(a) some people can't make meaningful contributions to the economy because they lack the intelligence to compete with machines
(b) some people can't work because globalization means that their potential contributions can be done cheaper by someone in the middle class overseas who is happy to work for less than US minimum wage allows them to work for
>(a) some people can't make meaningful contributions to the economy because they lack the intelligence to compete with machines
The underlying assumptions of this question would require significant justification to accept them as approaching truth.
First it assumes the people are the problem rather then the job. Then, that 'intelligence' is the end all be all of valuable contribution. And add the 'machines will automate value creation away' and we've got a 'blame dumb poor people for not being able to keep up' trifecta.
>(b) some people can't work because globalization means that their potential contributions can be done cheaper by someone in the middle class overseas who is happy to work for less than US minimum wage allows them to work for
Define 'middle class' and 'happy'. This seems to be arguing for a race to the bottom but framing it as government interference keeping the magic of the market from happening while completely ignoring that minimum wage isn't even enough to keep up the cost of human capital in the US and that the 'cheaper' labor might have a lot to do with those wonderful happy low paid workers having no political voice to help protect them from absorbing all of the costs of negative externalities in their countries.
>(c) some people refuse to work because the benefits safety net is more comfortable than work
Again, the underlying assumption that people 'refuse' to work because they are comfortable not working. The hidden alternative being they get no safety net. The mechanism of either working or starve is somehow better? Markets can't work toward efficiency if people are negotiating against loss rather than for gain.
A plausible alternative theory is that low end work is broken rather than the safety net. We allow people to be paid less than their upkeep and keep the threat of pain (starvation, homelessness) just visible so that it motivates them to take jobs that pay less than their time is actually worth to them if weighed outside of that threat to their wellbeing. So, their decision is to work for mere survival or not work for mere survival and many make the rational choice.
Raise the top marginal tax rates, strengthen social safety nets (social security, welfare, etc). Use Congressional authority to raise wage floors (minimum wage, threshold for overtime), thereby pushing corporate profits into labor's pocket. Perhaps even reduce the work week by 8-16 hours, considering the massive productivity gains over the last 40 years, which has gone primarily to corporate profits.
The bedrock of corporate profit is consumer demand.
We're in a vicious cycle where people are unemployed/underemployed -> consumer demand is depressed (because they have no money) -> companies don't hire (because nobody will buy their goods) -> people are unemployed
You have to break the cycle by first propping up consumer demand, and the most direct way to that is by giving consumers money to spend.
And he would've succeeded if he was willing to blow up the deficit further.
That actually happened with our entry into WW2, sharp increases in spending and hiring, and immediate end to the Great Depression (note that weapons, ships, planes and the like are about useful to a peacetime economy as digging holes in the ground--the key is you need to hire a lot of people to make them)
And exactly how the WW2 recovery happened. Government created demand for products, and deficit spent until the economy roared back. Subsequent gov't surpluses from increased tax revenue were then used to pay down deficit.
Uh dropping the Hours for full time work. The DOL made the time and a half for work over 40 hrs per week to increase labor demand. Imagine a world where it's 6 hrs per day or 30 per week. More people would be employed. And since those hours are paid piece wise no ones hourly wage would decrease. That's how the labor force could increase.
Your idea of Scandinavian democratic socialism seems to be rather misguided. You probably haven't lived here?
- Top marginal tax rates are not that different -- the difference is more in that the higher tax rates kick in earlier in Scandinavia, which is necessary because average earnings are lower. In the U.S., the high earners pay a larger proportion of tax revenue than Scandinavia. US: the top 2.7 % pays 51.6 % of federal income tax [0] while in Finland, the top 3 % pays 22.4 % of income tax revenue [1]
- Wage floors: Scandinavian countries don't have a legal minimum wage at all [2]. The minimum compensation for each job is negotiated in collective bargaining per sector, and several U.S. states already have higher and more broadly enforced minimum wages than what these per-sector agreements are in Scandinavian countries.
- Corporate profits to labor's pocket: compensation per employee as percentage of GDP at factor cost per person employed is not substantially different in the U.S. from northern EU. [3] Yes, it's somewhat falling because of technological development and increased regulation and taxation everywhere.
Overall, the difference in fact is that in many areas, the Scandinavian countries have less socialism, more market economy - more open competition and less protectionism. It seems that you think the Scandinavian success is socialism, when in fact it is neoliberalism. [4]
Again, have you actually understood how we here in Nordic countries have arrived in this model?
Your approach looks like a cargo cult to me: it lacks understanding of the basic mechanisms, and instead focuses on some external insignia and symbols.
Yes, I've studied the economic principals underlying Nordic socioeconomic success. Again, I believe other methods will need to be undertaken to achieve the same outcome, due to the drastic cultural and economic differences between Nordic countries and the United States.
That's not cargo culting. That's adapting to your circumstances.
At a macro level, labor has benefited alongside productivity—automation and globalization—in the 19th and 20th centuries. So the question becomes how much society should insulate individuals from economic change.
There are no guarantees that one's current skillset will always be relevant, one's current marginal value will increase, or that economic demand will remain in the same geography. Automation and globalization exacerbates these issues, but they're not new issues: textile workers in the 1800s destroyed machinery over concerns it would reduce the need for their labor.
You have no unalienable right to keep your job.
So I take issue with your hypothesis inherent in (a) and (b) that some people "can't work" because the economy has shifted. Opportunity and economic need for labor still exists; people need to adapt.
But there is an issue here, and the solution is (re)skilling. We need programs that help and support people of all ages to gain the skills they need to get a job in high-demand fields. A basic income might help, too—e.g., to avoid the catch-22 of needing money to move to a new town to get a job to get money.
If economic demand is dropping precipitously in certain locations, intervention action is needed in the form of state or county-level policy to retain or attract labor supply and/or economic demand.
If benefits programs are more desirable than an alternative of working a low-wage job, then "refusing to work" is logical. If waste and abuse is egregious, then the programs should be changed. But at the same time, we need to get comfortable with the fact that some people will choose to do the bare minimum.
I think each country should have a first responsibility to its own citizens - getting all of them to some standard of living before allowing immigration or offshoring or importing. This would work for all except a few countries (and then importing/offshoring/exporting by other countries would be able to help them.)
We could simply define jobs for people, and stop importing products in those categories. Need more jobs? Restrict more product importation and offshoring.
I should add that I've worked in factory automation - fully lights-out factories - and we are capable of creating a great quality of life for people. This isn't the early 1900's, we can create all the jobs we want for the people who want jobs.
And there are competing studies about the effect of the safety net - since countries with the best safety nets also usually have the best economies and the most innovation (some think it is tied to the ability to take risks without becoming impoverished if you fail.)
> We could simply define jobs for people, and stop importing products in those categories. Need more jobs? Restrict more product importation and offshoring.
It's becoming more common to advocate for scaling back globalization as a solution to local economic problems. It might even work; I wonder if there are any downsides?
The commonly cited downsides include (a) rent seeking among protected industries and (b) prices of domestically produced goods are higher. How true these are in practice is probably somewhat controversial and difficult to measure.
Why not get rid of minimum wage? We'd open up opportunities for all sorts of new wage deals and payment structures. What's the point of having people on welfare who could be working as a servant or doing some sort of work? It would also disincentive automation when labor prices can be driven down and suddenly everyone becomes employable.
(a) some people can't make meaningful contributions to the economy because they lack the intelligence to compete with machines
(b) some people can't work because globalization means that their potential contributions can be done cheaper by someone in the middle class overseas who is happy to work for less than US minimum wage allows them to work for
(c) some people refuse to work because the benefits safety net (including disability for unverifiable conditions (source: http://www.theatlantic.com/business/archive/2013/03/disabili... ) is more comfortable than work