Saturday, June 6, 2015
Friday beaver - How did we get here?
We're getting to the point of diminishing returns. In all aspects of society. What do I mean by that you might ask? In so many things we've become too efficient for our own good. What used to take dozens of workers now takes two or three and many jobs have been replaced by one machine or robot automatically cranking out products like never before. All well and good for the bottom line and prices for some items have never been cheaper. I said some. A color TV used to cost several months' salary now can be had with just a few days' labor. And what was once hand made in a factory by dozens of workers can be done mostly without human hands touching the product. Such was the case with almonds. What once took an army of pickers days of work can now be done with a shaking machine that removes the nuts and captures them at the base of the tree. No need to hire Jose and the boys for that back breaking work.
Same thing with education, but in this case rather than resort to new methods to tackle an ever increasing work load it was easier just to eliminate entire subjects. Of course the American system never was quite up to wold standards, but it's gotten progressively worse. We now have high school graduates who can read at better than a third grade level if at all. Once we trained young people to work in a factory or go on to college, but the factories are gone and there only so many jobs left that require college. What's left are service jobs that require little education and don't pay very well so where's the incentive to do well in school? And who wants to be saddled with a massive student loan when there no guarantee you'll be able to pay it back. Imagine if you will if you had some thing akin to a mortgage after graduation and all the jobs pay minimum wage or a bit higher.
How did we get here? Base wages never kept pace with inflation. They haven't doubled in 35 years here while at the same time costs have nearly tripled and in some cases quadrupled. How did that happen? What used to be subsidized like colleges are no longer. Taxes on the wealthy used to pay for 2/3s of the costs for college. Taxes also built our roads and much of our infrastructure. Taxes at one time were 90% of everything over $100,000. The wealthy were still wealthy back then and didn't seem to complain.
Lastly there's the push for efficiency and savings. The lay off two workers and give that to one worker with a new job title but with little or no increase in pay. Cut that can of beans down to less than a pound and you increase the bottom line by millions. Airlines squeeze in another row of seats. And forget the free lunch or dinner. And don't get me started on the worthless paper that's being sold all over the world. Simply put they're just bets on debt. Speaking of which...
No Bank fails this week but keep an eye on Greece at the end of the month, it could get interesting.