What the biggest employment problem in the economy?

(a) Everyone has problems.

(b) No one has enough money.

Not having as much money as you'd like is rarely a person's biggest problem. It's more often the other way around.




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Every unsolved problem is demand not being met.

If you want to consume more, you gotta provide more. That doesn't necessarily mean working harder and certainly doesn't mean working yourself into the ground.

If what you're providing isn't valued (or not valued to your satisfaction), solve a different problem.




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I think the answer is already in the works but it will be painful for many and I think we are experiencing it now. It requires a devaluation of expectations until market forces raise wage disparity across the globe. It will require less dependence on credit as that credit will be harder to pay back. That has it's own negative impact on the economy further exacerbating the problem. The income disparity here cannot be fixed by legislation because the income disparity is not limited to just this nation. Most investment is not just in this country and the rich are invested across the globe with many US companies being global in nature. That further separates the higher income from the lower.

 

Most people at the lower level do not go into debt to maintain basic expenses as they cannot get credit to begin with. It is those above that trying to live a life that their income won't allow that use credit. Higher than that, the higher levels of debt. I know a doctor living in a million dollar house that cannot scrape up 6K without borrowing from his 401K.

 

The main issue is that too many people aren't making enough money.

Family median income 2012 dollars
http://www.census.gov/hhes/www/income/data/historical/families/2012/F06AR_2012.xls

Year - income
2012 62,241
1979 57,734
1953 31,929

In the 26 years from 1953 to 1979, real median family income (in inflation adjusted terms) grew by 81%.

In the 33 years from 1979 to 2012, real median family income (in inflation adjusted terms) grew by 8%.


http://bea.gov/national/nipaweb/SelectTable.asp?Selected=N

In the 26 years from 1953 to 1979, real GDP (in inflation adjusted terms) grew by 126.4%

In the 33 years from 1979 to 2012, real GDP (in inflation adjusted terms) grew by 137.9%

http://bea.gov/national/xls/gdplev.xls

What do you think?

Things only seem too expensive because median incomes have not kept up with economic growth.

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Hard to start up and expand when folks don't have enough money to pay for your products or services.

 

I agree. We don't need to go more in debt. There is plenty of income to tax to pay for it.

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That wouldn't hurt spending and demand if people who spend money had the money to spend.

That is a problem.

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But especially employees in the middle and bottom. Top employees like CEOs have seen their incomes grow much better.

 

Good observation. A generation ago, unions helped middle class workers get wages that gave the purchasing power to drive the demand for products and service the drove a vibrant economy.

Those days are long gone. Maybe we should bring them back.

 

American worker productivity has been growing as strongly as ever.

We didn't see 10 million people lose their jobs because they all of a sudden lost their work ethic.

 

An inheritance isn't an entitlement. It's a gift.





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Not all investments have the same risk, return, or terms.




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Unions have already priced themselves out of the global market. Those jobs are gone. The large mfg plants have been abandoned. You have to face reality at some point.

 

Only because people are let go from their jobs. Automation and piling on those left increase productivity after the chaff has been eliminated.

 

Some manufacturing will come back to this country when global pay disparities lessen, as they are now in India, and manufacturing costs plus outsourcing costs, that is transportation costs, are more closely aligned with producing here.

 

Pick a different problem.




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I think you're confusing personal situation with economics. They're really different and as an individual I'm doing quite well, but that means nothing if the entire economic engine isn't doing well. It's our collective power that matters.

 

But I think Tax has a point. One of the problems is driving education toward unproductive outcomes. You can get a degree in something that is inane and it will not help you get ahead in the current economy.

 

Without question, bad choices usually yield bad results. But look at the macro instead of the individual level. Imagine the nation pumps out an extra 200k bachelor's degrees per year for some period of time while people try to get educated in most-demanded areas like medicine, STEM jobs, etc. Then those areas become dilluted and wages will also begin to drop over time as more people are able to do the same work. I'm someone who did exactly that after working for the military and then private sector as a technician in a dying industry. I reacted and saved my own situation. As others do the same, the remaining difficult to fill positions will dwindle and that just adds more industries to the pool of jobs overwhelmed with qualified and educated people. In the end, we still lose. We need growth to create demand for jobs/workers. Otherwise, we're all competing for too few jobs so less and less important are our educations and skills as more and more people qualify to do the same work and will do so for less money just to have a job.

 

I think you point out one issue I tell many young people. You reacted, which you would have to define, but it appears from a technical standpoint and I assume a skill. I often tell the young that if you want to feed your family, get a skill, or more than one. A degree might help in the long run to make more money but a skill will always feed your family.

We will not see real growth until the world wage disparity equalizes. I am afraid that is the new paradigm. We can try to artificially create it which the Quantitative Easing was all about but real world circumstances will always prevail and artificial means will just create unsustainable bubbles.

 

Our collective power is the result of our combined individual contributions. Many of us are finding ways to solve more ambitious and more valuable challenges each year; others are flipping burgers or running errands, same as their fathers and grandfathers did.

And much of the strain within our country results from that inequity of contribution to our collective power and to the moral questions of how we prioritize applying that collective power to the problems of individuals in both situations.




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80% of the population owns 5% of the wealth.

http://www2.ucsc.edu/whorulesamerica/power/wealth.html

The middle class has been eviscerated.



In 1980 the top 1% earned 8.5% of total income. In 2007 they earned 23%.

In 1980 the bottom 90% earned 68% of total income. In 2007 they earned 53%.

http://taxfoundation.org/article/summary-latest-federal-income-tax-data-2012#table3

GOV'T POLICY MATTERS !!!

Keynes wrote "The End of Laissez Faire" in 1926. He was correct then, and his insight remains more valid than any economics that conservative Libertarians propound ad infinitum and ad nauseum. Laissez Faire is nothing more than a childish Christmas wish of no substance; just hope and myth, and smoke and mirrors. Fails every time we try even the tiniest bit.



Third World countries. One of the things they all had in common was a small, very rich elite, small middle class, and a large lower class. They also shared very low economic growth as a result. This has been known for at least 50 years. The US has been going in this direction for at least the last 30+ years as we have gradually de-industrialized and government policies (such as trickle down economics, "free trade", etc) have promoted the shift of wealth from the lower and middle classes to the economic elite


Neo-Liberalism/Conservatives is/has destroyed the American Economy in favor of the so called "Job Creator"... In reality are "Job Exporters"...

 

Just getting the top 2% back to Clinton's 39.6% will bring in almost $4 trillion this decade. Instead the GOP fought Obama and forced him to only increases the top rate on the .08%. That's an extra $4 trillion could REALLY help

Getting the top 1% back to the effective rates we had 1945-1980 would bring in over $10+ trillion more in revenues this decade