5 ms·

"Because the companies leading the process are so productive, they pay high wages but do not employ many people. They may thus do little to reduce unemployment,

"Because the companies leading the process are so productive, they pay high wages but do not employ many people. They may thus do little to reduce unemployment, while aggravating inequality." That can't really carry on long term can it? Not much chance of infrastructure improvements without a tax base?

stcredzero 14y ago
> That can't really carry on long term can it? Not much chance of infrastructure improvements without a tax base? This is a problem for large political units going back to at least the Roman Empire. The government should be doing everything it can to empower small businesses. It isn't because of two-party adversarial politics, however.
- HotKFreshSwag 14y ago
  Not so much two-party adversarial politics so much as big business and the 0.01% funding and controlling the two viable parties. The center-right party and the right party used to compromise. The system wasn't always this dysfunctional but one party has been hijacked by fringe groups who refuse to compromise.
- lcargill99 14y ago
  "Empower" how? Subsidies? If you enact subsidies, then you create an environment in which somebody has the incentive to aggregate the subsidy - in a large business. That's agricultural policy in the US for the last hundred years in a nutshell.
  - stcredzero 14y ago
    Please, let's not have one of those debates. I agree directly subsidizing businesses is foolish, in part for the reason you cite. I think there are lots of infrastructure-like things that could be provided, including healthcare. There is clearly something broken in US healthcare. It doesn't function as useful market for individuals and small businesses. There's clearly something screwy with the economics of it. You can have the last word. I have to go sell my car.
    - ams6110 14y ago
      When did healthcare become "broken" in the US? It hasn't always been so, back to 1776, right? I think the answer is pretty obvious.
      - jandrewrogers 14y ago
        It became broken as a side effect of wage control regulations during WW2 that encouraged healthcare to be tied to employers. The second world war is long over but this particular unintended consequence is still with us.
  - nazgulnarsil 14y ago
    cutting taxes =/= subsidy.
troyastorino 14y ago
Ultimately there are going to have to be shifts in what skills people learn. There will be high unemployment during the adjustment period, but as long as demand for low-skill jobs shrinks, people will adjust and learn new skills. You don't have to go back to school to learn how to be a programmer :)
- dangrossman 14y ago
  Two faulty assumptions: 1) That for every low-skill job lost, a high-skill job replaces it. That's not the case. When robotic arms replace 100k factory workers, the robotic arm companies do not need 100k new programmers, nor are the factory owners going to use the reduced labor costs to turn into software shops. It's not like the industrial revolution all over again; computers and robotics are producing such enormous productivty gains that eventually there will be fewer people required by the labor force than the working-age population. 2) That people whose skills are no longer in-demand will somehow acquire other skills. Some will, but large swaths of the unemployed won't, especially among people 50+. That's why so many millions, especially 50+ women, have now been unemployed for years. It's not such an easy transition as you make it out to be -- people won't simply adjust, no, a large portion will essentially drop from middle-class to poverty and stay that way until they die. It's not they who will take the new jobs, it's the younger next generation that never had the obsolete skills. A 55 year old with only a HS diploma for whom a computer has never been more than a magical toaster that delivers e-mail, only existing in the past few years of his/her life, is simply not going to become a professional programmer even if he/she wanted to.
  - lcargill99 14y ago
    The theory says that workers with low marginal productivity can move up the productivity scale. And largely, that's what's seen, but it's far from perfect.
  - chernevik 14y ago
    The productivity improvements of particular individuals needn't be so drastic as going from assembly line worker to computer programmer. (Bear in mind that not all "assembly lines" or "programmers" are the same -- there are very likely line workers at Boeing who are multiples more productive than programmers at [big Fortune 500 company of your choice].) Workers can improve productivity by taking jobs that are otherwise less desirable. Maybe they have to commute further, or work shifts they don't prefer. There is a small segment of the workforce that can improve its productivity just by showing up on time. Some folks will have to make more drastic changes, such as moving. Many people moved to Florida to build houses that, as it turns out, no one wants. Those people won't find construction work in Florida but might well find it in North Dakota, which is currently going bonkers. And they can seek retrainings that might seem marginal. Maybe they learn to weld, or operate a crane. A semi-literate adult who buckles down achieve actual literacy probably opens very large possiblities for productivity gains. So moving up the productivity curve doesn't mean learning 55 year olds learning Python. It can mean finding a way to do 5%, 10% 20% better. That said, I have to agree that improving productivity is a lot easier for people with sound education and training to begin with. One of our great problems is the failure of our schooling culture to properly prepare people to understand and learn new things. EDITED TO ADD: Also, I don't want to sound ignorant of all the difficulties of this. Some gains are easily achieved, some are hard won but worthwhile for non-economic reasons. And some of the sacrifices required are pretty hard. It is one thing for economists to talk about "labor mobility" as a factor driving productivity, and another for those who find they have to move half-way across the country.
adventureful 14y ago
America doesn't have a tax base problem, it has a spending priority problem. The total government system in the US collects more in taxes than the entire German economy is worth. You'd think we could have nice roads given that. The problem is what that money is being spent on. Our tax system is also extraordinarily complex, with thousands of taxes, and a tax code that the IRS doesn't even fully understand. Individual Americans spend $300+ billion (last I recall reading) just preparing their taxes each year.
- rayiner 14y ago
  http://www.politifact.com/truth-o-meter/statements/2011/nov/07/rick-perry/rick-perry-says-taxpayers-spend-half-trillion-doll/ http://www.politifact.com/truth-o-meter/statements/2011/nov/... If a number seems hard to believe, it probably is. Think it through--how many hours do you spend doing your taxes each year? A few hours? How many hours do you spend showering and brushing your teeth each year? Maybe it's businesses--but the entire US legal sector is only about $150 billion.
  - adventureful 14y ago
    I don't hire someone to brush my teeth for me at $65 / hour or $250 / hour etc. The US Government disagrees with you. "The cost of preparing and filing all business and personal tax returns is estimated to be $250 to $300 billion each year. According to a 2005 report from the U.S. Government Accountability Office, the efficiency cost of the tax system—the output that is lost over and above the tax itself—is between $240 billion and $600 billion per year." "The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress. It is part of the legislative branch of the United States government." http://en.wikipedia.org/wiki/Tax_preparation http://en.wikipedia.org/wiki/Tax_preparation A tax is a burden imposed upon me by an external force. In the case of taxes it's generally completely involuntary. I voluntarily brush my teeth. There's a very, very, very large difference between having a time and financial cost imposed upon you, and choosing to spend a few dollars and x hours per month on brushing my teeth. If someone is imposing a tax upon you, it's properly their responsibility to make sure it's as efficient and as non-painful as possible (in terms of time to file, added costs, etc). The US Government has completely failed in that regard. It's almost universally agreed (aka bi-partisan) that we have a disaster of a tax code complication wise. 1.75 million accountants in the US. That's about 60% more than there are lawyers.

stcredzero 14y ago

> That can't really carry on long term can it? Not much chance of infrastructure improvements without a tax base? This is a problem for large political units going back to at least the Roman Empire. The government should be doing everything it can to empower small businesses. It isn't because of two-party adversarial politics, however.

HotKFreshSwag 14y ago
Not so much two-party adversarial politics so much as big business and the 0.01% funding and controlling the two viable parties. The center-right party and the right party used to compromise. The system wasn't always this dysfunctional but one party has been hijacked by fringe groups who refuse to compromise.
lcargill99 14y ago
"Empower" how? Subsidies? If you enact subsidies, then you create an environment in which somebody has the incentive to aggregate the subsidy - in a large business. That's agricultural policy in the US for the last hundred years in a nutshell.
- stcredzero 14y ago
  Please, let's not have one of those debates. I agree directly subsidizing businesses is foolish, in part for the reason you cite. I think there are lots of infrastructure-like things that could be provided, including healthcare. There is clearly something broken in US healthcare. It doesn't function as useful market for individuals and small businesses. There's clearly something screwy with the economics of it. You can have the last word. I have to go sell my car.
  - ams6110 14y ago
    When did healthcare become "broken" in the US? It hasn't always been so, back to 1776, right? I think the answer is pretty obvious.
    - jandrewrogers 14y ago
      It became broken as a side effect of wage control regulations during WW2 that encouraged healthcare to be tied to employers. The second world war is long over but this particular unintended consequence is still with us.
- nazgulnarsil 14y ago
  cutting taxes =/= subsidy.

troyastorino 14y ago

Ultimately there are going to have to be shifts in what skills people learn. There will be high unemployment during the adjustment period, but as long as demand for low-skill jobs shrinks, people will adjust and learn new skills. You don't have to go back to school to learn how to be a programmer :)

dangrossman 14y ago
Two faulty assumptions: 1) That for every low-skill job lost, a high-skill job replaces it. That's not the case. When robotic arms replace 100k factory workers, the robotic arm companies do not need 100k new programmers, nor are the factory owners going to use the reduced labor costs to turn into software shops. It's not like the industrial revolution all over again; computers and robotics are producing such enormous productivty gains that eventually there will be fewer people required by the labor force than the working-age population. 2) That people whose skills are no longer in-demand will somehow acquire other skills. Some will, but large swaths of the unemployed won't, especially among people 50+. That's why so many millions, especially 50+ women, have now been unemployed for years. It's not such an easy transition as you make it out to be -- people won't simply adjust, no, a large portion will essentially drop from middle-class to poverty and stay that way until they die. It's not they who will take the new jobs, it's the younger next generation that never had the obsolete skills. A 55 year old with only a HS diploma for whom a computer has never been more than a magical toaster that delivers e-mail, only existing in the past few years of his/her life, is simply not going to become a professional programmer even if he/she wanted to.
- lcargill99 14y ago
  The theory says that workers with low marginal productivity can move up the productivity scale. And largely, that's what's seen, but it's far from perfect.
- chernevik 14y ago
  The productivity improvements of particular individuals needn't be so drastic as going from assembly line worker to computer programmer. (Bear in mind that not all "assembly lines" or "programmers" are the same -- there are very likely line workers at Boeing who are multiples more productive than programmers at [big Fortune 500 company of your choice].) Workers can improve productivity by taking jobs that are otherwise less desirable. Maybe they have to commute further, or work shifts they don't prefer. There is a small segment of the workforce that can improve its productivity just by showing up on time. Some folks will have to make more drastic changes, such as moving. Many people moved to Florida to build houses that, as it turns out, no one wants. Those people won't find construction work in Florida but might well find it in North Dakota, which is currently going bonkers. And they can seek retrainings that might seem marginal. Maybe they learn to weld, or operate a crane. A semi-literate adult who buckles down achieve actual literacy probably opens very large possiblities for productivity gains. So moving up the productivity curve doesn't mean learning 55 year olds learning Python. It can mean finding a way to do 5%, 10% 20% better. That said, I have to agree that improving productivity is a lot easier for people with sound education and training to begin with. One of our great problems is the failure of our schooling culture to properly prepare people to understand and learn new things. EDITED TO ADD: Also, I don't want to sound ignorant of all the difficulties of this. Some gains are easily achieved, some are hard won but worthwhile for non-economic reasons. And some of the sacrifices required are pretty hard. It is one thing for economists to talk about "labor mobility" as a factor driving productivity, and another for those who find they have to move half-way across the country.

adventureful 14y ago

America doesn't have a tax base problem, it has a spending priority problem. The total government system in the US collects more in taxes than the entire German economy is worth. You'd think we could have nice roads given that. The problem is what that money is being spent on. Our tax system is also extraordinarily complex, with thousands of taxes, and a tax code that the IRS doesn't even fully understand. Individual Americans spend $300+ billion (last I recall reading) just preparing their taxes each year.

rayiner 14y ago
http://www.politifact.com/truth-o-meter/statements/2011/nov/07/rick-perry/rick-perry-says-taxpayers-spend-half-trillion-doll/ http://www.politifact.com/truth-o-meter/statements/2011/nov/... If a number seems hard to believe, it probably is. Think it through--how many hours do you spend doing your taxes each year? A few hours? How many hours do you spend showering and brushing your teeth each year? Maybe it's businesses--but the entire US legal sector is only about $150 billion.
- adventureful 14y ago
  I don't hire someone to brush my teeth for me at $65 / hour or $250 / hour etc. The US Government disagrees with you. "The cost of preparing and filing all business and personal tax returns is estimated to be $250 to $300 billion each year. According to a 2005 report from the U.S. Government Accountability Office, the efficiency cost of the tax system—the output that is lost over and above the tax itself—is between $240 billion and $600 billion per year." "The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress. It is part of the legislative branch of the United States government." http://en.wikipedia.org/wiki/Tax_preparation http://en.wikipedia.org/wiki/Tax_preparation A tax is a burden imposed upon me by an external force. In the case of taxes it's generally completely involuntary. I voluntarily brush my teeth. There's a very, very, very large difference between having a time and financial cost imposed upon you, and choosing to spend a few dollars and x hours per month on brushing my teeth. If someone is imposing a tax upon you, it's properly their responsibility to make sure it's as efficient and as non-painful as possible (in terms of time to file, added costs, etc). The US Government has completely failed in that regard. It's almost universally agreed (aka bi-partisan) that we have a disaster of a tax code complication wise. 1.75 million accountants in the US. That's about 60% more than there are lawyers.