Yeah … that all sounds a little weird, doesn’t it …
Well, listen to this excellent discussion from The Young Turks YouTube network, where they outline the new California 10 dollar an hour minimum wage (yes, we in Canada are already above that) that takes effect in 2016 … over 2 years from now. There is huge push back of course, as the wealthy right wing nut jobs are swearing up and down that it will kill California’s economy … this is, of course, utter baloney.
San Francisco already has a higher minimum wage (only in the USA do you have a situation where every level of government has huge power to muck with their citizens’ livelihoods it seems) and their economy is booming. Burger King and McDonalds aren’t running away … they are running towards San Francisco. Because consumers with more money in their pockets spend it!!!
The TYT talk goes on to cover this issue very well and then transitions to a savaging report on Wal-Mart's falling profits. They have adjusted their orders down two quarters ahead … which is truly rare. This signals that they are being pounded into dust by falling sales.
How could that be? After all, they roll back prices weekly, regardless of how many poor souls are collapsing every week in their factories in the far east. That must be drawing people into their stores like crazy …. no?
No. You see, they have lost the plot …. their brand of mediocre goods at dirt cheap prices appeal very much to many people (including me) … but the engine that really consumes their stuff is the working poor. They can do very well there and I’m sure that they do. Except that Wal-Mart has been the #1 employer in the USA for years now, and thus their own people are probably their biggest market.
But Wal-Mart is also a classic tribute to the avarice of the wealthy … they have always fired people before unions could get organized, they pay crappy wages, and they avoid paying benefits wherever they can. The film above discusses the new phenomenon where all of the Wal-Mart stores that they surveyed have replaced full time staff with temporary staff. Pretty much across the board.
This has two negative effects – first, their primary market is disappearing (same effect as the destruction of government budgets by sending the entire middle class to the far east, only on a slightly smaller scale) because temporary employees get no benefits, probably get less hours than a full week’s worth each week, and are effectively on a starvation level hourly wage. Second, they don’t tend to have enough employees to keep the store shelves organized and they have fewer motivated employees than once was true (exploited people quickly lose that sense of family as motivation to do a good job), so the stores are a bit of a mess these days. Guess what that does? It sends people to COSTCO.
And speaking of COSTCO, they actually pay an average of over 20 bucks an hour, use full time employees, and their profits are growing. Looks like good employee practices have a positive effect on profits. (Well, DUH!)
And here is the black eye for the American taxpayer … the video discusses a study that was performed regarding the tax implications of the obvious financial benefits for Wal-Mart shareholders and owners and they conclude that every single store in the Wal-Mart chain is now costing over a million per year in taxpayer benefits to the poor that work there. So … to make this perfectly clear … Wal-Mart does not have to pay benefits for medical etc. with their new strategy … but someone has to pay when these people get sick and that is now the US taxpayer. One million dollars per year per Wal-Mart store as an average.
Sneaky, but obviously effective. And apparently legal, as are so many counter-productive behaviors in US law. And since the people at the top are probably making more money overall, do you really think they care at all about a drop in profits? (Maybe … I guess we’ll see where it goes.)
Anyway … a great little video … I really enjoyed it.
And they alluded to a series of “banned TED talks” that got the speakers into trouble for telling the truth. This one is particularly truthful in that it tells the truth about the fact that the rich do not create jobs. You and I (consumers) do …
Some graphs to illustrate the tilting of the table that has made the rich so much richer and buried so much money (dead money, basically) offshore … the first one illustrates perfectly how wrong the common wisdom is that says that rich people create jobs. Utter hogwash. This is a self serving oft-repeated (by the rich) platitude that is meant to shut off debate. The Democrats play along with it (perhaps because most of them are also wealthy?) and it must just be easier to take all the nation’s wealth without earning it … one supposes …
The USA have stopped taxing the highest income earners … where exactly is the sense in that? At the very least, should not everyone in a country contribute a reasonable amount of their excess? After all, they get paid ridiculous wages and where does it say that they should sock millions away in overseas accounts to be wasted? The speaker in that TED talk makes the point clear …
“I make thousands of times the average income, but it is impossible for me to spend thousands of times the average consumer.”
and …
“Hiring more people is the last resort for a business, fueled only by excess demand”
And as we know, making people poor shrinks demand … sigh …
And what have costs done while the average American (and most of the western world by extension) has taken this terrible beating? Have they mercifully stood still? Bwa ha ha ha ha …. not a chance.
The median household income in the USA is stagnant at 50,000 …. if the average American retained the same percentage of the GNP they used to have, that number would be a lot higher …
The game is fixed, and the whole world are the losers … those in government who make fiscal policy throughout the west need to stop drinking this kool-aid and start thinking about rebuilding the powerful middle class tax and consumer base …
