Larry Gude
Strung Out
http://www.wsj.com/articles/better-than-raising-the-minimum-wage-1432249927
The Oracle sees much. He just doesn't see the obvious; supply and demand in labor is THE problem.
You'll have to read the whole thing which, I know, an American should never have to do before commenting on something but, hey, you really should.
In any event, Warren's argument is against the minimum wage and in favor of new and better tax cuts as the way to help the poor. He does this hot on the heels of expressing the concern that the Forbes 400, since it's inception a little over 30 years ago, has had it's share of wealth go from $93 billion to $2.400 trillion, up 2400%, or, about 25 times, while the median...tripled.
Now, he talks about all the ones we reflexively think of, education, hard work, innovation, etc but he does so in that same reflexive fashion that does not take into account a society where everyone is educated, qualified, works hard and so forth and the simple fact that all of that success equates to improvements in productivity that then equates to less jobs and less pay for them as the top 'earns' a higher higher percentage of wealth. He talks in analogies, which is fine, saying that if we look at this through the eyes of sports, he'd not even be able to earn the minimum but that hugely misses the point; if there was good balance, even the worst player has a role, has a job. And, to reverse his analogy, in terms of the skill sets rewarded now, more and more is there for 'superstars' who are, in turn, being paid out of what no longer goes to the lesser players whose roles they've eliminated while, at the same time, not confronting that the shear volume of 'superstar' roles, by definition, can't keep pace with more and more people competing for them through the more and more ruthless process of eliminating those lower roles.
He off offhandedly offers up how 200 years ago we were all relatively equal on the farm.
He says the poor are not poor because others are getting rich and this is imply not true. The pie is the pie. If the top gets 25 times more of the total than it used to, you need more pie or those lower down to get less. Period. Capitalists talk in terms of wealth creation and a better mousetrap will always have a place but, MOST of the gains at the top are paper wealth, the simple manipulation of perceived value of the labor and ideas of others to parties motivated not by the product or service but by the perception of the value of the products and services. If that was good for workers, the median, the ratio wouldn't be 25:3.
He argues we are all better off for the Henry Fords and Jobs and Waltons but, are we? Does he ever walk around and see his fellow American's? Ford made things better for his workers; better jobs, better wages, better life. Can that be said of Jobs and Walton whose workers are in sweatshops over seas? For some, yes, spectacularly better but, again, nowhere near better for most.
It's striking to me that an icon like Buffett would not discuss the most basic principle of an economy; supply and demand, and it's impact on ability to earn.
The Oracle sees much. He just doesn't see the obvious; supply and demand in labor is THE problem.
You'll have to read the whole thing which, I know, an American should never have to do before commenting on something but, hey, you really should.
In any event, Warren's argument is against the minimum wage and in favor of new and better tax cuts as the way to help the poor. He does this hot on the heels of expressing the concern that the Forbes 400, since it's inception a little over 30 years ago, has had it's share of wealth go from $93 billion to $2.400 trillion, up 2400%, or, about 25 times, while the median...tripled.
Now, he talks about all the ones we reflexively think of, education, hard work, innovation, etc but he does so in that same reflexive fashion that does not take into account a society where everyone is educated, qualified, works hard and so forth and the simple fact that all of that success equates to improvements in productivity that then equates to less jobs and less pay for them as the top 'earns' a higher higher percentage of wealth. He talks in analogies, which is fine, saying that if we look at this through the eyes of sports, he'd not even be able to earn the minimum but that hugely misses the point; if there was good balance, even the worst player has a role, has a job. And, to reverse his analogy, in terms of the skill sets rewarded now, more and more is there for 'superstars' who are, in turn, being paid out of what no longer goes to the lesser players whose roles they've eliminated while, at the same time, not confronting that the shear volume of 'superstar' roles, by definition, can't keep pace with more and more people competing for them through the more and more ruthless process of eliminating those lower roles.
He off offhandedly offers up how 200 years ago we were all relatively equal on the farm.
He says the poor are not poor because others are getting rich and this is imply not true. The pie is the pie. If the top gets 25 times more of the total than it used to, you need more pie or those lower down to get less. Period. Capitalists talk in terms of wealth creation and a better mousetrap will always have a place but, MOST of the gains at the top are paper wealth, the simple manipulation of perceived value of the labor and ideas of others to parties motivated not by the product or service but by the perception of the value of the products and services. If that was good for workers, the median, the ratio wouldn't be 25:3.
He argues we are all better off for the Henry Fords and Jobs and Waltons but, are we? Does he ever walk around and see his fellow American's? Ford made things better for his workers; better jobs, better wages, better life. Can that be said of Jobs and Walton whose workers are in sweatshops over seas? For some, yes, spectacularly better but, again, nowhere near better for most.
It's striking to me that an icon like Buffett would not discuss the most basic principle of an economy; supply and demand, and it's impact on ability to earn.
