Does Anybody Make a Living These Days?
by Bill Sardi: Mr.
Oís Fairness Taxes Could Backfire and End Up A Big Zero for America
John Williams of ShadowStats.com
pointing out the real US unemployment rate is above 20% and the
economy is headed for some sort of future calamity before 2014 that
may bring on unemployment rates of 50-60%, finding and keeping a
job has to become "Job 1" in America.
The young who
are entering the workforce for the first time are hit the hardest
because they usually do not have the experience or financial backing
to start their own business. Though one of my neighborís sons is
defying the odds and starting his own online business Ė a first-of-its-kind
site that helps school sports teams raise money now that public
and private schools donít have sufficient funds.
A major problem
that I see is that it never dawns upon many people they need to
increase their value. And there are "value traps"
as I call them Ė getting a PhD is no guarantee you will be gainfully
employed. For example, in Cuba and Argentina there are few jobs
so people go back for more schooling. These countries have the best-educated
cab drivers. Taxi driving is the only job that is widely available.
A lesson here may be to use your education to create your own job
rather than relying upon someone else to create opportunity for
education keep up with the speed of information?
education trap" in America today is that higher education has
largely become unaffordable and going into lifetime debt to gain
a degree that may not pan out into a career is potentially a dead-end
proposition. Readers might want to view an incredible short online
video entitled "Did
You Know?" which points to the fact knowledge is increasing
at such exponential speed that college textbooks are out of date
by the time a freshman becomes a senior, that careers must change
many times over a lifetime due to the speed of change, that the
top ten in demand jobs in 2010 did not exist in 2004 and that we
are preparing students for jobs that do not yet exist. This video
cites a fact that according to the US Department of Labor "todayís
learner will have 10-14 jobs by the age of 38."
of the speed of change
About 15 years
ago I took advantage of an explosion of information in the field
of nutrition that was occurring. There were more published studies
involving nutrition and health in just a short period of five years
than there was in the prior 50 years. Whoever was educated and degreed
in the field of nutrition was holding antiquated information in
their head. I began to bone up on new information about vitamins,
minerals, herbals, by visiting local university medical libraries
and photocopying articles that I filed. Today this is much easier
with online access to the entire National Library of Medicine. I
became the "go-to" guy in the field of dietary supplements
to answer perplexing questions from consumers. I turned my self-taught
knowledge into a new career. I authored more than a dozen books
and am heard on the radio as a pitchman for a dietary supplement
company over a thousand times a month.
radio interviews are taped, I earned passive income, another lesson
on the road to financial freedom. Barbers, doctors and dentists
reach a point where more they cannot be any more productive without
burning out. If Barbara Streisand had to sing a song every time
someone wanted to hear it, her income would be limited. But she
sings it once and technology makes it possible for her to earn income
every time her tapes are sold. Passive income should be a long-term
goal for everyone.
I soon found
myself being sought after for radio interviews and public presentations.
I wasnít degreed in the field of nutrition. I was a perceived threat
to some degreed nutritionists who wondered how I could speak out
so boldly on health and nutrition issues without a degree (my degree
was in journalism and public relations).
I have also
had a number of wanna-beís contact me, wanting me to educate them.
They want to do the same thing I do in life. I give them a list
of books to read and other online sources I use. However, they usually
donít want to do the necessary homework, they want me to spoon-feed
them, educate them via e-mail or by telephone. They want personalized
education served up on a platter. They want me to literally put
words in their mouth. It doesnít come that easy. You canít lip sync
language of a new field first
and information technology all create value by creation of an undecipherable
language that requires translation for consumers. One of the stumbling
blocks to learning a new field is that it is like learning a foreign
language. You have to catch on to new terms. For example, a few
of the buzzwords in the field of nutrition today are epigenetics,
apoptosis, autophagy, hormesis. A new entrant will have difficulty
understanding what biologists are talking about unless they can
catch on to the terminology. The same is true for any new field
you enter, and it appears this fast-paced world will require workers
to learn whole new sets of terminology many times over a lifetime.
of free educational opportunities
There is another
lesson here too. Unprecedented access to online information should
help people adapt their career paths, create new directions, learn
new skills, but this doesnít appear to be the current American experience.
Unfortunately, we see young people largely using the internet for
self indulgence and social purposes. Music and social networks prevail
among the young. Yet many of these same young people, particularly
those in the Occupy Wall Street movement, lobby for equity in wages
and wealth redistribution, as I will discuss below. The plundering
of the American economy by the financial sector is appalling, but
seeking transfer of wealth from rich to poor should not be a career
institutions really dedicated?
A killer for
higher learning institutions is that you should be able to access
online lectures from the most prominent professors of physics, biology,
mathematics, and obtain their recommended textbooks, take proctored
tests and skip the high cost of attending classes altogether. The
of schools offering courses and degrees online is growing. But
online learning is the death knell for brick and mortar schooling.
appear to be attracting young students at the time when they want
to exert their independence from their parents and to frankly, find
how to hook up with the opposite sex. Without the school health
clinic providing the birth control pills and a wide selection of
partners housed in co-ed dorms, one wonders how many students would
remain serious about their "education." The real commitment
of educational institutions towards learning should be called into
question. I have often called American universities "welfare
for teachers." Professors today are largely interested in maintaining
their jobs, not in finding their students one.
Iím left with
the thought of a young person with a college degree, with some acquired
knowledge but few skills. Compare a college grad like that with
a young person who has learned how to repair Mercedes Benzí or who
can write a complicated computer program on a rush deadline, but
has no degree. Which one has the greatest value in the marketplace?
Skills are marketable. Skills cannot be taken away. If your boss
fires you and thinks you are a bum, so what? If you have skills,
you can travel.
aspect of a college degree is inclusion in a "good old boy"
network where fraternity members and alumni identify themselves
in visual ways, like school flags that fly in front of their homes,
to identify themselves in a semi-secret society to gain favor for
contracts and jobs. The University of Southern California alumni
association is said to have set itself up in a similar manner to
Masonry. In recent times I have observed that more friends and acquaintances
have joined Masonry to enhance their earning power. The fact that
educational institutions rely upon an informal network of favoritism
based upon entrance into an elite alumni group rather than advancement
by demonstrated skills and knowledge is a tacit admission these
institutions have little to offer graduates in the form of true
competitive advantage. This is a distasteful way of getting ahead
in life as it doesnít build real personal value.
and the supply of labor
One of the
problems is not seeing your worth in context of labor supply. This
is why unions were fashioned. For example, there were too many bricklayers
and hod carriers and many would work for less and less just to get
the job. Unions were formed to negotiate minimum wages or livable
not always necessary in producing adequate wages. It was Henry Ford
who realized he couldnít sell his model-T cars without consumers
having adequate incomes to afford to buy one, so he compensated
his workers so they could buy the vehicles they built.
chart. What it shows are the number of jobs available in the
Cincinnati area compared with wages. It is clear that jobs which
require greater education, skill and experience are much scarcer
and much more rewarding financially. This may seem obvious to readers
here, but not to the average Joe looking for a job. If you want
a livable wage, you are going to have to become something more than
a stock clerk. If you have knowledge and skills others donít and
you can coax others to pay for that, you will earn more. Common
knowledge pays common rates of pay.
for livable wages
What we often
read or hear today in the news are efforts by workers to obtain
a "livable wage." You can click through here
and read about bus drivers in New Mexico delivering their plight
to a sympathetic news reporter who is attempting to help them gain
better wages. But as you read the news story it is obvious that
a contractor for the public school transportation contract under-bid
to win the contract and now canít make a profit. The bus driver
union says starting pay for these bus drivers is $9.87 per hour
and $13.60 per hour for a veteran driver. The average annual salary
ranges from $10,000 to $12,000 with no health benefits or retirement
packages. The bus drivers complain they are victims of "paltry
state funding." The drivers say they are "trying to get a living
wage so that people here can get off of welfare and food stamps.
It's hard to raise kids on 10 dollars an hour." Lesson: donít waste
your time fighting for higher wages when your employer doesnít have
want to be paid what they need, not what they are worth
here is that the news reporting is slanted. First, these are part-time
jobs, obviously. There is no implied guarantee these are careers,
no implied social contract their employer will provide for the total
needs of their family. Second, there is a lesson here. Iíve found
that most people want to be paid what they think they need, not
what they are worth. Many confuse the cost of lifestyle with the
cost of living.
So, how much are you worth?
In the past,
when I interviewed people for jobs, I would ask them, mid-interview,
when we got to the subject of salary, "what do you think you
It was a trick
question. Some interviewees would look at me and say "I couldnít
accept less than what I was making on my prior job." They thought
I was trying to get them to accept a lower rate of pay.
I would ask
the question again, only this time give them a clue that this question
was a trick question. After I gave them time to think about this
I would say: "I want all of our employees to think they are
worth a million dollars. If they work and make contributions, they
should think of themselves that way. All good workers are underpaid.
If we had a million dollars to pay our best workers, we would. Obviously,
we can only pay what we produce in profits." My answer obviously
caught them by surprise. Being underpaid is the hallmark of any
great worker. Yes, worker bees in the beehive are also underpaid.
never really find out what they are worth in the open job market
because they have never shopped their resume. The first rule is
to keep a current resume handy. If you constantly shop your resume
and you receive a firm offer from an employer at a significant higher
rate of pay, you can go back to your boss and inform him/her you
have a better offer on the table and you canít cheat your family
and pass it up. Your boss will then have to mull over the cost of
replacing you or increasing your rate of pay to retain your services.
Donít play games with this. If you announce you are leaving your
job for a better opportunity, your boss may have no choice but to
find a replacement. Most employees are overly loyal to their employers.
Pay us or
Of course there
is the "pay us or else" syndrome. Union bosses might threaten
to burn a business down if labor demands are not met. Maybe picketing
will force a business to raise wages. Look at what is happening
in Greece. What union bosses there are saying is, cut our wages
and lay off workers and we will burn down Athens. A recent austerity
measure in Greece (a 22-percent cut on the standard minimum
monthly wage) resulted in just that. Burning
buildings could be seen in news reports.
There are often
implied social contracts when employers hire workers. There is no
greater example than Benton Harbor, Michigan, where Whirlpool Corp,
the worldís largest maker of household appliances is headquartered.
sales slid 47% in 2011 and it no longer employs workers there.
Benton Harbor is 92.5% African-American with a per
capita income of $8965, Michiganís lowest. This small town has
been placed under martial law. Benton Harborís residents feel they
have been betrayed, that they labored to make Whirlpool what it
is today, and now they have been left out in the cold.
While a manufacturer
may not have any obligation to provide lifetime jobs in its community,
the story in Benton Harbor is a sad chapter indeed in the annals
of corporate and government irresponsibility. Public
funds that should have been directed towards ailing Benton Harbor
went elsewhere. The rub is that in 2009 Whirlpool received a
$19.3 million federal grant, in part to create jobs. A year later
Whirlpool received $20 million from the State of Michigan to expand
has abandoned Benton Harbor, outsourcing more and more jobs overseas
or moving them to other locations in the US. This is all part of
the crony capitalism that exists in America today, and the current
administration in Washington DC is enmeshed in it, to the detriment
of many. Such a strange irony that the nationís first minority chief
executive embraces the crony capitalism seen here in Benton Harbor,
and yet its people seem oblivious to the origins of what has happened
there. The only out for these people appears to be relocation.
expectations and over-sympathetic journalism.
often donít make much money so they frequently write tear-jerking
pieces that side with disenfranchised Americans. A story
in the Shreveport, Louisiana Times serves as an example.
in Shreveport writes of the plight of a 60-year old "paraprofessional"
who works with the local school system, earns $17,444 a year with
a take-home pay after taxes of $12,400, and who can, according to
the news report, no longer afford to shop at Dillardís or TJ Maxx
for designer clothes, or treat herself to weekly manicures or eat
out at nice restaurants, and struggles to pay her home mortgage.
The suffering must be tremendous.
The news report
ends by saying "The cost of living is not the same as it was in
the 1960s." That certainly is true, and needs to be addressed.
of a food bank in Shreveport said: "It is definitely time for
the government to redefine their percentage of what poverty is."
we do see a steep slide in the quality of American life in this
downturn in the economy, the example of the 60-year old woman in
Shreveport is not a good one. How any employer can enter into a
social contract to keep paying this school workerís home mortgage
and ensure she gets timely manicures is beyond comprehension. America
is in a state of decline. Donít avoid reality. Learn to live beneath
As sad as it
is to see Americans slide from independence to standing in line
at food banks and applying for food stamps, Iím not sure this type
of news article gets directed towards the real origin of this personís
plight. The real problem is the high rate of inflation, a problem
I discuss in more detail below.
pace of change in the world may seem cruel, but sympathetic news
articles about the slide of the American middle class into the food-stamp
class may not be what American workers really need to hear. Americans
have to gain an understanding of the origins of this huge financial
meltdown in America. Certainly the movement of manufacturing jobs
offshore is a major earthquake-level event that has not been sufficiently
answered by government or industry. Up to a point industry has to
be competitive. If it doesnít lower manufacturing costs by shifting
production overseas then competition will. At that point in time
there should have been a major shift to retrain American workers
towards higher technology jobs. Millions of jobs go wanting in America
for the lack of skilled laborers. The McGraw-Hill
Research Foundation predicts a shortfall of more than 35 million
skilled and educated workers over the next 30 years
largely relies upon the assumption consumers have money to buy their
goods. The consumer economy represents the greatest share of the
Gross Domestic Product (GDP). If workers have lower or no incomes
the consumer economy will flatten and there fewer goods will be
sold. American business can lower its costs by shifting manufacturing
offshore, but at the risk of killing consumer demand. Long term,
America has shot itself in the foot.
is to get a union or other agent to negotiate a pay raise for you.
According to an article in the Huffington
Post, recently union and management in the New York City hotel
industry announced a new contract for 30,000 hotel workers in the
city that calls for a 30% raise for senior housekeepers that would
elevate their annual salaries from $46,000 to $60,000 over a 7-year
period. Does this sound outrageously high? Before you weigh in on
this issue, let me provide more information.
Newman of the Huffington Post says: "Seeing rich business analysts
on TV bemoaning workers making probably a fifth to a tenth of the
income they take home each year is nauseating." Reporter Newman
was referring to an accompanying Fox News report where TV reporters
agonized over hotel housekeepers making that much money.
steps out his reporterís role and adds: "Workers should
be able to demand a living wage from their employers but under the
law today." He goes on to say: "That's the real problem
of rising inequality in our nation."
that over the past few decades wages have not kept up with the cost
of living. Wouldnít it be nice if hotel management could just step
forward, increase hotel room rates and then increase all their employeesí
salaries? But it isnít that simple. At some point, hotel rooms become
less affordable. Pay raises simply cannot be passed along to hotel
guests without harming business. And who is going to get other competing
hotels to follow along? If hotel room rates are unduly high in New
York City, tourists and business guests might start booking rooms
in New Jersey, across the Hudson River.
But again we
are pinning the tail on the wrong donkey. It is the Federal Reserve
that took the nation off the gold-backed money system and forced
a debt-based paper money supply that is backed by nothing more than
the full-faith and credit of an insolvent nation, that is responsible
for the relatively low wages American workers earn today. The planned
inflation by the Federal Reserve, which is higher than the Fed admits
to, is what pressures wages to be increased. However, wages have
not kept up with inflation.
A single mother
making $36,000 a year with one child who was born in 1990 finds
her child entering the job market for the first time at age 21 in
2011. How much does that youngster need to make as a starting salary
to equal his motherís purchasing power in 1990? The answer is ~$60,000!
Thank you Mr.
Bernanke! You are the correct donkey, not the employers! Organized
labor keeps railing employers. Workers and their unions should be
criticizing the inflationary policies of the Federal Reserve. How
could unions have missed pinning the donkey tail on Mr. Bernanke?
When you go
to your boss and ask for a pay raise, how much should you ask for?
The answer is 7-10% more if you want to keep up with the real rate
of inflation (see ShadowStats.com).
That kind of pay raise would only help you tread water. Obviously,
American businesses canít hand out 7-10% pay raises each year.
on wealth hoarders
of a common mind-set of the working class is provided by an online
blogger who is an employee at a chain hotel. He describes a scene
where he was picketing his hotel for livable wages and deriding
a couple who chose to walk into the hotel restaurant, then suddenly
realized he was almost late for his job and ran inside to don a
waiterís apron and found he was waiting on the very people he was
chastising outside. He said he served them kindly and was even rewarded
with a $20 tip. Yet he titled his blog about this as "Waiting
On Wealth Hoarders."
this fellow, union negotiations with his hotel chain had been stalled
for nearly three years. He says "the hotel refuses to pay workers
what theyíre worth. In my department alone, each employee works
three or four jobs with no extra pay. In a single shift I am a waiter,
a busser, a food runner, a host and sometimes a bartender. Iím afraid
one day Iíll discover that Iím the manager with no comprehension
of how I got the title."
He goes on
to say: "Frankly, Iím tired of being taken advantage of by
the hotel. When its CEO makes more than $6 million a year and I
see the rest of us struggling day by day just to pay the rent, it
Maybe his hotelís
CEO is overpaid, I donít know, but he was also coveting the presumed
wealth of the customers he was waiting on. I donít know of a restaurant
that could survive without cross training its employees.
employees and advised them to take advantage of their employer by
learning every task within reach regardless of whether they are
working with the understanding they are being paid to do additional
jobs. That way, when the time comes to let go of someone during
a downturn in business, they will be the last one to receive a pink
slip. Furthermore, should you leave your job at some time in the
future your next employer will inquire what you did on your last
job. If you say you "just waited on tables" you may not
get a better job or better pay. You are cheating yourself if you
are waiting on your employer to pay you for everything you do.
for things to change
So many friends
and acquaintances, particularly those in the construction and housing
industry, donít know where to look for a job. They are hoping the
economy will turn around and housing will boom again. It wonít.
With American banks hiding 4 million foreclosed homes on their accounting
books which will be released into the housing supply over the next
four years, supply is going to overwhelm demand and the real estate
and home construction industry will not return to any sense of normalcy
over the next decade. We forget that housing and real estate essentially
rely upon incomes, which are being eroded by inflation. Unless there
is some major change in the nationís money policies and real incomes
begin to rise, construction jobs will not return. For electricians,
general contractors, roofers, fire sprinkler fitters, plumbers,
carpenters, the future looks dim and you will need a kick in the
butt to generate another source of income.
here is the economy is not going to change Ė you will have to change.
My neighbor re-directed his career, from selling automobiles to
becoming a licensed pest controller. More consumers in immediate
need of rodent control now search online rather than refer to the
Yellow Pages. My neighbor posted up an attractive website and began
to receive calls the first day on the job. He then found many conventional
ways of controlling gophers and moles to be inadequate and developed
inventions to combat the problem. A lesson here is to use your
job as a base to pay the bills and as a learning lab to create passive
income. Books, new products, online services, can generate passive
is about to destroy the underground economy
If you are
mulling over the idea of setting up shop on E-bay, you may want
to rethink that idea. So many of my disillusioned friends and acquaintances
have gravitated to generating an income on E-bay. Certainly E-bay
has been a saving grace for many. I know of a friend who resells
clothing on E-bay to over-sized males who are embarrassed to go
shopping in a store. I know of another friend who buys old motorcycles
and sells off the parts on E-bay. A problem here is that E-bay income
is about to come to a halt. This year (2012) the Internal Revenue
Service is requiring E-bay to issue 1099k tax forms that declare
gross revenues from online sales. Probably most E-bay sellers have
not been paying taxes on this income. Now they will be forced to
pay taxes. You can read the warning
from E-bay on its website.
E-bay sellers will have to raise prices and they may not be able
to offer more economical prices compared to brick and mortar stores.
I see the whole E-bay economy melting down which is a counterproductive
move on the part of government. This black market of sorts does
generate incomes that become part of the consumer economy. (Wikipedia
says a black market or underground economy is a market in goods
or services, which operates outside the formal one(s) supported
by established state power.) State and federal governments will
predictably collect less taxes, not more, by burdening E-bay sellers
with tax 1099k forms.
Even more discouraging
is the fact that organizers of swap meets are now required to send
estimates of income for each participant to the IRS and to demand
each seller have a DBA (doing business as) fictitious business name.
Again, I think this will be counterproductive. Prices will rise
and fewer goods will be sold. The whole reason for swap meets and
E-bay sales could vanish.
what we have learned:
- The size
of your paycheck will largely be determined by the number of people
who can do your job. There can even be too many engineers or PhDs,
which diminishes your value. If you are the only person in the
world who has a certain skill or unique ability, you should then
test to see if employers or consumers will part with their money
for your services. You will only know your true value when you
shop your resume.
- When working
for someone else, learn everything you can on the job. Make it
difficult for your boss to lay you off. Take acquired skills to
your next job to increase your value.
do not equate with income. Diplomas are archaic as do not keep
up with the fast pace of new information. Work on skills, not
diplomas. Create a job and employ yourself. Donít wait to get
hired. Take advantage of the exponential growth in information
by gaining new marketable skills and knowledge.
- When entering
a new field, the first challenge will be to understand new terminology.
Learn it like you are learning a foreign language.
- Manage your
own employee file. Ask satisfied customers for a written note
that you can place in your file. Keep track of the skills you
have added to your expertise.
- Donít expect
your demands for higher wages to be met by an employer that is
struggling to make a profit.
- Donít be
confused over the cost of lifestyle versus the cost of living.
Learn to live beneath your means.
- Go where
opportunity exists. Apple Computer is booming. Oil fields in North
Dakota canít find enough workers. Sales of guns and seed for crops
are soaring. Donít get caught selling buggy whips when they went
out of demand long ago.
- Wealth transfer
is not a career move. Donít waste time participating in occupy
- You need
to make 7-10% more per year to keep up with the true increases
in the cost of living. Keep that in mind.
- Work to
build passive income.
of your work habits, attitudes, attention to detail, willingness
to do tasks you arenít paid to do and your loyalty to your employer,
the business environment supersedes all of the efforts you bring
to a job. Unless something is done at the top level of government,
Americans will continue to suffer erosion in their quality of living.
Incomes have not kept pace with inflation. Unless inflation is dealt
with, American workers will continue to be impoverished.
him mail] is a frequent writer on health and political
topics. His health writings can be found at www.naturalhealthlibrarian.com.
latest book is Downsizing
© 2012 Bill Sardi Word of Knowledge Agency, San Dimas, California.
This article has been written exclusively for www.LewRockwell.com
and other parties who wish to refer to it should link rather than
post at other URLs.†
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