Monday, July 27, 2015

Asking The Greek Question Here

A while back, I posed the question that I think Europe should be asking re:Greece as well as themselves: How can you earn enough money to repay your debts?

This is a pretty simple question, one even an academic might be able to understand. I blogged about the Walmart crowd yesterday - many of them obese, covered in tattoos and speaking pidgin English. I couldn't figure out just what these people are supposed to do with their lives once academics raised the minimum wage to the point where machines were cheaper than hiring them. Meaningful work, at almost any wage, adds crucial value to life. An alternative of watching daytime TV (or worse) while collecting welfare is a living death.

These people are God's children, too, worth in His eyes as much as any of us.

In any case, that wasn't my primary thought while wandering the aisles of Walmart. Each one of those folks owes about $60K in government debt and that's just at the Federal level and doesn't include unfunded liabilities like Social Security.

What kind of idiot thinks these people are going to be able to pay that back or service our ever-growing debt? Who could be so unfeelingly cruel as to load them up with so much debt, without them really knowing or understanding? These are the people who will end up losing their jobs, having their bank accounts frozen and watching the elderly in their communities begging in the streets. Meanwhile, the academics running our government, both Republican and Democrat, will be smart enough to diversify their investments and escape the worst of it.

Really, what I thought as I watched a tough-looking hombre who was covered in skull and gun tattoos (who was shopping with his mommy) was, "Why shouldn't he get all those tats? If the women in front of him want to skip out of school in 8th grade and eat until they swell up like beach balls, why shouldn't they? If they want to live that kind of life, who has the right to raise wages until they can't find jobs and pile debt on them until we all go bankrupt and they take the worst of it?"

Secretary of the Treasury Jack Lew, graduate of Harvard, explaining how if we renooberate the fenombulator of aggregate demand, taking into account marginal tax rates on unearned interest income credit due to subsidized marmot exports to key trading partners, you can see that the growth of our debt is sustainable for the near future.

After that, we're all hopelessly screwed, but that's OK, because he's got plenty of good investment options.


tim eisele said...

"I couldn't figure out just what these people are supposed to do with their lives once academics raised the minimum wage to the point where machines were cheaper than hiring them."

The thing is, this is not a speculation about the future. This is a problem now, at the current minimum wage, not a future problem that will only happen if the minimum wage goes up. There are already more unskilled, untrained people than there are jobs that can make constructive use of such people[1]. Machines have already eliminated the vast majority of jobs of the "strong back, weak mind" variety, and of the "do a simple job many, many times a day" variety. There are already fast food places that are going full-automatic, and once the early-adopters prove feasibility, that will be that. Increasing the minimum wage might speed up the transition, but it is in progress already, and even lowering the minimum wage to zero wouldn't stop it. There will still be plenty of jobs, but these unskilled people aren't going to be able to do them.

My point is that "figuring out what these people are going to do" isn't a problem for the future. It is already a problem, now. So what are they going to do?

[1] For most jobs, a completely unskilled person is actually a liability that costs you money to keep around, even before paying them. They break things, or do things wrong, or otherwise take up the time of the more-skilled workers supervising them, to the point that they have negative value. They may eventually learn the ropes well enough to have positive value, but by that time they are no longer unskilled - you've spent time and money training them. And the more automation you have around to increase the productivity of your skilled workers, the more likely it is that the unskilled worker will mess things up. So why would you hire them, even if they'd work for just a dollar an hour?

K T Cat said...

I completely agree. I think what is most disturbing is that no one is addressing the issue because no one wants to say that there is any segment of the American population that is slothful or ignorant and not worth the current minimum wage pay. Once you agree that there really is a group of people at the bottom of society, you can deal with the issue. I don't agree that those jobs are never coming back, but I do agree that they're not coming back if we continue to live in denial.

I'll go back to my original concern - no one cares about people like the barely-English-speaking, middle-age dude I met at Catholic Charities who told me that all he wanted was a job of some kind. He was getting free food and he hated that. He would have been fine with $5 an hour, but that wasn't open to him.