What makes the current economy so awful is not that there is unemployment, or that there are unsold houses. Rather, things are bleak because it is so unusually difficult for workers to find buyers of their labor services, and for home owners to find buyers of their houses. FULL ARTICLE by Robert P. Murphy
Source link: http://archive.mises.org/16148/why-is-unemployment-so-high/
Why Is Unemployment So High?
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My compliments to Robert Murphy for his proclivity in writing one fine article after another.
His conclusion about the undermining role of government is comprehensive. I might only emphasize how the government subsidizes unskilled or low level skills, at the loss of the development of innovative technologies that provide the higher paying jobs.
The reason you are not seeing a bounce back in employment over the last two recessions is during this period you have seen employers utilizing contract labor. And as healthcare insurance cost and labor taxes rise, you will see this job base expand at a greater rate.
As an example, my daughter was working at a job that was reducing their workforce. The first person to leave her department went directly into contract work. Further cutbacks were needed and soon my daughter was laid off. She then started the job search with low expectations. After two months she was hired by a company and two of the companies she interviewed at gave her contract jobs. She basically went from unemployed to over employed and is building her home based business.
A couple years ago I was building a house for a VP of sales for a worldwide company. He had a sales force that covered most of Asia, Europe, North America and South America. As I was building the house using subcontractors and not having any direct employees other than myself, he became very interested in my business model. I explained to him that I paid a fair price for labor, but the main savings was I did not have employee overhead. Basically, overhead is cost that you pay and get very little in return.
As the economy slowed, this VP was pressured to reduce cost and he applied my subcontractor model to his sales force resulting in major layoffs. Then he hired everyone back as independent contractors. And since he cut overhead cost, the new independent contractors were making more money and was able to write off expenses. Furthermore, these contractors increased their sales which further cut the company’s unit cost.
What you are seeing is the market adjusting to the high cost of employment that the government is mandating.
I agree and think we’re headed to a far different employment paradigm in the years ahead.
Many folks will be permanent “temps”, they’ll work at the same place for years, but will never be hired by the company they labor for they’ll be employees of a temp agency. In a few cases that I’m familiar with the temps get a dollar an hour more but no benefits. And of course they’ll be the first to go as the company can just call the temp agency so there’s no cost or uncomfortable conversations to have.
You’re also right about the costs of healthcare etc and since some of those costs only apply to full timers and not part timers I can see that many folks will be working two part time jobs with no benefits from either. In some cases they’ll be working 50 hour weeks with no overtime pay since they’ll be working less than forty hours at each job.
The massive government involvement over the past couple of generations has caused this massive shift as employers are suffocated with mandates and regulations from the federal, state and local levels. Not to mention having to deal with several governmental entities at each level.
That’s interesting Ray that you know temps who make a few dollars an hour more. In financial services, where I’ve worked for the last 7 years, the temps always make less, because the agency takes a cut of their pay for the service of having found them a job. It’s usually a few dollars an hour; for example, the temp group we recently brought in are mostly making $13 / hr, but the position, if given to a full-time employee, paid $15. We’re still paying out $15, but the last $2 go directly to the temp agency.
I have no idea how temps work in other industries, as banking is the only one I’ve been in in a position to hire and work with temps.
The ones I know work through Kelly Services usually in factory, warehouse or light industrial settings. The temp agency charges the full cost of the employee (salary, social security etc) plus a few percent more. In one job I know of the temps get $10.75 an hour to start, but the company employees get $9.50 to start, plus benefits.
I don’t know how common this is or isn’t as I’m really only familiar with two agencies in this area and most are blue collar type of jobs.
Another thing that’s interesting here is that many companies do not actively recruit for their hourly positions. They use the temp agencies so they can try out the person for a few months before they actually hire them on. Of course the temp agency, in their contract with the company, requires the person to work a minimum of 90 days as a temp before the company can hire them, or else the company has to pay a fee. I guess this is how the temp agency makes their money.
Here is how companies figure temp workers, they are not employees! Back in the days when I had a paying job, the company I worked for had to reduce head count. The head count was basically the people on the payroll. So we laid off people and hired temp workers to replace them. The temp workers were charged to another account, not payroll. In the end, we reduced head count, paid higher unemployment premiums and in most cases needed to hire two temps to replace one employee.
This is when I quit and started my own company!
Thank goodness for people like you
A lesser person would have gone no further than demand the government “do something”
Does the government count these contract employees to be “unemployed”?
There are many contract workers that are unemployed. In the construction industry, there are many that work small contracts and paid by the homeowner. Most homeowners do not send out 1099′s to the contract worker, so they don’t report the income and collect unemployment at the same time. I know of one individual that turned down a job offer at Lowe’s because he was making more off unemployment and cash jobs.
Then you have people that set up a S-Corporation that show no income for the first few years. With no income, they do not have a payroll, but yet they do have money coming in that pays them back for their investment, interest and depreciation. Basically, you have to pay yourself a wage with all the withholdings when you are making money. And that wage must be within reason.
You have to understand how the unemployment rate is figured. The government calls a sample group and ask them if they are working. If they are not working, they ask them if they are looking for work. Now if you are one of those people that collect unemployment and work side jobs, you are not going to give them that information. Or if you are someone that is collecting unemployment and trying to set up a business, you are not going to give that information.
Next time you go out to dinner, pay attention to the crowds. You would think with 24% of the people unemployed, the restaurant would be 75% of what it used to be. But that is not the case, the wait is just as long at Olive Garden as it ever was. The lines at Starbucks are getting longer every day.
An alternative explanation is that American Capitalism doesn’t need US workers. Tghe last two quarters have produced the highest rates of corporate profits in history. As an example Apple has ~30,000 overpaid, over-nannied US employees and ~1,000,000 Chinese. If US workers want jobs let them lower their expectations. No sane American capitalistwould invest in the US when they can hire Chinese at less than half the rate.
“If US workers want jobs let them lower their expectations.” ???
OK, how cheap are you willing to work for? The going rate for Chinese workers is $4 for a 10-hour day. Are YOU willing to do that? Either unemployment hasn’t hit YOU yet, or you are an employer who wants to pay as little as legally permissible because slavery is illegal in the US.
The problem is that there is now a big difference between being “out of work” and being unemployed, and a big difference between the “cost of living” and the CPI.
“Out of work” and “cost of living” refer to what is happening to real American people and families, and are things people can relate to. Unemployment and CPI are worthless government statistics.
I object to the “reasons” given for high unemployment. Murphy absolutely omits mention of government-facilitated population growth through immigration.
Murphy ignores the more than 1 million annual legal immigrants, and at least that number of illegal aliens coming annually.
Virginia Deane Abernethy
615 936 0720
So since he left out something you think shouldn’t have been, you object to ALL the reasons?
Sixth paragraph mentions immigration:
You seem to be saying that this wouldn’t result in more jobs, and thus increase unemployment. How do you arrive at this conclusion? Why wouldn’t more people mean more businesses and more jobs (if the economy were healthy)?
Immigration is clearly not the problem – except for native-born Americans who are overpaid and underworked.
Maybe we need more entrepeneurs, eh? In other words, maybe we need less people seeking to be employed and more seeking to employ others.
If there were less red tape to go through, less commitment involved in hiring workers (due to being forced to pay for benefits/wages that you can’t afford), a lower income tax rate and less financial/regulatory uncertainty there would be more entrepreneurs…
Alas, these things show no sign of diminishing.
Maybe because it is easier to get a job when you already have one? Since the capitalists have adopted Libertarian principles and sent most manufacturing jobs off shore many working class people are getting second jobs to pay the bills. Many retired people are re-entering the job market to pay the bills. Many people are working past retirement age to pay the bills.
I don’t know any libertarian principles that support sending manufacturing jobs off shore. What libertarian principles?
The principle that a rising tide raises all boats and the deadheads deserve to sink.
Admission and public presentation that you’re hopelessly lost, and incapable of the most rudimentary understanding of the principles.
As said before, and will say again:
You don’t get it.
And you never will.
Billwald, and anyone else needing guidance…
Libertarian principles are devoid of preference.
To proclaim the off shoring of jobs as a libertarian principle is like saying doing drugs is a libertarian principle or prostitution is a libertarian principle. They aren’t. In and of themselves they have nothing to do with libertarianism.
The essence of Libertarianism is free will (i.e. choice) within the parameters of property rights and non-aggression.
What people do with their property, as an act of free will, is not part of the discussion.
I could just as easily prefer to hire American workers. How I run my business and manage my capital is not concerned with libertarianism.
Having the right to choose how I run my business and manage my capital is.
Libertarian principles are devoid of preference.
>Libertarian principles are devoid of preference.
Which is exactly why a social contract with moral principles must govern the economic system else evil and our slave masters will come out on top.
You Social Darwinists out there . . . Any evidence that humans have become more moral (more humane) in the last 10,000 years? Seems to me we have learned to do evil more efficiently.
Actually the evidence is overwhelmingly positive.
Search on “Steven Pinker on the myth of violence”
The Libertarian principle is buying the cheapest labour because it’s not the business’ issue to pad out workers’ lifestyles.
And why does everything cost so much that second jobs, etc., are required? That’s the issue…. And, yes, we are wealthier when developing countries with cheap labor send us goods that would cost much more if made here in the USA.
Were the free Americans wealthier when they had slaves to do the grunt work?
Is it more moral to maintain our slaves in foreign lands?
The CSA screwed up big time by insisting they should “own” slaves. They should have had their government import slaves and turn them loose. The slaves would have become American Dalits.
The New England states tried slavery but it didn’t pencil out because slaves were property which had to be fed and housed in New England winters when the factories didn’t have any contracts. It was more profitable to hire free white people and let them starve when there were no contracts.
Who said anything about slaves? Hundreds of millions of Chinese people, for example, have risen out of absolute poverty by making things for the developed world. We benefit because we get things cheaper. Slaves they are not.
There are “special economic zones” in China where people are virtualy slaves. The Falong Gong are basicaly forced into slave labour. Some like to tout China as an example of a free market. It is just as screwed up, due to central planning, as anything you will find in the west.
Look up the ghost cities in China, it makes the US housing collapse look like failed garage sale in comparison.
maybe.doesnt apply to s/w services from india though.you should stop buying chinese goods if you are convinced that all chinese labor is slave based.china is no free market.but the alternative for the chinese workers is starvation.
Why do Americans think they are “free” BECAUSE we can own guns, go to church, make economic and social choices, vote, and write nasty stuff about the government on line? Exactly why should our owners care if we own guns, vote, go to church . . . as long as hard assets continued to be transferred from the workers to the owners?
They just stole another $trillion and no uprising. Why Not? Because every two years we have a national revolution and a change of government and nothing changes. Why not? because they control/own the major parties.
Our owners have learned much since the French Revolution and their experience is exemplified in the US Constitution as amended. Every two years we have a revolution but it only takes six months to corrupt the new legislators. See . . . our owners understand the Christian doctrine of our “sin nature” much better than do the church goers.
>And, yes, we are wealthier when developing countries with cheap labor send us goods that would cost much more if made here in the USA.
How can we be wealthier when most families have a negative net worth? This wasn’t true (I don’t think) in the 1950′s thru 1960′s.
Again, why do a lot of people have a negative net worth? Intervention in the housing market got a lot of people to buy overvalued homes, that are now underwater – negative net worth. This has nothing to do with cheap labor overseas.
Many people have a negative net worth because they confuse debt/credit with wealth. They assume holding a mortgage on property is equivelant to owning the property.
What is “working class people”?
Is that somebody that earns within 10-20% of what you earn?
Or is it somebody who earns a salary that falls within some mean that the govenment categorizes for you?
Or is it anybody with a job?
Or is it anybody who doesn’t file a 1099?
Or is it anybody who works at a job in order to pay bills?
“Working class people” is a meaningless phrase. But one you embrace as a good slave to your slave masters.
You don’t get it.
And you never will.
To me, “working class people” are those who work for wages, not fees, as theoretically professional people do.
billwald…
Your line or reasoning was shown to be false hundreds of years ago. It is incompatible with logic and you should either make an honest effort to see past your misconceptions or stop trying all together.
Here is a story that helped illustrate the “Libertarian principle” > of the benefits of the division of labor and comparative advantage (the quotes are because these principles are not limited to libertarians but are held by everyone with knowledge of economics and a willingness to engage in logical thinking)</i.
Imagine Bill, a highly skilled surgeon with his own practice. He is the best surgeon in town, but he also has a real gift for sweeping the floor. Now imagine Sam, a person with no surgical skills and only mediocre sweeping ability. Bill is better at sweeping and surgery than Sam is… does this mean that Bill would be better off doing his own sweeping after performing surgery, thus performing fewer surgeries? Or would everyone be better off if he could hire Sam to sweep while he focuses on surgery?
There is no essential difference between the division of labour within a household, within a town, state, country or world. In EVERY CASE people are better off if they are allowed to trade freely with each other, each person focusing on what they do best. If you believe that it is beneficial to trade with people in your city then why does trade magically become bad when it happens across a national border instead of a state border?
To anticipate your answer that there are labor standards and minimum wage etc. in the US and trade will weaken those standards you are partly right. The US can't compete in manufacturing despite its huge advantages in capitalization and technology precisely because its companies are so heavily burdened by regulations. But imagine how much higher prices would be if people did not have the option of trading outside the country.
I could go on for pages, but others already have and I need to go to sleep. Read Hazlitt's "Economics in One Lesson", I believe it throughly addresses all of the comments I have ever heard you make here. It is easy to read, short and interesting… I hope you give it a try.
Hong Kong has a minimum wage now. (it was expected to pass July, 2010, anyway) It seems inevitable.
Someone wrote above that employees should lower their expectations for compensation when job seeking. Why shouldn’t entreprenuers and consumers expect labor to want a bigger piece of the pie and accept it, rather than ask someone else to do what they are unwilling to do themselves…pay for someone else’s comfort?
“There would be more jobs if you were only willing to work for Chinese wages”, seems to be the jist of what I am reading. It’s humorous to me that so many people act as if they can’t understand why someone would feel threatened or dominated by that prospect.
Anthony,
You are correct in the short run, but, as Sir Maynard observed, “In the long run we are all dead.”
Will your economic theories still work when the 400 richest families control 75% of the assets and incomes? 95%?
WTF is wrong with your brain?
Austrians are the long run. Any counter-cyclical policy is just a quick fix to ease the US’s addiction to inflation. Which, incidentally, fuels the fires of consumerism, something which you, as a leftist, believe is “bad”, and transfers wealth from those poorer to those who are richer.
Also of note are two more things. The first regarding that statistic. It’s a bullshit measure that doesn’t really add up to anything noteworthy, since, as J Murray pointed out, most of the stuff in that figure are illiquid assets. The second being, the US has been moving away from a free market for quite a while now, and currently, at increasing speeds. Mechanisms like inflation and minimum wage transfer wealth from the poor and disallow them to ever entering the job market, making them prime subjects for welfare and the votes that come with it.
All in all, you should be more critical about the insidious role of central planning and democracy than the nebulous and poorly focused complaints about x% owning y% then blaming libertarians for that.
Median wage is now around $33K, around $15/hour. Keeping in mind that the US price of big ticket items and clothing, most consumer goods is set by the manufacturing cost in 3rd world nations plus shipping (minimal cost) and profits, say there was no minimum wage and no union shops in the US.
1. Estimate a probable range for the median wage after the immediate effect of dropping the minimum wage set in.
2. Would the median US household have a higher or lower standard of living?
You just don’t seem to be able to grasp one simple concept. Income is only one side of economic life – expenses is the other. How much things cost matters big time. It makes much more sense to free up the marketplace and let prices drop drastically then to engage in some socialist calculation of income equality, living wage, etc. This never works, as you have kind of been proving with your posts (and others). We have more and more poor people in the USA because the market is less free, and because smart people like you want to force wages up to some magical level.
You just don’t seem to be able to grasp one simple concept. Prices for manufactured consumer goods will not fall until the US standard of living is approaching the Indian/Chinese standard of living because they set the wage/price standard at the bottom of the food chain.
Relative prices of manufactured consumer goods continue to fall within a free market. Part of the free market experience is being able to select from all labor sources everywhere, taking into account wages, quality of the final products, transportation to ship products to consumers, etc. The result is always an increase in material wealth over time when the free market is allowed to reign. The evidence supporting this, and the evidence supporting the problems with intervention in the market, is overwhelming.
Dave Albin March 22, 2011 at 1:36 pm:
“We have more and more poor people in the USA because the market is less free…”
The cause is not regulation, because the US has been on a deregulation and privatization binge since Reagan took office, when the top income tax rate was 70%. For those of you who are not millionaires and are old enough to have been working at an adult job back then, are you subjectively better or worse off, minus consideration for the “wealth effect” caused by debt?
We have more poor people because Americans are expected to “lower their expectations” and the price paid for labor has dropped relative to increase in GDP enabled by technology. The portion of price devoted to labor cost has dropped, while the portion of price devoted to profit has not. That is the reason for the divergence in real incomes between those who work for a wage and those whose incomes come from investments.
A fervent believer in truly free-market economics appears to be able to watch his neighbor and his family starve because his neighbor is unable to live decently in the U.S. if he matches the price of a Chinese laborer held in virtual slavery. Of course, those who receive the income from capital feel justified in wallowing in their own ever-increasing profit due to choosing the low-cost labor of the Chinese rather than paying a living wage to his neighbor. There does come a time when just the tiniest bit of altruism is desired, no matter what that psychopath Ayn Rand said.
A fervent believer in a free-market is hopefully smart enough to see through your bullshit. Your lack of understanding about anything to do with economics and utter misunderstanding of everything that is happening around you.
A fervent believer in a free-market is able to look at the current high unemployment and understand that a large untapped labor force is a valuable resource that in a truly free market would be hired and put into employment regardless of anything happening in China.
I am utterly dismayed that a obsolete merchantist viewpoints and common misunderstandings, misplaced morality, and bleeding heart-style self-delusion that your espousing in your post that have been demolished over and over and over and over and over again is so common.
Your either a idiot or just ignorant. The latter can be fixed, fortunately.
If you want to actually have a voice worth listening to I challenge you to find out why instituting tarifs and sactions against China imports would:
A) Destroy a significant amount of our export business, leading to higher unemployment and falling wages.
B) Lower the standard of living of those you purport to care about.
Understanding these two facts may help you break out of your 1800′s-era delusional mindset.
All progress depends on the destruction of Jobs.
Another common fallacy is the idea that we need to “save” jobs. Actually, all progress depends on the destruction of old jobs and the transition to new jobs. If jobs didn’t go away we would still all be hunters and gatherers (5 thousand years ago), or 95% of us would be farmers (150 years ago: “Save the family Farm!”), or many would be buggy whip makers (100 years ago), or stenographers and on and on….. Think of how many ditch diggers were replaced by the backhoe. (The genesis of government farm programs was the unfounded fear that too many people were leaving farming for other work. And yet the programs continue!!!)
The economist Milton Friedman visited a vast public works project in China 30 years ago and was surprised to find that massive earthworks were being done by laborers with shovels. He asked the boss why they didn’t use bulldozers. The reply was that they wanted to save jobs. Friedman’s reply was that if they wanted to maximize jobs, the thing to do was to replace the shovels with spoons.
The amount of work to be done is fundamentally infinite.
There will always be more to do. No caveman was ever unemployed. “Unemployment” is a relatively modern luxury produced by:
• Accumulated savings and unemployment insurance which allows people to choose to wait longer to get exactly the job they want.
• The need to retrain when jobs are destroyed and new ones become available.
• Risk aversion by employers fostered by uncertainty about economic and especially political trends.
It is politically fashionable to assume that there are two types of human beings: those that “deserve” to have jobs, and those that have the “duty” to provide them. Since there are more of the former than the latter, policies desired by democratic majorities tend to be favor the former and blame the latter which only make matters worse.
@Barry,
Great comment. I believe there is a book out now that would interest you. It is called, “Eat People” by Andy Kessler and it speaks directly to what you are saying. Check it out and enjoy.
Do 400 families deserve to control half the assets and income in the US?
Only if Obama says they do.
If they trying to compete with Chinese and Indian workers they will.
More than 22%: As aptly commented by others before me, there are the ones who prefer work over government handouts (and can’t live nor die), as minimum wage and temp workers. Then, in going back to shadowstats, BLS statistics are based on probing per sample interviews, but more importantly by sampling tax returns: You file a Sch C with a loss, you are employed, regardless whether you also look for gainful employment or not. There are scores of so-called “consultants” filing severely under-performing self-employment on Sch C. 30% unemployment is a very conservative estimate of the unemployed (but able to work) incl. the ones with incomes between negative amounts and welfare level amounts (not on welfare). Next, as Jeffrey Tucker was telling me, about 50% are government workers + predominantly government contractors + those able to work but on government handouts. Remains max. 20% in private industry or running their shops with a sustainable profit. The latter won’t grow for reasons your gave, Dr. Murphy, also because, as – forgot who quoted in Mises Daily – a factory costing $ 100 m to set up in Philippines costs $ 1 bn to set up here; the 90% difference is not the labor cost, but the regulatory cost in the US of A.
I see a two-tier system developing:
1) Those who work directly or indirectly for government.
2) Those who do not.
The biggest problem, as I see it is that the first category is increasing and the second category is shrinking.
This is very well stated. And points directly to the root causes of so much inequity, suppression and, ironically, impending tyrrany.
It’s also much easier to explain unemployment as caused by a cycle-induced shortage of capital goods.
I see a couple of instances where theory doesn’t correspond with practice.
1) On Crusoe’s beach only the best workers are retained (true at first); only the highest wages are paid (true at first, in order to lure the best workers); and submarginal workers must remain unemployed (false; they are used to replace the workers who continue to insist on the highest wages). Because of marginal cost (submarginal workers are worth the lower wages paid because they more than offset their lower productivity which is expected to improve with experience. Everybody will catch some fish unless the fish aren’t cooperating), employers will settle for less productivity per employee so long as the expected level of profit is maintained. Employers are fond of playing one group of employers against another to accept lower wages; else why would they go to China?
2.a) “Surely it would be better for those firms to hire the unemployed at much lower wages? And why is it increasingly difficult for graduates to obtain unpaid internships? Why would any firm refuse free labor?”
Now that would be the ultimate in profit maximization!
(2.b) “In reality, firms face the same problems as Crusoe did with his limited capital – they must only employ the most productive workers at the highest wages.”
Why would employers do that, when they are always striving for 2.a? If that cannot be done due to conscience, regulation, or the fact that their fellows would string them up if they didn’t at least pretend they weren’t pirates, then the threat of the submarginal workers replacing them would serve to keep wages from going any higher than the absolute lowest the employed workers would accept.
The answer is actually obvious as why unemployment is still high. Look where the new money created by the Fed went: which was into funding the outsourcing of jobs, factories, technology transfers abroad, military bases and infrastructure spending abroad, speculation in financial assets and artificial consumption with debt. If most of the money is not being lent and whatever is spent is being invested overseas; then obviously not many jobs in the US would be created.
Besides that the US has enormous structural issues due to not entirely but in large part to exchange rates. The paragraphs from Gerard Jackson’s article, “Blame Keynes Not China for America’s Economic Mess” below says it all:
Exchange rates do affect a country’s production structure if the exchange rate is left overvalued or undervalued for too long a period of time. A country that runs an overvalued currency for a lengthy period will find its production structure becoming more domestic oriented: its export industries will decline and imports will rise. In such an economy one should expect to witness the emergence of a“rustbelt” accompanied by an excessive expansion of the financial and service sectors along with delirious claims that the economy has now entered a“post-industrial” phase. The irony is that this process was accurately described 77 years ago. (Friedrich von Hayek, Money, Capital and Fluctuations: Early Essays,Routledge & Kegan Paul, 1984, pp. 150-2.)More than 80 years ago Bresciano-Turroni noted how a rapid and sustained monetary expansion could expand the financial sector:
The increase in banking business was not the consequence of a more intense economic activity. The work was increased because the banks were overloaded with orders for buying and selling shares and foreign exchange, proceeding from the public which, in increasing numbers, took part in speculations on the Bourse. The banks did not help in the production of new wealth; but the same claims to wealth continually passed from hand to hand. (Bresciano-Turroni, The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany, John Dickens & Co LTD, 1968, p. 404).
“E” is for Excellent comment !!! (IMHO – in my humble opinion, that is.)
We can blame the Bernanke FED because, YES, they are indeed idiots.
But IMO the GREENSPAN FED is the one that virtually destroyed the American Economy — mind you the Federal Administrations of G. Dubya Bush and of President Obama were no great shakes either !!! The only thing that Bernanke might add to this witches’ brew, is the Coup de Grâce.
I predict that Americans will continue to unshackle themselves from the regulations of the Federal Government, as intimated by the other posters. Americans are not Ingenious Yankees by mistake, but by birthright! They will use loopholes (contracting out), small-town ventures (local manufacturing and agriculture, distributed locally) as fuel costs and government-imposed fees (shades of the Boston Tea Party) continue to increase, and they will eventually (by some means, perhaps the Tea Party or whatever comes thereafter) disengage from stupid and resource-draining foreign adventures (even though, as much as many people in foreign lands believe, America is often their ONLY salvation), and perhaps these ingenious Yankees will even create their own local Money Systems free of the corruption of Wall Street and The FED. Lending and borrowing done on the Internet will one day mature, allowing most American to bypass their broken banking system and corrupt politicians.
billwald worries about the concentration of America’s wealth in the top 1 percent of America’s families — in that he is right. But why not join the Austrian Revolution instead of lamenting something that has been part of The Federal Reserve Bank of America’s objectives and mandate for the last 98 years? Why not join Ron Paul in getting RID of The FED? Why not billwald? END The FED now !!!
And perhaps the most excellent of all of E’s comments above is the point about Exchange Rates. This is exactly what a Fiat Paper Money System contorts into — a completely Broken Money System on a worldwide basis that allows central banks in China and America and elsewhere to continue to play their games.
These games will end very badly — what would happen if one day they called a war, and no one came? What if one day, The FED printed more paper money, and the people turned their backs on that money, and instead created their own?
Thanks for the compliment. Fiat exchange rates have created a lot of havoc with world trade today. The outsourcers that lobby for protectionist trade that benefits them which they call free trade forget that the theory of free trade was based on a world gold standard that was assumed uniform throughout the world. If there was a world sound monetary system, the outsourcers wouldn’t have access to the printing press like they do today to fund the outsourcing of US jobs, factories and transfers of US technology overseas that US taxpayers funded. Also the multinationals wouldn’t be able to outsource to other countries like they do today that have central banks who create unlimited amounts of credit out of thin air to fund their move overseas and manipulate their currencies so that the price of foreign labor is artifically cheaper based on paper exchange rates .
For the near term, the State Bank of North Dakota may be a model that some States may want to follow to re-industrialize. It may not be perfect but it’s better to create credit and spend the money within a State to fund investment. The Bank of North Dakota has helped the State of North Dakota maintain low unemployment and to have regular budget surpluses. The success of the State of North Dakota with it’s State Bank has been it’s focus on encouraging saving to fund investment and it’s ability to create credit to fund industry for the purpose of production with the money created being recycled in the State through the use of the State Bank.
At this point, anything is better then creating new money to fund the outsourcing of jobs, factories, technology transfers abroad, military bases and infrastructure spending abroad, speculation in financial assets and artificial consumption with debt. In the last decade over 50,000 US factories have been moved overseas. How can an economy grow when capital which is the material means of production is being lost.
Interesting article to read: What is North Dakota’s Secret?
http://www.forbes.com/2009/06/30/north-dakota-hoeven-business-energy-economy.html
When the world went off the gold standard it was replaced by the commodities/money trader standard which seems to work very well.
The way I understand it . . . commodities are raw materials with a huge international market and a low unit value. Oil, for example. An Arab fills a tanker with oil. He wants the maximum price for it. The shipping cost per bbl is so low that it doesn’t matter if the tanker goes to China or New York, the difference is only a few cents per bbl.
The market works so that the buying power of the cargo is the same in China or New York and it doesn’t matter if the payment is in dollars, yuan, or francs. The aggregate effect of commodity prices balances the aggregate effect of the international money market.
I joined the John Birch Society in 1963 when it was a semi-secret cabal. The Goldwater campaign and the following few years convinced be that Americans are plain stupid, you all the exception that makes the rule. “No one ever lost money under estimating the intelligence of the American public.”
The Wife and I went to school in New York when the drinking age was 18. I thought when the 18 year olds got the vote the first thing they would do would be to raise the drinking age to 18 in the rest of the states. Instead it was universally raised. 20 year old Americans prefer to sneak their booze instead of drinking in a pub? Truth, young people seldom vote, old people always vote. Old people control the money, young people can’t control anything.
Truth, one mature adult says, “I would make more money with the Rs in power but I can do OK with the Ds.” Another, “I can make more money with the Ds in power but will do OK with the Rs.” They both say, “The Devil I know is preferred to the Devil I don’t know. I know Rs and Ds. “
Dr Murphy,
You’re articles are great but this one seems to lack the usual candour. I think you’re being a little soft on the ‘employee-side’ of the unemployment situation. My personal contention is that the following are pretty significant (and they ‘blame’ the employee):
1) the prevalence of the “money illusion”,
2) the propensity to herd &
3) emphatic inflation fears.
It’s completely unpalatable to say that unemployed people should take a 50% haircut on their (former) wages, right? Well, maybe the denial of this is significant for unemployment. I explain this in further detail here.
Couldn’t employers just as easily take a 50% haircut on profit?
Why wouldn’t someone concerned enough to slash wages in half concurrently dismiss 20% of their employees? Why would you care about unemployment at all if you can maintain a profit, or avoid losses, with pink slips? (especially if your employees are low skilled) Unemployment still increases. Average people don’t think in economic terms like economists do. Business owners are going to be just as clueless as employees about what prices should be.
Incidently, where exactly is the wage floor? It seems that it would be at the point where living in an employers dorm (if not tent) is better than receiving a wage. It annoys me at how crass some people are at dismissing fears (albeit misinformed by your account) that people have about losing jobs and income.
See; it is completely unpalatable, right? I could be misinterpreting your comment, but you should understand that I don’t advocate or urge any party (employer or employee) to move from their position. The price falls where it falls. I wasn’t saying that anyone should take a wage cut (unless they want to); rather, I was saying that it is a horribly unpleasant proposition to most.
The reason why I mentioned that was to demonstrate the “money illusion”: people still think that it is a viable and intelligible thing to meaningfully compare nominal dollar wages over time – it isn’t: the dollar is ever-changing in terms of composition and value.
You’re right; an individual employer wouldn’t care, but that doesn’t matter for overall unemployment. After being fired; an employee can drop their offered wage rate to a level profitable for some employer (barring the minimum wage unfortunately). I’m saying that; mass unemployment isn’t mechanistically destined to happen; rather, its a function of preferences.
Gresham,
How low can you go? “The price falls where it falls”. The employer will always have an advantage because there will always be unemployment, so the price will most likely fall on labor.
In my scenario (living in employer provided dorms), you could end up a virtual slave to your employer, even though you would still be better off than being unemployed. Choosing to be unemployed to pursue a higher paying job becomes more and more difficult if all of your earnings (room and board) are going towards survival. You can’t save in a situation like that, and therefore cannot build wealth. Unless you sell a few days worth of food every week, until your pay is cut again.
Government wouldn’t be the only roadblock to more and more production. I believe the jist of what you are saying is that all prices go down, so wages would buy more, so no need to worry about the dollar amount received for pay. Right? The increased employment at lower wages facilitates more production at lower prices. Right? Wealth increases for everyone. Government intervention impedes the process. Everything is contingent on increased production.
Eventually, someone is going to be pissed about the benzene being dumped into their drinking water. If they are effective, by whatever means, in making that employer pay for that pollution, the poor asshole that is paid room and board and three meals a day to take it to the river is going to be pissed when he loses that job.
I don’t believe that changes with or without the state determining minimum wage or anything else pertaining to cost of production. The state and it’s regulations exist because conflict exists.
“Right?”
“Right?”
“Wealth increases for everyone. Government intervention impedes the process. Everything is contingent on increased production.”
Yep, right.
And right again:
“The state and it’s [sic] regulations exist because conflict exists.”
Citizens who want more than they earn, they can become burglars or rob banks, or they can vote.
“Wealth increases for everyone. Government intervention impedes the process. Everything is contingent on increased production.”
This is true as long as “everyone” includes the Chinese and Indian population.
Greshams-law
I agree.
I don’t know how the reply buttons decide to apply themselves.
Andy,
First I should say that my use of the word ‘fall’ was intended as a metaphor, apologies. Basically I mean the price goes where it goes (up or down). So, the response to your question is: as low as it needs to go.
Indeed, there usually is at least some unemployment. That doesn’t mean that the employer has an advantage though. Basically, the unemployed are people that haven’t found an employer at their desired wage rate (bar min. wages). There is no advantage. Likewise – at any given time – there are plenty of employers that haven’t got employees at the wage rates that they want to pay. Even if I were to accept your notion that the price ‘falls on labor’: if this is undesirable, the laborer can always try to become an employer. Nobody’s forcing him to do otherwise.
Again, upon what premise would one be a slave to one’s employer? One is broadly free to move, opt out, die, become an employer or whatever else.
I wasn’t really saying that, and I wasn’t really advocating that anyone should do anything. Rather I was saying that people’s perceptions about the comparison of dollar amounts – itself – impedes their own and others’ capacities to be employed. Although I by and large agree with those notions that we shouldn’t fear deflationary spirals (if we seek the truth).
My judgements are based – by and large – on the sanctity of private property. Although I frequently find the economics on this site compelling, the more compelling thing is that we all – by being human and alive – implicitly advocate the notion of private property. Thus, I regard propositions that contradict private property to be somewhat misguided. Notions like ‘economic stability’, ‘increased production’ and so on are value judgements that aren’t the prime thing to be guarded (in my mind). That they happen to align nicely is just a bonus.
>Again, upon what premise would one be a slave to one’s employer? One is broadly free to move, opt out, die, become an employer or whatever else.
But when the major employers control the government???
>My judgements are based – by and large – on the sanctity of private property.
Say again? Most private property is owned/controlled by the Family 400/government/international corporations (all the same entity under different names). Very few people who work for hourly wages own any property free and clear which is worth much.
Billwald,
Sorry, replying to myself because there isn’t a reply button by your post.
If we assume the ‘major employers control the government’, then I say it’s broadly the same. You’re broadly free to attempt to be an employer, you can move abroad, you can rise up against the government. What I mean to say, is that you can wield your life pursuing whichever endeavours you think most appropriate. You’re a slave to your employer to the extent that you grant him ‘ownership’ of you.
Firstly, you should note that I don’t think that there exists any private property on this planet in the strict sense of the term. What I meant here was that you shouldn’t use tools that violate private property to achieve your arbitrary stated goals such as ‘economic stability’ (whatever that means) and so on.. What I mean is that I say statements like ‘this and that should be like this and that’ based on non-violation of property rights – not based on stated arbitrary economic objectives.
Gresham,
If his only compensation is food and boarding, and he has no prior savings, he will be dependent on his employer to give him sustenance. Allowing him to use transportation or some form of communication would be charitable on the part of the employer and his only means of finding different work outside of his immediate area. There is obvious incentive not to do so because the employer cannot be 100% sure that all of the unemployed would be willing to do the same work at the same rate. This also gives incentive not to go too low in order to retain labor. I am arguing that this isn’t really cooperation so much as it is competition between the employer and the employee.
That is precisely why I said “virtual slave” and “difficult” to find better work. Knowledge of available alternatives is extremely unbalanced in this case and gives a definite advantage to the employer. Virtual isolation may more easily become forced, physical isolation. He shouldn’t expect much help from Libertarians that may see him as gainfully employed. How would you ever know the reality of the situation if you refuse to violate private property?
I might agree that consumers would pressure someone economically to change his treatment of employees …if… it weren’t for racism, sexism, nationalism, religious discrimination and all the other ways that we find to hate each other in the world. Apathy about the less fortunate is a strong demotivator as well.
“Rather I was saying that people’s perceptions about the comparison of dollar amounts – itself – impedes their own and others’ capacities to be employed.” I understand this to be a statement about the rigid attitude of labor concerning nominal wage levels. Do employers have a perception problem as well, or do I have a perception problem with this statement?
I can’t help but notice that employers generally lower employee’s nominal portion of the profits before their own share of the profits. That nominal amount must have some significance or it wouldn’t meet with such resistance. If it were so inconsequential, employers could easily avoid conflict with less sophisticated, less perceptive workers by sharing the future uncertainty of a nominal wage change.
Capital is more important than people, and it still sounds more like a battle than economic harmony to me. Capital means survival, of the business and the individual. It wouldn’t be protected so adamantly if it didn’t.
My understanding of Libertarian philosophy is that you aren’t opposed to wage disputes, you would just rather it be more individually costly than simply casting a vote to accomplish personal agendas. I believe that makes combat more frequent because fighting an individual may be more tempting than fighting an enemy that you probably will not defeat. Doesn’t minimum wage, to a certain extent, alleviate the need for combat? It has become a political fight rather than the physical fighting that was taking place in earlier American history.
Andy,
These comments are getting really long, so I’ll just answer the questions. I should warn you in advance that what I’m going to say may sound very ugly – but I assure you that I’m a well-intentioned human being!
“How would you ever know the reality of the situation if you refuse to violate private property?”
In my mind, you cannot say ‘if you don’t violate private property rights, then you don’t get such and such’. The inevitable question is; why is ‘such and such’ a goal? In this case; why is ‘knowing the reality’ a goal?
“Do employers have a perception problem as well, or do I have a perception problem with this statement?”
No, I don’t think you have a “perception problem” with this statement. I don’t think that the “money illusion” is exclusively reserved for employees. I work on the assumption that it pervades the entirety of the economy. In fact, I think we have good grounds to assume so; because businessmen nevertheless engage in imprudent activities – they fail to anticipate the business cycle.
“I believe that makes combat more frequent because fighting an individual may be more tempting than fighting an enemy that you probably will not defeat. Doesn’t minimum wage, to a certain extent, alleviate the need for combat?”
I don’t really understand what you mean by ‘fighting’ and ‘combat’ here. Do you mean something along the lines of; ‘I demand that you pay me!’ ‘No!’ or conversely ‘I demand that you work for me!’ ‘No!’?? In a private society, people who can’t make deals with one another don’t execute transactions with one another.
Anyway, you should understand that this supposed ‘tension’ is prevalent throughout the economy. For example, I want to buy a Ferrari for £10, but those bloody b******* won’t give it to me for that! I’m thinking of starting a petition and going to the house of commons in London to demand my ‘fair share’ of Ferrari!
Likewise, the Ferrari corporation wants to sell me a Ferrari for £1’000’000’000, but I’m such a bloody b****** that I won’t give it to them. They’re thinking of starting a petition and going to the house of commons in London to demand their ‘fair share’ of my money!
Andy March 27, 2011 at 1:37 am:
“I can’t help but notice that employers generally lower employee’s nominal portion of the profits before their own share of the profits.”
That is precisely why I equate the present-day manifestation of capitalism as piracy. The employer decrees that an hour of labor he willingly paid $10 for yesterday is only worth $8 today for the sole reason that the employer’s profit from that worker’s labor has decreased $2 and not because of any decrease in quality or quantity of the worker’s production.
When there are many more unemployed people than jobs the wage floor must be where the person with the smallest cash requirements can’t improve his financial position by taking a job?
If he could eat better dumpster diving than by taking a job? When working nets less than begging?
“Jobs”, the phantom that forever haunts the union-stooge. Apparently, taking a “job” or begging is all this yo-yo can imagine. Poor indeed.
Gresham,
“Do you mean something along the lines of; ‘I demand that you pay me!’ ‘No!’ or conversely ‘I demand that you work for me!’ ‘No!’??” I would add that, “I have a life that I am trying to make profitable, therefore I am also in competition with the person that employs me and the consumer that employs us both.” Consumer and labor demands on products reduce profit for the entreprenuer and vice versa. I don’t see cooperation as clearly as you do.
Most individuals begin their working life as employees of another. You need to attain capital in order to become an employer or simply independent in a capitalist economy. If your wage is commensurate with your survival alone, you don’t gain capital. Therefore, you never become anything more than dependent on those that have capital.
I would guard against losing my capital jealously. Even though I would arguably be more harmed as a small business owner than as an unskilled laborer with the implementation of a minimum wage, I may try to convince someone that he is better off allowing me a greater degree of economic security than he. I may even call him a statist and a serf if he protests.
“For example, I want to buy a Ferrari for £10, but those bloody b******* won’t give it to me for that! Exactly. Similar to “I want my enormous jar of dill pickles, so why don’t you just stop this bloody talk of unionizing my WalMart and living wages and such, and get back to serving my demands.” You don’t want to, and I don’t want to. That makes for a very harmonious market place.
Andy
You need to differentiate between new money and old money. New money, mostly paper profits, I suppose began with Bill Gates, it didn’t hurt him to a have a father who was the richest lawyer in Seattle. Most old family money people are invisible and have never held a real job. The queens of Great Britain and the Netherlands, for example. Do the Rothchilds ever get on the ‘richest’ list? They mostly own hard assets, mines, land, cities . . . .
First, let me point out that none of us “owns” property. If you disagree with this statement, quit paying rent (aka property taxes) on “your” property, and see what happens to it.
Lenin said he would “grind down” the public between the twin millstones of inflation and taxation. Obama has added regulation. One can argue whether what is happening is consciously directed, or just plain stupidity. But the outcome, if no change is made, is implosion of the United States.
It wasn’t Obama that added regulation. Placing the blame on him (alone) misses the mark tremendously.
Then no one owns a car because if you don’t pay an annual license fee you can’t drive. The only thing you can own is food because after it is eaten it has zero value.
Owing a house free and clear gives me a sense of security because the county can’t steal it until I an 3 years in arrears in paying in paying the taxes. The taxes are less than 5% of my pension.
Indiana has a 1% cap on residential property tax. I noticed that all three of my vehicles, a year after tax cap enacted, have been charged an extra $25 each for registration. Public insistance on not paying taxes at all just made the cost appear somewhere else. I saved $90 on taxes. Waiting to see what happens to schools around the state. Thank god I got my $15 though. I know from the work my wife does that the ‘tards she cares for are quietly being defunded and moved back into institutions. Thanks Mitch.
Andy – the long term effect of the cap on residential property should be to make slumlording more profitable. As transportation costs increase people will be forced to live closer to their work except for people who can do their work on line.
One problem with “on line” is that it includes the people in India, most of whom speak better English than the median US high school graduate. A friend works for a nation wide real estate title insurance company. Most of the public records they access are on line. His company has bought an Indian company and commanded that all routine title work be sent to India. Our local hospitals are having our MRIs read in India.
Bottom line is the post WW2 American Dream bubble of a house in the country and a job in the city has popped. But traditional US cities with single family residences are not being built. Another 40 years and most US cities will look like a Japanese city but much dirtier . . . OK, make that a Chinese city.
Earlier in the month, Illinois decided to tax Amazon for sales made by Amazon partners who were resident in Illinois. Amazon immediately cancelled it partnerships with companies located in Illinois.The speed with which this took place is staggering. (I have nicknamed this the e-Dukakis effect, after the former Governor of Massachusetts, who raised taxes only to see the computer companies, located close to MIT and Harvard, relocate to Texas.)
In the past, relocating a manufacturing plant was expensive and perhaps undesirable, since there may have been a good reason for its location – we don’t build ships in Denver Colorado.
However, now many businesses can be relocated anywhere in the world, and require very little in the way of upfront capital investment.
So when it comes to creating jobs, high taxation and regulation are a killer. They create a disincentive to business. The only businesses that will stay are those that have to be there, such as restaurants.
The author would do well to take his nose out of his Austrian economics books, jettison his tired ideas and ideologies and look around himself. The biggest reason for high unemployment is the increased pace of outsourcing to Asia since 2000. The outsourced jobs now include both blue collar and white collar jobs.
Chinese workers are beginning to demand higher wages and safer working conditions. For some odd reason, labor doesn’t like paying for everyone else cheap crap with their health and lower living standards.
Theo, they aren’t so different from American workers. It isn’t their fault that we can’t get enough inexpensive, Chinese made, SpongeBob boxers.
As I’ve learned from earlier posts, you are not impoverished unless you are famished to the point of starvation. On second thought, shut the fuck up and make my damn Mardi Gras beads, China boy.
Chinese workers will be content when our standard of living is as low as theirs . . . and so will our owners be content.
History shows the revolutions are started when living conditions of the lowest class start to improve and the workers see that more improvement for the entire population of serfs is possible. This is why it is dangerous for our owners for their straw bosses to begin thinking of themselves as “middle class.” If our owners can get us American serfs all back to a minimum standard of living fast enough AND blame it on Muslims and Arabs all will be OK and peaceful again.
Look at the union-stooge project his grubby little emotions onto the Chinese. Yech.
If you don’t like it, get your ass back on that ox and sell me some rice.
a great graph and some good info at the beginning, but the dogma about the relationship between minimum wage and unemployment. It’s tired, it’s old, and it isn’t true.
http://www.epi.org/publications/entry/briefingpapers_bp150/
Some low wage paying service sector jobs may have been affected by an increase in minimum wages but high paying manufacturing jobs that usually pay much above minimum wage wouldn’t be affected. High paying manufacturing and R&D jobs as well as high paying service sector jobs are being outsourced to countries that manipulate their currencies which make the price of foreign labor cheaper and whom subsidize the multinationals move overseas. These are the areas where many of the jobs are being lost which is contributing to the high unemployment numbers.
Today the issue is not so much about wages being propped up but that the money printing stimulus packages from the Fed has gone into funding the outsourcing of US jobs, factories, technology transfers overseas, military bases and infrastructure spending abroad, speculation into financial assets that is pushing up things like commodity prices and artificial consumption with debt instead of production in the US. If the money created was being used to fund production and industrialization instead of outsourcing; then more jobs in the US would have been created.
The Bank of North Dakota is an example of a model to follow. It places State tax funds into their own State bank that they can recycle to fund services, projects and industrial development within the State. Additionally they work with other private banks in the state with loans and also hold deposits of other private banks and individuals. Instead of having to depend entirely on issuing state bonds, they can create credit to fund development within the State. The state of North Dakota has been successful at regularly maintaining low unemployment and budget surpluses with it’s state bank because they encourage savings and can create credit to fund development. Also, the deposits with the Bank of North Dakota are not FDIC insured but insured by the State which prevents high over leverage on the Bank balance sheet because the State Bank knows it doesn’t have a printing press. So money is not created to fund much speculation.
Strongly Recommended to read:
What’s North Dakota Secret?
http://www.forbes.com/2009/06/30/north-dakota-hoeven-business-energy-economy.html
Might it also be because of information asymmetry? For example, I see hiring signs all over the place at pizza parlors and gas stations, but when asked (I have a neighbor who has been looking), we are told that “we’re not really hiring, we are just collecting information. We don’t have any real openings.” Because this is so prevalent, there seems to be a chilling effect–at least with my neighbor. He’s given up on those two industries altogether; because they are wasting his time. If we believe that companies are just trying to market on the cheap and are just duping applicants into surrendering personal information, without even guaranteeing that it will result in some sort of follow-up, won’t that also cause a drop of participants in the workforce? How prevalent is this deception on the part of the hiring companies?Could it be so prevalent that the true intentions of companies remain masked,and thus invisible to policymakers as well?
I am currently unemployed. I was laid off the end of February of this year. I had a job that paid about $13 per hour.
I collected exactly 1 UI benefits check while unemployed. There is a hold on my UI benefits because I turned down a temp-to-hire job offer from a temporary staffing agency in March.
I am definitely NOT the type of person who made six figures before the layoff, who then applies for low wage fast food jobs so they can turn them down and remain on UI benefits and do nothing but collect money at the taxpayers expense. Those people are losers.
The job I rejected was :
1. Out of town. The commute at upwards of $4 per gallon of gas (plus the extensive wear and tear on my old car that already has 100K miles on it) would eat up any earnings I would have made at the $10.50/hour the job was to pay. I believe a job paying 80% of your previous earnings is considered reasonable, but the transportation expenses would have made it extremely difficult (if not impossible) to break even. While the pay was statistically correct, I crunched the numbers for my own budget and decided the job was too expensive for me to take.
2. The job was in a call center. I promised myself I would NEVER take another call center job. Customer service call center work sucks. Anyone who has ever worked in a call center can tell you that. It’s why they have such god-awful turnover. I decided that since the call center was *just* a call center — the company’s HQ and other departments were all out of state, limiting my ability to ever be able to move/be promoted *out* of the call center — and since the offer was only the first position I had interviewed for since my layoff, that I could afford to wait and send out some more applications and do more interviews. I could have taken the job, but since it was *out of town* it would have greatly restricted my ability to set up job interviews closer to home (i.e. there wouldn’t be a long enough lunch break to drive back to my town, go through the interview and then drive back to work without being very late).
Since my UI benefits were suspended, I’ve been living on my savings and some income from a short term temp assignment. I was lucky to get this temp assignment, since it is with a company (well, a local school district actually) where I have already applied for several full time/permanent positions, so it was a bonus to be able to make a little money and semi/sort of get my foot in the door someplace I might be much more interested in working (a far cry from a call center!).
While the government might consider me off the rolls, and statistically that’s making the Obama administration look good, I don’t really feel that I owe the Obama administration a PR success from taking a sucky call center job for less than the even the low wage I was already making before. It’s not like I’m a former financial executive with a six figure lifestyle for Christ’s sake! I was making $13 measly bucks. I really don’t think that 80% of $13 bucks is a living wage for someone with a geriatric automobile to replace. I couldn’t care less about the administration’s problems. I, as an individual, want the right job for me: close to where I live (for as long as gas prices continue to rise), paying enough that I can save money to replace my old car (without going into indentured debt servitude with a car loan), and a job I can actually stomach. I am a former teacher (although my teaching certificate expired many years ago) and I feel that even an admin job in a school system is far better than call center slavery at $10.50 an hour.
Health insurance = cheaper than I ever imagined! As an employee, I had the least expensive, high-deductible insurance through my employer’s plan. I think I was paying at least $60 to $70 a month for that. Since leaving my employer, I shopped around for private health insurance. A Dave Ramsey ELP found a Humana plan with a high deductible which costs me only $46 a month. If I’d known it was that cheap, I would have happily *quit* my old job years ago and temped until I found something I actually enjoyed, around people who don’t gossip about and backstab their coworkers all day long (it was the most toxic environment I’ve ever worked in, and all I can say is good riddance to bad company!). Granted, I’m a 42 year old woman in good health with no chronic or preexisting conditions, so that helps. Still, I don’t think private insurance is as expensive as everyone claims. Shop around, and you can probably get a better deal than your employer is offering you.
I live in a state that is not a right to work state, and I pay both state and local income taxes, as well as property tax (I’m a homeowner with a prime mortgage, believe it or not – but real estate prices where I live weren’t inflated like they were in other parts of the country, so I’ve never been underwater, and I bought my home in 1999, before the housing bubble really started to pick up steam). The city where I live is a college town, and the city government is NOT friendly to new businesses, which I think is part of the reason so many of the job openings that *are* available are out of town and I’m actually struggling to find something with a shorter commute.
If you are thinking that choosing a humana medicare part d plan for 2011 is a good idea, you are not alone. Humana Part D drug coverage has been one of the most popular prescription drug programs for Medicare beneficiaries.
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