1. Welcome to SportsJournalists.com, a friendly forum for discussing all things sports and journalism.

    Your voice is missing! You will need to register for a free account to get access to the following site features:
    • Reply to discussions and create your own threads.
    • Access to private conversations with other members.
    • Fewer ads.

    We hope to see you as a part of our community soon!

Reich: Higher Wages Aren't Coming Back, and Here's Why

Discussion in 'Sports and News' started by Riptide, Jan 15, 2015.

  1. Riptide

    Riptide Well-Known Member

    Where do I fit in this equation? Where do you?

    For a large portion of employers, there’s no need to offer more to employees. There are still millions who are out of the labor market and whom the government has officially stopped counting as unemployed. These people aren’t sitting on personal wealth that can fund a permanent vacation. They eventually need an income, and for companies effectively looking to keep a body in place, that’s enough to continue wage depression. Labor union representation of workers has been low for years, which means that negotiations between employees and employers is always tipped in the latter’s favor.

    Increasingly, there are other options, as well. Companies can outsource, as Reich argues, although that’s often more a matter of avoiding environmental and safety regulations, because, for many businesses, labor is a small portion of the cost of their goods. A bigger issue is how industries have increasingly automated operations and services. When even the work of anesthesiologists can be automated, as Johnson & Johnson JNJ -1.25% has done with its Sedasys system, how can anyone expect any job to be secure? The combination of high education, high demand, and need to administer a service locally was supposed to be the sine qua non of professional security. But it doesn’t exist.

  2. Boom_70

    Boom_70 Well-Known Member

    Who is "Reich" ?
  3. Dick Whitman

    Dick Whitman Well-Known Member

  4. bigpern23

    bigpern23 Well-Known Member

    Chargers offensive coordinator. Once led a pretty good comeback against Oilers in the playoffs.


    EDIT: Dammit, Dick, you beat me to it.
  5. Riptide

    Riptide Well-Known Member

    Kyle Reich, Boom. Brother of Frank.
  6. Boom_70

    Boom_70 Well-Known Member

    is there a 3rd Reich?
  7. The Big Ragu

    The Big Ragu Moderator Staff Member

    Wow. I can't remember the last time Robert Reich was right about something. ... but if you live long enough.

    It's funny, because the BLS touts the good news every jobs friday (the monthly unemployment report) and the stock market has been mostly buying the BS the last 3 years. With the Federal Reserve printing money like mad, everyone spent that time looking for good news. To the point that bad news was good news (the Fed might keep buying assets and rigging interest rates). Really bad news got spinned as good news -- for example, jobs numbers that most people have known bore no resemblance to their reality.

    There are a handful of people who have noticed this phenomena and have been yelling into the void for several years now. The phony numbers the BLS puts out have shown unemployment coming down -- particularly in the last year. But it's a nonsensical number, because they don't count millions of people -- namely people who have given up. The workforce participation rate has fallen off a cliff. The real unemployment rate, if you counted those people and the people working part-time jobs who wish they were employed full time, would be well into double digits. Anyone who has taken the time to go through the numbers every month, knows we gave up a ton of relatively high-paying jobs 6, 7 years ago. And most of the jobs that are contributing to unemployment coming down now (aside from discouraged people dropping out and not getting counted) have been part-time and low wage jobs in the hospitality, leisure, retail, temporary services, etc. sectors. So they tout a number that shows more people working than they were 5 years ago. ... and then everyone is shocked when wages stay depressed (and even declined in the latest report).

    It's because to the extent we are creating any jobs, they are crummy jobs. I am not sure I have ever said this. ... But Reich is right. This is not going to change anytime soon. We are in a depression. And it's a worldwide depression. It all stems from failed fiscal and monetary policy around the world has just exacerbated it and is keeping the flush out of bad debt from happening so we can actually recover. No matter what nonsense the BLS has been reporting every month. ... The broad middle of 80 percent of Americans has known that things aren't good for the last 7 or 8 years, and they can see for themselves that they aren't getting better.

    Also, a chunk of the actual jobs that we were creating were in the oil e&p industries -- places like the Bakken. A lot of the money the Fed pumped in to create the phony economy was making its way there -- highly levered companies borrowing up the wazoo to get rigs up. Think the same thing that led to the housing crisis, except in shale oil drilling. That was creating a good chunk of the new job growth. That whole farce is collapsing now. Even with their interest rates kept manipulated low still, they still needed West Texas crude trading well above where it is now. So rigs have been coming off line at a fast clip lately -- and with it all of those jobs. That had been the one growth area in America (even if it was artificial being created by interest rate manipulation that is getting people to lever up and gamble). The loss of those jobs won't help wages.
    Last edited: Jan 15, 2015
  8. Riptide

    Riptide Well-Known Member

    That's Kurt. He's a skinhead in Brandenburg.
  9. Boom_70

    Boom_70 Well-Known Member

    That made me laugh. Exactly what I was thinking. The guy is a clown. Sticks his head out of the ground every now and then
    and makes these grand predictions that are always wrong.
  10. old_tony

    old_tony Well-Known Member

    Labor has to follow the law of supply and demand just as goods and services do.
  11. BTExpress

    BTExpress Well-Known Member

    With all due respect, you REALLY need to sit down with someone who lived through the 1930s.
  12. The Big Ragu

    The Big Ragu Moderator Staff Member

    He is right in his description of what is going on. And for once, he didn't give a cockamamie prescription for how to "fix it" -- usually with copious regulation or centrally planning. the economy

    Reich is a super bright guy. And he has a keen understanding of reality. He's just incredibly dishonest, in my opinion. He will say things purposely that he doesn't believe. ... if it fits an agenda he wants to push (usually intervention in markets). That makes him dangerous in my opinion. He is bright enough, and knowledgeable enough, to snow people by giving partial facts or using obfuscation to get them to buy into what he wants. And he does that frequently. This time, he left it at a simple description of what is happening. It must fit his agenda. That is why he didn't go wrong.
Draft saved Draft deleted

Share This Page