What happened to wages?

[rah]

Not really tough to be an investment adviser the last decade.

While the stock market has been a tool for the wealthy the lottery is a tax on poor people.

 

[innonimatu]

But we can all be investors and modern technology makes it easier than ever to participate. So much so, that there really isn't any excuse for someone to not be investing something into their future. If you can afford a smartphone, you can afford to invest.

If you are all investors you end up with a speculative bubble. Investing per se does not produce anything. It is an action with a goal of capturing a portion of what somebody else is producing, in the form of profit.

To take and run with your example: if everyone abstains from buying a smartphone and instead invests on smart-phone makers, the market crashes for lack of demand and everyone ends up jobless and broke. This is an absurd example of course, but the point is: for some to profit from investment others must be consuming, and others yet must be laboring at a loss. But you know that, because...

And that's the point I'm making. You aren't going to change the system. You just aren't. So the next best thing is to start finding ways to exploit the system to work in your favor. That's what I'm talking about with regards to personal choices. Maybe people would be a little more successful in life if they started thinking for themselves instead of just following the herd.

If you are really poor of course your overriding priority tends to be to exploit the system to work in your favor. It's magnificently summarized in that scene in Parasite:

- She's rich, but still nice.
- Not "rich, but still nice". "Nice because she's rich", you know? Hell, if I had all this money I'd be nice too!

Perhaps worrying about others is indeed a "luxury". But do not begrudge people who do it. It's the only way life in a community improves. Systems can be changed.

I will say it's funny that the younger generation are using that "Ok Boomer" crap to completely disregard the advice of an entire generation of people who have already gone through the struggles and draw from that wisdom, and then complain about how hard it is to succeed.

It was a generation whose fathers left them a legacy of an improving system for the common man, and who changed that system much for the worse. A generation who could get essentially free education. It was far from being universal, but higher education was also not (as it is today) a nearly universal requirement for employment. A generation who lived through an era of improving wages and state services.

If the system could be changed during the boomers' time to make it so much worse, why can't it be changed again to make it better? And if everyone's ethics and aims is about taking advantage of everyone else to survive, it is about looting not producing. It's decadence, not construction. Very understandably, young people wish for more than living as looters. You should he glad for that, not cynical over it. Cynicism is the worst kind of politics there is...

 

[Commodore]

for some to profit from investment others must be consuming, and others yet must be laboring at a loss

There is absolutely no reason those three groups have to be mutually exclusive though. A factory worker can also be an investor while also being a consumer. Hell, that factory worker may even be investing in and consuming the very product he labors to produce.

To take and run with your example: if everyone abstains from buying a smartphone and instead invests on smart-phone makers

My line about smartphones wasn't a call to abstain from purchasing a smartphone, it was to make the point that if you can afford one, then you should have enough disposable income to dedicate to investing. Especially since there are a bunch of apps out there right now that allow people to invest without requiring them to have any prior knowledge or experience in investing.

 

[El_Machinae]

When I'm running the numbers, I keep trying to figure out what would happen if regular folk saved more. Dollars. In comparison to buying things on credit. It would create competition for the 0.1% who gobble up the productive property. The reduction in credit-based purchases means that more of the dollars would be going to the customers and to the suppliers of the products.

I mean, the world where we don't save and buy things on credit HAS shuttled money upwards pretty quickly. And those dollars don't buy production, they purchase ownership. And that's creating the imbalance.

 

[Commodore]

but higher education was also not (as it is today) a nearly universal requirement for employment

I don't know if this statement is accurate. I was making some pretty good money and never had a problem finding a job before I got my degree. Of course I also worked a lot of crap jobs to work my way up to where I am now. My story isn't unique or rare either. Plenty of people out there are able to build successful careers in a wide variety of fields without ever stepping foot on a college campus.

The idea that a degree is a requirement for employment nowadays is the "great lie" that has been fed to the people that has created the student loan debt crisis we have now. In other words: the "you need a degree" line isn't so much a cold, hard fact as it is a great marketing ploy for universities.

 

[innonimatu]

I mean, the world where we don't save and buy things on credit HAS shuttled money upwards pretty quickly. And those dollars don't buy production, they purchase ownership. And that's creating the imbalance.

Money is (mostly) debt. It is created as debt. In accounting every credit has a corresponding debit. Every financial asset is someone else's debt. For accumulation to keep increasing the debt must keep piling up. This is why nobody who is wealthy and greedy, and knows how money works, wants to lower the general level of debt. It's rather the opposite, they will want to keep increasing it and fugure out new ways to make it "sustainable". 50-yead debt. 100-year debt! Zero rates. Negative interest debt!

The real prize is playing the lord, as creditor, over the debtors. The divine right of the aristocracy is no more, all hail the self-righteous right of the creditor.

If the creation of debt were restricted, limited (not even going into the old remedy of debt jubilees to discourage of build-up of debt), so would the power of creditors be limited. Unsurprisingly, they never want that.

The idea that a degree is a requirement for employment nowadays is the "great lie" that has been fed to the people that has created the student loan debt crisis we have now. In other words: the "you need a degree" line isn't so much a cold, hard fact as it is a great marketing ploy for universities.

It is a great lie indeed. But it works, marketing works.

And worse, sometimes (many times?) people without degrees are also persuaded that they "don't deserve", can't demand, higher wages even where they are doing something very much necessary.

 

[Hygro]

Everyone loves a ladder reset in MMOs, you'd think we could figure something cool out for money.

 

[Birdjaguar]

https://www.bls.gov/news.release/empsit.t15.htm

look at that u-6 number

Why?

Here is U6 over 20 years.

 

[Lexicus]

Why?

Here is U6 over 20 years.

View attachment 543401

Well, notice how it roughly doubles the U-3 measure...

 

[Birdjaguar]

Well, notice how it roughly doubles the U-3 measure...

Of course it is higher. It measures a different group of people. Each of the U numbers measures something different. But U6 is at a 20 year low. If you think that U6 is a better gauge than U3, fine, but like U3 it is much improved over the past ten years. Are you counted in either or both numbers?

 

[Lexicus]

Of course it is higher. It measures a different group of people. Each of the U numbers measures something different. But U6 is at a 20 year low. If you think that U6 is a better gauge than U3, fine, but like U3 it is much improved over the past ten years. Are you counted in either or both numbers?

Okay, I'm not sure why you are removing this from the original context it was in, which was me responding to the claim that unemployment is already as low as it can go. It is at a 20 year low, great. The policy change away from full-employment happened well over 20 years ago.

 

[Birdjaguar]

Well, notice how it roughly doubles the U-3 measure...

Okay, I'm not sure why you are removing this from the original context it was in, which was me responding to the claim that unemployment is already as low as it can go. It is at a 20 year low, great. The policy change away from full-employment happened well over 20 years ago.

You didn't say that in your post which is why I asked "why?" U3 will be hard pressed to get much lower. To bring down U6, we will need more service sector jobs which don't happen unless we grow the GDP. Finding jobs to bring down U6 is kinda like the last mile problem for various service businesses. It is the hardest part. Creating and maintaining jobs is hard. It is even harder in rural areas, and for people with few skills and who may not be motivated. Many part time workers don't want more work or they will lose other benefits. A simpler solution is UBI.

For those who might not be familiar with how unemployment is calculated in the US

The data are also used to calculate 5 alternate measures of unemployment as a percentage of the labor force based on different definitions noted as U1 through U6:

• U1 : Percentage of labor force unemployed 15 weeks or longer.
• U2 : Percentage of labor force who lost jobs or completed temporary work.
• U3 : Official unemployment rate per ILO definition.
• U4 : U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
• U5 : U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to work, but have not looked for work recently.
• U6 : U5 + Part time workers who want to work full time, but cannot due to economic reasons.

Below is the overview of these six measures.

Spoiler :

• U1:
  
  This is the proportion of the civilian labor force that has been unemployed for 15 weeks or longer. This unemployment rate measures workers who are chronically unemployed. During business-cycle expansions, this rate captures structural unemployment. However, during lengthy business-cycle contractions, this rate is also likely to include a significant amount of cyclical unemployment. U1 tends to be relatively small, in the range of 1-2 percent.
  
  
• U2:
  This is the proportion of the civilian labor force that is classified as job losers (workers who have been involuntarily fired or laid off from their jobs) and people who have completed temporary jobs. During business-cycle expansions, this rate is likely to capture some degree of frictional unemployment. However, during business-cycle contractions, this rate is most likely to consist of cyclical unemployment. U2 is larger than U1, but still remains substantially less than the official unemployment rate (U3).
  
  
• U3:
  This is the official unemployment rate, which is the proportion of the civilian labor force that is unemployed but actively seeking employment.
  
  
• U4:
  This is the official unemployment rate that is adjusted for discouraged workers. In other words, discouraged workers are treated just like other workers who are officially classified as unemployed, being included in both the ranks of the unemployed and the labor force. It is technically specified as the proportion of the civilian labor force (plus discouraged workers) that is either unemployed but actively seeking employment or discouraged workers. The addition of discouraged workers generally adds a few tenths of a percentage point to the official unemployment rate.
  
  
• U5:
  This augments U4 by including marginally-attached workers to the unemployment rate calculation. Marginally attached workers are potential workers who have given up seeking employment for various reasons. One of these reasons is that the workers believe such effort would be futile, which places them in the discouraged worker category. Those who have other reasons for not seeking employment are placed in the broader marginally-attached workers category. The addition of marginally-attached workers adds a few more tenths of a percentage point to the official unemployment rate.
  
  
• U6:
  This augments U5 by including part-time workers to the unemployment rate calculation. The addition of part-time workers adds a full 2-3 percentage points to the official unemployment rate. This measure of unemployment is perhaps the most comprehensive measure of labor resource unemployment available.

• 
  

 

[Hrothbern]

It is even harder in rural areas

Creating growth of GDP is imo as much understanding and focussing on growth factors for growth areas as understanding and focussing on a soft landing how to decrease the population in rural areas.

Getting your human resources to locations where they are more productive and earn more.

 

[Birdjaguar]

Creating growth of GDP is imo as much understanding and focussing on growth factors for growth areas as understanding and focussing on a soft landing how to decrease the population in rural areas.

Getting your human resources to locations where they are more productive and earn more.

Yes, there are at least two issues. Rural areas need economic based jobs (jobs paid for from outside their area or region; not local service sector ones) thereby growing the "GDP" of their area, and the skilled people needed in growth areas need to migrate to those areas. They will need housing (affordable) and amenities to fit their lifestyle.

Remote work is one solution to keeping population in rural areas, but for that to work the right infrastructure must be in place and those remote workers will need social and cultural support from the community. The only ways rural communities will survive are: retirement locations for those who don't need to work; remote work with above average pay; tourism; attract new industry to locate there, essentially growing the town. Entropy wins without an input of money!

China was/is on the right track when they moved 400 million people from the country to the cities.

 

[Hygro]

Americans moved into cities too... gentrification on the back of backdoor austerity.

 

[El_Machinae]

What's backdoor austerity?

 

[Birdjaguar]

Americans moved into cities too... gentrification on the back of backdoor austerity.

Yes they did and still are. Gentrification rebuilds cities at the expense of the less skilled and educated. One solution is better inner city education and skills training. With a labor surplus such efforts were not necessary in the past, but that is changing and qualified workforce is currently the number one issue for growing companies. Having a qualified workforce will attract growing companies to that area.

 

[Hygro]

What's backdoor austerity?

When you run big deficits and have low interest rates but it's still austerity for 90%. I could have called it covert, that would have been better.

 

[El_Machinae]

Oh yeah, that would totally cause it!