Kevin Hassett of the American Enterprise Institute, suggests that YOUR FAT PAYCHECK is what keeps unemployment so high right now.
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.
Basically, a labor market that doesn’t adapt to demand becomes smaller. But he then goes on to describe causes, such as union contracts, unemployment benefits extensions, and the minimum wage that are really just GOVERNMENT.
So instead of it being my FAT PAYCHECK, I’d suggest instead the real problem is our FAT GOVERNMENT.
So what do I recommend? Well, we can treat the symptoms… for instance get rid of the minimum wage, but I’d rather go to the heart of the matter and just not have the government so powerful and corrupt.
Unions are powerful only because they have the force of the United States backing up their “right” to be a monopoly of labor. Make unions compete, get rid of their monopoly status. And do not permit public employees to unionize or lobby.
Will anything like this happen? No. Our system is too corrupt and too far gone to be salvaged. Alas, we wait for the fall with the corrupt ones picking who wins and loses.
September 7th, 2010 at 10:11 pm
You’re classifying the minimum wage as a fat paycheck when anyone who gets it qualifies for public assistance?
The labor situation in the USA is due for some drastic adjustments mainly as a result of lower cost production abroad that undercuts domestic wage rates and prices. Try “China, Inc” by TC Fishman. And unions aren’t a dominant factor because so little of the work force is unionized. We have a competitive labor market that would like some relief from the downward pressure on job count and compensation. Basically, the upper third of the workforce is doing well and the bottom two-thirds is steadily losing ground. Perhaps the upper third should tone down complaints about the lower two-thirds.
Whether government is fat or thin is largely irrelevant.
September 7th, 2010 at 11:28 pm
Fat relative to the productivity the typical minimum wage earner can produce.
I don’t believe public sector employees should be allowed in unions. Period.
you just pronounce that government doesn’t matter. And yet… gosh, I’ve created many jobs and say it is.
I’ll go with me on this.
Of course none of this matters. Our system is so corrupt that what is right hardly matters, only who has been bought.
September 8th, 2010 at 7:43 am
You’re having a great time worrying about a minor economic problem – unions.
And I question your assessment of cause and effect of US government on the private employment market. Much of the political pontificating about taxes and regulation is in service to business profits, not national economic health. Our fundamental economic problem is rising world competition about which the US government can do little that would not make the problem worse by protectionism. .
September 8th, 2010 at 9:47 am
Public unions are costing us trillions.
Private unions cost us BILLIONS JUST THIS YEAR. And their pensions pose another trillion dollar problem.
If you don’t get it, I can’t explain it, since it is pretty obvious.