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June 05, 2008

Time to demand higher wages

Higher prices for the working people are the cost of doing business: gasoline to go to work, baby sitters and school lunches. But unlike the big companies, we have a tougher time absorbing the costs.

One way we can fight back is with a better wage increase. We can let the unions demand a wage increase to whatever percent prices go up on commodities that we are held hostage with, such as gasoline, utilities, taxes and whatever we buy from foreign countries. Especially the ones that sell us oil.

The non-union employers will follow the unions. I know some people don’t like unions, but they do set the pace for everyone’s wages.

Also, senior citizens over 70 should get a discount on the gas tax and school taxes, as we don’t drive as much anymore and have no one in school. We paid our dues.

If that doesn’t work, we should fight back at the polls by voting out all those in office and trying to get new ones in until we get somebody who cares.

Joe Christifano
Kansas City

Comments

Engineer

devin
I'm not sure of your take on the causes of the "Great Depression". I was there, although young, but everyone seemed to be doing well in 1928. Lots of money floating around, lots of good times. Years later, following the death of a family member, I came into possession of a good sized box filled with worthless stock certificates. But what are you proposing? It appears to me that if we are to be part of a global economy and our products are to remain competitive, American semi-skilled (factory) workers can no longer earn the salary rates they have enjoyed in the past. Their huge productive edge due to the massive capital investments supporting their jobs is diminishing due to capital investments in other countries. Perhaps you or Casady can tell me how this may be avoided.

NoMoreMrNiceGuy

Sure we can have it both ways, jobs being sourced simply for cheap labor and not allwoing the same wage and labor guidelines we have is not moral or the right thing to do. I agree with Devin about balance.
I refuse to wear Nike, for several reason, but one being that they are made with slave labor then endorsed by hypocrite athletes.
I wear New Balance, a better shoe and made in the States. As for 4 day work weeks, that would be a good idea for those that are in an industry or profession where that is achievable. Unfortunately our industry does not operate on those bankers hours.
I say demand lower taxation and more government accountability.

Casady

It sounds like you had a really cool trip, Devin. I'm jealous.

Your comments echo some basic economic theory that I hold pretty near and dear. As you pointed out, an unfettered capitalist system does result in a concentration of power. Take it one step further and that balance of power will leverage economies of scale will result in a plethora of monopolistic indutries which will, in turn reap monopoly profits. Not only will the producer/labor be lost in this situation as the worker skilled in a particular industry is forced to work for whatever wage the monopoly supplier decides to pay but goods and services are also priced above marginal cost which is usually not the case in an economy where there are multiple producers of similar goods and services.

devin

My wife is spending the summer leading cycling tours of Europe, and I just got back from spending a couple weeks with her in eastern Europe. It was very fascinating to talk with people who had lived under communism. What was most surprising was their ambivalence toward the change. As one of my wife's friends summed it up, "Under communism, we made plenty of money but there was nothing to buy. Under capitalism, there is plenty to buy but we can't afford it." Don't get me wrong, they were very glad to get rid of political communism--the totalitarian state that controlled what people read, said, and did--but I didn't meet anybody who was unreservedly glad to have capitalism. And most of the people I talked to were business managers and owners who benefit the most from capitalism. It was very interesting.

I really liked the comments of my wife's friend because they're a much more succinct way of saying what I've been advocating. Without some method of wealth distribution, power and wealth inevitably become concentrated in fewer and fewer hands. Nature is simply horribly unfair when it comes to handing out talent. Just look at the animal kingdom--most animals exist solely as food for other animals, only the strongest get to reproduce. Human society is no different...left to its own devices, an unfettered capitalist system simply becomes a way for the tiny fraction of most talented people to extract resources from the rest. The trick to a healthy economy is balancing the need to reward talent and productivity with the need to spread the wealth to everybody. Without an intentional effort to do this, economies become stagnant because eventually the masses become incapable of consuming more because they have no more resources to spend. This was the problem of the Great Depression...the rich had plenty of money to invest, but nothing to invest it in because the masses couldn't afford to buy any more. It was only ended through the massive wealth redistribution program that was WWII. Of course, the idea is at least 3000 years old as it's mentioned in the old testament of the Bible. Every 50 years, debts were canceled, so economic conditions were to some extent "reset" to provide the massive buildup of wealth in the hands of only a few.

Finding the right balance is always a difficult thing, but from the looks of what they've accomplished in less than two decades in eastern Europe, it seems like they're onto something.

solomon

Imagine Lionel Barrymore's voice when reading this letter. Its fun.

Marctnts

One more thing:

"Also, senior citizens over 70 should get a discount on the gas tax and school taxes, as we don’t drive as much anymore and have no one in school. We paid our dues."

I'm not sure I follow the logic on the gas tax issue. Since this tax is paid at the pump with every gallon bought, if you drive less (hence you buy less), you are already paying less in taxes. What more is this guying looking for, a senior discount similar to what he probably gets when he buys a cup of coffee at McDonald's?

Marctnts

To the letter writer, feel free to demand all the higher you wages you want. Kick, scream, strike, do wantever you think you must to "demand" to be paid more.

Rememeber, however, that the company you work for probably pays you what they feel (and the market has determined) your services are worth, not what YOU have arbitrarily determined is justified by unrelated price increases. As such, they may decide to respond to your demands with a polite "NO" or a pink slip.

See how that works. You are free to demand more money. The company is free to say no if the market determines there are others who will work for the salary you make. No need for government involvement, no need for new regulations.

Marctnts

I have to agree with Casady on this one. Advocating the free market, which I also happen to agree with, while at the same time trying to eliminate foreign competition seems backwards to me.

Casady

"tomatoes". Sorry. I don't want Katman coming after me.

Casady

"Another option is to change to a 4 day work week (some city governments are doing that and it's already happened in Europe), tele commute is possible for some positions, have your employer provide bus passes, etc."

I've been a long time advocate of these options as well. I'm not sure about the gardening approach though. The last time I tried to set up a garden, it cost me over $300 for a dozen shrivled up tomoatoes but that's just me.

NMMNG, how can you advocate a free market system yet put forth regulations on outsourcing? Like it or not, we are part of a global economy and you can't have it both ways.

dolcemusica1

I'm an accountant and can tell you - higher wages either means increasing prices to keep your net income intact or the bottom line suffers (which means the business could go under eventually).

Another option is to change to a 4 day work week (some city governments are doing that and it's already happened in Europe), tele commute is possible for some positions, have your employer provide bus passes, etc. Also, grow your own tomatoes, fruits, etc. Go in with others and buy a side of beef from the meat market - prices can be cheaper that way.

There are creative ways to keep your way of life in tact without significantly raising the costs of your company (I'm gathering you do still want your company to stay in business so you have a job).

NoMoreMrNiceGuy

"Demand" higher wages. Whiner. You can not demand anything, you are paid according to the value of your skill sets and what you bring to the company.

Unions DO NOT set the pace for everyones wages. While I advocate paying people fairly for a fair days work, unions often foster the opposite. People that think they are entitled. If I own a small business and you DEMAND higher wages, I will simply hire someone else unless you warrant higher wages. How about lower taxes? You see when you increase wages on enterprise you also increase taxes on enterprise. Let's also throw in the mix that Obama and the Dems want to implement mandatory healthcare coverage (regardless of cost) by all employers. This will cause many small businesses to simply close shop. I know, I have owned 2 subchapter S corps. and while we paid very well, we could not afford elaborate healthcare thanks to the ridiculous taxation and overhead that goes along with many business models. Lower taxation and more incentive is the nly way to balance things out. Companies that outsoource without merit overseas should be penalized but also should be given the opportunity to bring those jobs back to the USA with tax incentives. Unions do not help the market but hurt it.

Engineer

If wages go up, prices must follow. If prices rise for reasons unrelated to wages, raising wages will case an additional rise in prices.

 
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