Thread: Any work is good work

Originally Posted by Wayne1963

As to the title of this thread, "Any work is good work", I disagree, the decline of American wages has been horrific for the last 40 years. The American middle class worker is making about what they made in the 80s.

If the answer is having more manufacturing returning to North America in order to build the middle class then reduced wages as well as reduced profit margins will have to happen. Otherwise no one will be able to afford what's made here. Just a basic fact of economics.

I still don't know whether that old lady worked because she had to or because she wanted to. The second part I think almost everybody would agree that a lot of sense of fulfillment can be derived from just the act of working regardless of the wage (e.g. volunteering).

As far as the first part it's not all that complicated if you look at the fundamentals. Social security does not have to be a pyramid scheme. As long as on average people get back what they put in it is sustainable (there are details about cost of living and inflation but those are technicalities that are simple math). It boils down to - the current retirees get what the current workers put in. It seems pretty fair too - what people get is tied to the current economic conditions, so their retirement is not tied to what a cup of coffee or a loaf of bread cost 50 years ago when they contributed. It's a simple social contract - no need for the pathos about those past generations, how they made the country what it is, what they had to live through, what they had to sacrifice - just make sure something cross-generational as retirement scheme works. Because that's just the nature of things - if it doesn't work on a country level it has to work on family level, i.e. children will still have to care for their parents when those stop working.

The problem is when on average people get more than what is put in, then the difference has to come from somewhere. The solution is obvious and simple - scale back what people get in retirement. They get more either because they live longer than expected, or because they were promised more than they should've been promised. So, raise the age before they can draw benefits (because they now live longer), and scale back what was promised.
The problem is entirely political - those who get retirement benefits vote the most and have by far the strongest lobby, so the politicians elected as a result continue to perpetuate this unsustainable state. Eventually this will have to be addressed, when it grows to be too big of a problem to ignore, and the result will be far worse then than if it is addressed sooner.

But everybody is selfish - retirees think they may be dead by then, or in a too bad shape to know what's happening to them; politicians' highest priority is their current job. And so this is just how it is going to be.
The only way out is if the economy grows enough to support those high benefits (for sustainability you need the current contributions to equal to the current payments). But, that is not likely to happen either with the US economic structure - it prioritizes capital over labor, the capital is highly concentrated among very few people, so the profits don't contribute much to the social security fund.
Alternatively young people would smart up and start voting in larger fraction for their interest, that could solve the political issue and make sure what needs to be done gets done.

I've lived in Germany for a while - the way they run things would be characterized in USA as 'pure socialism'. It's far more egalitarian society too. I don't think they work harder than americans.

Originally Posted by Brenngun

If the answer is having more manufacturing returning to North America in order to build the middle class then reduced wages as well as reduced profit margins will have to happen. Otherwise no one will be able to afford what's made here. Just a basic fact of economics.

Not really, the companies made profits before at the wages and benefits levels then and the people could afford to pay the higher prices of the goods made and sold here. Free trade only works on a level playing field where participating countries have similar standards of living. In the global economy there are too many vastly different standards of living for that to work well.

In the end countries with a relatively high standard of living suffer a decrease and countries with a lower standard gain an increase in theirs but the gap between the two still remains large. Profits do increase though.

Bob

I do whine and moan about my job a bit due to all the BS that is there that doesn't have to be...but I am thankful that I do have it. I got into the railroad industry about 8 years ago. Many think that if you are a railroader you make a lot of $, think again. If there was a middle income bracket, I would be sitting at the very bottom of it...most likely at the mid to upper end of low income. What railroading does have going for it is that it is relatively stable even in todays job market & so far railroad retirement has been kept from the politicians. The hours are terrible as you don't know when you are going to work...but it's a job. I can think about better things & much worse things to do...

Originally Posted by BobH

Not really, the companies made profits before at the wages and benefits levels then and the people could afford to pay the higher prices of the goods made and sold here. Free trade only works on a level playing field where participating countries have similar standards of living. In the global economy there are too many vastly different standards of living for that to work well.

In the end countries with a relatively high standard of living suffer a decrease and countries with a lower standard gain an increase in theirs but the gap between the two still remains large. Profits do increase though.

Bob

Outfits only care about the bottom line. Employees are a necessary inconvenient drag so wherever the cheapest source of labor ie they will go. A textbook case is the Mattel Toy Co. originally they were located in N.Y where they had to deal with unions and high taxes and high overhead overall. However they were a very profitable company. In the 1980s as I recall they sold the land the company was on and moved lock, stock and barrel to El Paso, Texas where there were no Unions and lower taxes and other costs. I don't recall the prices of their toys dropping one cent. They were one of the largest employers in town. After the free trade agreement passed they picked up and moved to Juarez, Mexico. The folks in El Paso could see the factory across the Rio Grande. In Juarez land was practically free and there were no regulations of any kind. They could do as they please except for the bribes of course. Funny I don't recall their toy prices being reduced. Of course their profits sure went up as did the unemployment rate in El Paso which never recovered from that.

Back in the 80s our Govt caved in to industry and drank the kool aid and believed the fairy tale stories business told them how allowing them to move off shore would benefit the economy here. It benefited the bottom line alright and what we have now is because of policies started then.

As far as Social security is concerned it's problems are easy to solve. People simply pay more. When you take out private insurance as costs go up you either pay more or get less. Why is SS any different?

TBS

Many years ago my wife and I had breakfast with an American couple while on holiday. It was at a time when the Canada/US free trade deal had been in effect for a bit and it had just been widened to include Mexico. The fella asked me what I thought of free trade. I told him I thought we got it up the back side when we signed with the US because many manufacturing jobs headed south to of all areas, states that were non union and unions were seen as being communist. I also told him that it would now be their turn to get it up the back side as Mexico was now on board too. He worked in the publishing industry in the US and allowed that it was already happening. Turns out he knew of a plant being built in Texas and complete except for the machinery. The machinery intended for that new Texas plant went right on by into Mexico for use there. I know exactly how that works and why. Yea, nothing happens overnight and everyone is riled now and wants to close the barn door after the horses are all gone. Kool aid for sure.

Baby steps first with regional free trade zones like Canada/US or the EU, then slowly expand those free trade zones to include more countries and finally tie them into a world wide network called the Global Economy. Yea, we've been had and then some.

Bob

Originally Posted by thebigspendur

As far as Social security is concerned it's problems are easy to solve. People simply pay more. When you take out private insurance as costs go up you either pay more or get less. Why is SS any different?

So the choice is between charging the current workers more and giving the retirees less. Of course when everybody only cares for their own the retirees would prefer the first approach, while the workers the second.
So, may be instead of measuring who has the biggest lobby (we know the answer) we could consider what is fair and responsible.

Here are the historical tax rates: http://www.taxpolicycenter.org/taxfa...historical.pdf
The taxable limit has been going up (inflation), but the tax rate has been going up as well.

That second part is plain wrong. Why should somebody put in the system during their working life 10% of their income and when it's time to get retirement ask that the current workers pay 15% to support their pension? The current workers should have to put exactly the same rate, the taxable limit should be going up with inflation and retirees get as much money that translates into. Anything else is one generation mooching off another and/or fiscally irresponsible.

Originally Posted by gugi

So the choice is between charging the current workers more and giving the retirees less. Of course when everybody only cares for their own the retirees would prefer the first approach, while the workers the second.
So, may be instead of measuring who has the biggest lobby (we know the answer) we could consider what is fair and responsible.

Here are the historical tax rates: http://www.taxpolicycenter.org/taxfa...historical.pdf
The taxable limit has been going up (inflation), but the tax rate has been going up as well.

That second part is plain wrong. Why should somebody put in the system during their working life 10% of their income and when it's time to get retirement ask that the current workers pay 15% to support their pension? The current workers should have to put exactly the same rate, the taxable limit should be going up with inflation and retirees get as much money that translates into. Anything else is one generation mooching off another and/or fiscally irresponsible.

The bottom line is if you cut the benefits there are just too many folks who are totally dependent on SS. Yes, it wasn't designed for that but it's a fact. So if you cut their benefits what are they going to do? T.V shows of 90+ people gainfully employed look great but is doesn't reflect reality. These people will just show up at the states door looking for welfare and foodstamps.

No matter what you pay into SS when it's your turn to retire you know you will be taken care of. it's not an investment scheme where you figure what you put in and what you take out. No matter what you put in whether is 5%, 7% 10% you will get way more than you put in. The attitude that I ain't supporting those old people is just a breakdown of our system.

Originally Posted by thebigspendur

The bottom line is if you cut the benefits there are just too many folks who are totally dependent on SS. Yes, it wasn't designed for that but it's a fact. So if you cut their benefits what are they going to do? T.V shows of 90+ people gainfully employed look great but is doesn't reflect reality. These people will just show up at the states door looking for welfare and foodstamps.

That's why you cut them from the top, those who aren't totally dependent on it get a little less - I think that's what they call means testing. And increase the retirement age (people are healthier and live longer, so they could work longer too), as well as fix the inflation indexing to reflect inflation. I don't think anybody is living in luxury on social security, but 1200/month is median wage and working people with kids do live on that, so a retiree with no dependents and a ton of free time should be able to make do with less.

Originally Posted by thebigspendur

No matter what you pay into SS when it's your turn to retire you know you will be taken care of. it's not an investment scheme where you figure what you put in and what you take out. No matter what you put in whether is 5%, 7% 10% you will get way more than you put in.

There is getting more than what you put and there is getting disproportionally and unfairly more than you should be getting.
You work 45 years and contribute 10% of your median salary, then for the 15 years you live in retirement you could get 30% of the current median salary. It's fair to get the current median salary because the economy has grown in the meanwhile, it is even fair to get a little more to account for the population growth. However it is unfair to get 60% of the median salary over 30 years (because of the increased life expectancy), and to support that you make the current workers pay 30% of their income, and it is unfair to charge it to the nation's credit card and make it a problem of whoever future generation gets the credit card canceled.

Originally Posted by thebigspendur

The attitude that I ain't supporting those old people is just a breakdown of our system.

There is a big difference between supporting old people to have a decent living and supporting a higher standard of living for them than I have myself (statistically speaking). When the country suffers as a whole one age group shouldn't be exempt from the sacrifices that the rest have to make (well children probably should suffer least).
The thing is that social security is currently a small problem - it is a matter of small changes (a couple of extra working years, or 1150/month instead of 1200/month), but if you take the attitude that retirees could just get more and more and the working people can be taxed higher and higher rate, this is a fundamental problem, unsustainable system that is destined to crash in a horrible way.

Originally Posted by thebigspendur

No matter what you put in whether is 5%, 7% 10% you will get way more than you put in.

That's pretty much the definition of 'unsustainable'.