Quote of the Day
“There was a woman in Iowa who shared her story of financial struggles, and [Romney] gave her an answer right out of an economic textbook. He said, “Our productivity equals our income.” And the notion was that somehow the reason people can’t pay their bills is because they’re not working hard enough. If they got more productive, suddenly their incomes would go up. Well, those of us who’ve spent time in the real world — (laughter) — know that the problem isn’t that the American people aren’t productive enough — you’ve been working harder than ever. The challenge we face right now, and the challenge we’ve faced for over a decade, is that harder work has not led to higher incomes, and bigger profits at the top haven’t led to better jobs.”
President Obama is going to ride populism and his humor right to a second term.
Unfortunately Delaware Dem, and President Obama misunderstand what is meant by “Our productivity equals our income”. What it means is that as a country, the higher output per person, the higher the income. That output can include all kinds of automations and such, but the bottom line is when the output of a country is divided by the number of workers, that is our productivity. So the higher productivity as a country we have, the higher our incomes are.
That does not mean that people are not working hard, People in Mexico work very hard, I have seen it first hand, but because of a number of things in Mexico, even though the individual workers work hard, the countries productivity is much much less than ours. Hence, the country of Mexico has much lower average incomes. So again, unfortunately, President Obama shows he does not understand basic business principles.
Rusty, what institution are you posting this from?
“So the higher productivity as a country we have, the higher our incomes are.”
That was more or less true until the 80’s. Not anymore.
http://stateofworkingamerica.org/charts/hourly-wage-and-compensation-growth-for-productionnon-supervisory-workers-and-productivity-1947-2009/
Nice try, Rusty! Sadly for you, FACTS have a liberal bias.
Awesome quote. Gets directly to the heart of the matter in a way that only the simplest of simple wingnuts could misunderstand.
So let me see if I understand what you guys believe, if you don’t believe higher productivity leads to higher income, then you must believe the opposite, that lower productivity leads to higher income. Maybe you should check out Mexico, they have much lower productivity than us, but by some mysterious way, they also have much lower income than us. hm, that’s a mystery.
I think I was halfway into third grade before I figured out the more productive you are, the better you do. You guys must have skipped third grade.
“So let me see if I understand what you guys believe, if you don’t believe higher productivity leads to higher income, then you must believe the opposite.”
Rusty, I put a link to a graph (with colors and everything) that you might want to check out. It shows stagnating wages in spite of productivity gains over the last 3 decades. That’s not the opposite, it’s just really shitty for the average worker.
Please keep explaining how Mexico’s economy works though. It’s super informative.
Rusty, your logic has a gaping hole. Just because something is not black, that doesn’t make it white. Productivity has virtually no impact on wages. Hard work, in an ever-growing number of occupations, is not rewarded. Wage growth has been stagnant (0.1% inflation adjusted) since 1979. GDP, corporate profits, the stock market, CEO pay, the income of the top 1%, all have experienced tremendous growth over that timespan. Meanwhile, salaried employees have been working longer hours without any increase in compensation. The middle class is shrinking. And this is all chiefly due to Republican policies that are designed to boost the stock market while crippling the labor market.
Here’s some simple logic for you: When employees are more productive, but without any increase in pay, corporate profits, and the bonuses received by upper management increase. This is because output increases and expenses stay the same. This is ideal for CEOs and investors. The only thing that would interfere with this model would be a strong labor market. Therefore, it is the interest of employers to weaken the labor market, thereby allowing lower salaries and more flexibility to managers who want to get more hours from employees without paying overtime. Naturally those who benefit this system support (and lobby) politicians who will help weaken the labor market, by which I mean Republicans.
As a salaried, non-managerial employee, this harms me in order to comfort the comfortable. One of the many reasons I support Democrats and pro-labor policies.
As far as Mexico goes, Mexicans work more hours than Americans do, so that kind of blows your whole argument right there.
Xstryker, your are confusing working hard with productivity.
If a man digs a trench with a shovel for 8 hours, he is going to dig x amount of ditch. And he is going to make x amount of money. However, if a man digs the same width and depth trench, in the same soil as the first guy, except, he uses a backhoe, he is going to dig a trench multiple times longer than the first guy, in the same amount of time. Even though he might not have worked as hard as the first guy, his productivity was much, much higher. Hence the job he produced has more value, hence his wages WILL BE HIGHER. Does not have anything to do with republicans or democrats
“Hence the job he produced has more value, hence his wages WILL BE HIGHER”
You are embarrassing yourself!
It really doesn’t work that way. I’m speaking from the experience of digging trenches with picks and shovels and digging trenches and foundations with backhoes and excavators.
Send me a postcard from the planet you live on where productivity equates to wages.
Personally, I think you’re a fucking nimrod but your arguments PROVE the fallacy of Austrian economics.
So joe, if your right, and I am wrong, then lets carry it to the next level.
If one man digs a 100 foot long trench with a table spoon, and the second man digs the same exact trench for the same exact customer, with a shovel, by your way of thinking (that productivity has nothing to do with wages), then you believe the man digging with the spoon will get paid the same hourly wage from his customer as the man with the shovel.
@Rusty — What they get paid depends on the labor market, not their productivity.
The problem Romney and you are making is confusing levels of analysis. A nation’s productivity and income might be linked, but not necessarily for an individual. A typical worker gets paid a wage that is unrelated to how much they produce. If they speed up a chicken processing line to produce more chickens per hour, the workers probably get the same wage as always. They are just forced to work harder.
Indeed the capitalist system is based on decoupling productivity from wages. What workers get paid is not based necessarily on what they produce, and the biggest earners actually produce nothing. They just collect the money from sales or investments.
“Rusty, your logic has a gaping hole.” Understatement of the year!
There are several ingredients for what people get paid in any market, anywhere in the world. But by and far the most important ingredient is productivity. Just like if I am making steak for dinner, and I am using steak sauce, and seasoning, and steak. The most important ingredient by and far is the steak.
So even though supply and demand are ingredients in wage calculations, depending on whether the economy is contracting or expanding, to truely change the long term income levels, productivity must rise
@Rd “There are several ingredients”
How about the ingredient that determines what fraction the boss keeps? That’s the #1 factor determining the Gini index. It’s the #1 ingredient that determines worker earnings.
And the Gini index in the US has climbed and climbed. We’re now just like China and Mexico!!
And how can this be??? A very aggressive Fox news campaign to convince suckers that (1) taxing the rich is bad, and (2) Unions are evil.
SUCKERS!!!
What you guys may not be factoring in is over the last 30 years we continue to live in an ever increasing global market. So even though us productivity has increased over the last 30 years, we have lost ground in productivity increases compared to many up and coming economies around the world. Which in turn creates downward pressure on goods we make, which in turn puts downward pressure on our wages. The only real solution is to increase our productivity relative to the rest of the world. Trying to get business owners to take less profit is not the solution, and is a complete waste of time because you are never goinf to accomplish it. The only reason business exist is to make profit, the more the merrier. The only thinf you can do is if you dont think the owners are sharing enough profit with the empliyees, is to work somewhere else, or start your own business, with the internet these days, it is pretty easy to do. Or you could join or organize a union, but that often leads to productivity losses, and hence, actually lowering wages over time.
Rusty misses the point. Yes, what he says is true, but he forgets the principal buyer and investor of these companies overseas is the US. Therefore, we control the outcome.
The productivity increases in other countries, are beyond our capacity to match. WE DON’T WANT OUR AMERICA TO BE LIKE CHINA; just as one example. Rusty doesn’t realize it, but that is exactly where his argument will take us.
Ugh, who wants to live in China? Smog every day, poison in our water and foods, standing in factories 16 hours straight, then sleeping for 5 then doing it again? Is that really the America we want? Of course not. and no intelligent person would ever argue that we need to become more productive than those nations that have no rules…
Better to ask first, what kind of America we do want, then go after it. From just talking around, it appears that we want an America where we can work, own our home, eventually get a boat, put our kids through school, drink clear water and breathe awesome air, live longer and healthier, and be able to have enough to retire on and not burden our children with tons of debt…
Agree with that vision? or Rusty’s. If you agree with my vision, then things will have to change. To pay for that, it will have to come from our corporations and businesses. They’ve gotten a free ride for 12 years, they owe us money.. and it’s time the collector stand on their doorsteps for a change…
Right now, corporations are skimming $1.7 trillion every 65 days right out of our economy. At four quarters a year, in 2 1/2 years, if we took all of it, our entire deficit would be paid. Just 2 1/2 years.
Now we don’t have to be so hasty. We can take longer.
But whereas Rusty is saying… we can’t afford to give any American a raise for the rest of our lives… my point is, that we choose to say, that if you don’t give us a raise then we’ll tax that profit away from you anyway, and put a government employee back to work.. So, if you want to keep your money, you’d better effin invest in your people, now.
In fact, just raising the capital gains tax, would probably within a year, elevate every two-working person’s family’s income by $10,000.
So the issue, is not what can we afford. That is the frame of argument they would like us to consider. What should be debated, is how would we like to live..
Once that gets decided, we then decide.. how much will corporations pay so we can and will achieve it…
It all comes down to what we want. Other countries don’t have that option. WE do.
And I don’t know where all these armchair business experts think that trying to get corporations to pay more is not the solution.
It is the solution. There is $1.7 trillion sucked out of the economy every 65 days.. Imagine if that was entirely put to building commercial buildings?
Who is the knucklehead that started this crazy idiotic idea, that we need to cater to businesses? Perhaps sometime in our past, when we were all doing well and they were hurting, we thought it might be a good idea to flow some money over to their way? Well, buddy, it’s time we flow it back. Give us any lip, we’ll take it all.
@Rusty — First of all, you are missing the point of the OP. A woman tells Romney she is struggling economically, and he responds with a comment about how productivity is measured. Can you say out of touch?
Second, you can cut into the profits people make. It’s called taxes and minimum wage laws. You are right that businesses just want to make money. That is why it’s the responsibility of the democratic public to decide what is and is not an acceptable way to make money — the people acting through their elected officials.
A point missed in Rusty’s argument, one that is accented in Valentines comment above, is the duplicity in those Republican arguments, that say it is unfair to take money from businesses and corporations, but completely fair for businesses and corporations, to take money back from their employees…
Duh. Again, tell us why we can’t take money from businesses and corporations?
@kavips — You are absolutely right in your posts. We can take money from businesses and corporations. The people can decide to do whatever they want (within the bounds of the rule of law and equal rights for all). It’s called democracy (republicanism, more specifically). When will the people wake up?
I have automated many a process in my day, thereby increasing productivity. My salary did not change beyond regular small annual raises, except when I changed jobs. And I can say with certainty that responsibility, not productivity, determines salary. Productivity only produces profit, which only benefits workers who have a direct share of profits, ie the self-employed – and their prevailing determination isn’t productivity but rather demand.