We have a situation, it seems, that is really causing some issues.
Due to the fact that the Federal government is on a spending spree, many companies are finding they cannot hire employees. They are posting jobs but nobody is coming in. Some are even going so far as to pay people simply for applying.
The reason this is the case is that many people are making as much, if not more, than they were when working. The unemployment from their state along with the Federal money is provide more of an "income" than a job would.
Of course, this has business leaders up in arms and the right is jumping to the defense. Some states are now turning down the Federal money in an effort to push people back to work. This is short-sighted in my opinion.
The deal breaks down as such:
People are making more money on unemployment because the businesses do not play squat. It is really that simple. We are even seeing a number of McDonalds employees who are staging a "strike" on the day that corporation holds it annual meeting. This is done in effort to bring attention to their plight.
There is another challenge to all of this: workers arent paid squat because they bring very little to the table. Low skilled work equate to low pay. We have done very well at creating low end jobs that the skills of the average person are minimal.
Many say that workers should simply be paid more money. The problem is how much that affects the pricing of the products. Where I live, a "value" meal at McDonalds is already near $9. How much higher can it go?
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The reality of the situation is that we need to major shift in our economy. Generating jobs just so people have a place to go is moronic. The fact that companies are not finding workers is a good thing.
Why do I state this?
The answer is simple: it will force them to automate. We have been lagging behind the historic technological curve the last few decades. Much of this is due to the low productivity gains in construction. However, when we look at the lower end of the spectrum, not much has changed.
It is time to radically alter this.
Yes, if this happens, we will be confronted with a host of other issues. What do we do with all these out of work people? How can we support them all? Won't this create more inequality?
These are valid questions which are beyond the scope of this article. Certainly they will have to be addressed at some point regardless of what happens. The fact is we are automating more so we might as well start to take control of it.
We need to completely alter society. This is happening just in incremental stages. The challenge is that, at some point, it is all going to accelerate anyway. Sadly, with how people are behaving, we are going to be woefully unprepared for what comes.
The idea of creating bullshit jobs just so people have a place to go is bordering on inhumane today. When we look at the jobs many do, they are not sources of pride, satisfaction, nor healthy esteem. They also are not financially beneficial either.
In short, they are dead end jobs yet people have to work 45-50 hours a week just so they get some meager wages coming in. For many, this is basically a caste system for life. If there is a class change, it is usually down, from middle to lower income class.
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One of the reasons we have so many problems financially is because we see the growth rate rather anemic. Over the last 20 years, it steady dropped. The United States, which is the largest economy, has a nGDP that is below 4%. That is pathetic. It should be a mandated 7+% before the Fed even begins to start thinking about tightening. Until that point, they need to print like they never did before.
Innovation is a powerful way make this push forward. This will make companies more profitable, allow them to lower prices while maintaining margins, and eliminate a lot of headaches that come with workers. This will make the capitalists very happy while upsetting the socialists.
Of course, because of this, there will have to be some type of technological safety net. As deflation takes over due to automation, the Fed is going to have to offset that with a lot more money. Instead of providing money to Wall Street and the bankers, we will have to see a bunch of direct stimulus. This will make the socialists happy and upset the capitalists.
The present course of action is going to eventually find us in this situation anyway. However, instead of being proactive, we will find ourselves in a reactionary position.
Ultimately, I believe a lot of this is solved by turning toward crypto-economics. However, until the mainstream is ready for that, we will have to ensure these discussions.
In the meantime, we can start the march forward by increasing our productivity by automating all we can. Odds are the political "leadership" turns to the same ole tired solutions they always do which are ideologically driven.
That said, maybe they do get a bit creative and come up with something new like abolishing the income tax in favor of direct stimulus from the Fed.
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