7/27 The rich vs. the poor - Debates in Congress underscore growing income gap, by Carolyn Shaw Bell, prof. emerita at Boston's Wellesley College, Boston Globe, p. D4.
Both major debates in Congress right now highlight the problem of income inequality in this country. The tax cut bill...and their discussion of Medicare benefits extension and a patient's rights bill.... Both [sides] referred frequently to the wealthy and less well-off, and other terms broadly descriptive of an unequal income distribution.
[We note her wording for this problem - in terms of income gap, unequal income distribution, inequality -
does not include the most actionable term for it, extreme concentration of wealth.]
The budget surplus...occurred because of the economic boom still going on.
[We'd feel better about Carolyn's perspective if she questioned the language of "surplus" in the context of a $5½ trillion national debt and talk of Social Security bankruptcy in a few decades.]
distance
[Or did they increase because of the astronomical compensation of top executives? Carolyn mentions this, in passing, further on - ]
...Examples of inequality abound: the growing [disparity] between paychecks of top business executives and of employees in their firms....
[...but doesn't deliver the technical information about the definition of the government indicators that we so urgently need.]
..\..Wage increases were minimal at the beginning of the period, but gradually rose enough to catch up to and then pass the increase in prices.
[Expressions of marginal joy! We get productivity gains in quantum leaps from wave after wave of miraculous technology, and wages can barely keep up with inflation. And again, how much of our "wage" (i.e., earned income) data is skewed upward by inflated top-executive pay? Carolyn now starts gearing into this issue - ]
However, the people who make up the top 5% of the income distribution take a larger share of total personal income today than such people did 30 years ago, increasing from 16% in 1968 to 24% in 1996. The share of income going to those in the mid 60% has declined by almost 10% over the same period.
[We'd like to see the comparable figures for the 1920s. Bet they'd show a similar pattern.]
...Most striking of all, survey data shows a significant increase in the inequality of incomes since 1968. Before then, the post-war years had shown a steady move toward increasing equality.... The Gini index [of inequality] shows that from 1947 to 1968, inequality decreased by more than 7%. while from 1968 to 1994 [it] rose by 22.4%. This...means that the gain in equality of the previous two decades was totally wiped out and the trend reversed [and exacerbated].
[Good observation. Let's see if she ventures an explanation. No, she goes off into sociology and problems with poverty measures, finessing the question of whether we need to measure poverty when we can measure inequality - and more actionably, concentration.]
Another major change occurred in 1968...the steady decline in the share of the population living in families.... Economists talk about "real" income when they compare changes over time, but this only means that dollar figures are corrected for price rises, not for any other differences. And no one has yet constructed a dollar measure of poverty satisfactory to all, nor is it actually possible, since people differ in their definitions of need. [However,] the Bureau of the Census provides other measures of basic needs that escape this risk.
[Her language here implies the whole flawed pathology-oriented approach of the last 65 years to social amelioriation = define basic needs/lacks and satisfy them at taxpayer expense. The alternative - making it as easy as it should be at our level of technology to earn a really good living for yourself - is completely missed.
[Carolyn ends with a description of these other measures of basic needs, counting unpaid utility bills or service cutoffs, would you believe. The ending is so anticlimactic that one has to ask if the real ending got edited out.
[We find this posture of the comfortable liberal academics quite unsatisfactory. Carolyn is content to sit on the sidelines and describe the pain of the economic butterfly as the display pin passes through it, without raising a finger (or a relevant question) to withdraw the pin and free the once-beautiful (more balanced) organism. But what do we expect during the "information technology revolution" if not just more and better ways to describe our deterioration? Then she has the obtuseness to suggest that we must accept better measures of the butterfly's pain, in lieu of stopping the pain.
[Our approach at Timesizing.com is to design a solution. Granted it's a long-term solution, but it's a solution in an area where no one else is even close. In short, it's unique.
[We maintain that gradually deteriorating but still adequate labor-employment balance diminished inequality - and centrifuged wealth - between the carnage of World War II and 1968. The balance gradually deteriorated because working hours did not diminish over that period to offset technological efficiencies, which were pouring into the economy, and postwar workforce growth due to immigration. Then babyboomers began to hit the job market in the late 1960s, and the modern woman, armed with the Pill, began to express her independence by getting a job, unaware that her worsening of the labor-employment balance would soon lock her into the job market, motherhood or not, as the growing aggregate labor glut (and continued frozen working hours) restrained wages.
[The rest of our Timesizing solution you can pick up elsewhere on this website or from our book, Timesizing, Not Downsizing. Suffice it to say here, that though we are disappointed with Carolyn's non-existent followthrough, we're glad that she at least raised the issue again. It is disappointing to see mainstream economists proceeding so slowly at the dawn of a new millennium. Maybe a question within Carolyn's scope would be, Is there a downside to the concentration of wealth to the concentrators, along the lines of neo-classicism's "marginal utility of wealth"? We're glad that she made use of the concept of share in her language about "the top 5% of teh income distribution take a larger share" than 30 years ago. Perhaps she would find interesting Chesterton's "pan-utopian flaw" - which makes critical use of the share concept.]
[High techies getting insulated and masochistic.]
7/26 Unions need not apply - High-technology sector still unmoved by labor's song, by Steven Greenhouse, NYT, C1.
SEATTLE - As the labor movement sets its sights on the booming high-technology world, employees like Matt Shea, a 24-year-old software developer, seem ripe for the picking. He often clocks 70-hour weeks, his managers sometimes push him to work past midnight, and he never receives overtime pay.
But ask Mr. Shea whether he wants a union at his workplace, a thriving Internet start-up called Go2Net, and his response is a puzzled expression that says, "Does Not Compute."
[We submit that this is because American unions have betrayed their hallmark issue and basic power lever, shorter hours. What good are unions when they are making no substantial contribution to human well-being, freedom and progress? For 1½ centuries, they hammered at the hours issue, cutting the workweek in half from 80-84 hours/week to 40. But in the Depression unions, like Esau in Genesis 25, "sold their birthright for a mess of pottage" - they allowed themselves to be lured away from their power lever, their ability to control labor surplus by cutting hours, and traded in their trust in the market forces of supply and demand in exchange for trust in FDR, the New Deal and big government. Instead of a firm 30-hour workweek, they received a rubbery 40-hour workweek plus a hodgepodge of lollypops - unemployment insurance, social security, AFDC, minimum wage, job creation and makework (at an implicit and eternally frozen 40-hour level) - none of which, despite the hullabulloo, solved the Great Depression by even half until World War II, and none of which would be free from constant erosive forces once labor became a surplus and powerless commodity. And that powerless state was only a matter of time with efficient technology pouring into the economy in wave after wave.
[And now it has become ingrained in our culture. We have become slaves. "He often clocks 70-hour weeks...and he never receives overtime pay"? What is that but slavery? Dem happy happy slaves on dee ole plantayshun. Let's listen to dat boy talk - ]
"As far as me personally, and for everyone else here, unions have never come up," said Mr. Shea, who said he loved his job, notwithstanding the sweatshop hours. "Everything I want is offered to me here."
[Here we go again. "Oh," say de Massas, "why you complain? Our slaves be happy slaves."]
The American labor movement has belatedly recognized that if it is to reverse the decades-long slide in the percentage of workers belonging to unions, it must make some headway in high technology, the economy's fastest- growing sector....
[And the only thing that unions can possibly offer high-tech workers is the most basic kind of freedom, free time. How can we have family values without family time? How can we have better communities while we're spending spending 70-hours a week on the job? How can we even sell our technology as something of inherent value when it supposedly saves work but we ourselves are working hours we haven't worked since the 19th Century - and here it is, nearly the 21st Century!? And as for the claim that wages are rising, if the real workweek is back at 70 hours a week, THAT 70 is the divisor to calculate our real wages, not 40. This has not been brought out by any standard economists (whose role seems to have become purely decorative during our tremendous erosion of living standards).]
Persuading technology workers to join unions will not be easy, though, because of all that is lavished upon people like Mr. Shea. His job gives him valuable stock options, flexible hours, an excellent medical plan, a sense of family [huh? oh yeah, the "corporate family" - pathetic!] and, perhaps most important, the thrill of building something.
[Hooboy. Let's unpack this "mess of pottage" -
• Stock options eventually crash when so much of the world has turned into a sweatshop, happy or not, that buying power collapses and we've turned most economies into Black Holes of compacted wealth. A "Black Hole" economy concentrates wealth in the top income brackets where people just don't have time to spend it. The "distant early warning" is Bill Gates with his $100,000,000,000 - more money than he could spend in a thousand lifetimes. "The more concentration, the less circulation" is the layman's version of the economist's "diminishing marginal utility of wealth."
• Flexible hours are not shorter hours. A four-day workweek is meaningless if it is only a repackaging of the 40-hour workweek - four 10-hour days.
• An excellent medical plan? Every other developed country in the world has universal health coverage. American power elite stinginess in this matter is turning into a lever to force people into slavery in their sweatshops. We're turning into the new Soviet Union as our media keep pounding us with the myth that we have the highest standard of living in the world. But how long will that be able to survive growing divergence from the facts? The real USSR had a lot tighter control over its media than we do, and still the word eventually got out that living standards were way behind.
• "A sense of family" - yeah, well, plantation owners exploited their slaves sexually, and our purely legislated approach to gaining respect and freedom from harassment ain't gonna survive the growing, officially denied, labor surplus either. And the reason for poor white trash in the antebellum South was the constant care of Dixie culture to ensure a plentiful supply of free labor. As we said above, basically an employee who relies on work for everything, eg: family, is pathetic, - not much better than a "private room on the Web" for a social/sexual life.
• The "thrill of building something" - somebody's ELSE's "something"? How boring. And the over-hyped projects a lot of these high-tech companies are "building." With more of the basic freedom of free time, we can build our OWN something(s).]
Labor leaders acknowledge that they face an uphill battle - only a small fraction of the nation's two million computer and software developers, programmers and engineers belongs to labor unions.... For Mr. Shea, the 24-year-old software engineer, unions are not so much undesirable as irrelevant.
[Not if they get back on their hallmark issue and push for the only thing they have in their tradition that high-tech employees need - free time. And our Timesizing approach offers the most complete, gradual and market-oriented way of getting it.]
[Another danger for high-tech workers is their growing insulation - "I'm doing fine. (And so everybody else must be doing fine too.)" This kind of insulation characterized the whole diminishing workforce portrayed in Deep Space Nine's single economic episode "Present Tense" (1996), where the inner cities were turned into walled "sanctuaries" into which the unemployed were ushered, whatever their numbers, and given food. This seems to be happening already except we're building separate "prison cities" instead of using our inner cities. We have the biggest prison building industry in the world - have for a decade now - and our prison population will reach two million next year and exceed Russia's, giving us the world's record prison population, despite our self-anesthetization with fantasies of world dominance in quality of life. We have made it easier for a growing number of people to earn a dishonest living than an honest one - and this in the age of more work-saving technology than ever before in history.
[But as long as we have plenty of born-to-be-slaves people like Matt Shea, there will be no real progress on any front - ]
"My goal has always been to develop software that lots of people use," he said.... Not do his 70-hour weeks make him resent management. "As far as what gets me up in the morning or what makes me stay up so late, that's a pride issue.... Last night I was up till 4 A.M. testing a new home page."
[It's necessary to accommodate such workoholics in our ideal economic design, but to ensure that their chronic overwork and underlife hurts only them and if possible, helps others rather than depriving them of their fair share of the world's most under-noticed diminishing resource - natural, market-demanded work that humans, not technology, must do. Timesizing accommodates workoholics by saying, "OK, you can work all 168 hours/week if you want, but at a certain point you must shift gears and become part of the economy's work-provision function rather than staying part of its work-absorption function all the way up to 168.
[We implement this by a very simple design feature that ensures that overtime and overwork are converted into training and jobs. One way of doing it is via an overtime tax, with an exemption for reinvesting overtime earnings in training and hiring. For workoholics on salary, a shadow time accounting system would determine their functioning wage by dividing their actual hours into their salary. They would be required to reinvest the overtime portion of their wage in training and hiring, or have it taxed away from them so the government could make its less efficient attempt to facsimilate the training and hiring they should be doing. Thus employees would be penalized unless they were willing to get out of their employment-hogging, wage-depressing type of workoholism and directly contribute employment and skill sharing. The concept would be introduced on the corporate level first (an overtime tax on corporations with an exemption for training and hiring) in order to establish sufficient on-the-job training programs to accommodate the people who feel either they can't get enough money or enough job satisfaction to stay with the job they have under a tax-or-train enforced maximum workweek.]
7/21 Trade deficit [over $21b] sets a record during May - Rising gap with China is particularly thorny [$23b in 1st 5 mos. of '99], by David Sanger, NYT, C1.
[Or as the Boston Globe's more informative leader has it,]
Importing trouble - America's trade deficit increased 14% in May, setting another record, as oil prices surged and demand for US exports sagged, Bos Globe, D1.
[Trade perturbations were also a big part of the setup for the Great Depression. As we say on our 1920s page (under point #10), "in 1925 the UK tried to go back on the gold standard...at the same level they came off it in 1914 at the start of the Great War.... This clobbered British exports and triggered a depression in the UK already in the mid 20s.... See J.K. Galbraith's *Age of Uncertainty (1977) p. 203."]
7/21 Spurning corporate Japan - For some, lifetime jobs lose appeal, by Sharon Moshavi, Bos Globe, front page.
[This is your standard attempt to say lifetime employment doesn't matter because some (implication: the best) people want to be entrepreneurs and "not just follow a stupid boss's decisions." The weaknesses are:
7/17 Gates hits $100 billion mark, more or less, by Amy Harmon, NYT, B1.
...Mr. Gates, who owns 19.4%, or about one billion shares, of the company he co-founded in 1975, owes his world record to the remarkable performance [dba monopoly] of Microsoft's stock.... The company is the first to top $500 billion in market value. If it were a country it would have the 9th-largest economy in the world, behind [the US, Japan, Germany...] Spain, which [last] has a GDP of $553 billion [and ahead of ???]....
[Four days later (7/21), a letter to the editor takes issue with this statement. Richard Moxon of Medina, Wash. points out that Microsoft's revenue would be more comparable to a country's annual output of goods and services (or gross domestic product/GDP) than its market value, and by that measure, Microsoft's $20b annual revenue weighs in much further down the country scale than 9th - somewhere around Uruguay or the Czech Republic, the 61st and 62nd largest economies in the world (Microsoft is no Spain, p. A22).]
Philip Greenspun, creator of the Bill Gates Personal Wealth Clock, a Web site that continuously calculates the value of Mr. Gates's Microsoft stock, had a more pointed speculation. "Maybe this will convince my students they shouldn't work so hard to become rich," said Mr. Greenspun, a researcher at MIT's laboratory for computer science. "Because they're probably not going to get richer than Bill Gates, so they might as well do something interesting and valuable to society instead."
[Gates] lives in a $60 million mansion on the shores of Lake Washington with his wife and two children [and] has recently begun to contribute more to philanthropy..\.. Last month, in the largest gift ever by a living person to a charitable foundation...Gates...donated $5 billion to support education and health care causes. Yesterday, in a few hours of stock market trading, Mr. Gates's holdings surged by just about that amount, brushing $100 billion for the first time....
"Gates has crossed a psychological marker and it's going to icrease pressure on his to recycle more and more of that money through his foundations, said Ron Chernow, an eocnomic historian. "There will be more attention focused on the extraordinary lopsided distribution of wealth."
[We maintain that ideas are worth more than any money, and if Gates had the right ideas - about automatic market reinvestment instead of discretionary philanthropic redistribution - he could singly solve all the current still-here long-term boring world problems of poverty, hunger, unemployment, welfare, disability, prison explosion, population explosion.... The series of programs that Timesizing introduces replace capricious and drop-in-the-bucket charity with a series of automatic reinvestment thresholds that efficiently empower a maximum of people and put the beef in the old goal of the "greatest good for the greatest number." And Priority One, they give more people more financially secure free time to get going on these projects.]
7/17 Lenders regard Mexican economy with suspicion - A series of defaults tightens the credit market for most companies, by Sam Dillon, NYT, B2.
MEXICO CITY, July 16 - Mexico's stock market and economic statistics are among the healthiest [make that "highest" - healthy indicators are quite different] in Latin America. But the failure of two major companies [Bufete Industrial - construction, and Grupo Dina - vehicles] to meet debt payments [both on Thursday] focused attention on the plight of scores of other heavily indebted concerns, marooned without credit by the country's four-year banking crisis....
[Companies of the future will need very little outside capital because of greater design flexibility. Check out the design of the most flexible company in the world, Nucor Steel, with both an adjustable corporate workweek and adjustable wages determined week by week by incoming product orders. You've heard of Just-In-Time (JIT) production? Nucor carries this to the level of a fine art. And they don't do layoffs - their employees have job security.]
[Is this what's in store for us unless we SHARE THE VANISHING WORK and CUT THE WORKWEEK ?!]
7/15 In Japan, mired in recession, suicides soar, by Stephanie Strom, NYT, frontpage.
[Mustn't say "depression," mustn't say "depression"...]
TOKYO - In their annual sweep of the Aokigahara woods at the end of last year, police officers found 73 bodies.... The lush...forest nestled at the foot of Mount Fuji has long been one of the most popular places in Japan for suicides. What's different now is the number: a year earlier, the police recovered 55 bodies.
Japanese are killing themselves in record numbers.
Some 90 people a day committed suicide last year, a 34.7% rise over the previous year.... Asahi Shimbun, one of Japan's leading newspapers [has declared] the situation an emergency.
Japan's economic recession [mustn't say "depression," mustn't say "depression"...], and the shame and stress caused by layoffs or the fear of them, are largely to blame, say most experts, although suicides often stem from a combination of factors, among them depression [aaaarrrggh, they SAID it, but in a secondary, "soft" context].
Japanese are grappling with unemployment that has risen to record levels as struggling companies slash their work forces [instead of their work weeks à la Timesizing] and cut back on hiring new graduates in an effort to bring costs more in line with international standards [and domestic markets down to international lows].
A total of 32,863 people committed suicide in 1998, both the largest number and the highest rate of suicide...since the police began keeping records in 1947....
Suicide in Japan has little of the stigma it carries in Western societies [as yet].... The rate...in the US in 1997 was 11.1...compared with 19.3 per 100,000 in Japan.... There was a 45% rise in suicides among..\..middle-aged men (40-59)...and 40% among young men (in their 20s)....
"Even if you graduate from the best university, you cannot always find a job," [said Yukiko Nishihara who runs a suicide hotline].... "Young people are feeling very hopeless about their future."...
The shame associated with not having a job is immense...and much understood by executives, who feel bullied by foreign investors and analysts pushing them to...cut jobs....
[And indeed, why should Japan be as suicidal as the rest of us?]
[Hey, Europeans and Japanese - want some ammo to dump on our "low" American unemployment rate and our s-motherly attempts to shove our suicidal jobcut-not-hourscut "wisdom" down your throats? - here ya go. The following in a "below 4% unemployment" state - ]
7/15/99 Thousands of applicants crowd R.I. event for shot at mall jobs, AP via Boston Globe, p. A33.
PROVIDENCE, Rhode Island - Demand for jobs at the Providence Mall is unexpectedly high, with 6,000 applicants turning out for 1,500 job openings at a job fair.
The fair, held Tuesday at the Rhode Island Convention Center, attracted people who jockeyed for a slew of retail positions as well as jobs as janitors, pizza makers and [oh yeah] bank managers. The mall is expected to open in August.
The event drew a crowd, despite the fact that the state's [official] unemployment is below 4%.
"Oh, my God. Overwhelming! It's unbelievable," Nordstrom human resources manager Lucy Ross told The Providence Journal.
The department store had one of the fair's most popular booths, giving out about 2,000 applications for its 350 openings by midday Tuesday. Other employers ran out of applications.
The mall's general manager, Joseph J. Koechel, said the turnout suggested that people want to make job changes and that they are excited about the new mall.
[Get real, you idiot. Try talking to these people and you'll see the kind of changes they want to make - from no-income joblessness to a low-pay job like the classical guitarist mentioned below, or from a two-hour commute to a one-hour commute....]
The mall will have 150 stores and restaurants and a 16-screen cinema. The biggest stores are Lord & Taylor [we thought they went broke], Filene's [we thought - never mind] and Nordstrom.
Those who attended the fair included a man whose wife is dying of cancer and a classical guitarist running out of money.
[For Lester Thurow's not-as-gullible-as-he-looks riff on our "scientific" unemployment rate and other darts, check out our unemployment page.]
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