I was sent this picture to make a comment on and it turned into a large discussion and now a full blown blog post. First, let me put up the religion of the left and their understanding of the economy:
I don’t know if you can say this is a left wing exclusive position. some right wing libertarians believe this but no, I do not agree with what she’s saying. Bringing poor people into a job market does affect the wages of other poor people in that market. I also don’t think the 1% consider stopping illegals a huge priority. The GOP establishment clearly doesn’t.
Income inequality doesn’t cause poverty. Poor economic conditions, a lack of education and motivation cause poverty. Got a poor person? Train him to be a doctor and viola, you have a rich person. Why? Because it’s a needed skill he can trade with us.
People tend to think of “the economy” as a static collection that people grab chunks of. The idea that wealth is continuously created and destroyed isn’t really on peoples radar. If income inequality was really what causes poverty, then Bill Gates made the world a poorer place by inventing Microsoft and America itself is causing poverty in China and Mexico instead of slowing increasing the standard of living in those areas.
I have a different view: poverty is the default state of humanity and the state we continuously travel towards. We have to get up everyday and fight that state with production in order to not all live as cavemen.
The current economic conditions
What’s going on right now is pretty amazing, to be honest. CNBC is complaining that we’re not seeing wage growth despite admitting there’s a worker shortage. According to my economics classes, that won’t stay that way long. It appears we had a lot of people who had just dropped out of the economy coming back in. It’s unfair to even compare the numbers with Obama era numbers.
“The increase in the unemployment rate came due to a rise in the labor force participation rate, which increased 0.2 percentage points to 62.9 percent as 601,000 people came off the sidelines and re-entered the labor force. A more encompassing measure of unemployment that includes discouraged workers and those at part-time jobs for economic reasons also rose two-tenths, to 7.8 percent.”
I mostly agree with what the president is doing economically. There should be wage growth in the blue collar sector shortly and it feels like those people have had a rough few decades. Some people are predicting doom and gloom, but they’ve also been wrong every time about pretty much everything so I’m going to stick with: wage increases by the end of the year.
Not sure I’ll benefit much from it, but i’ll say this: the Great Recession never hit the IT sector in Saint Louis. We always enjoyed super low unemployment, but at the height of it wages stagnated because employers had a mindset that we were just lucky to be working. You could change jobs and get a raise, but staying put kept you at under 3% the whole time. The lesson here is, employers are hesitant, without real pressure, to pay you more than your neighbors. If they know your whole block is in foreclosure, they are unlikely to give you a decent raise.