Tag Economics

One of Seven

Michael 4 Comments

I’m doing something today I don’t usually. I’m complaining. Yes, you’re right, I have expressed displeasure from time to time but this is different. This is head shaking, head scratching, “what did you expect” vent-age.

You can tell by how late it is that I wasn’t even certain about posting this, but clearly I have. If you don’t want to think of me as a complainer stop here and I’ll see you again on Thursday.

Yesterday’s paper featured an article, “Why aren’t wages rising?” It stated that although some of the brightest economists in the country can’t agree on the reason, they do agree that wages are not increasing any faster than the rate of inflation. Today’s paper had a headline that a local company’s employees are “set for raises” for the next three years after the company and a local union agreed to a new contract.

So salaries are going up, nobody is losing spending power, yet nobody, or at least not one headline writer, is happy.

Was I the only one to see this 60 years ago? There used to be a time wages were commensurate with results. Now they are time released. Ever year everybody gets more money for doing the same work they did the year before. The widget maker doesn’t make more widgets for the widget company to sell yet the widget maker makes more money from the widget company. The widget company can’t report to the widget investors they are turning a smaller profit because they are spending more money paying the widget makers so they raise the price on widgets. Now that the price of widgets is up, everybody who buys a widget, including the widget makers, go to their respective companies and say next year they will need bigger raises, inflation isn’t making their dollar go as far. The next year the companies, including the widget company, increase workers’ salaries, sometimes by predetermined, contracted amounts. Again there are no more widgets to sell to offset the increased expense so again the price of widgets goes up. And the snowball continues its run downhill.

I never have and never will understand how people believe it is their right to get more for doing no more. I also never have understood and never will understand how the same people upon receiving this windfall instead of voluntarily sharing their increase with their church or synagogue or charity or charities of their choices complain about it being not enough while simultaneously complaining about others getting increases for not doing anything to deserve them. The price of everything keeps getting more and more expensive they say.

NoMoreMooneySo wages aren’t going up but are going up just not enough because they only go up as much as necessary to keep with inflation but that’s not enough because everybody else gets more too.  It won’t end. It can’t end. For it to end everybody has to simultaneously say they want no more increases, even minimal cost of living increases. You can’t do it piece meal because somebody will (with a capital WILL) break the chain and not give back. And you can’t just rely on people. You need industry, large and small companies, profit based and non for profits to agree to no increase fees or prices except for bona fide improvements. Wages will go up in response to increases in output and profits will go up when true efficiencies result in lower expenses. Won’t happen. Can happen but won’t. Too many people have to make the right choice. The right choice never made anybody anything for nothing.

Greed is one of the seven deadlies, isn’t it?

Big Deposit, No Return – or – Politics as Usual

Michael Leave a comment

Thanks be to all that is holy – “Election 2014” is over!  Woohoo!  Now we can stop with the crazy television ads, incomprehensible radio ads, and unnerving street side campaign signs (although not far from He’s house is a hillside with signs from last fall’s election (yes, it was one of the losers (isn’t that always the case?)).  The questions have been put and answered who will “lead” for the next few years.  The big question (why them?) might never be answered.

No, this post has nothing to do with the politics of politics.  Rather, it’s the economics of politics we’re calling to our question.  Here’s a case in point.  The governor in our state will be making about $190,000 of our money every year for the 4 years he will serve.  That’s about $760,000 total.  He spent over $40 million to get that job, and according to the news, over $10 million of it was his own money.  Apparently he is pretty well off even without the nearly $200K annual stipend.  That means for his job search, he spent (of his own money) 13 times what he stands to make over the next four years.   That’s over 52 times what he spent of everybody’s money to get that job.  Hmmmmmm.  Is this really the man we want proposing a budget for the entire state?

Stop to think about you most recent job search.  If you are absolutely thrilled with your current position you probably still look to improve your standing every now and then.  If your current position pays you well enough that you could afford to spend $10 million looking for a new position we’d probably say that you are pretty thrilled and that current position is fairly secure.  Your search might include checking out an Internet job board or the careers pages of a company you have lusted over since you got into your field.  Total cash outlay, whatever you spend on computer or smart phone access which also includes your e-mail, general searches, everyday access to your favorite websites, blogs and videos, and the occasional cyber shopping trip.  A deal at maybe $500 for the year.  If you land a job that pays that same $190,000 our governor will make next year you would have spent less than one-quarter of one percent of your potential salary to make that new salary.  (You can propose our budget any time!  Have you thought of running for governor?)

Of course it could be that those willing to spend 52 times to get a job that pays what they stand to make in a year are looking at more than just a return on their investment.  For whatever reason, someone was weird enough to spend a whole lot of money to get a job that makes comparatively very little money (and not just his own money, he convinced others to let him spend millions of their dollars also).  And more people were weird enough to vote for that guy thinking that made a lot of sense.  Maybe it will.  We suppose we’ll find out in the next four years.

For now, it would be nice if they get those signs taken down.

Now that’s what we think. Really. How ‘bout you.