferential basis - changing the law would invalidate that - it would take what works on a local (small portion of the market) level and try to make it work on a macro (everyone) level.

non-starter. even a caveman can understand that your premise is truly idiocy, or a hidden agenda to devalue the currency

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

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In all fairness, a devaluation of the US Dollar is exactly what the US needs to deal with their debt load.



That's not substantiated in any way. you just as well print enough dollars to just pay off the debt then -

no one will notice and the economy will just churn along happily


devaluation of the US Dollar is just what every OTHER economy needs to get a temporary boost - before crashing along with us.

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

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