Which is why I'd be in favor of an end run that solves a lot of these problems in one stroke, personally.
Liberals and conservatives alike have supported a negative income tax for a good while (including such free-market stalwarts as Milton Friedman). If we provide enough money, guaranteed to all citizens, for the basic necessities of life, then companies will be forced to improve their working conditions and salaries by the elimination of the greatest forces that make people put up with them (hunger and homelessness).
NOT THE BEES
Except all that would do is make companies charge even more to keep up with government-augmented incomes. And then the money basically just goes in a circle from citizen to business to government and back, but now the citizen is wholly dependent on it.
You're basically trading your almost-complete dependence on an exploitative workplace for a very complete dependence on a corrupt institution that's been bought out by said workplaces.
edited 24th Jun '12 10:40:27 PM by Pykrete
Or they'll just pay them even less because they'll say all those amenities are being provided with them, and I can't say I disagree.
I don't think a welfare state is the answer.
Moar and Moar and Moar
Probably not. I do think there's a bit of a free rider problem with going to a strong welfare state, but at the end of the day, it still is better than the status quo down the road. (It wouldn't really be better TODAY, but except for a demographic bump over the next decade or two, we're going to continue down that road of simply needing less labor to fill our needs)
Personally, here's my solution:
1. A surtax on investments based on unemployment. That is, higher capital gains and transaction taxes when unemployment is high.
2. Use that money to directly hire people, as well as to subsidize low-income and low-hour workers.
3. But along the same line, the average work week will need to be reduced. The whole goal of this plan is to reach and maintain full employment, in most circumstances. Full employment is the answer here to the problems you're talking about. The welfare idea allows people to "drop out" of the market, resulting in the same thing, however I'd like a more balanced approach which shares the load among a wider swatch of society.
4. Tackle inflation by regulating non-competitive necessities, and nationalizing if necessary. One of the major problems with this, is that non-competitive necessities (such as say, health care, internet and communications access and electricity) are able to, if unchecked, demand a higher percentage of the economy because of the inelasticity of their demand.
That's my back of the envelope plan. It's a widespread plan to share productivity gains, not just economically but socially and culturally, through all of society, instead of the status quo which uses productivity gains to actually hurt people.
Democracy is the process in which we determine the government that we deserve
@Karmakin: So essentially, #2 would amount to a CCC program? If necessary, hiring people to dig holes and fill in holes, instead of putting them on welfare?
If by CCC you're referring to the conservation corps, that isn't quite what they did.
Considering the state of our infrastructure right now, that wouldn't be a bad idea. Any alphabet soup government corp would have their work cut out for them at this point.
Inflation in Canada is on par with the United States, so I don't see how a greater availability of welfare causes increased inflation at all. Ontario, for instance, gives out upward to 10k per person in income assistance (unrestricted cash).
Secondly, outsourcing occurs because the only real way to beat cheap labour is with productive labour (ie. with expensive machines and stuff). But, largely speaking, if the sunk cost is very high to build the new technology, plus the associated risk with high cost facilities, companies rather go with the tried and true cheap labour. It's the same reason why ancient Greece completely ignored labour-saving machines and just used slaves instead. It's not cost-efficient in the short-run, therefore capitalism prices it out forever. If government doesn't step in the private market is designed never to step in.
Also, there's a major crackdown on unions occurring across the west. The right to strike is being undermined by government-backed arbiters who simply give unions the worst deal possible and threaten them with fines for striking. Companies don't necessarily have to deal with unions, but you can't say "that's not capitalism". Corporations aren't capitalism because they limit liability of the owners. You can't just have one-side.
Limited-liability corporations are most certainly a part of capitalism; they always have been. Shareholders only have to risk what money they choose to put at risk. It's a free market.
Just a suggestion, you might want to stop trying to say "THIS is capitalism, and THIS isn't!" and start saying "this is a bad thing," which is an easier case to make without triggering semantic messes.
@Barkley: I'm aware the CCC was used on reforestation and infrastructure improvements, but it was first and foremost a program to create jobs, thus the comment on digging holes and filling in holes. I could also have made a Bridge to Nowhere joke somewhere in there.
The CCC is still alive and well in California, and they do good work, not busywork. I know a few guys who are in the corps and most of what they do is beautify our forests and parks, as well as help deal with the obvious californian problem of wildfires. They clear brush and debris and maintain fire lines where there is no debris, so that if/when a fire occurs, it won't be able to jump that line and spread the fire even further.
I think the acronym is somewhat confusing here. The Civilian Conservation Corps was created to get people back to work as a part of the New Deal. Not joshing the actual work it did, but that wasn't the reason behind its establishment.
The California Conservation Corps is built on a different model; its purpose is young adult development, and part of the reason that succeeds is because it makes a visible difference in California. Unlike the original CCC, the two aspects necessarily work hand-in-hand.
@ Ramidal
You suggested that unions are not a part of capitalism, then how would corporations be? Either you allow both to be acceptable or not.
The system isn't balanced and actually it looks more like unions might be a better stepping stone than socialising income from factories. The examples include the nordic countries and Germany where they have unions create a system in which people spend away their high incomes for high-quality goods thus creating a market for themselves. You would buy German or Swedish goods with your high wages, the goods would cost a lot, but they'd be of higher quality than Chinese imports, so there's a real reason to go with it.
The unions guarantee minimum wages and high wages for experienced and skilled workers. Corporations engage in a fair manner with employees knowing that if they don't treat them well relative to the market, the employee has all the vehicles of mobility guaranteed to them by the government. Treat them poorly and they jump ship.
@Breadloaf: You're missing my point.
Under an unrestricted free market, workers are free to form any damn organization they want without government interference. So are employers. So. Employers can form corporations. Employees can form unions. The difference is that corporations can make money without engaging in force or fraud (they do use both; that's not the issue here). Unions usually can't get what they want without using force, so in a free market, they will be unable to function.
The evidence is pretty clear: Today, unions are only effective if they can make union shop contracts that force every worker at the company to join the union (this contract is legal in non-right-to-work states), and where they can force the company to accept such a contract (and in any state where it's legal, Taft-Hartley rules essentially require a company to accept such an agreement as part of "bargaining in good faith"). In states where the right-to-work doctrine is in effect, unions are not effective. During the early labor movement, incidentally, unions succeeded only when they could prevent nonunion workers from crossing the picket lines by force of arms. But I defy you to say that that's "a free market" in any sense.
In an unrestricted free market, unions would not exist. Not because they were banned by the government, but because employers could refuse to recognize them and could fire their members freely; thus, unions cannot survive without coercive input. Corporations would exist, because they can survive purely as a result of voluntary economic choices. This is the classical definition of freedom: the right to make contracts without fear of force or fraud.
It just so happens, however, that such pure capitalism is a recipe for dystopia; workers have a "free choice" between work and starvation, after all. That was Marx' point. Marx' solution to the problem was to abolish the free market; most socialists and social liberals today want to regulate it. But please don't pretend that regulating the labor market creates capitalism, because it doesn't.
edited 25th Jun '12 5:11:19 PM by Ramidel
Okay, I think I can accept that description. When you stated only that "unions aren't capitalism but corporations are" I found it demanding an explanation.
But, in terms of the perceived skills gap, socialism seems like a rather extreme reaction to the problem. For now, I just want employers to purchase skills from the market at a price that reflects the cost of building that human capital. If a university degree, on average, costs $250 000 in America, then wages that demand a bachelor's degree should reflect that. But they don't.
Somehow the market has priced labour so low it can't pay for the human capital it expects and that is unsustainable. The question is whether capitalism is capable of correcting that wage issue and if you say no, then I'm more inclined to go full socialism but I don't think that's entirely necessary.
This is getting a little off-topic, no?
Anyway, this article
(and the book it advertises, I think) makes an interesting argument:
Peter Cappelli: The idea of a skills gap—maybe back up a second further—is the employer’s diagnosis of the situation they’re facing. So what they report is that our hiring systems are not producing the kind of candidates we want, they’re not perhaps producing enough of them, or the ones that we’re getting are too expensive. So that’s the phenomenon. Their diagnosis of this is that, as you were saying in the introduction, that it’s something to do with the workers themselves, the applicants, maybe the labor market, maybe the schools. There’s one group missing out of this, and that’s the employers themselves, of course. So one of the things that the skills gap argument does is it leaves the employers out of the picture altogether, as if there’s nothing they can do about the situation they find themselves in. So the short answer to your question—The skills gap, is there one?—I think the answer is pretty clearly no. I think at least in the way most people would think about a skills gap.
Steven Cherry: Employers can’t find workers at the going wage. True or false?
Peter Cappelli: That’s false, and that’s almost by definition the case, because we know how markets work, and markets adjust and wages adjust. I had an employer write to me the other day saying they had a skills gap, and they really did. It wasn’t wages, because they did market wage surveys, and they were paying what everybody else was paying, and all the employers, by the way, are having a skills gap, so it’s a big problem. Well, if everybody’s got the same problem, and you’re all paying the same wage, it’s probably the case that you’re not paying enough. So the way markets work isn’t you set the wage and say, “Well, this is good enough.” You pay what it takes to get the people you need, and if wages have to go up, then so be it, right? You wouldn’t say, for example, that there’s a shortage of diamonds. Diamonds are very expensive. They cost a lot, but you can buy all the diamonds you want as long as you’re willing to pay.
edited 25th Jun '12 6:00:00 PM by Wicked223
You can't even write racist abuse in excrement on somebody's car without the politically correct brigade jumping down your throat!
@Breadloaf: I would not trust the free market to correct the value of labor on its own, so there'll need to be government intervention somewhere. My argument for the sideways move (establish a minimum standard of living through negative income tax, health care and education reform, supply-shocking the labor market) is that it's significantly less subject to regulatory capture than targeting regulations against outsourcing jobs or underconsuming labor. (Also, because our existing entitlement system is in need of a comprehensive overhaul anyway.)
Karmakin's suggestion of running a government labor pool is another way of doing it. So is a mandatory reduced workweek, though a caution: right now, workers on an hourly wage want as many work hours as they can hustle for. That system needs to be smashed, whether through subsidies or a minimum wage hike.
edited 25th Jun '12 6:49:49 PM by Ramidel
Oh I wasn't the one backing ideas about regulating outsourcing and the like. I'll think a bit about what I'd like to have in the system before I post again.
Right. I'm saying that government intervention will be necessary, made my own suggestions on where to insert said intervention.
In states where the right-to-work doctrine is in effect, unions are not effective.... In an unrestricted free market, unions would not exist
But "right to work" laws are a restriction placed on the labour market. It takes a legal restriction to prevent a union and an employer making a deal. In an unrestricted free market, a group of people could come up to me and say "you have to employ from our group only or you get none of us" and then I would have the legal freedom to accept or deny based on whatever factors I see as relevant.
![[up]](https://static.tvtropes.org/pmwiki/pub/smiles/arrow_up.png "[up]"){kind=icon}
Yes, but there are also laws against union-busting and hiring scabs to break a strike, which is what usually happened before such laws were enacted.
Moar and Moar and Moar
In an unrestricted free market we'd all be working for script.
Democracy is the process in which we determine the government that we deserve
And because of that, they can't be trusted to regulate themselves responsibly, which is why the government needs to do something.
Unfortunately it isn't just a complicated issue, there's a lot of outside interference from lobbyists as well. The government is the only real group in a position to fix this, and they aren't really able to do so.