09-03-2024, 06:06 AM
The truth is a bit complicated... mainly because economic reality tends to be.
One factor that I never see addressed is that of the psychology of "profit". Note in the graph how productivity has climbed. This is almost entirely due to technology. The digital revolution has taken us far in those terms. CNC tech, for instance, has made affordable to vast millions things that would otherwise have been impossible for anyone to afford, some of it even beyond the reach of the wealthiest people. Think "cell phone" and "personal computer" for example. At CCNY we had a 4381 mainframe and at CUNY's graduate center we had a 3090E, IBM's flagship at the time. Those were many millions of dollars worth of hardware. Today, the smart watch you bought for $200 has more computing power that both of those mainframes put together.
The cost of production of countless items has gone through the floor, thanks to digital technologies. In spite of a workforce that is ever flagging on the average, productivity rises all the time, and with better QC than ever before, at least in most products. Lesser costs + higher productivity + higher quality = growing margins of gross profit.
And so to my point: as those margins grow, yet the real income rates stagnate at best, but in most cases actually shrink, one must turn to the business owner and ask why this is the case. They will invariably refer to lower costs, etc., but if you ask them why they have not increased employee incomes to match real rates of earnings in the face of the unavoidable inflationary nature of FRNs, they either get that deer-in-the-headlights look as they reach for a pistol, make believe they didn't hear you, or rarely will make valid reference to the wild costs that "government" regulation imposes upon them, pointing out that every dollar given in salary costs them $3 due to regulations.
But there is also the fact that humans. As such, we like to gather more and are not fond of giving away... at least in the ways relevant here. Why pay them more if they will stay for less? And why stay if you cannot keep up? Because humans. As in Law, case studies are a huge part of the work of getting one's MBA, and we did hundreds of them. One macro-economic reality is that producers will ask $x/unit in Market A and $y/same-unit in Market B. Why? Because it is what they can get away with. You will pay, say, $1000/month for a life-saving drug in America, but in India it will be $50/month... and the disparities are that stark in some cases. One goes for maximum profit at all times, and they do so with very few exceptions. That is part of what happens in free markets. But what of the employees falling behind in real terms? That is a decision that owners make and they do so consciously. You cannot fix human beings because human beings. The solution, according to the likes of the wannabe Prostitute In Chief, is to impose controls from above. The real solution is to leave nature to its devices and keep things FREE. Those who decide they've had enough will either find better jobs or start their own businesses. The rest? Tough noogies. If you're content to remain in spite of your complaints, you deserve nothing better.
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