Someone else’s take on the post-employment economy

I’m not the only one who thinks you and your kids need to be prepared for a future that will be harsh and brutally-competitive. Here’s a documentary worth watching: Obsolete, on Amazon Video http://amzn.to/2kFn0qL If you have Amazon Prime, which is how I stumbled onto it, you can probably watch it for free. As of…

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Ready or not, here comes Sociofascism

Michael Snyder states the obvious for the benefit of people still in denial:

40 Percent Of Americans Now “Prefer Socialism To Capitalism”

This was inevitable for many reasons. For one thing, the United States already has its productive infrastructure built-up. The powers-that-shouldn’t-be set their livestock loose on the continent and left them relatively alone (except when drafted for seizing land or resources in wars) to build up the infrastructure. Now that it’s built, they want to switch to a combination of Socialism and Fascism (also known as “corporate Socialism”) because that gives them more direct control over people and other resources.

So, the public and private school systems (including college and university) have been set up to indoctrinate for socialism for decades now. Propaganda disguised as commercial entertainment helps too.

Instead of the government directly managing the means of production itself, the government sets up partnerships with cronies in private corporations, which is Fascism, except that unlike classic Fascism, Sociofascism is hostile to small business and private property for the serfs, and it openly embraces big government. The cronies in private corporations affect a superficial “progressive identity”.

Oddly, the powers-that-shouldn’t-be regularly knock over socialist regimes overseas, like in Venezuela. I don’t have any insider insights, but my guess is that there is a rule that Socialism is for developed economies only; in countries with less infrastructure, they want more productivity first. Another issue might simply be that socialist economies are more vulnerable to trade embargoes; Iran, Syria, and Russia have withstood trade sanctions but Venezuela was an easy target. One factor is undoubtedly fear of seizure and nationalization of assets owned by US government cronies. If and when countries like Venezuela are absorbed into a super-state comparable to the EU, things might change, and if they do, the Venezuelans won’t have any choice!

I have no idea how to stop the tide; at this point my options appear to be to swim or drown. I don’t like the idea of throwing in the towel and joining the forces of evil, though the very wealthy, and in particular a lot of software company executives, have done exactly that. Aside from being the path of least resistance, which is how ruthless people end up on top, socialism helps to protect them from up-and-coming competitors.

Even if I were tempted, I don’t profile correctly to get past the gatekeepers. And the parasites have reached the point of saturation anyway.

In the mean time, you and I have a living to make. That will get harder and harder as the economy contracts, and more and more of the remaining jobs are with companies and government agencies that have hiring preferences for someone else.

Here’s what my plan is counting on: Socialism is Socialism, even when it comes packaged as progressive Fascism. It’s inefficient, and fails to adapt to change. Even to the extent that Socialism is imposed on the rest of us in the form of higher taxes and more regulation, the socialists have to tolerate at least a small sector of private businesses to take care of details they can’t. Even the Soviet Union winked at some black market activities. I don’t think it will be necessary to go black market except for a few services like medical—imagine going to see some guy who isn’t a doctor but knows how to set a broken arm, because you don’t rank high enough in the socialized medicine system to get to see a doctor within any kind of reasonable time-frame. Mostly it will be grey-market and tolerated as long as you don’t give someone in the system reason to come after you. Watch your back! Tolerances will be low and gatekeepers on the internet are already watching your every move.

Watch for my mailing list subscription, which is about ready for roll-out, then sign up for my newsletter so you can follow the discussion.

Lobbying to destroy jobs

Prices are related to supply and demand. When supplies are low relative to demand, prices go up. When supplies are high relative to demand, prices go down. When demand goes down relative to supplies, prices go up. When demand goes up relative to supplies, prices go down. When prices are set, then supply or demand will change to reach a new equilibrium.

I’m not aware of any valid evidence of exceptions. The relationship applies even in centrally-planned Communist countries, where  supply and demand are impacted by central planning bureaus set both price levels and production goals. If the price is set lower than the price that would be negotiated between buyers and sellers, then shortages occur. If the price is set higher than the price that would be negotiated between buyers and sellers, then products sit unsold in warehouses, or more likely, get stolen and sold on the black market.

The same relationship exists in the market for hourly labor. If the price of labor is set higher than the price that would be negotiated between employer and employee, then a shortage of jobs occurs.

In Seattle, the city council unanimously passed a law phasing in $15/hr minimum wage, which at the time was the highest in the country. Proponents of the law immediately deemed it a success, without waiting for much less looking for any evidence of higher unemployment.

If you claim that “all swans are white”, you can’t prove that statement by showing me a white swan. You can’t prove it at all; you can only show me that your good-faith effort to find a non-white swan hasn’t produced anyyet. Your claim is good until and unless you go to someplace like Australia, where black swans occur. Absence of evidence does not constitute evidence of absence.

Similarly, if you claim that raising minimum wage doesn’t increase unemployment, then to support that claim, you need to make a good-faith effort to look for people who lost their jobs after the wage increase.

The first restaurant to announce layoffs was zPizza on Capitol Hill near Seattle Central Community College. The owner didn’t just lay off all her staff—she had to shut down. She said she didn’t want to lay off her staff, but she didn’t know how to make payroll.

Instead of looking for evidence of job losses themselves, proponents of the minimum wage increase were quick to discount the evidence found by others:

You might remember that a few months ago, the Seattle zPizza location announced its looming closure and said the city’s $15 minimum wage law was to blame.

The story became national news, offered as a cautionary tale about the impact of higher wages. Never mind local unemployment is below 4%. Never mind that more than a dozen pizza joints were hiring that very week. Never mind that there are more restaurants licensed for business in Seattle than before the $15 law passed.

Now a new pizza place is set to move into the very same location that zPizza is leaving.

Remember that pizza place that said it was closing because of $15? Everything they said was wrong.

Remember that pizza place that said it was closing When did pizza places ever say anything? It was the owner who said it was closing. This misattribution is part of a pattern of inaccuracies, generalities, and distortions in the author’s thought processes.

Everything they said was wrong. Assuming “they” is the owner, the article doesn’t provide a single specific example of anything she said that is wrong. It doesn’t provide a single example of anything that anyone else said that is wrong. The whole editorial is full of non-sequiturs—that is, reasons that don’t logically justify their claims.

Never mind that more than a dozen pizza joints were hiring that very week.” How is that relevant? Assuming that the claim is true, what matters is whether the trend is rising above its moving average, or falling.

Now a new pizza place is set to move into the very same location that zPizza is leaving. How is it that the new management is able to make positive cash flow when the previous management couldn’t? Oh, here’s how:

The space of more than 1,700 square feet cost her more than $7,000 in rent each month. Shah-Burnham said 33 percent of her budget went toward labor costs, and raising the wages that fast would have been unsustainable.

She closed the shop after July 4.

Now the space will become Ian’s Pizza, which currently has four stores in Wisconsin and one in Colorado.

Because they have fewer than 500 employees at these stores, Ian’s Pizza will be on a different schedule.

For small employers, they must pay $15 an hour by 2021. For small employers who pay health benefits, they must pay $15 an hour by 2019, which includes a minimum of $12 in cash and a minimum of $3 in benefits.

A tale of two pizza joints: Seattle’s minimum wage for franchise owners

The new pizza operator isn’t required to pay the higher minimum wage yet! The previous one was on a different schedule because of the size of her parent company—which in no way changed her costs or profit margins. In other words, the new pizza restaurant Working Washington offers as “proof” that the higher minimum wage rate wouldn’t result in higher unemployment isn’t actually paying the higher rates!

The lobbyists for the minimum wage increase didn’t disclose this information. They’re only looking for evidence to support their bias, not evidence that contradicts their bias. They’re trying to prove that all swans  are white by looking for white swans, not black swans.

It’s worth addressing another argument for higher minimum wages: that wages in general are not keeping up with the cost of living.

That’s true, but irrelevant. The assumption is that corporate profits are keeping up with, or maybe even surpassing, the cost of living, and that workers aren’t getting their fair share.

Which corporations are we talking about? Halliburton? Apple Computer, with its offshore sweatshops? How about all the companies that have hiring preferences for holders of H1B visas? These are not major sources of employment within the USA. At least in the USA, most wage-earners work for a small business, the ones with thin profit margins.

Stagnating wages are a symptom of “peak economy”; nobody can simply regulate them higher, without triggering higher prices elsewhere. It’s a game of trying to minimize your own losses.

There are a number of possible ways that employers can respond to rising minimum wages. They might have to shut down their business completely, especially if they were never particularly well-capitalized in the first place, which is generally true of small businesses. That’s what happened to zPizza. They can automate more of their operations, which is what bigger and better-capitalized businesses tend to do. That’s what several fast-food restaurant chains are planning to do, replacing cashiers and order-takers with automated kiosks. Some can use subsidized labor, and a few can get away with using black-market labor. The overall trend will be net loss of job.

  • Plan to enter the workforce as something comfortably above “entry level” labor. Being able to do so requires job-ready skills and experience.
  • Don’t start a business that is dependent on entry-level labor; it will be expensive relative to its productivity.
  • Beware of starting a business that is vulnerable to the job losses of low wage earners. An example would be low-income housing; your tenants would stop paying the rent after losing their jobs.

No mystery why men missing from workplace

Here’s an article about male unemployment I read a few days ago.

Thousands of Maine men are missing from the workforce, and no one really knows why

I don’t find the article very informative, but it’s worth a few comments of my own.

…at 26, Twitch has never held an official job. He’s worked as a roofer, a blueberry raker and a construction worker — “backbreaking shit,” he said — but always under the table.

In other words, Twitch DOES work, contrary to the hypothesis of the newspaper article. One of the questions the author should have been asking is why it’s easier to get a job on the black market than elsewhere. The answer would probably have to do with excessive government regulation, including excessively high minimum wages and the burden of mandate Obamacare. But she never goes there.

Male labor participation rates (the inverse of unemployment) have been in long-term decline in the USA, since about 1950. That was shortly after World War II, when most of Europe’s industries were in ruins while those of the USA were still intact. That left the USA as the world’s premier industrial powerhouse of the era.

Since then, the globalized economy effectively means that every worker on the planet competes with every other worker. Germany quickly rebuilt its Ruhr industrial center after the war, and Japan became a major industrial power-house, followed by South Korea and China. The locus of production shifts a bit from time to time, but the overall, long-term trend has been to shift away from the USA and western Europe.

From the 1970s on, women started competing with men for jobs on a large scale. That created more competition for jobs for men domestically.

Pressure to keep labor costs down spawned a meme (that is, a “mind virus”) popular among the ruling class that women are willing to do the same job for less money than men. Actually, they’re not, which has spawned huge numbers of discrimination lawsuits, but the meme persists. I have heard employers explicitly state a hiring preference for women.

I’ve also heard another meme that sales and service staff should always be women and people of color on the theory that “sales staff should look like the customer” and that they are “less intimidating than white males”.

Hiring preferences for other-than-white-males reduces the number of jobs available for men and especially white men. The author of the article doesn’t bring up this fact.

I would guess there is another cause of rising American unemployment that is becoming an ever-increasing factor in the situation: the infrastructure is already built. In fact, with the switch to a post-industrial economy, much of our infrastructure was abandoned. But the point is you don’t need big shipyards once the ports are already full of ships that will last a while longer yet. Foundries don’t need to make more steel rails for trains when the amount of railroad track is declining, not growing. We already have more airports and freeways than we need.

The total size of the economy has probably peaked. Infrastructure accumulates, but resources to feed into the industrial infrastructure do not. This is a big problem.

Standards of living are falling, and eventually our population will fall as well. We won’t need as much inventory of single-family housing as we have now. Probably pretty soon, most people won’t be able to afford cars, so we’ll need fewer of those. The long-term economic decline will keep feeding on itself.

Women are impacted less than men because they are favored for service occupations, which are not related to manufacturing anything. But recently even women’s employment has peaked and is starting to fall.

Wages for less educated men have been falling steadily in recent decades.

Irrelevant. Wages for highly-educated men are also falling! I strongly suggest ignoring the author’s insinuation that going to college will get you a job: unemployment rates for new graduates are high, and most of the jobs they are finding require no college degree!

What’s lacking is not college; what’s lacking is skills. A degree in Liberal Arts will not get you a job any better than Twitch’s black-market itinerant labor, but it will get you into debt. At least Twitch probably doesn’t have any student debt—he’s ahead of the game!

A surge in incarceration rates has also made it harder for men to find work, since the vast majority of prison inmates are men, a 2016 report by former President Barack Obama’s Council of Economic Advisors theorized.

The vast majority of men are not criminals. This is not a real reason for rising male unemployment. Presumably the only reasons for claiming otherwise has to do with kiss-off attitudes towards men, and caring more about jailbirds than the rest of us.

The last of the big theories about why men are leaving the labor force comes mainly from conservative scholars who say the broadening of eligibility criteria for social welfare benefits — in particular, disability — have lured men away from the labor force.

More likely, the eligibility criteria were broadened because of rising thresholds for employability, in other words, confusing cause and effect.

Men are LESS likely to receive so-called “entitlements” as women.

Minority women in particular are far more likely than their male counterparts to have used food stamps. About four-in-ten black women (39%) have gotten help compared with 21% of black men. The gender-race participation gap is also wide among Hispanics: 31% of Hispanic women but 14% of Hispanic men received assistance.

Among whites, the gender-race gap is smaller. Still, white women are about twice as likely as white men to receive food stamp assistance (19% vs. 11%).

Pew Research, The Politics and Demographics of Food Stamp Recipients

They are also less likely to receive, and receive a smaller share of, other entitlements than women do. This makes men LESS desirable for low-wage employment, because they are not being subsidized. Employers assume that employees will want more money if they’re not getting welfare benefits, so some of them won’t even consider hiring anyone who is not in the system. Some jobs placements are arranged directly through the social welfare agencies; companies like Wal*Mart and Marriot Corp send their openings directly to welfare agencies for placement. You can’t get those jobs if you’re not collecting welfare benefits.

There’s no real mystery regarding why so many American men are unemployed or under-employed. The real question is what to do about it. The president’s council of economic advisors is not going to help you, you probably won’t qualify for a subsidy from the government, and the media is misleading you.

Keep reading my blog for better ideas.