Wednesday, January 29, 2014

interwebs the greatest legal facilitator of inequality in human history?


theatlantic | In the past, the most efficient businesses created lots of middle class jobs. In 1914, Henry Ford shocked the industrial world by doubling the pay of assembly line workers to $5 a day. Ford wasn’t merely being generous. He helped to create the middle class, by reasoning that a higher paid workforce would be able them to buy more cars and thus would grow his business.

Ford’s success trickled down, as other companies followed his lead. Automotive companies not only employed numerous well paid workers but they created a large demand for other product and services that employed millions more—steel, glass, machine tools, auto dealers and dealerships, gas stations, mechanics, bridges, roads, and construction equipment. The workers in those industries purchased homes, appliances, and clothes creating still more jobs.

One reason we are failing to create a vibrant middle class is that the Internet affects the economy differently than the new businesses of the past did., forcing businesses and their workers to face increased global competition. It reduces the barriers for moving jobs overseas. It has a smaller economic trickle-down effect.

Doing some of the obvious things like raising the minimum wage to fight the effects of the Internet will probably worsen the problem. For example, it will make it more difficult for bricks-and-mortar retailers to compete with online retailers.

Surprisingly, the much-vilified Walmart probably does more to help middle class families raise their median income than the more productive Amazon. Walmart hires about one employee for every $200,000 in sales, which translates to roughly three times more jobs per dollar of sales than Amazon. Raising the minimum wage will also make it more difficult to bring manufacturing jobs back to the U.S. The Internet is not the sole force driving income inequality in the U.S. Our languishing education system is a major contributor to the problem. But two things are certain: the Internet is creating many of those in the ultra-wealthy 1%; and it forces businesses to compete with capable international competitors while providing the tools so that businessmen can squeeze inefficiency out of the system in order to remain competitive.

If the government is going to be in the business of redistributing wealth, a better approach would be to raise the earned income tax credit and increase taxes to pay for it. Not only would this raise the income of low paid workers, but also it would subsidize businesses so they would be more competitive in world markets and encourage them to create jobs. Since the minimum wage would not go up, moving jobs overseas would be a less attractive alternative.

If policy makers want to attack income inequality, they must pay more attention to the ways in which the Internet is affecting their businesses. If we ignore the power of the Internet when making policy decisions, we are in danger of allowing it to become the greatest legal facilitator of income inequality in the history of the planet.

12 comments:

makheru bradley said...

De Blasio meets with AIPAC: "Part of my job description is to be a defender of Israel."

http://www.presstv.ir/detail/2014/01/29/348339/ny-mayor-holds-secret-meeting-with-israeli-lobby/

CNu said...

lol, then this buffoon needs to send some of NYPD's "finest" over to Jerusalem to stop, frisk, and regulate...,

CNu said...

Lamis Deek! Accept no substitutes....,

Uglyblackjohn said...

Interesting. My club has been doing VERY well. Our crossover success with the younger members of established families is almost unheard of in these parts. The patriarchs of these families take me to lunch and dinner regularly. The inside jokes and negative comments about those Blacks who imagine themselves with any sort of power are becoming even more common in our topics of conversation. (It seems that most of them have a white handler working with him/her behind the scenes.) Being able to sidestep the desire for the acquisition of status or power seems to make me a more desirable target. The thing is, my shit is already paid for and I don't need to have the latest and greatest the market has to offer. Being able to say, 'No' seems to be ones greatest value.

Vic78 said...

It seems the article's telling us that something's wrong with this country. Public school's purpose is cattle management. They'll tell you that in college if you didn't figure it out before then. If there's a group that hasn't been doing well for at least two decades, well that's part of the scheme. It's some shit to do with being a good citizen. The upper classes also don't want real competition. An educated population would have chased them out of town a long time ago.

makheru bradley said...

"a 2005 study of over 20,000 adolescents found that third-generation Asian-American students performed no better academically than white students."

[Back in 1899, in Washington, D. C., there were four academic public high schools-- one black and three white. In standardized tests given that year, students in the black high school averaged higher test scores than students in two of the three white high schools. This was not a fluke. It so happens that I have followed 85 years of the history of this black high school-- from 1870 to 1955 --and found it repeatedly equalling or exceeding national norms on standardized tests. In the 1890s, it was called The M Street School and after 1916 it was renamed Dunbar High School but its academic performances on standardized tests remained good on into the mid-1950s.] -- Thomas Sowell

As long as these groups are able to keep critical components of their traditional culture intact they are able to progress. The more they attempt to assimilate into European American culture, the more difficult it becomes for them to keep progressing.

makheru bradley said...

I'd say by the look on their faces JJ just got through wearing out, or at least tongue-lashing this scarecrow.

http://bit.ly/1ehQjVk

CNu said...

lol&smdh...., Bro. Makheru feels the spirit of my reaction to BD's latest, and raises a full notch of sheer moral and visual horror.

CNu said...

C'mon Tom..., open your mind up to the seductive allure of ascriptive hierarchy and "natural" rights. It's all about that breed dood. Crack open a little Robert E. Howard http://en.wikipedia.org/wiki/El_Borak El Borak is described as shorter than other characters and he has a
slender figure. Nevertheless, he is described as "compact" and quite
strong. His defining physical ability, however, is the quickness that
inspired his pseudonym. El Borak describes his ancestry as Highland Scot
and Black Irish, he has black hair but has black eyes instead of the blue typical of the Black Irish.Let that stentorian fantasy from BD's youth seep into the cracks and crevices of your cranial dome-piece.

Then cap it off with the inimitable appeal of the Die Schwarze Sonne http://greyfalcon.us/ and the humid steampunk theosophical fantasy and mystery that that all entails...., This is Church to BD - and here you go pissing on the mysteries of his faith like some kind of fanatical Lutheran reformer.

Tom said...

BD I ground through that endless breastbeating a second time, and the guy does describe (not show) just a couple of studies that might at least address the question. If he isn't misrepresenting them, and if the studies themselves are any good. Post a link or two to actual articles if you want folks to pay any attention to this stuff.


Peer review is like judicial review: it probably makes things better on average but it is nowhere near a guarantee of case-by-case quality.

Tom said...

LOL I missed my calling, I have the urge to be a fanatical reformer. But it doesn't pay.

Vic78 said...

I think I know what goes on during church time.

http://youtu.be/5MQzc6SQk_E

What It Means To Live In Netanyahu's America

al-jazeera  |   A handful of powerful businessmen pushed New York City Mayor Eric Adams to use police to crack down on pro-Palestinian stu...