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Wages up, investment income down? This sounds like cause for average people to celebrate. Wonder why the headline is focused on the negative aspect...
by leereeves 8y ago
Wages up, investment income down?
This sounds like cause for average people to celebrate. Wonder why the headline is focused on the negative aspect...
- r_smart 8y agoWhy would I want to celebrate someone else making less money?
- olefoo 8y agoIf their revenue is coming at your expense. Due to say, stronger consumer or environmental protections.
- r_smart 8y agoYou have no proof that any of that is the cause. So at the very least, celebration is probably premature.
- leereeves 8y agoBecause that money comes from someone. If wages are up and investment income is down, money is being transferred from the 1% to the 99% for a change.
- r_smart 8y agoWealth isn't a zero sum game. Further, that money is being transferred voluntarily. People buy things like iPhones because they think it enriches their life more than having the $600 it costs. Hundreds of millions of people believe this, so Apple has a ton of money. There were no victims in the transactions.
- bbddg 8y agoWhat about the person working at a Foxconn factory with suicide nets?
- leereeves 8y agoJust to show that the example doesn't prove much: millions of people voluntarily spent money on narcotics too. Entertainment products aren't making consumers richer in the long run. Correcting income and wealth inequality will help ensure the long term health of the economy, and once that's done, we can have another debt-financed consumption binge, but the current binge can't last forever without consequences.
- mjburgess 8y agoWealth inequality is productivity inequality, not having-less of a fixed amount. "Fixing" wealth inequality by decreasing the productivity of the wealthy is madness. "Inequality" is a feature of exchange and production, it cant be "fixed". The lives of those who suffer most can be improved by helping them be more productive. Not by hobbling everyone else. That fails to improve anything. EDIT: To clarify, the inequality is in what you can do with your total current assets: including time/effort, but CURRENT WEALTH. Yes, Jeff Bezos can do more with $100B than you can with $100. And yes, you with 100$ can do more than a person with 1$. People in poor countries produce things at a rate and with such general demand that their current assets (including their time/effort) arent very productive. Bezos can make another billion without taking it from anyone, just by deploying his assets better than you cna.
- coderzach 8y agoJeff Bezos isn't a a billion times more productive than an average person. He's leeching off the productivity of amazon's workers.
- dpark 8y agoAmazon wouldn’t exist without Bezos. It’s kind of a stretch to say he’s leeching off his employees when his vision and drive literally gave rise to Amazon. Also I’m pretty sure Bezos doesn’t collect much salary. His wealth is tied to how much Amazon is worth. He’s essentially taking nothing from his workers because his net worth is based pretty much entirely on how much someone else is willing to pay for his shares.
- hn_throwaway_99 8y agoWealth may not be a complete 0-sum game, but for at least a couple decades virtually all the economic gains in the US have gone to the top 10%. So when people are cheering that wealth is (finally) starting to flow from the investor-class to the wage-earning class, it feels disingenuous to me, or at least willfully naive, to blithely argue "why are you rooting for someone else's income to go down?"
- r_smart 8y agoJust because one went up when the other went doesn't mean that there's a causal relationship. If we assume it is causal and the trend continues, you can expect belts to start tightening. I don't know if you've ever worked at a company that wasn't turning a profit (and isn't living on the borrowed time of VC money), but I have, and it sucks. Hiring freezes, wage freezes, wage reductions, staffing reductions. All kinds of fun.
- nkozyra 8y ago> Wealth isn't a zero sum game. Wealth isn't something that be quantified objectively, so at some point you need to put hard parameters on what qualifies wealth or thresholds of wealth. At some level, "money" (which is the representation of wealth) is at any given point finite. This makes it inherently a zero sum game. The "any given point" allows us to avoid arguments about fiat and monetary policy. At any given point if I get $1, that value comes from someone else (or elses) down the chain.
- bluGill 8y agoYou are confusing money for wealth. If I gave you back 3000 years in a time machine with a trillion dollars worth of gold (gold being money 3000 years ago) you would be much poorer than you are today despite having most of the world's money in your new era. Someone taking a log and turning it into a chair increases the world's wealth even if no money changes hands. Someone who prints money (via inflation or counterfeiting) has changed the amount of money in the world but has not changed the amount of wealth.
- nkozyra 8y ago> You are confusing money for wealth I was trying specifically to not do so; I was expressing money as the point-in-time measurement of wealth.
- r_smart 8y agoThat's the point though, it's inaccurate to do so. Money is a finite resource, but its value constantly fluctuates. It's just a unit of exchange that exists for convenience. The total supply of money does not correlate to the amount of 'wealth' in the world, such as it is. I know this makes it a pain in the ass for you to make / explain your point, because there's no unit of measurement for wealth (hence why you used money at any given point in time). It just doesn't work that way though.
- jpadkins 8y agoIf you create a new good or or perform a service, you have created new wealth. (building a log cabin created wealth) wealth is not zero sum. Even money is not zero sum. Anytime someone creates credit, new money is created and the money supply is expanded. And money is not representation of wealth. It is a unit of account and transfer.
- normal_man 8y agoThe victims are the employees of Apple who receive a tiny percentage of the value they create, while a huge percentage of it goes to the corporate owners. Edit: by extension, all the consumers are likely in the same position. Employees are all exploited by their employers, who steal most of the value created which they had little to no hand in.
- r_smart 8y ago|Employees are all exploited by their employers, who steal most of the value created which they had little to no hand in. I'm sorry, but this is bog-standard communist clap-trap. Even if you don't like the current arrangement, the use of the word steal is absurd. Individual wealth, regardless of which income quintile you're in, has risen exponentially since the industrial revolution. There's lots of room for criticism of the world as it stands (crony capitalism and printing a sea of money being favorites of mine), but words like exploit and steal are crazy. And to say that an employer had little hand in the value of the products created is just silly. Even if we ignore everything else, you can't just disregard the massive capital expenses that go into building the infrastructure to make an iPhone. Somebody had to come up with that money to even make the company possible, long before the profits started rolling in. I've had the dubious pleasure of working for companies that were posting little or no profit vs others that were making lots of money. Personally, I'd be happy to be 'exploited' by the wages Apple pays.
- normal_man 8y agoWell I am a communist, so that makes sense. Crony capitalism is just capitalism, by the way. It's designed to work that way. In Apple's case, the "massive capital expenses" have been paid for many times over in profit; when does the compensation shift back to the people creating the day-to-day value? Never, I guess? And by the way, I'm not talking about the $300k engineers in Cupertino. I'm talking about the people who were throwing themselves of factory roofs until they set up nets to take even that measure of freedom away.
- r_smart 8y ago
- coldtea 8y ago>Wealth isn't a zero sum game. That's the fairy tale they sell to suckers. In real life, it can be very much zero sum, and that's regardless of whether the slice is "growing or not".
- defertoreptar 8y agoNot to mention how they swept quarterly GDP growth under the rug. GDPnow was expecting 1.8, and it instead was 2.6.
- rootusrootus 8y agoWasn't the GDP number a bit of BS due to so much of it being inventory?
- ionised 8y agoAre real wages really up when inflation and cost of living, healthcare rises are factored in? Everything I've read suggests real wages have been stagnant since the 70's.
- castlecrasher2 8y agoThe article says "wages up .3%"
- ionised 8y agoRead the rest of my post. The question stands, because the article doesn't specify whether it is talking about wages or wages in real terms. Someone mind explaining what these downvotes are for? All I asked was a question. This place is becoming like Stack Overflow.
- amanaplanacanal 8y agoThose numbers are always inflation adjusted.
- ionised 8y agoGood to know, but I wasn't aware.
- amphibian87 8y agoSo, a negligible amount?
- uxp100 8y agoHow much do you expect wages to rise in a month?
- TheCoelacanth 8y agoThat is not a negligible amount of growth for a single month.
- witcherchaos 8y agoUS wage is growing though. Money is flowing into US at an unprecedented rate due to: a.) Fed raising interest rates to a normal level. Government bonds are now earning close to some of the faster developing countries, without the risks. b.) Brexit impacting the growth of EU. Germany narrowly avoids recession....for now. But grew only 1.5% in 2018. There's still the matter of a possible US tariff on EU automobiles. And Italy/Greece/Spain debts are still a thing. c.) Chinese economy is crumbling. GM dropped crashed 15% in China in 2018. Ford dropped 36%. iPhone sales dropped 13%. Louis Vuitton dropped 20%. Overall car sales dropped 13%. Stock market dropped 22%. Real estate sales in January 2019 dropped 44%. d.) Asian countries impacted by China's fall. South Korea's export to China dropped 14% in 2018. Japan dropped 8%. Taiwan dropped 10%. Singapore dropped 8%. e.) Uncertainties and high debt ratio in developing countries, prompting money to seek safe harbor. Tariff and protectionism impacts. f.) lastly, US is growing at a healthy 3% in 2018
- pas 8y agoHow does the Fed interest raise helps with more money flowing into the US? I mean okay, money flows into US "saving accounts", but due to higher interest rate a lot of investments will be put on hold, no? The Fed raised the target federal funds rate, which is the rate of the interbank overnight repo market, which is basically the "back office" clearing house between the accounts of creditors and debtors. And all of this means that the NY Fed's trading desk does a lot of open market transactions to reach that goal. (It converts cash in banks' reserve accounts into US Treasury bonds, thus forcing banks to increase their reserves - to meet requirements, hence forcing banks to loan reserves from other banks, which pushes up the overnight repo rate.) How does this effect the US Treasury bond auction rate? (In theory banks [and other primary dealers that participate in the auction] just use loans (excess reserve) to buy bonds, so if excess reserve is less, then fewer banks are able/willing to buy bonds, so yes, that pushes up rates, but the target-FFR increase only affected US banks, and US T-bills are bought by a lot of foreign entities.)
- appsonify 8y agoall I know is they raise interest rates, it absorbs up the money supply in circulation due to the attractive yields on the Ts also the whole trope about 'China owning most of US T-bills' is actually false, there is apparently T-bills that are specifically sold to foreign nations, and then there are the real T-bills that not many countries own. The other one is an IOU and may not be honored, say during wartime.
- ryansmccoy 8y agoJust an observation, but I've noticed that Reuters is not a fan of the current administration.