Do we need Public Service Cuts?

[mintogrubb.livejournal.com]

In the Uk, we call CEOs 'Company Directors' - but the fact is , they still earn far more than the people at the bottom of the pay scale. i forget where i read it, to be honest, but I'm pretty sure that they used to earn about 20- 30 times as much as the people on the bottom a few decades back - but now in the UK, they earn almost 100 times as much as the poorest workers do.

the rich are getting richer and the poor are getting poorer. The problems happen when people like 'Fred the shred' take out loads of midddle layer people and pocket the difference. It isn't that the organisation got better, it's just that the workload for middle layer managers increased, and there was less payout on wages and salaries.

And for this, Fred gives himself a bonus.

now the Cameron government is in on the act. The "Big Society" simply means that one guy gets paid a few grand a year to mow the grass on the village playing field. the government fire him and get some other guy to do it on a voluntary basis, and the other guy goes on Welfare.

So, instead of paying a bit of income tax, he is now picking up taxpayers money instead - but the government is still saving money on one side of the balance sheet and not telling us the rest.

What ought to be happening is a big investment to keep people in work - useful, community based services instead of the arms industry, for sure, but paid employment trumps a welfare payout, right?

And this could be afforded if we closed the tax loopholes. The fact is that if you live in the UK, you can simply sign everything over to your wife, have yourself be paid a salary by a limited company that she owns, and stuff all the excess money into an off shore tax haven, where it collects minimum taxes and you can pick it up and take it with you when you choose to retire. I kid you not, this really happens.

A system whereby CEOs could only earn 10 times what their lowest paid worker earns would handle the wealth distribution problem better than taxing the rich directly- yes, let the bankers have a hundred grand in salaries and a big bonus besides - so long as the workers who make it happen share the wealth and get at least 10% of what the fat cats earn.

And why not close the tax loopholes too? Rather than closing schools and hospitals that serve the whole community, we should be closing tax loopholes that only serve the very rich. rather than putting people out of work, we should be putting our house in order and having a more equal pay scale, with less of a gap between the top and bottom earners in our society.

We are not all in this together - some of us are going first class and the rest of us are travelling in steerage.

Comments

[mintogrubb.livejournal.com]

It is called a wage.,/i<>
LOL. It is often pittace in most cases.
the fact is that the richest people in society are eanring more in real terms than they used to, keeping more of the wealth that Society creates.

now , some people are not willing to acknowledge the debt that they owe -Of course there are people who are literate and numerate enough to work the tills in Walmart and Tescos, and they got to work on time as well - but let's stop and think.

Did Mr Plutocrat, who owns Walmart or Anything Else PLC make this happen? er, no, it was taxes that paid for the education that puts young Sharon and Tracey in a position to apply for the job, its tax money that pays Dave the road mender to keep the raod in good repair for the busses and cars that take these people to work.

But the amount of tax that rich people avoid paying is scandalous.
electric light , running water, police, fire and ambulance services don't just happen . taxes get paid and they pay for all that and more. The rich are not paying their fair share, as a percentage of what they get out of the system in return for their investment in making it happen.

The nature of wages

[montecristo.livejournal.com]

The wage is paid when his particular part of the work is done, before the service is delievered or the goods sold. The person who exchanges labor for a wage is paid on the labor before anyone knows whether or not the efforts of that labor can be exchanged at a profit. The owners of the company are not paid unless and until the goods and services are sold at a price which exceeds the fixed and variable costs. The laborer's wage represents a guaranteed return on labor exchanged. The entrepreneur has no such guarantee.

Re: The nature of wages

[mintogrubb.livejournal.com]

Greetings, fellow member of the Unitarian Jihad.

What you say is true up to a point. As someone who has actually worked in providing both goods and services in my time, let me tell you what goes on in the real world - at least in England.

It is ture that when the goods leave the factory gate, that they factory owner hopes for aan invoice , and sometimes has to chase it up. It is true that the workers will have to be paid, and usually are, before the manufacturer gets a return on the goods s/he has provided for use. As I say, this is true up to a point.

It would also be true, however, that the shopkeeper, if they are smart, is going to want to see the colour of the customer's money befoe they hand over the goods. So, no risk on the supply side here.
However, there is always the risk that they may buy goods that cannot be sold at all, never mind at the asking price.

But let me tell you that in the service industries, that the Teacher, the firefighter, and ven the humble bus driver and railway worker will be providing the service for the whole month before seeing their wages - ok it is paid monthly and called a salary, but it is money paid for company service - just what the factory worker gets.

So, London Transport, for instance , is getting money in the kitty *before the bus driver gets paid.

But what has this to do with the broader argument?
See, wealth does not happen Just when an inventor has a bright idea, or when a wealthy person decides to build a factory and make the gadget. It happens when an army of peoole get up early and put in the hours to produce those goods.

Or, when several people get up early and decide to go into work and provide that service. When workers go to work - then we get all those clothes, all that food, and lots of things like banking and haircuts and police protection annd madical care.

And none of these things, let me point out , have any intrinsic value at all - that are worth what people say they are worth. What the market is prepared to pay.

Now, my argument is that the people who provide the capital are getting an awful lot more than they used to get out of the arrangement, and the people who do the work are falling behind as a percentage.

Rather than use the Unions to call a General Strike, the workers could , and indeed should prefer the scalpel to the blunt instrument and aim for Legislation to ensure that they get a better return on their labour that they give.

The only argument is that 'the market will not bear it'. but the Market is not the Employers, the market is everyone. the Market was telling us that it would not bear the weight of scrapping child labour. It did when it had to.
we were told that the Market would not be able to stand if women got equal pay. It managed. And doubtless , the Capitalists and the papers they own will be telling us that there is no way they can afford to pay workers a fairer wage, but I think they will.

Re: The nature of wages

[montecristo.livejournal.com]

Good, good, we're getting to the meat of the discussion here. In fact, we're in agreement over most of what you have to say. Let's take a look at some of the things you bring up in the last paragraphs though, where I think there is more to be said.

Now, my argument is that the people who provide the capital are getting an awful lot more than they used to get out of the arrangement, and the people who do the work are falling behind as a percentage.

First off, I will stipulate that this is actually happening, as you've said. The thing is, we have to examine if it is a bad thing and if so, we have to know why it happens before anyone can realistically propose changes intended to correct the problem.

If XYZ Inc has a natural economy of scale where there are no restrictions to entry into the market then there is no reason to begrudge whatever compensation anyone involved in XYZ receives, no matter how much of a difference there is between the least paid employee and the most paid. It is none of "the public's" business — literally. On the other hand, what if we have a tax and regulatory structure that disfavors smaller competitors with flatter hierarchies and distorts the nature of production and finance in ways that favor more layers of bureaucracy and management than would be necessary in a free market? What if we have a market regulatory structure that actually promotes immediate bottom-line stock-price thinking instead of long-term profitability for the firm? These are things that can be attacked and changed. They are distortions of the free market.

In contrast though, simply voting for government to redistribute wealth adds more distortions to the market and unleashes hosts of unintended consequences, some of which are not really visible, involving the forclosing of alternative arrangements that never happen or perverse economic incentives that are hard to trace out.

Re: The nature of wages

[mintogrubb.livejournal.com]

In contrast though, simply voting for government to redistribute wealth adds more distortions to the market and unleashes hosts of unintended consequences, some of which are not really visible, involving the forclosing of alternative arrangements that never happen or perverse economic incentives that are hard to trace out.

Me, I am all in favour of equal pay for women ( and by equal pay, I mean they get the same money for performing the same task, not any of this "80 cents to the male dollar BS", because if women really want to earn big bucks it pays to go into engineering and not catering , ok?)

But, like i said, if women drive trains or work on the assembly line, i think they ought to get the same money as the men. Period.

Now it used to be said that women got paid less because - well, bosses always did it that way.
And women started saying ' this ain't fair', they went on strike and got more money. And somehow, this did not cause the coolapse of Western Civilisation...

For me, the argument is not so much about economics as Social Justice. Yes, costs get passed on if you pay women more than you used to, but a hi wage economy where prices rise is prefereable to a place where food is dirt cheap and people earn peanuts .

And we must also remember that the places in the USA, and in the world, where more equality exists in socio- economic terms, there is les crime, less teenage pregnancy, less drug addiction and alcoholism. even the rich are better off in more equal societies than the rich in less equal ones, as the lower orders produce more wealth if they are well housed , well fed and contented.

Re: The nature of wages

[montecristo.livejournal.com]

But, like i said, if women drive trains or work on the assembly line, i think they ought to get the same money as the men. Period.

Well, I say that is an interesting philosophical position to hold but if you want it validated, start a business and pay the same rates and see if it works out for you. Compete; don't waste energy trying to coerce the other guy to be you. If, as you seem to believe, there is no economic advantage or distinction which justifies paying women eighty cents to a man's dollar then your firm will be at an economic advantage because you are not hindered by what appears to be an irrational prejudice.

...they went on strike and got more money. And somehow, this did not cause the coolapse of Western Civilisation...

There is quite a lot damage and injustice which can be done which will not cause the immediate collapse of Western Civilization. Someone burgling your house will probably not cause the immediate collapse of Western Civilization but that is no reason anyone should favor it.

"Social Justice" is an oxymoron. Justice is about rendering unto individuals as their individual actions merit. Individuals think and act. Individuals bear responsibility. "Social Justice" is the epitome of injustice: it is judging and penalizing or rewarding individuals based solely upon group memberships whose qualities and circumstances are arbitrarilly assigned by various factions according to the political power of those factions.

As for your last paragraph, I will concede a certain amount of correlation. Of course, one can diagnose problems that tend to be correlated: crime, teenage pregnancy, drug and alchol addiction, and income disparity, and be completely wrong about root causes. You get less of all of these problems where there is freedom and mobility. The more political organizations attempt to coercively interfere with human liberty in the misguided attempt to rig outcomes, the more of all of those problems their society gets.

Re: The nature of wages

[mintogrubb.livejournal.com]

Well, I say that is an interesting philosophical position to hold but if you want it validated, start a business and pay the same rates and see if it works out for you.

I think you will find that if you opened up a business in *my* country, and you *didn't* pay women the same wage as men doing exactly the same thing, then you would have to pay hefty fines for breaking the law. It's that simple.

You would also face fines and maybe closure if you got caught employing 7yr olds in your coal mine or in your cotton mills. Oh, and don't even think about running a machine without an adequate safety guard on it to stop people from losing their fingers - that will get you closed within minutes, and might even get you a ride in a police car if you want to take things that far and see how the law reacts.

I CAN see why it may be very economically advantagous to pay women less , or taking on a seven year old, or running a place with inadequate safety precautions. I also know that in England, we don't allow such things.

And, let me phrase it another way- just because the law said "Right, no more child labour , no more unsafe premises and no more paying a person less beause she happens to be female" - that did not mean it became uneconomic to operate. Everyone in the manufacturing industry was in the same position - the only people who lost out were those whochose to break the law - and frankly, as a man I would not want my wife or daughter working in a place like that anyway.

"Social Justice" is the epitome of injustice: it is judging and penalizing or rewarding individuals based solely upon group memberships whose qualities and circumstances are arbitrarilly assigned by various factions according to the political power of those factions.

It is an interesting definition and a somewhat unusual take on things. As a child, I had no political voice whatever. Even so, it was deemed that i be sent to school by law , instead of earning money by going into a dangerous cotton mill or having to work in a coal mine. Personally, i think I was ather better off than if I was alive in the Victorian era when Mill owners had a much freer hand.

I would be interestd in seeing how things go in your country, BTW - what are the laws on child labour there?

Re: The nature of wages

[montecristo.livejournal.com]

I think you need to do a little more economics reading and some more historical reading in books where the historian is informed by some good economic understandings. This:

...the Market was telling us that it would not bear the weight of scrapping child labour.

...is factually untrue. The prevalence of child labor was in decline when legislatures started passing laws regulating it. On top of that, it was only economic conditions, not "legislative magic" that would have allowed civilization the luxury of not having children work in factories. Even if legislation had been passed earlier, all that would have been accomplished is starving families who needed the income working children provided them. To look at it as merely a question of "social conscience" is naive, in that it disregards the reality of the capital base and the state of the division of labor network.

Furthermore, with regard to the issue of "equal pay for equal work," that is a more complex issue than those militating for political looting would have people believe. Things in the real world are most often not the case that "all other things are equal" such as when comparing two jobs and calling them "equal work." Yes, everyone can thrust out their chins and engage in political beligerence and they can reap the unintended economic consequences of doing that as well. Saying: "I think the market will bear it," may make people feel good about having politicians play Robin Hood for them, but it does absolutely nothing to prevent the economic distortions that frequently represent disastrous consequences created by those well-intended policies. For the people who survived, Soviet Communism "worked" too, especially if you were among the nomenklatura or an aparatchik, until of course, the system collapsed, as Ludwig von Mises predicted it eventually would, only four short years after the revolution. Even so, I think the millions of dead produced by that system would have disagreed with the assessment that it worked, even though somebody survived and some even prospered. It is almost a zero-cost proposition to claim: "I want more money for group X!" In fact, from a purely abstract consideration, who wouldn't want people to have more money? The problem is that "more money" does not come from whim; it comes from people freely exchanging goods and services in a complex economy. Disregarding people's liberty damages that economy.

I'm not saying "the market will not bear it" in response to cries for political interventions into people's free econonomic transactions. I am saying that if the desired arrangements were economically viable, then people free to arrange their own affairs and transactions would enter into such arrangements voluntarilly. When you have to use force to coerce people into arrangements that make you feel good it is evidence that they do not regard those arrangements as comporting with their values. There volumes of laws and regulations already forcing people into arrangements and transactions that they would not choose of their own free will. Many of those impositions of force are actually creating the problems you claim you want to fix. It is better to ask if the coercive transactions now in place are causing the the things you see as being wrong before reaching to the legislature to undermine economic liberty with yet another distorting imposition of force.

Re: The nature of wages

[mintogrubb.livejournal.com]

Then , are you saying that you are Ok for unions to have a free hand in the workplace?

Just so you know, i am a trade unionist , but am anti ' closed shops', and not really in favour of the communist ideal of the workers state and the abolition of private property.

I think that the market ought to be regulated, and that equal pay for women, for example , came in on the back of strike action and the legislation that followed.

Maybe the argument for child labour was getting economically weak, but women were still getting less than men until the 1970s.
How do you feel about the Equal Pay Act?

Re: The nature of wages

[montecristo.livejournal.com]

Then , are you saying that you are Ok for unions to have a free hand in the workplace?

As long as associations are voluntary, being neither coerced nor forbidden, then they are moral and should be legal in a just system. If Adams, Smith, and Jones want Wilson to represent them in employment negotiations then nobody should attempt to force them into a different arrangement. Conversely, Adams, Smith, Jones, and Wilson have no business attempting to force Carter into joining them.

I think the Equal Pay Act is an attempt to substitute one group of people's economic preferences for another group's by force.

Re: The nature of wages

[mintogrubb.livejournal.com]

I can agree with you here - but if you are going to uphold the rights of 'the individual', then you have to ask if you want 'the individual' to have the right to make some pies and not tell you if they are using a carcinogenic food additive to improve the flavour.


You also have to ask if it's ok for them to open up an explosives factory in the middle of town - just letting people do their own 'self regulation ' leads to things like the BP oil spill - how's that working out for people in the affected areas in the Mexican Gulf?

When a cop draws a gun and stops a bunch of hoodlums from robbing a bank, i think that is also "an attempt to substitute one group of people's economic preferences for another group's by force."
however, I am all for it, just like I'm in favour of the State enforcing my wife's right to the same money for doing the same job as me.

Getting away with robbing a bank is easy if you are holding a sub machine gun, and paying women less is also easy if the system will allow it- that's why we have laws against doing such things.