Labor Costs Are Down, but Who Really Benefits?

I've been meaning to write a post about an avalanche of furloughs, wage reductions, benefit reductions I've been stockpiling as they've come through over the past 2-3 months but simply have not had the time to do it. This story via Bloomberg talks about the subject from a 40,000 point of view, although I'd caution that almost any report out of government is to be viewed with jaundiced eye. This set of data seems pretty hard to manipulate since wage data is straightforward, so I'll make an exception and post government data (which I try to avoid).

• Employment expenses in the U.S. rose 0.3 percent in the first quarter, less than expected and the smallest gain on record, a sign the worst recession in at least half a century is restraining wages and benefits. The first-quarter gain was the smallest since records began in 1982.
• The increase in the employment cost index compares with a 0.6 percent gain in the last three months of 2008, the Labor Department said today in Washington. In the last 12 months, costs were up 2.1 percent, after a 2.6 percent year-over-year gain in the previous quarter.
• Labor costs, which account for about two-thirds of company expenses, are likely to stay contained as the global downturn forces businesses to trim workers and benefits.
• Among private companies, total compensation costs increased 0.2 percent, the smallest gain since that measure began in June 1980, while for state and local government employees, compensation increased 0.8 percent. (now of course - this brings up another issue I've talked about repeatedly; the complete disassociation between public and private workers... even in the worst post World War 2 recession public worker costs are increasing at annualized 3.2% rate - even as their private counterparts are getting 1/3rd that. Mull for a moment how we are paying for that divergence. I don't think Americans are paying attention - and each time the states get in trouble, I guess we can borrow from the Chinese - or ourselves via quantitative easing - and steal from future generations to pay public workers today. But some day there needs to be a rationalization ... tax rates need to skyrocket to pay for our promises to the public sector. )

Now as stock market participants we must clap and cheer at the "discipline" of our corporations at making sure costs are contained. Or as Alan Greenspan called it "the productivity miracle" is once again here again.

This ties into one of our "very long term" views about the pressure on US wage earners that I believe (unlike 99% out there) is a secular change not cyclical. Median wages have stagnated the past decade and many Americans turned to their home (or credit cards) to make up for it. Hence you had a zero and indeed a negative savings rate nationally for parts of the 2000s. Further we are moving to a more transitory, "temporary" type of workforce - and this is why so many companies have beaten (very low) expectations this quarter. So many heads have been chopped so quickly - that the expense lines have improved. [Apr 2, 2008: The Underemployment Rate is Rising] So we have a secular (in my belief) class of underemployed in the country

I've been struggling to think of a term for all these people who are struggling with part time work, working 2 jobs, or in contractor jobs where they get hired/fired on a daily whim ( I call them "nomad workers") This is a systematic and secular situation - nothing to do with 1 month's report or another. It is part and parcel with the erosion of living standards - and why so many in the middle and lower economic strata turn to home equity, credit cards, etc to just get by.

So this brings up the great disassociation - what is good for the stock market (and companies) is not really quite so lovely for the workers. Again, I have a dark view on this as a permanent change in America... but the stock market only worries about the next day or week. So as long as you "beat the number" everything is good, and green shoots abound. My personal belief is many Americans, via increasing instability over the past decade, are seeing the situation in a very slow creep around them - but it is so incremental as to not be easily visible. If you've never read the piece I suggest going to [Dec 8, 2007: Do the Bottom 80% of Americans Stand a Chance?] to get my long -erm views on what really has been happening in the country.

Now what we see in Bloomberg is a very low level of wage increase - 0.3% in a quarter annualizes to 1.2%...that degree of degradation is due to recession. You can simply pick up the local newspaper (if you still have one in your area) and read about the cost cutting measures from small businesses cutting health care, to larger businesses cutting 401k contribution, to wage freezes, to wage reductions, et al.

But my contention has been inflation has been understated by the government versus reality - and with the amount of profits going to small slivers of society (at levels not seen since the 1920s) the "median" humanoid in America has been falling slowly behind year after year. I had never seen before what IBM proposed about a month ago to some of its workers - you are free to keep your job you have if you move abroad.... and (kicker) accept the local wage. Canary in coal mine? If so, my thesis is playing out in its next stage.

But, as stock market speculators all we care about is the nirvana of the "workerless" economy and the lower the wages, the lower the benefits, the lower the costs. And all that matters are lower costs = more profits. What you need to ask a generation or two out is at what point do wages get to the point where the median worker can no longer enjoy the median middle class lifestyle. Or are we going to need to wait that long to find out? Even before the Great Recession, I was reading studies where parents are beginning to believe their kids won't be able to maintain the same lifestyle they did. Not parents in the upper 15-20%; parents in 30th, 40th, 50th percentile. After all this ability to increase living standard is the great carrot in our society and why we allow such divergence from top to bottom versus "those damn socialists" overseas.

Now the counter-arguments are familiar: (a) as the Baby Boomers retire, a much smaller workforce remains to take their place hence less people fighting for same amount of jobs = higher wages, and (b) we are the technical innovators of the world so new jobs are around every corner. I'd argue in an increasingly flat world, why do jobs that don't require hand to hand contact (i.e. nurses) need to remain here at all? As Baby Boomers retire the job can be outsourced (p.s. can Baby Boomers afford to retire?)

And we've had technological innovations here for years - where has the job growth been the past decade? Government and healthcare.... oh yes financial innovation (worked out great) and that innovative industry called "building houses". Anyhow we don't talk about these issues here because its a stock blog and the time frame in the stock market is hours, days, or (nowadays in rare cases) a month. Just keep your eye out on what is going on out there - think of how 2 workers (mother and father) now bring in income to be able to replicate similar lifestyle to what 1 worker did 2 generations ago. (and yes the living standard is higher now but that's not the point - what sacrifices are necessary to maintain that now higher standard?)

Or how many are stuck working 2 service jobs to make ends meet versus how one would do 25 years ago. Most of those folks I speak about don't have time to read this blog, nor any income to invest - but they are a growing class of America. I will say again - if Ben B gets his way and he is able to reflate a new bubble (and avoid deflation), this version of stagflation could make the 70s look like a cake walk - worker "power" back in the 70s was far greater, and the ability to move jobs overseas was far weaker. But at least the "ownership" class will be giggling to self in their new found asset appreciation. And that's the main concern. (err, I'm sorry Main Street = Wall Street is what I really meant to say)

But as always I could simply have Michigan bias, and be completely wrong.

EDIT 12:05 PM

- so as an investing site let's take the 'other side of this commentary' - as I said; this is "great news" for companies.

See below

• Corporate earnings worldwide haven’t been the disaster analysts predicted as companies from Ford Motor Co. to Siemens AG beat earnings estimates through job cuts, factory consolidations and a dose of lowered expectations.
• One reason is the low hurdle the companies set earlier this year by reducing forecasts, rather than any recovery from the deepest U.S. recession in a half-century, investors and analysts said. At the start of April, equity analysts estimated earnings among S&P 500 companies fell 37 percent in the first quarter. Six months earlier they had been calling for a 22 percent gain. (that's a 59% divergence - the bar was set very low. Ironically we were mocking Q3 and Q4 2008 estimates in early 2008 when the talk was of "2nd half recovery" - I didn't realize how low estimates has been slashed in Q1 2009)
• Far from being a buy signal, sometimes earnings that beat estimates should be a “major red flag for investors” because they were achieved by cutting costs that may restrict growth, said David MacGregor, a Longbow Research analyst in Independence, Ohio. “The assets they are closing or rationalizing today, a year ago they would have said they needed for the recovery phase,” MacGregor said. “Recovery is not imminent, and is far enough into the future that they are re-sizing the business to a much lower level.”

The rest of the story is just a litany of companies that slashed heads in massive waves. But they "beat" - time to cheer. With the recovery "in 6 months" I guess they can begin rehiring now.

Comments

[TeresaE:]

How does that "compensate".

Ten people, even ten very rich people, will NEVER have the purchasing power of thousands of regular wage guys.

NOT to mention that soon, that top 1% will be directly supporting the 50% that no longer have jobs.

So, once taxes go to 80-90%, will your view still be so rosy?


On May 01 08:20 AM Cetin Hakimoglu wrote:

> But the wealth of the top 1 percent has risen considerably in that
> time period, which compensates for stagnant real wages for middle
> class.
>
> ----------------------...
> This ties into one of our "very long term" views about the pressure
> on US wage earners that I believe (unlike 99% out there) is a secular
> change not cyclical. Median wages have stagnated the past decade
> and many Americans turned to their home (or credit cards) to make
> up for it.

May 01 09:00 AM

[TeresaE:]

Nearly all the "increases" in average wages over the past decade (since NAFTA and China trade) have been in health insurance.

My rates go up 20% a year for my employees-even when they don't use their policies.

Our living wages continue to decrease, while necessities of life increase.

Maybe good temporarily for Wall Street, but all signs are pointing to long term horror.

May 01 09:02 AM

[cynewulf:]

Why do government workers wages, creep ahead of the private sector ,year after year? Why do we send our manufacturing industries ,abroad? Listen to the lies that are fed to us about poor government workers, even by the President. When people are lied to for decades about the same stuff, it is because the lies are passing,because it is what the average citizen wants to hear. Kudos to Trader Mark for pointing out the truth.

May 01 09:52 AM

[OperaMan:]

I think your observations on the declining fortunes of 99% of America’s workers are spot on. And your observation regarding the bleak future for the standard of living for those 99% of Americans is prescient. But, to think that this situation can continue in the long run without causing strong countervailing forces to emerge is, I think, naive.
There are some real consequences to this trend which may affect the future course of the other trends you mention in your article, some of which may be:
• Business that depend on the aggregate spending by consumers, especially those businesses that cater to spending on non-essential or luxury items, are going to suffer a continued decline in their overall revenues. This will inflict some pain on those members of the privileged classes who live off the income from these businesses which will in turn create pressure to make substantial political changes to try to fix things.
• Political pressure from the disadvantaged masses will also support movements for political change. We already see this in the election of Obama and the continuing collapse of popular support for the Republican laissez-faire capitalist agenda amongst the 99%. The Obama Administration’s pushes for comprehensive health care reform and for EFCA are just the start. If the situation does not improve, political pressure for more extreme measures will result and the privilege classes may well reflect back nostalgically on the Obama Administration’s mild move towards socialism as having been quite benign. Consider the high polling numbers for Obama at the 100 day mark of his administration as a signal in the shift in the public’s mood.
• Your description of IBM’s solution to export their workers to lower wage countries is very interesting and has many implications. Not the least of which is a massive brain drain which will rob this country of its innovative edge as not only America’s innovative citizens leave to find better situations (and likely more amenable foreign employers), but the lure of America to talented foreigners quickly fades as well. Once the word is out on just how bad an employer IBM is becoming, how much of the world’s engineering and scientific talent want to work for it or, by extension, for any other American company?
• Seeing what bad career choices science and engineering are in this country, more young people will continue to avoid studying for degrees in these fields in favor of careers with better probable outcomes (including entrepreneurial ventures). Innovation will continue to decline in this country as American becomes progressively less attractive a place for talented foreigners to immigrate to and American companies become progressively less attractive to work for (even in their foreign subsidiaries).
The decline of the American middle class and the American life-style are well under way. What political and social pressures and changes emerge as a result will be very interesting to observe. We are all in for a bumpy ride.

May 01 10:04 AM

[Tom E.:]

The decrease in incomes and purchasing ability by the US masses will ruin the home market for many US businesses. It is Henry Ford's philosophy in reverse (paying workers more than prevailing wage at the time so they could afford to buy his cars).

Once this occurs and other countries see that the US market is not so valuable anymore, the other countries will shut their home markets to US business. It is a fools game we are playing.

May 01 10:26 AM

[Econ 101:]

Shine a light on the cockroaches, watch them scatter

Support HR 1207, an Audit of the Federal Reserve:
www.govtrack.us/congre...

Find your congress person:
www.house.gov/house/Me...

Why is BHO looking like Bush Lite??
www.oftwominds.com/blo...

May 01 11:50 AM

[Ageless:]

All of these changes relative to people, work, average income, erosion of the middle-class as "longevity based workers" was predictable as long ago as when Charles Handy wrote the Age of Unreason in the late 1980's.

In the early 21st century, Daniel Pink wrote about Free Agents in his book - Free Agent Nation and, just as the economic bombs were about to burst last year, Carleen MacKay, Phil Newbold & Brad Taft predicted an increase in free agency (including a yet-to-come amazing acceleration in Free Agents after a national health care plan becomes fact which, like it or not, it will) in their latest book, Return of the Boomers. And, yes, they also wrote that America could not compete without the mature workforce and the mature workforce could not sustain itself without continuing to upgrade knowledge and skills if they "hoped" to continue to work and earn.

If ever there was a more natural setup (than longer lifetimes and a smaller next generation) for increased emphasis on free agency in a globally competitive world of work, I've not heard of it.

Expect a stronger shift to free agency as U.S. employers will, increasingly, only pay for current skills, current talent and specific credentials in any age group.

Overall pay will stay low, while the few...the prepared...the educated... will make more money if they can stay abreast of marketplace change...Many of these people will be Boomers (and beyond) because the smart ones will combine their experience, their established penchant for hard work with new skills or education.

Do not count on people to retire. Retirement is a word for another day for most. Sustainability is the word for a new century..for people and organizations alike.

Do not count on obsolete measurement systems (such as used by the government) to offer good data relative to the new demands of a new economy.

May 01 01:34 PM

[TraderMark:]

With the vast majority of those commenting on the market, making a living off the market - and most of them only from the long side, especially on financial teevee, you will here the constant blather of all things that make the market go up are good. Right now we are seeing a never before seen transfer of deficits from the private sector to the public via Treasury and Fed. This is cheering by market participants. Why not? This removes risks from stocks, its a subsidization game.

Hence you get the constant clapping, cheering, roaring, et al on short term results that increase profits. The mess it creates in a society? Not part of the "game".


On May 01 07:57 AM dcb wrote:

> There are many people on this site who see the financial landscape
> through the prism of stock market prices only, and that everything
> that raises the market must therefore be good. That is a shame. I
> worry we are sacrificing market performance for over all economic
> good and that will come back to haunt us in the long run. But, if
> you have enough money you will be able to escape the hungry masses

May 01 01:34 PM

[TraderMark:]

here = hear

May 01 01:35 PM

[TraderMark:]

OperaMan

good points. You have a more positive view on the "masses" than I do. I see corporate socialism here, versus people socialism overseas. And we mock those overseas... when we do the same - but mostly for the biggest political donors. Meanwhile, over "there" in those "socialist" countries they take to the streets for 1/50th of what is going on here. So what exactly would be the breaking point that would get people involved? We have a few cute tea parties while this massive transfer of wealth (to the few from the many goes on)

So we'll see how it works out; my belief if a lot of dogma is ingrained into the minds of many, and the "lottery ticket" that 1 in 500,000 can "strike it rich" or 1 in 50 million can "be like Bill Gates" allows the system to continue as is. Versus "socialist" countries where that lack of lottery ticket to "be like Gates" is not there, but people don't fear getting sick the wrong week when they don't have insurance. just one example. But good points.


On May 01 10:04 AM OperaMan wrote:

> I think your observations on the declining fortunes of 99% of America’s
> workers are spot on. And your observation regarding the bleak future
> for the standard of living for those 99% of Americans is prescient.
> But, to think that this situation can continue in the long run without
> causing strong countervailing forces to emerge is, I think, naive.
>
> There are some real consequences to this trend which may affect the
> future course of the other trends you mention in your article, some
> of which may be:
> • Business that depend on the aggregate spending by consumers, especially
> those businesses that cater to spending on non-essential or luxury
> items, are going to suffer a continued decline in their overall revenues.
> This will inflict some pain on those members of the privileged classes
> who live off the income from these businesses which will in turn
> create pressure to make substantial political changes to try to fix
> things.
> • Political pressure from the disadvantaged masses will also support
> movements for political change. We already see this in the election
> of Obama and the continuing collapse of popular support for the Republican
> laissez-faire capitalist agenda amongst the 99%. The Obama Administration’s
> pushes for comprehensive health care reform and for EFCA are just
> the start. If the situation does not improve, political pressure
> for more extreme measures will result and the privilege classes may
> well reflect back nostalgically on the Obama Administration’s mild
> move towards socialism as having been quite benign. Consider the
> high polling numbers for Obama at the 100 day mark of his administration
> as a signal in the shift in the public’s mood.
> • Your description of IBM’s solution to export their workers to lower
> wage countries is very interesting and has many implications. Not
> the least of which is a massive brain drain which will rob this country
> of its innovative edge as not only America’s innovative citizens
> leave to find better situations (and likely more amenable foreign
> employers), but the lure of America to talented foreigners quickly
> fades as well. Once the word is out on just how bad an employer
> IBM is becoming, how much of the world’s engineering and scientific
> talent want to work for it or, by extension, for any other American
> company?
> • Seeing what bad career choices science and engineering are in
> this country, more young people will continue to avoid studying for
> degrees in these fields in favor of careers with better probable
> outcomes (including entrepreneurial ventures). Innovation will continue
> to decline in this country as American becomes progressively less
> attractive a place for talented foreigners to immigrate to and American
> companies become progressively less attractive to work for (even
> in their foreign subsidiaries).
> The decline of the American middle class and the American life-style
> are well under way. What political and social pressures and changes
> emerge as a result will be very interesting to observe. We are all
> in for a bumpy ride.

May 01 01:40 PM

[LKofScotland:]

excellent article. "99% of workers lose" is clearly off the mark since once you factor in the "government workforce" you're talking about a signifcant portion of our "working" population. more importantly this brings up the question of "who pays" or, as AG Cuomo so indelicately puts it to pension funds, "influence peddling." Herein lies the simplicity to what the author has presented, no? The bailouts of banks that are fleecing you by you the taxpayer is no accident, no? It's part and parcel of the same regime we've electing both democrat and repubican for 60 years. BO is no different, no? Perhaps it is unfortunate we have to witness this corruption in full public view--although i would say it is all the rah-rah journalism that all politicians are beautiful people persons that strikes me as a little disjointed. and yet we have these blog sites, too--so maybe that's just irrelevant anyways. in any case there is "technology" and "efficiency." it is real. foreigners don't invest billions in building auto plants throughout the USA because its a fun thing to do. that is success in spite of the abuse of labor that is one of its many dark underbellies. (rank lying and a refusal to tell the truth under oath strikes me as another. it's not like they need any more money. i guess lying really is the only thing most of these people do well.) in any case--great article. keep up the fire. understand though you will sustain far more losses than wins from your positions and let your readers know that as well.

May 01 02:14 PM

[dcb:]

If you believe this I feel very sorry for you.


On May 01 08:20 AM Cetin Hakimoglu wrote:

> But the wealth of the top 1 percent has risen considerably in that
> time period, which compensates for stagnant real wages for middle
> class.
>
> ----------------------...
> This ties into one of our "very long term" views about the pressure
> on US wage earners that I believe (unlike 99% out there) is a secular
> change not cyclical. Median wages have stagnated the past decade
> and many Americans turned to their home (or credit cards) to make
> up for it.

May 01 02:31 PM

[PainfullyAware:]

You Rock TraderMark - Well Done Piece Exposing The "Slow Squeeze" Of The Populous.

Slavery Does Not Always Involve Shackles. None are more hopelessly enslaved as those who falsely believe they are free. Unbridled Expansion Of Government Leads To Complete Subjugation.

The "Value To Effort" Ratio has been considerably eroded by Governmental Mandate/Compliance And Tax/Tariffs at all levels of business and personal finance.

"Company" used to be semi-synonymous to "Extended Family Working Together For Mutual Benefit". Yes, Labor Abuse Has Existed In Vile Form Throughout History - This is The Result Of The Bastardization Of The Concept Of "Company". Viewing Humans As A Resource Always Begins The Demise.

The Fact That Congress Gets A Raise Every Year UNLESS They Vote To Stop It Is Abhorrent and Indicative Of "The Way Things Are".

As The Fearful Look Away The Valiant Begin To Muster.

Knowledge Can Be As Powerful As Money.

The price to good people for apathy in public affairs is to be ruled by evil.

To Assume Benevolence Is Foolish.

May 01 02:32 PM

[mgcolin:]

I don't understand all the hand wringing over lower wages in the US. The need for significantly lower employee costs is neither good or bad. It is reality - the US is a lousy place to do business because workers are just too expensive.

In the global economy the US worker must become more cost effective to compete, and with the mediocre education and poor work ethic of the average US worker vs. those in Asia and elsewhere, economic reality will force wages down.

Healthcare costs also need to be cut for US business to compete - people should either pay for their own healthcare or we need a cheap national insurance plan with everyone in a massive pool.

Without lower total costs per employee US business leaders with a choice will continue to offshore as much labor as they can and who can blame them?

And it won't kill corporate earnings when US consumption declines - consumption will more than be made up by the emerging middle class in Asia and Latin America.

I think over the next 20 years you'll see real CEO and executive earnings increase by double GDP (so about 2% per year) since the best cost cutters and accountability drivers (the real key to value creation in a mature economy) will be richly rewarded by Boards of Directors and shareholders.

The professional/skilled workers and middle managers will have real wages cut by 40% or so to get on par with the rest of the world, and the unskilled workers will be cut by about 60%.

You've already seen this in deregulated global industries like airlines, automobiles. Airline pilots now make a competitive wage, not the insane union pay they were getting 10 years ago.

What's wrong with having a competitively priced workforce?

May 01 04:16 PM

[I am not a ...:]

So true,I am at the bottom of the financial ladder so I see things from a perspective many of you hopefully will never see. The real slavery imposed on the unknowing has been credit. Now that the credit crunch ( long time coming BTW) is here many are now trying to tighten the chains of the credit slaves by decreasing their real income. It will only end in tears and no amount of fancy speechifying by BO is going to do any good what so ever. The Time to prevent the collapse of the social fabric and the decent into a Zimbabwe like morass is NOW.


On May 01 02:32 PM PainfullyAware wrote:

> You Rock TraderMark - Well Done Piece Exposing The "Slow Squeeze"
> Of The Populous.
>
> Slavery Does Not Always Involve Shackles. None are more hopelessly
> enslaved as those who falsely believe they are free. Unbridled Expansion
> Of Government Leads To Complete Subjugation.
>
> The "Value To Effort" Ratio has been considerably eroded by Governmental
> Mandate/Compliance And Tax/Tariffs at all levels of business and
> personal finance.
>
> "Company" used to be semi-synonymous to "Extended Family Working
> Together For Mutual Benefit". Yes, Labor Abuse Has Existed In Vile
> Form Throughout History - This is The Result Of The Bastardization
> Of The Concept Of "Company". Viewing Humans As A Resource Always
> Begins The Demise.
>
> The Fact That Congress Gets A Raise Every Year UNLESS They Vote To
> Stop It Is Abhorrent and Indicative Of "The Way Things Are".
>
> As The Fearful Look Away The Valiant Begin To Muster.
>
> Knowledge Can Be As Powerful As Money.
>
> The price to good people for apathy in public affairs is to be ruled
> by evil.
>
> To Assume Benevolence Is Foolish.

May 01 05:27 PM

[sether:]

I prefer not to compete with children, or anyone who is content to sh*t in a bucket during a 12 minute break in their 13-hour day. The increasing exposure of the US workforce to global competition by Globalist Freemarketeers has only served to gut this place out completely. We could have used the wealth of this nation to bring the rest of the world up by degree, but instead we allowed it to be bled away by Globalist plutocrats, who are rapidly reducing us to developing-nation status in most major socio-economic statistics. mgcolin won't be happy until he can get a new kidney for $40 at the corner organ-mart. Or maybe he'll be selling. What a dick.

On May 01 04:16 PM mgcolin wrote:

> I don't understand all the hand wringing over lower wages in the
> US. The need for significantly lower employee costs is neither good
> or bad. It is reality - the US is a lousy place to do business because
> workers are just too expensive.
> What's wrong with having a competitively priced workforce?

May 01 09:39 PM

[g452ooo:]

There is a growing class warfare in this country. It is between the quintessential "haves" vs. the "have-nots". But most people don't realize who the "haves" are. The masses only know that they are the "have-nots". Now some think the Wallstreet barons or the investors are the "haves". And others think that landlords are the "haves". And there are multiple other groups which many consider to be the "haves".

But, few people realize who the very largest group of "haves" is in this country. It is GOVERNMENT WORKERS. They are the largest group of "haves" by a long shot. Well, what is it that they have that we don't? They have job security, first and foremost. Have any of you ever seen a government employee fired or layed off. I don't mean "riff'ed". That is a voluntary separation, with a nice lump sum offered as inducement. I mean actually told that they are being terminated. I don't mean those (rare ones) who have committed a gross infraction or crime.. I mean, downsizing. Nope. It doesn't happen. Or have you ever heard of government workers taking a cut in pay? Absolutely not. Or no raise? Sorry, they religiously get raises every year.

You have a job for life when the government hires you. The pay isn't out of line compared to the private sector. But, the job for life, is getting to be the big feature. There is a whole lot of financial security which comes with that too. And, the benefits when you leave employment after 20 to 30 years of service.. ahh, now they are really nice.. much bigger than what us private sector folks will be looking forward to receiving once we get to be full retirement age.

So, how come the government workers get a better retirement than the rest of private sector workers? We know that they aren't in the Social Security system. But, why is their retirement pay so much better that the rest of us? Did they work harder than us or were their jobs much more hazardous then ours or did they work longer? They get full retirement benefits after 30 years service at age 55. Age 55! What is up with that? Why do they get full retirement 10, 11 years before we poor private sector folks can, and they get higher benefits at that?! And, they get medical benefits for life too.

What we have here is a dirty little DOUBLE STANDARD. While those of us out in the private sector have to work 44, 45, 46 years to qualify for a retirement benefit, these GOVERNMENT workers can work just 30 and then retire with a better income than we do with almost half again as many years in the workforce! Now, I know that all you government workers will all jump in here and tell me how your job was so hard, and your hours were so long or whatever special reasons you have for justifying this dirty little DOUBLE STANDARD.

May 02 01:55 AM

[Al-USA:]

mgcolin wrote:

"
I don't understand all the hand wringing over lower wages in the US. The need for significantly lower employee costs is neither good or bad. It is reality - the US is a lousy place to do business because workers are just too expensive.
"

I was going to disagree and answer the above post with the theory of the velocity of money, demand destruction, etc... But, I think writer sether above "nailed it" in a different, but still succinct manner.

Very good article Trader Mark. As a short-term trader, I benefit from the market, but I fear that other capitalists, the ones who write policy, are taking this capitalist state to where Lenin described in his famous quote: "The capitalist will sell the rope used to hang him..."

In other words, the conditions for a 19th century style capitalism and the uprising of the still asleep proletariat (working/middle class) with all the bloodshed that entails as the proletariat fought against the excesses of the bourgeoisie (owners of capital) in the 19th century (up until the conclusion of the 1930's, no less) is well underway...

May 02 02:40 AM

[mgcolin:]

It doesn't matter what you 'prefer'. The Asians are destroying the US economy industry-by industry because they are smarter, they work a lot harder for less money, and they can find a way around most intellectual property.

Like you I'd PREFER not to have to compete every day in an industry where hyper-competitive Asian competitors have driven aggregate profit levels below zero. But it doesn't matter, neither you nor I have that choice unless we do something that they can't do more productively, which usually means cheaper. And as technology is commoditized there will be fewer and fewer industries where much matters other than having the lowest cost structure.

You can whine all you want about the globalist plutocrats - the reality is they run the markets, not you and your 'preferences'. US wages simply must come down significantly for intelligent managers to do anything but offshore to the countries with the lowest costs.

Last time I checked a kidney was a kidney and if they'll sell one for $40, then yes I'll sell mine for $39.


On May 01 09:39 PM sether wrote:

> I prefer not to compete with children, or anyone who is content to
> sh*t in a bucket during a 12 minute break in their 13-hour day. The
> increasing exposure of the US workforce to global competition by
> Globalist Freemarketeers has only served to gut this place out completely.
> We could have used the wealth of this nation to bring the rest of
> the world up by degree, but instead we allowed it to be bled away
> by Globalist plutocrats, who are rapidly reducing us to developing-nation
> status in most major socio-economic statistics. mgcolin won't be
> happy until he can get a new kidney for $40 at the corner organ-mart.
> Or maybe he'll be selling. What a dick.
>
> On May 01 04:16 PM mgcolin wrote:

May 02 11:44 AM

[mgcolin:]

Why don't you just try to get a job in the government?


On May 02 01:55 AM g452ooo wrote:

> There is a growing class warfare in this country. It is between
> the quintessential "haves" vs. the "have-nots". But most people
> don't realize who the "haves" are. The masses only know that they
> are the "have-nots". Now some think the Wallstreet barons or the
> investors are the "haves". And others think that landlords are the
> "haves". And there are multiple other groups which many consider
> to be the "haves".
>
> But, few people realize who the very largest group of "haves" is
> in this country. It is GOVERNMENT WORKERS. They are the largest
> group of "haves" by a long shot. Well, what is it that they have
> that we don't? They have job security, first and foremost. Have
> any of you ever seen a government employee fired or layed off. I
> don't mean "riff'ed". That is a voluntary separation, with a nice
> lump sum offered as inducement. I mean actually told that they are
> being terminated. I don't mean those (rare ones) who have committed
> a gross infraction or crime.. I mean, downsizing. Nope. It doesn't
> happen. Or have you ever heard of government workers taking a cut
> in pay? Absolutely not. Or no raise? Sorry, they religiously get
> raises every year.
>
> You have a job for life when the government hires you. The pay isn't
> out of line compared to the private sector. But, the job for life,
> is getting to be the big feature. There is a whole lot of financial
> security which comes with that too. And, the benefits when you leave
> employment after 20 to 30 years of service.. ahh, now they are really
> nice.. much bigger than what us private sector folks will be looking
> forward to receiving once we get to be full retirement age.
>
> So, how come the government workers get a better retirement than
> the rest of private sector workers? We know that they aren't in
> the Social Security system. But, why is their retirement pay so
> much better that the rest of us? Did they work harder than us or
> were their jobs much more hazardous then ours or did they work longer?
> They get full retirement benefits after 30 years service at age 55.
> Age 55! What is up with that? Why do they get full retirement
> 10, 11 years before we poor private sector folks can, and they get
> higher benefits at that?! And, they get medical benefits for life
> too.
>
> What we have here is a dirty little DOUBLE STANDARD. While those
> of us out in the private sector have to work 44, 45, 46 years to
> qualify for a retirement benefit, these GOVERNMENT workers can work
> just 30 and then retire with a better income than we do with almost
> half again as many years in the workforce! Now, I know that all
> you government workers will all jump in here and tell me how your
> job was so hard, and your hours were so long or whatever special
> reasons you have for justifying this dirty little DOUBLE STANDARD.

May 02 12:26 PM