What's up /biz/, let's talk labor participation an

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>>1054115
>But unemployment is only 5%! It's got to be something else!

You're right. It is something else, because the definition of "unemployed" has been changed by the BLS just about every year for the past 8 years. It's called "labor non-participation". This is all the people who can no longer accept unemployment compensation because they've been unemployed too long; they've given up.

Here's a chart. It was made with data from the Bureau of Labor Statistics, so if there is any bias, it's in the direction of making things look better than they are.

Blue is the US population. Green is the total number of unemployed, plus the total number of "non-participating" working age adults. The red dashed line is the "out of work" percentage. Right now it's sitting at just under 32%. Mind you that's not 32% of just working age adults, that's 32% of the entire nation.

The rate of "out of work" people of working age, 16-64, is closer to 50%.

Things have not been this bad since non-participation first started being recorded. It probably hasn't been this bad since the Great Depression.

Things are much, much worse than you think. And they will only get worse.

>>1054115
And because all they do is deliver them, they can't see many reasons _why_ they're not being purchased.

Back in 2003, you bought a 6-inch Marvel Legends Iron Man with 30 points of articulation, a completely unique sculpt, a diorama base, and a comic book packaged in a giant plastic clamshell for $6.99 retail.

Today, they're trying to sell me 4-inch "Marvel Legends" Iron Man with 12 points of articulation, mostly reused parts, no diorama base, and no comic book on a cheap cardboard blister card for $10.99 wholesale which they expect to retail for $14.99.

Barely 10 years and they want double the money for a quarter of the product.

I can bang on people for being poorfags until I'm blue in the face but that kind of inflation would be insane even without stagnant wages.

>>1054141
>hidden inflation
>best example is muh action figures

I sometimes forget I am on 4chan

>>1054162
Your statement literally made me lol. Woke up my girlfriend laughing. I love and hate you for it.

>>1054115
What do you expect?

Economics pretend that GDP is the only measure of prosperity, whether in growth or otherwise.

Recessions and depressions look like this, even if the wealth effect generated by QE doesn't present it as such.

Most of the world is in recession already. The government can't admit their policies have failed or else the markets will crash. Underemployment is quite high right now, much higher than what is being reported. That is what has caused the wage stagnation for most people.

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There is also the impact of wage stagnation (pic related).
Making billionaires does not stimulate the economy as much as making a richer working and middle class. Someone with a $1,000,000 does not eat a 1000 times more than someone with a $1,000 income, does not possess 1,000 cars and 1,000 homes.

The lower the income is, the the higher share of it allocated to consuming is. The share of income not allocated to consuming goes to investment and savings which stimulate the economy from the offer side, by generating capital for companies to invest, and in turn create jobs.

But creating jobs does not stimulate the economy if those jobs do not pay enough to keep up with inflation. The current split of wealth is increasingly directing available income towards the upper classes, where it stimulate offer, without of being re-injected in the economy via everyday demand.

The demand generated by companies depends on the "base" demand, that of the final consumer, which is being stifled by an excessive share of wealth remunerating capital instead of labor.

>>1054241
Id like to point out the flaw in your arguement. Someone with $1mil doesnt live in the same 1k/month rental and drive the same 25k car as you either

Look at the Baltic Dry Index. Since 2008 the chart has been nose diving and since the latest global meltdown the index took a bigger shit. No one is exporting. The last time it was this bad was in 1929, where countries weren't exporting and started to raise tariffs to meet their revenue goals.
http://www.businessinsider.com/baltic-dry-index-falls-to-lowest-level-in-history-2016-1

This is the worst in history.

Could this be related to the decline in the white population?

More generally, doesn't fewer rich people lead to a concentration of wealth and a decline in spending, since appetite for goods doesn't grow with income, at least not past a certain point?

Yeah there needs to be more jobs, especially middle class ones. Higher paying jobs frees up shitty paying jobs because people tend to work 2-3 shitty paying jobs until they have a good paying one.

>>1054255
My argument doesn't say anything different. What the billionaire consumes is more expensive, but not an million times more expensive. His expenses are higher but still represent a lower share of income.

>>1054317
A billionaire doesnt need to eat something a million times as expensive because he spends his income on other services that middle class cannot afford.
IE Private jet and yacht plus fuels for them. Pilot and crew for his private jet.
How much did he spend in just thise two items? How many jobs created from yhe pilot and crew? How much on jet fuel? How much on the jet fuel? Jet and yacht maintenance and the people he pays to do it?
You cant argue "its bad to have few people with billions because they dont eat 1000 times or own 1000 homes"

>>1054408
The bread and butter of employment are goods and services.
Most people do not build private jets or uncork champagne for a living.

>>1054424
Those were just 2 examples out of a pool of hundreds. You must be low iq. Here let me list some more for you.
Billionaires own multi million dollar homes. These homes cost more money to maintain. The lawns are bigger so they pay more than the $20 a week you pay to keep it mowed. Perhaps this million dollar home has a pool that must maintained. Perhaps the billionaire employes a....chef, maid, security guard, etc etc
Parts for his 100k bmw costing most than replacement parts for your 25k ford sedan
Etc etc etc
No matter what you say billionaires create jobs and a demand for expensive goods and services. Of course not many people build yachts for a living but if not for billionaires NO ONE would create yachts for a living.

>>1054448
Only shills insult unnecessarily here,

It is true that billionaires create a greater demand by their increased ability to demand for leisures and luxuries, but that does not compare with the demand of hundreds of people for food, housing, clothes etc.

>>1054448
If you go on listing the type of jobs a billionaire creates, you completely missed the point.

Whatever goods and service he consumes they do not absorb 100% of his income, that's why he's a billionaire..These goods and service would absorb 100% of the $1,000 of 1,000 paupers and would drive demand in shorter cycles than through the billionaire's use of the same amount of money.

I never said it's bad too have billionaires, I said also said we need inequality in an economy, but it becomes counter-productive when too extreme. The U.S isn't the richest country in the world because it has more billionaires, but because its poor and middle class can consume more than in other areas of the world.

Please read thread from the start before ranting about points not made.

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>>1054448
You're essentially making the same stupid argument thomas malthus did over 200 years ago

Without a class of idlers to create demand by spending on servants and luxury consumption goods you would see a decline in aggregate demand and cause unemployment making everyone worse off

The truth is the more billionaires there are to spend the national revenue on consumption the less of the revenue gets utilized by industrial capitalists who would invest back into expanding their industrial fixed capital and production

Servants and yachts don't expand national revenue once their consumed, rentier parasites slowly kill an economy

>>1054408
>You cant argue "its bad to have few people with billions because they dont eat 1000 times or own 1000 homes"
I can, and a handful of billionaires do, because they realize how dangerous it is when you have a small group of individuals earning thousands to tens of thousands of times what the average worker earns.

Nick Hanauer, billionaire venture capitalist and one of the first investors in Amazon:

http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014

>Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
>And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.
>If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.


And just because this is a great quote
>"It just happened that the second Jeff—Bezos—called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller... Cybershop didn’t make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht."

>>1054448
>Parts for his 100k bmw costing most than replacement parts for your 25k ford sedan

Alright, let's say that this hypothetical billionaire drives only high-end luxury vehicles. Shit, let's say he drives two Aventadors. Let's also say that maintenance on these two vehicles is 100 times that of a "standard" vehicle, so $50,000 each per year.

So the billionaire pays about $1,000,000 for the cars, and roughly $100,000 per year thereafter. The average person pays $25,000 for the cars and roughly $500 per year thereafter. So the billionaire consumes (ie adds the the economy) roughly 40 times what a normal person does when purchasing and 100 times what a normal person does through maintenance.

So at most, the billionaire is consuming the equivalent of 100 people. But the billionaire isn't earning the equivalent of 100 people. He's probably earning closer to what 1,000-10,000 people are earning. And if we look at wealth inequality, rather than income, the figure remains just as bleak; the billionaire controls somewhere on the order of thousands of times what the average person commands.

Billionaires do not contribute to the economy on *anywhere* near the level that middle class people do. Think of it this way: for a billionaire earning 5,000x median wage, he'd have to spend 5,000x what the average person spends. This means that he'd have to spend somewhere between 75-100% of his income, every year, forever. They do not do this.

I'm not saying being wealthy is bad. It's very good, in fact, to have wealth inequality. But when wages of the bottom 90% of people have remained flat for 50 years while the wealth of the top .01% has grown thousands of times (inflation adjusted), something is wrong, and it is *not* good for the economy.

>>1054448
Well, I guess this explains why the plantation economy of South America has created such pleasant societies.

The poor people there can just cut the grass of the rich for a white collar wage. The rich don't hoard at all; they're eager to give their money away, and workers there know they can ask for a really high wage because their employer is rich - thank god for the free market.

Oh, wait. That doesn't happen.

>>1054931
>>Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
>>And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.
>>If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.
Sounds like a switched on guy.

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>>1055670
And the biggest defenders of wealth inequality are OVERWHELMINGLY working class or lower middle class; the exact people getting screwed the hardest by such extreme inequality.

My dad is an example. He earns maybe $70k a year as a real estate appraiser at a county office. And anytime I (or my brother, or anyone else who has actually researched this stuff) suggest that such huge wealth inequality is extremely, horrifically awful for the economy and anyone not in the top ~.1%, he's the first to say that he "doesn't want the government redistributing HIS wealth" or "poor people getting handouts".

Dad. You ARE a poor people. You are getting fucked and you are literally defending it.

Pic related. Pic extremely related.

Since the wealthier you are the less you spend proportionally, wealth moving upwards produces less expenditure proportionally. This is some arithmetic-grade shit. Anyone who doesn't understand this concept certainly shouldn't have enough wealth to justify arguing against it.

I totally agree with the op. The problem more generally is called the prisoner's dilemma. The solution will not come from those creating it, so it will have to be resolved externally. This won't be a pleasant experience, if it ever occurs.

We are also on this ladder, and anyone average or trying to move higher is enabling the system that rewards the wealthy in their own pursuit of more wealth.

The other big problem I see is a large amount of useless, procreating people on the planet with no forces to counteract this process. Labor value goes down, social costs go up, people will eventually die en masse because of this so a sooner resolution would be better than later.

>>1055693
Forgot to say--I think it's clear we're hitting diminishing returns with credit too. I don't use credit and since my buying power is going down I have been spending less and less... there are not enough young fools racking up the debt to support the debt growth that occurred in the last 15 years.

>>1055679
Yeah but all it takes is one smart cunt to explain it and then there ain't no putting that genie back in the bottle nawmean?

I work in higher education and I see people that are retirement age, unfit to work, disabled, already retired, etc. coming back to school. One has to figure they're funding their education in just cold hard debt. When will that bubble burst?

>>1054294
This is what I hope to be doing. I currently work a part-time job and hope to get another part-time job so I can work both. I will work 53 hours to make a livable wage, and I am happy about that. Not even bitter or resentful..the reality is that I'm lucky to have anything at all.

>>1054286
its more a lack of jobs. the demographic isnt as important as what they do.

the middle class, black or white, has no jobs, because they are all overseas.

>>1055679

All your posts are totally spot on.

Essential this isn't a "moral" problem, but a problem of declining velocity of money.

This is made worse by technological unemployment.

The best solution for this is basic income directly issued by the treasury.

>>1054162
Sorry if you don't like the market I have actual documentation of pricing for.

Versus a car that people only buy every 5-10 years or food that goes on sale every other week in a myriad of promotional schemes (bogo, half off, x limit y all others z, buy spaghetti and get 2 sauce 25 cents off, etc).

>>1056264
But if you read into what I said, it also says less work. If a line of 10 figures shares the same body, it employers fewer sculptors, fewer designers (because so much is predetermined by the shared parts), fewer toolmakers, etc. Less paint means fewer painters in cases where it's done by hand, fewer mechanics in cases where it's done by machine because they break down less. Less plastic, less paint, fewer molds, etc means fewer workers at the raw material end too.

That's pretty much any manufacturered product, not just toys. Deliver less and less, produced by fewer and fewer, and charge higher and higher. And then when sales slump, you lose people and wages at the retail end. And then those people contribute to the sales slump everywhere else so further cuts happen at the production end and now you have a downward spiral...

>>1055679
>You ARE a poor people. You are getting fucked and you are literally defending it.

Fucking this. You know, with each passing day I start to understand why the poor in America remain poor: they are all voluntary cucks to the Americans that actually matter.

I mean if the same slump is happening in more sectors than just toys, no wonder China's on suicide watch around here.

>>1055679
>>1054954
>>1054931
>>1054122
You seem pretty intelligent. What, if anything, do you propose as a solution? Basic income (with a cutting back of all other entitlements and benefits, not LE FEEL THE BERN XD meme shit)? A sudden focus on producing and consuming in house? An agrarian exodus?

>>1056412
>What, if anything, do you propose as a solution?
It's... Jesus, it's such a massively complex problem.

First, a rule needs to be laid down. Before anything else is done, this just has to be established:

Wealth, that is, already-owned assets CANNOT be redistributed. The second you introduce theft of ownership into a system of rebalancing is the second you introduce class warfare, wealthy flight, and in all likelihood riots and violence.

After that, you need to know why a problem is happening before you can fix it. I think these are the fundamental cause of the problem of unemployment and, therefore, wealth/income inequality:

1) Productivity of the average worker has increased. A lot. Before, you needed 2 workers to fill 2 jobs; now you only need one.
2) The number of workers has increased. A lot. From about 135 million in 1977 to 204 million today.
3) Third, automation and outsourcing has siphoned mainstay jobs away from the United States. It’s just cheaper to hire foreign workers than it is to hire Americans.

(continued)

>>1056572
It can be boiled down to this: there aren’t enough jobs for the number of people we have. We can’t lower productivity, we can’t decrease the worker population (killing people is frowned upon), and we can’t undo automation or increase labor prices in other nations (to drive work back into the US). We can’t solve this by fixing the direct causes.

The only potentially reasonable fix I can think of (or have heard of) is a basic income. But this introduces a whole can of worms of dealing with “exceptions”. Sure most people would probably just live normal lives, consume like normal, raise families like normal, but the bad eggs could make things really ugly for the rest of us. Drug addictions and alcoholism come to mind immediately.

Economically, it would disrupt low-paying jobs, like retail and fast food workers: why would I show up to work at Walmart if I could just sit at home and play video games all day? This could cause wages to dramatically increase on the low end, to entice people to work, but at the cost of more expensive goods and services; businesses aren’t just going to eat those added expenses, they’ll pass it on to consumers.

And the problem dwarfing all of these is we just don’t know if it’ll work, or what effects it will have. You can hypothesize the effects of basic income all day long, but you just won’t know until it’s tested in the real world. Let me say that again: economists cannot predict what will happen, any more than a psychic can read your mind or a medium can talk with the dead.

>>1056572
>>1056578
And if you want a tl;dr...

I have no fucking clue. Nor does anyone else, as far as I know. The situation is bad and it needs to be fixed, but we don't know how to because this has never happened before.

And where will the money come from? We can't really cut spending on healthcare, or people will die (because they're lazy and unhealthy, but that's another issue). The next biggest chunk of the government budget is the military: good luck pushing a budget cut there. It would have to come from increased taxes and closing loopholes for wealthy individuals and businesses. You know what they'll do if the increase is slightly too high? They'll pack their bags and leave. Companies can find employees elsewhere. Wealthy people can pick whatever luxury destination they want and live there.

As a start, we'd need a committee of highly educated engineers, doctors, economists, accountants (to keep everyone's flawed sense of money in check), and successful business owners and entrepreneurs just to brainstorm ideas. Maybe submit a few ideas for broader consideration. Politicians do not have the know-how, the experience, or frankly the moral fortitude to figure this out.

>>1054162
Kek

>>1056593
What about a % tax on all investment-related transactions?

>>1056593
>I have no fucking clue. Nor does anyone else, as far as I know.

You are a good poster and a good person.

Every day I see an article in the news about how raising the minimum wage will literally destroy the job market and send unemployment soaring to the sky. I rarely see any form of analysis being done, it's all bullshit. It may have worked in European countries but we just don't know how it'll turn out here. We just gotta do something.

Also, it's important to remember that work not only provides pay, but community and fulfillment. Even shitty wagecuck work. It's hard to say whether or not basic income will cause those wages to raise. I just wanted to tack that note on.

>>1056578
>>1056593
The number of hours needed to produce each unit of industrial output has historically declined to the point where it can no longer be offset by increasing consumption. We can consume more and work less. Less work is the ultimate solution alongside a full employment policy by means of investment.

You can increase leisure time by political legislation... but leisure time can't be taxed so treasury officials are always unsympathetic towards it. The whole point of supply-side economics was to get people to work more hours and increase the magnitude of tax revenue and that's why treasury officials loved it.

A basic wage would really destroy the value of labor. It'll also probably cause even more asset distortion than there already is. I agree with the analysis from the other guy; another issue is quality engineering which leads to diminishing returns---a car built in the seventies had so much waste in its design compared to a modern car, so there was far more room to improve it and generate a return. I just don't see much more groundbreaking innovation in the future. How do we make portable computers better, for instance? They're already all screen, have good speakers, features, interfaces etc. The fact they all look the same is a testament to this.

There are too many people, and they are not creating value. I think water desal and batteries still have room for innovation. Water is going to become a serious issue in the next five years. I see fascism as being the only outcome. Or a big war maybe. Perhaps both.

Can we do the ice floe thing again with useless people? At least the natives understood sustainability.

>>1057935
maybe it seems that things can't get improved, but there is always room for improvement and you can always improve something or invent something, it's not that time yet

>>1057935

>A basic wage would really destroy the value of labor

>I see fascism as being the only outcome.

Neocon poltards at it again

>>1057991
>but there is always room for improvement and you can always improve something
Ehhh.
It wasn't long ago that steel production for instance was like 1% efficient. Doubling that efficiency is pretty easy. Doubling anything over 50% is impossible. As you get closer and closer to 100%, your gains become ever more marginal (and, generally, harder to accomplish as all the low-hanging fruit has been picked)

>>1058011
you may call us retards, but mind your manners, we are NOT neoconservatives.

>>1057885
Capital gains tax would probably need to be increased, especially at the higher income levels. Most of the .1% make money as capital gains anyway, not regular income (because regular income is taxed more heavily).

>>1057900
>raising the minimum wage will literally destroy the job market
Two cities in the US have already implemented a $15/hour minimum wage, I think Seattle and San Francisco. Those cities also now have the fastest growing economies according to a TED talk from... Nick Hanauer? I'd have to track it down again.

But yes, without work a lot of people would just never leave the house. Maybe community involvement (trash cleanup, community gardens, etc) could become a new norm if something like a basic income were implemented. People would certainly be happier if they socialized more.

>>1057902
>The number of hours needed to produce each unit of industrial output has historically declined to the point where it can no longer be offset by increasing consumption
That's a good way to put it.

>Less work is the ultimate solution alongside a full employment policy by means of investment.
I can agree with this. If a 20 hour work week became the new norm, companies would be able/forced to hire more people. But again, this will mess with the price of labor. We just don't know what will happen.

>>1057935
>A basic wage would really destroy the value of labor.
Do you mean it would destroy the value of labor from the worker's perspective? That is true; wages would be driven up to entice people to start working. If you mean that companies won't be willing to pay as much... Actually that could be a point too. "Why would I pay you $10/hr if you're already getting $7/hr from the government?" I'd be curious to see what kind of equilibrium we'd reach.

>I just don't see much more groundbreaking innovation in the future
People have been saying this every year since forever. If you see the most advanced technology we have, it's already ahead of everything else; you have no "better" reference. This is what people thought of the first smart phones, but every year, they get smaller, lighter, and faster.

That said, yes there are too many people for the system we have now, but killing people is a no-no, so we have to figure out something better.

>>1058185
>Capital gains tax would probably need to be increased, especially at the higher income levels. Most of the .1% make money as capital gains anyway, not regular income (because regular income is taxed more heavily).
No no, not capital gains, investment transactions (gain or loss, doesn't matter)

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>young people are poor as fuck and work part time shit jobs
>middle class is BTFO
>old people everywhere who don't buy shit anymore

Good riddance, too much useless shit around anyways

Bottom wages are way to high in the western world compared to the world worldwide. In hundred years time the purchasing power of a peasant will be somewhat the same, whether he is in India, Korea or Canada.

>>1054162

It was a pretty good example tho senpai.

>>1054628
Except that's wrong. They spend a much smaller fraction of their income in consumption than the middle class does.

>>1058189
>Do you mean it would destroy the value of labor from the worker's perspective? That is true; wages would be driven up to entice people to start working. If you mean that companies won't be willing to pay as much... Actually that could be a point too. "Why would I pay you $10/hr if you're already getting $7/hr from the government?" I'd be curious to see what kind of equilibrium we'd reach.

We already have this. I'll use WalMart as an example but other companies do this.

WalMart employs a very high number of people who are dependents (kids living with their parents) and poor/elderly who have their income subsidized by the government. They do this because the employees have already been pacified and won't demand higher wages.