Nick Hanauer, a multi-billionaire who made his money in the new
economy, explains the financial situation we middle-class folks are
in, and why our real incomes are falling; who the real job-creators
are; and why the stock market is going through the roof.
This will either make your head spin or make you punch a hole in your
drywall. Unka' George, this is for you:
I find that reasoning to be ridiculous. According to its proponent, the
reason for disappearance of middle class, is that a certain arcane
"federal overtime rule" was not adjusted for inflation.
This makes no sense. We live in a capitalist society where wages, for
the most part, are formed in a labor marketplace.
If workers bring a certain incremental additional value to employers,
then their wage would reflect that additional value (the extra amount
that the employer would earn from hiring an additional worker).
Workers with scarce skills or who are highly profitable, would command
appropriate wages, that would rise as the marginal effect of
workers on profits increases. That happens with or without overtime
Overtime rules were not designed to distort hourly wages. They were
designed to push working hours closer to 8 hours per day and to
increase employment. It is more profitable for almost all employers to
have 4 workers work 10 hours per day, than to have 5 workers work 8
hours per day, with the fifth worker bring unemployed. The overtime
rules push employers more towards employing five workers at 8 hours a
All kinds of regulations, of labor, salaries, wages etc, brings about
distortions in the marketplace that cost the economy money. It is
possible that the value of good social changes offset that cost, but
we should be clear on the existence of that cost.
In addition, when costs of transportation of goods or services are
low, jobs can move to countries with less regulations or lower costs.
I can emotionally understand why that billionaire campaigns for $15
minimum wage, but his reasoning does not stand up to scrutiny.
On Thu, 25 Dec 2014 20:24:55 -0600, Ignoramus11791
I'm going to guess you didn't read the whole article, nor the other
articles and the TED talk that Nick Haneur has given.
The overtime thing was just a response to what PBS was interviewing
about. Read the rest of the article and you'll have a better picture.
The "labor marketplace" is hugely biased against labor, and has been
throughout history, with a couple of exceptions: the World Wars and a
couple of bubbles, in which labor gained an advantage.
The study of Labor Economics is worth a Master's degree of study --
and often is.
Not if the workers are bidding each other down. That's the most usual
state in any industrial economy.
BTW, this is not something that's worth debating. Any study of the
history of the Industrial Revolution makes it clear what happens in
"Appropriate wages" are competitively determined. In general, workers
will work for whatever they can earn; if someone else will work for
less, they have to take less.
There is no "natural ratio" or natural wage. Labor is almost never in
a position to bargain much.
Think about it: How do employers decide what to pay a given worker?
It's competition between workers, with the marginal rate of return set
by competition with other companies who are in the same market. If
everyone pays $20/hour, then the worker is worth $20. But if the
competitors are paying $10/hour, then the worker is worth $10, on a
Management is almost always in the stronger position.
One thing that must be agreed at this point or the discussion will go
off the track: The market for labor is, and has been since the
beginning of the Industrial Revolution, heavily biased, disadvantaging
labor. The "distortion" is a function of labor's relative weakness.
There is no -- absolutely no -- evidence to contradict this.
The growth of the American middle class, and our great economic
success, is the result of legislation in favor of labor that attempted
to establish a more realistic balance. Our economic growth over the
past 70 years is largely the result of re-balancing that drove up
consumption. Our economy is 70% domestic consumption.
That's true. Once a country goes all-in for globalization and
offshoring, they've lost control of the balancing controls on their
labor market. And the result, for the US, is a 30-year decline in the
real wages of the middle class and a struggle to keep unemployment
down to a balancing level.
On Thu, 25 Dec 2014 20:38:07 -0600, "David R. Birch"
Many businesses have multiple "managers" on salary making
this little. Food service and chain retail stores are prone
to having a day manager, an evening manager, a night
manager, etc. with no authority to decide anything, and no
employees they supervise. Two prong approach: (1) The
employee gets a title instead of a raise; and (2) the
employee is overtime exempt. What's not to like?
For the employee, what's to like?
This means there are lots of people who have risen to their level of
incompetence with a meaningless title and poverty level salaries. Not
really middle class.
Which explains the service we get in the food and retail industries, but
is only a small part at the low end of the middle class. Anyone with
anything on the ball can do better when they see a title and no overtime
is a dead end.
On Thu, 25 Dec 2014 16:43:27 -0800 (PST), " email@example.com"
=============And many don't, even though they are required to do so.
To even the playing field between the honest employers, and
those who cut their labor costs by not paying overtime, it
should be mandatory that every employee punches in and out,
and working time off site is recorded. [random spot checks
and significant fines (treble FICA and back pay to the
employees?) should help implementation] The spot checks
should concentrate on just before starting time, just after
quitting time, and lunch/break time. Most likely this
should be augmented by random surveys of the employees to
determine how many hours of "voluntary" and required
overtime was worked, and with or without time-and-a-half pay
to identify the "bad apples" for on-site spot checks. This
was too much record keeping before computers and the smart
phone, but is entirely possible now.
While it is not reflected in the compensation data, the
average American is now working at least 181 hours per year
*MORE* than they were a generation ago. This is 4_1/2
weeks, or more than a month.
some time and attendance software and terminals, some with
cloud storage, and some using cell phones
We have to tools to correct this abuse, what we lack is the
will to use these tools to do so...
On Friday, December 26, 2014 12:37:12 AM UTC-5, F. George McDuffee wrote:
Thank god we do not have the will to impose more regulations on businesses.
Under your plan every employee would have to punch a time clock. In my entire working life , I never had to punch a time clock. And yet I did work a reasonable amount of overtime.
On Fri, 26 Dec 2014 09:00:56 -0500, "Jim Wilkins"
=============Several questions wrapped up in this strawman, such as "are
CO2 emissions a problem," and "how do you define excessive?"
Use restrictions may be well required where there is a
limited supply such as not watering the lawn during a
drought, or when electricity demand exceeds supply.
On Sat, 27 Dec 2014 06:39:25 -0600, "David R. Birch"
Yes, those evil doers in the 3rd world countries. Of course China has
a energy use (calculated in million BBL oil equivalent) of 10.2 per
capita, Indian 2.9 per capita and the U.S., 57.2 so we can tell that
them primitive places need to cut down!
On Fri, 26 Dec 2014 05:04:49 -0800 (PST), " firstname.lastname@example.org"
===================I also fell for this scam.
It is a carefully nurtured myth that people who do not punch
a time clock are some how superior to those that do. In too
many cases it simply means that instead of real cash money,
the employee got a title or classification change (possibly
with a token raise), e. g. from salary to salary exempt, and
more work for no (or very little) more pay.
I see no reason why everyone from the CEO down to the
sweeper should not punch in and out when they are working.
We see there is an apparent problem but there is no "hard"
data, and the only way to acquire it is to require all
employees to "punch the clock."
I am sure many of us will be shocked, both by how much we
are working, and the extent un-paid (or straight time)
over-time is required, and how much money is being diverted
by unethical or ignorant employers.
On 12/26/2014 11:28 AM, email@example.com wrote:
No need for a constitutional argument, it's just a condition for
employment. No salaried positions, all on the clock. It would give a new
perspective on how much actual value is in many management jobs(as in,
I've discussed that with my father, who had been an Air Corps company
commander during WW2 and held a high position in NH State government.
He made a good case that an effective manager can run an operation
smoothly enough that he doesn't have to be present to keep his thumb
on it all the time.
He took me on a lot of his trips around the state to visit his local
state park and ski resort managers, compliment them on their good
work, get in some fishing (and observing) and by the way show that he
was always paying attention to detail, like if a vehicle suspiciously
needed tires too often.
Dad never owned anything like that. My high school buddies, the sons
of doctors and lawyers, had the hot cars.
He was watching the purchase records for state-owned vehicles to catch
people selling the tires. Corruption was very limited in NH, the
ambitious crooks just moved to Massachusetts.
He knew the tricks because his Air Corps company had been in the South
Pacific where "repurposing" government equipment without authorization
was standard practice, to gain an edge on the Japs and improve the
primitive living conditions. The natives in New Guinea had no money to
buy stolen goods so MacArthur looked the other way and sent
complaining supply officers home for "combat fatigue".
Their Officers' Club had a beer chiller made from a misplaced Jeep
engine. His first mission on arriving in the Phillipines was to drive
his Jeep onto an 'available' cargo plane for a two-barrel booze run to
Accounts vary on whether the Dutch B-25 bombers were reassigned or
Oh, I thought you were referring to his catching you doing burnouts
with his car. <g> (Mine, either, BTW. His hottest was an Austin
Healey 100-4 he raced in Autocrosses and Gymkhanas, and it's on that
very vehicle which I honed my auto-mechanic's eye teeth.) My hottest
was a 1970 AMC Javelin w/ a 390cid putting out 400+hp and 425+ft/lb
after rebuilding with a mild cam. That was a very, very fun car.
OK, got it. Good for your dad!
Way to go, Mac!
Good story/great man! Was this your dad (wrong name), or did he just
know him, or what? He sounds a lot like Pappy Boyington. (loved that
TV series, ya darned college kid.)
My dad flew a Mitchell in several missions over Germany and France,
then was shot down over France and held in a stalag for 10 months,
'til the Russian tanks rolled over the fences.
Learn the art of patience. Apply discipline to your thoughts when they
become anxious over the outcome of a goal. Impatience breeds anxiety,
On Sat, 27 Dec 2014 06:47:19 -0600, "David R. Birch"
May want to exempt the true small family business to avoid
undue administrative burden.
The first step in correcting any problem is the collection
of adequate and reliable data. Until this is done you can't
be sure you even have a problem, or its scale. If it
becomes a U.S. labor standard that all employees are "on the
clock," as it is in some other developed countries, the
"stigma" of being on the clock will disappear.
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