Conservative columnist: Unemployment is high because you people won't take a pay cut

[marmar]

Typical conservathink, from Bloomberg columnist Kevin Hassett:



Your Fat Paycheck Keeps Your Neighbor Unemployed: Kevin Hassett
By Kevin Hassett - Sep 6, 2010 8:00 PM CT


Some observations perfectly at home in economics textbooks can be so beastly in practice that nobody is willing to mention them.

Ignoring the facts, though, leads to bad policies, and with the U.S. unemployment rate at a stubborn 9.6 percent, we don’t need more of those.

So here comes the leap into ice-cold water: The biggest problem with the labor market right now is that wages are too high. As Washington again turns to government spending as a cure for unemployment, some against-the-grain thinking is in order.

Economics teaches that full employment would be reached if wages adjust downward, to a level that better reflects current circumstances. At lower wages, employers would desire more workers. Labor markets generate persistent unemployment only if wages are sticky, failing to fall as demand declines.

A number of reasons help explain why wages don’t and won’t drop, beginning with federal and state minimum-wage laws. ..........(more)

The complete piece is at: http://www.bloomberg.com/news/2010-09-07/your-fat-paycheck-keeps-your-neighbor-unemployed-kevin-hassett.html

[CaliforniaPeggy]

1. Ha. The only people not willing to take a pay cut?

Those selfish bastards at the top.

:mad:

[GrantDem]

16. Exactly +1

[OhioChick]

27. You're absolutely right, Peggy!

:mad:

[geardaddy]

43. Straight up, Peggy.

:thumbsup:

[eShirl]

2. Wages? How about CEO salaries?

[LibertyLover]

3. If all my other expenses, like housing, food, clothing, etc.

were to also decline at the same percentage as a pay cut, I'd take a pay cut. But since they won't, I won't either.

[Hello_Kitty]

4. Okay Kevin, you go first.

I'm sure whoever pays you would be most appreciative if you'd cut your rate by a third. Plus they might be able to hire another writer!

[Sherman A1]

12. My thoughts exactly

If this is such a Grand Idea, he needs to lead by example...

Put Up or Shut Up!

[T Wolf]

31. You mean hire A writer, since what this shit types cannot really be considered writing. nt

[Quantess]

5. Notice how he directs attention to people who already don't make much money,

not the big shot CEOs who have been royally compensated for laying off workers.

Look at those struggling poor working people. They should be even poorer!

[Warpy]

6. CEOs first

and the rest of us will consider it when the bank accepts a mortgage payment cut, the grocery accepts a food bill cut, utilities all slash their rates, we get national health insurance, and our subsistence expenses all decrease. Until then, the ball's in your court, Binky, and you'd better start telling the fat cats who can still afford it to start tightening their own belts.

[DJ13]

7. How do these idiots expect workers to buy ever more expensive goods & services

on lower pay?

Are these right wingers (in either party) capable of seeing the bigger picture?

[Brickbat]

8. Wages are too high? I'd say -- especially for spewing out crap like this.

Come on, Kevin! Do you patriotic duty and get two people to work for your one salary!

[Canuckistanian]

9. Cheap-labor conservative propaganda

But I must say, he's remarkably up front about it. Just comes right out and says "Workers make too much"

Not very imaginative.

[Matariki]

10. I hope he's talking specifically to CEOs making 7 figure incomes. n/t

[anarch]

11. right. what we need after 30 years of wage suppression is to cut wages

It's ingenious! Now excuse me while I go give a glass of water to this guy over here who seems to be drowning.

[shanti]

13. ooh, this burns me up!

:grr: they just love to pit us against each other!!

[Ikonoklast]

14. He is showing his profound ignorance of basic economic theories.

What he is espousing would bring our economy to a resounding crash.

[flyarm]

15. well we might take pay cuts when the price of groceries goes down..and our mortgage prices get cut

and the water bill gets cut , and the electric bill gets cut, and our car payments get cut, and when college tuition gets cut, when our garbage collection gets cut and our cable bills get cut and our stocks go back up to what they were before we were robbed by Wall Street..BEFORE they got bailed out with OUR MONEY!
AND WHEN NAFTA GETS SHIT CANNED.. and our jobs come back to the USA and tax cuts are repealed to any US Corporation that takes jobs out of the USA!

We will never agree to pay cuts when the whores who get our tax money get huge multi million $$ bonus's..why sir don't you take your fight to those who are raping this nation first?????????? The corporations and the powers that be that keep bailing these pricks out with our money!

[Vickers]

17. Wait...I thought it was because rich people are taxed too much?

:shrug:

Hard to keep track of the repuke reasoning, I tell ya!

[RaleighNCDUer]

24. Well, that's right. Reduce the taxes on the rich and they will be able to

increase the wages of the people working for them who will then have more buying power to pump into the economy...

Oh...

Wait...

[Vickers]

26. It's damned confusing, ain't it?

:crazy::crazy::crazy::crazy::crazy::crazy::crazy::crazy:

[EC]

18. And I'm sure the tea people types

agree with him...sad...

[Xithras]

19. I'll take a paycut when you convince my creditors to take one.

This point has been raised before in outsourcing discussions. You cannot have an across-the-board cut in wages without also having an across-the-board cut in the cost of living.

[raccoon]

20. What planet is this idiot living on? IME, lots of people are already making

much less than they did in previous decades. Including yours truly.

[OHdem10]

21. Get used to it. Globalization in action. Think about it. The point

of Globalization is to harmonize wages around the world.
The U.S. has highest wages in the world. This means our
labor costs are so high that other countries cannot afford
to buy our products(other than European Nations). There all
our jobs were outsourced so Multinationals could make the
big buck using cheap labor.

This guy is just starting the mantra. Someone has to start
the message. All of you people who have been laid off--get
used to the idea. Any job you get will not pay anywhere near
as much as your old job(before layoffs).

While at first blush the guy sounds off base. Actually he is
very much on key. Perhaps he could have not been so blunt.
Perhaps he was blunt in order to capture attention???

[rox63]

22. Many of us have already taken involuntary pay cuts

Just to keep working. What an asshole!

[arbusto_baboso]

23. Well, we have certain "dems" who claim UAW is to blame for all of the auto industry's problems.

How is this that much different?

Don't get me wrong, it's ALL abhorrent and absolute bullshit, but there you go.

[Wickerman]

25. Fail

This guy is a mess.

Kevin Allen Hassett is an American economist. He is best known for his work in macroeconomics and tax policy and for coauthoring Dow 36,000, published in 1999. Hassett is currently a senior fellow and director of economic policy studies at the American Enterprise Institute. He was John McCain's chief economic adviser in the 2000 presidential primaries and an economic adviser to the campaigns of George W. Bush in the 2004 presidential election and McCain in the presidential election of 2008.

[ehrnst]

28. Sounds like he's advocating redistribution of wealth... (nt)

[NV Whino]

29. You pople?

So, I guess he's not taking a pay cut?

[T Wolf]

30. I read this in the Philly Inqy and kept waiting to see, at least, a perfuntory throw-away

line about executives - but it was not there.

The entire burden is supposed to land on workers. Why expect anything different from an AEI asshole?

At least in Philly, there were some reactions that tore this bullshit down. But there were also many who supported the idea.

My question is - how are people supposed to buy the shit the businesses want and need us to buy if our income is greatly reduced?

But then, I suppose I am the stupid one to look for logic in anything a rethug has to say.

[jgraz]

32. Hey asswipe -- we've been taking pay cuts for 30 years.

Every time worker productivity rises and wages stay flat, we get a pay cut. The parasites at the top have been sucking us dry for 30 years. Now they say that's not enough? We need to cut our pay so they'll do us the honor of hiring us for their shitty cubical rat jobs? No thanks.

How about this, asshole? Since worker productivity has more than doubled in the past decade, we Americans take a labor cut. Keep per annum wages the same, but cut the workweek to 30 hours. That'll give business all the incentive they need to hire more people.

[JVS]

35. Cut to 30 after doubling productivity?

Cut to 20!

[jgraz]

37. Hell, I'd settle for cutting it to 50.

[Capitalocracy]

48. With the kind of un/deremployment numbers and wage disparity we have,

we could cut it to 10.

[Rex]

33. Well that is nice, but this asshole forgot about the OTHER side

of economics.

Paycuts = cheaper products.

[SheilaT]

34. Current minimum wage is not

a living wage in most parts of this country.

I'm old enough that I got my first minimum wage job when it was $1.25/hour. Today that sounds frighteningly low, but I'm here to tell you that I could actually support myself, living very frugally, on that money. About a year later the minimum went up to $1.65/hour, and while I wasn't getting rich, there was definitely a little more slack in my budget.

[starroute]

36. Why does he think employers would hire more workers if they cost less?

Hiring employees isn't like buying apples. You don't say, "Oh, the cost came down this week so I'll buy more than I really need and maybe make applesauce."

Employers hire as few people as they can get away with to meet the market for their product. If they see an opportunity to increase their sales, they hire more people. If they see an opportunity to cut costs while still turning out the same amount of product, they fire people.

The only way that the cost of labor is going to keep employers from hiring is if the wages for an additional widget maker are more than the money to be earned by selling those additional widgets. And if that was true, then the widget manufacturer would already be out of business because he would be losing money on every existing employee.

As it is, all that lowering wages is going to do is decrease the number of people who can actually afford to buy widgets.

I'm not saying that it's impossible that wages could be too high in specific industries or locations. Demand for certain products varies, the need for skilled labor may decrease as automated machinery is introduced, and so forth.

But I find it impossible to conceive of any way to justify an argument that wages are too high across the board in an entire nation and simply ought to be slashed without any corresponding cuts in the cost of living.

[B Calm]

38. In other words: WORK CHEAP OR STARVE YOU PIECE OF SHIT!

[m00nbeam]

39. Unemployment is high because CEOs and major stockholders are greedy.

Period.

[LuckyTheDog]

40. That is totally bullshit

After I was laid off, I spent 11 months looking for work. When I finally got a job, the pay was 40% less than what I had made previously. (who works in the evil public sector) took a 10% pay cut and might have to take another in order to avoid being laid off.

Wages are "adjusting downward." And guess what? It isn't helping.

What we need are HIGHER wages so that people like us can start SPENDING again - on the new (or late-model used) car that we really need tp buy soon, on a vacation, on home improvements, etc. THAT is what would help the economy.

[area51]

50. +1 n/t

[tech9413]

41. Hey Kevin Asshat you can suck my hairy pair

If I can't live on the wage offered, I won't do the work! I was much more conciliatory in my younger days. I even took 20% off the top because the idiot son of the owner went through a headhunter who needed his piece of flesh and Daddy didn't approve. I took that job, even though it was starvation level wages, because my ex (the reason for the change of employment) should be able to carry us through. I did specify that if I couldn't prove my worth to the company in the first year, I would walk away free and clear. No request for unemployment, no reporting of prevailing wage violations, no reporting of a wash list of questionable/illegal practices.

These tools who think wages are too high should be required to live on what they feel is a reasonable wage for at least a year. After three months of mac and cheese and hot dogs from the popcorn popper or eating one meal three days a week to be sure you can pay the rent.

These assholes are truly in an impervious bubble.

"Economics teaches that full employment would be reached if wages adjust downward, to a level that better reflects current circumstances. At lower wages, employers would desire more workers."

Hey! shithead. If you adjust the wages downward, how do those at the bottom, the true working people, earn enough for subsistence let alone support the non-productive middle men of the economy?
The people shouldn't work to support the economy if it doesn't support them.

[Blue Owl]

42. Loathesome

Another corporate-sponsored stooge trying to gouge the middle class.

And no mention of the uber-rich TAX cuts, where the REAL money is?

[opihimoimoi]

44. Another RW Whacko meme exposing his privates to the public at walmart

[LuckyTheDog]

45. Freepers comment on the same column

Here: http://www.freerepublic.com/focus/news/2586323/posts?page=9

[Lorien]

46. Actually I've taken a 75% pay cut since 2001

so have most of the people in my industry. The CEOs need to take a 90% pay cut and can the bonus programs completely. THEN they would have the money to hire workers again!

[Capitalocracy]

47. Turn around! You're going the wrong way!

You're supposed to INCREASE wages to create more jobs!

[depakid]

49. Heading toward third world status and loving it!

[ornotna]

51. The 371 who gave this a Facebook rec.

First thing Monday morning they are marching right in to the bosses office and proclaim they are overpaid. Yeah, sure they are.