Comments:  This section is for listeners. To receive a reply from Jack Clark, you should call the comment line.

I did listen to it for as long as I could. But it was such a naive interpretation of the economics involved that I gave up. (Perhaps the real gems were hidden at the end?)

Guys, the answer to solving poverty is emphatically not "pay the poor more money". For an insight into what the answer is, take a look at what's lifting *billions* of people out of poverty in India and China. Hint: it's not socialism.

posted by  Anonymous  4:41 PM   [+]

 

too funny: bet these same politicians won't be a ble to figure out why their tax expenditures will go up significantly. Well DUH you just mandated a contract worker raise. uh oh , I sense a pay raise arms race for other emloyees not covered.

posted by  Anonymous  11:22 PM   [+]

 

Looks like you need to take a math class. BILLIONS? How many BILLIONS exist between China and India?

I also like how you skirt around the issue. You attempt to debunk the podcast, but provide no substance.

Hint: next time you attempt to prove something wrong, provide a source that proves you right.

Just a thought to keep in mind: the next time you're at a grocery store, remember that it takes a lot of experience to make sure that store runs smoothly. The reward for such work isn't high. If everyone was highly educated, who would run your grocery stores? Kids? Immigrants?

Haha. Good luck. :)

posted by  derek  2:02 AM   [+]

 

I take it that "Anonymous" believes that because of the great Free Trade(Slave Trade) agreements has been the great savior for the third world. Well... yes... but at what cost? To have U.S. jobs outsourced? To have U.S. workers compete with people that will work at near poverty wages in the third world? How does this glowing symbol of capitalism that "Anonymous" hold up as argument against paying a living wage? It's a perfect system if your rich corporation! Bottom line, the system is not setup for you to succeed. When corporations are running country the dream of Jefferson dies. Their is no "pursuit of happiness" when you live in the United Corporate States of America.

posted by  ~Joe  1:53 PM   [+]

 

I find it absolutely atrocious that you’re telling people that education is futile on a national level because the state of the job market is constant. In other words, if I educate myself out of poverty it’s going to knock someone else into poverty because someone needs to do the low-paying job I left.

Predicting the outcome of unskilled workers leaving the unskilled job market as they educate themselves is a simple Econ 101 supply & demand problem: supply of unskilled labor goes down and supply of skilled labor goes up. This results in rising wages for unskilled jobs and falling wages for skilled jobs, the exact result you seek. This phenomenon has occurred in every developing civilization in history. As a result of the price change, the quantity of unskilled labor demanded decreases. This happens because rising labor prices drive investment and technology (which are more available in an educated population!) to make individual workers more productive.

For example, suppose you own a coal mine and a company offers to sell you a device for $2500/yr that can make a single miner 20% more productive. If the price of mining labor is $10000/yr, this is not a profitable option. But if you pay your miners $15000/yr, you would profit from firing 20% of your work force and equipping all of your workers with the device. Hence your quantity of labor demanded decreases because of its high cost. This is precisely why mining operations have transformed from 1000 guys in a mine shaft with pickaxes 100 years ago to 100 guys with heavy industrial equipment strip-mining from the surface. They also employ geologists, surveyors, engineers, and all sorts of educated laborers. When the labor force is educated, costs go down and the need for unskilled workers declines.

Look at any factory in a developing country: rows and rows of tables at which thousands of workers hand-craft products. Now look at any factory in a developed country: a few dozen trained workers overlooking machines and operating heavy equipment. Here in America where education is available, people are expensive and are replaced by machines. The relatively scarce supply of unskilled labor in America is what drives unskilled wages to 10 or 20 times their value on the world market.

When you raise wages artificially without allowing the market to work, people simply lose their jobs without the education to find other opportunities. The lucky ones who get a state job will double their paychecks, while the unlucky ones live on welfare. This is precisely the arbitrary income inequality you are trying to prevent! (A side effect is that compensation in state jobs will decline in other ways: decreased benefits, harsh working conditions, abusive bosses, etc. Employers can cut costs with no fear of workers quitting their higher-than-market-value jobs).

The agricultural industry in 1900 employed one third of the American workforce. In 2000, the figure was less than 1%. By your suggestion, farmers in 1900 should have thought “Why get an education? The country will always need one farmer for every 3 citizens to feed them, and somebody’s got to do it.” Instead, they educated themselves and sought profitable opportunities in the market, and today farming technology has advanced to the point that a single farmer can feed hundreds.

The whole reason capitalism works is because individuals maximizing their personal incomes also maximize the national income; what’s good for the individual is good for the community. The economy is NOT a zero-sum game. Individuals should develop their education and their careers to offer services more valuable to the economy, rather than just trying to get more money for the work they’re already doing.

P.S. There are 2.4 billion people in China and India as of July 2006, and recent economic changes in these countries are precisely following the principles above. Get an education and get a career, or be forced to work at the world market price of your unskilled labor (the “poverty” wages you describe).

posted by  Anonymous  3:22 PM   [+]

 

Hi Ben;

I think that there are two kinds of prosperity - The good kind is the one that is gained by enriching and helping others in this one time journey in life – I heard this from Earl Nightingale in “The Strangest Secret”.

An evil prosperity is the kind where gangsters get rich by taking from others. Make them an offer they can’t refuse. This is most often done through outright thievery – threats – murder – torture - or legal chicanery of some kind or other where puppet lawyers and politicians can change laws or make them to suit themselves.

This is done without regard to whether or not it impoverishes a person. I think that the withholding of wages from the workers that have served you is a form of thievery and morally it makes you no better than a common thief or gangster.

The only thing I can say is that you - me - all of us - are going to someday have to stand before the judgment seat of God. I hope you never have to hear the words: “I never knew you.”

I believe in free enterprise as well. But, corporate run monopolies are not free enterprise. It’s not an exercise in democracy either – In these circumstances - democracy becomes dead – dead – dead.

Take care my Friend,

Jim

posted by  Jim  9:19 PM   [+]

  Post a Comment