Rebuilding the Middle Class

[WN1 Hit]

Gotta say the lower class needs more attention then the middle... or most importantly, the Homeless.

[armbarchris]

Fascists believe that a nation is an organic community that requires strong leadership, collective identity, and the will and ability to commit violence and wage war in order to keep the nation strong. Do you not see this when you look at the US?

You really call our leadership strong? And America's 'identity' is as uncollective as it gets.

[Rota]

Rota,

How is any company going to fund this? On top of the salary that they need to pay you, they also need to put extra money in a pot. Meaning that you will cost more for the work that you do.

If you earn 50K, in your example your boss needs to be an additional 12,750 for social security. Meaning that you do not cost 50K, but 62K.

The flaw in your proposal is that whatever your boss produces and sells will rise in price. For instance, you bake bread. You are employed by a local bakery. The price of a loaf will not be 2 dollar, but 2 dollar 50, because your boss needs to refund their costs.

With your Masters, I am sure you can figure the consequences..

I can't seriously go into my other questions as they are politics (what happens to the lower class and why not tax the upper class more)

Good question.
The social security payment burden is now being taken entirely by the employer, so every employer has a legitimate reason to cut everyone's pay by 7.5% when this new system is implemented.

If the baker in question made $50k gross, then the employer could reasonably change that to $46,750 without affecting the take-home pay. The 50k + 7.5% cost of his pay now is $53,250. The new cost of his salary to the employer would be $46,750 + 12,588 = 59,338 under the new system.

If the baker in question made $50k take-home, then the employer could reasonably change from $53,250 to $50k without affecting the take-home pay. The 53,250 + 7.5% cost of his pay now is $57,244. The new cost of his salary to the employer would be $50k + 12,750 = 62,750 under the new system.

In my youth I actually worked at a bagel shop. We made them the old fashioned way, no par-baked garbage that you just need to heat up. Every morning our baker showed up at 3am to start making the bagels. If the salary of the baker cost an extra $5,500 or 6,000 it would not have affected the cost of food. If the owner had to live with $100 less profit per week, he would still be able to afford his 5 bedroom house.

The new system would not affect anyone else in the shop, since the rest of the staff was part-time service employees that all qualify as "registered students" for the rebate.

Will the new cost structure take some adjustments? Yes. The whole point is to change behavior to fully utilize employees. If we tweak the new system to have the same costs as the current one, then nothing will change. I would hope that the new system would prompt changes like the one that actually occurred in that bagel shop.

Here is what happened...
The baker who had some sort of food-type associate's degree got hired by a local nursing home to be their nutritionist. She plans and organizes all the menus and prepares special meals for special needs like diabetics. She also got a healthy raise. The new system rewards this nursing home for fully utilizing her.

The owner took over baking 2 days a week and hired a part-time baker for the other 4 days. She was a single mom, so she would qualify for the "rebate" as well. It was nice for her to spend the wee hours working and have the whole day free to be with her kid.


Will adjustments have to be made? Yes
Can adjustments be made? Yes


As for your tax comment, I am totally in support of some tax increases on the upper class and some reductions to the lower/middle class tax burden. But that's a subject for another thread. I think this plan in conjunction with some income tax changes could do wonders for the economy.

Gotta say the lower class needs more attention then the middle... or most importantly, the Homeless.

You should read my other thread then. The solution to poverty.
Economic fixes are going to take many changes to many parts of the system. This thread is only about one possible tweak to one part of the system. You can't expect one magic button to fix every issue.

[Skirata]

I think this plan in conjunction with some income tax changes could do wonders for the economy.

/inb4 economy fails even more and everyone becomes lower class

[WN1 Hit]

Good question.
The social security payment burden is now being taken entirely by the employer, so every employer has a legitimate reason to cut everyone's pay by 7.5% when this new system is implemented.

If the baker in question made $50k gross, then the employer could reasonably change that to $46,750 without affecting the take-home pay. The 50k + 7.5% cost of his pay now is $53,250. The new cost of his salary to the employer would be $46,750 + 12,588 = 59,338 under the new system.

If the baker in question made $50k take-home, then the employer could reasonably change from $53,250 without affecting the take-home pay. The 53,250 + 7.5% cost of his pay now is $57,244. The new cost of his salary to the employer would be $50k + 12,750 = 62,750 under the new system.

In my youth I actually worked at a bagel shop. We made them the old fashioned way, no par-baked garbage that you just need to heat up. Every morning our baker showed up at 3am to start making the bagels. If the salary of the baker cost an extra $5,500 or 6,000 it would not have affected the cost of food. If the owner had to live with $100 less profit per week, he would still be able to afford his 5 bedroom house.

The new system would not affect anyone else in the shop, since the rest of the staff was part-time service employees that all qualify as "registered students" for the rebate.

Will the new cost structure take some adjustments? Yes. The whole point is to change behavior to fully utilize employees. If we tweak the new system to have the same costs as the current one, then nothing will change. I would hope that the new system would prompt changes like the one that actually occurred in that bagel shop.

Here is what happened...
The baker who had some sort of food-type associate's degree got hired by a local nursing home to be their nutritionist. She plans and organizes all the menus and prepares special meals for special needs like diabetics. She also got a healthy raise. The new system rewards this nursing home for fully utilizing her.

The owner took over baking 2 days a week and hired a part-time baker for the other 4 days. She was a single mom, so she would qualify for the "rebate" as well. It was nice for her to spend the wee hours working and have the whole day free to be with her kid.


Will adjustments have to be made? Yes
Can adjustments be made? Yes


As for your tax comment, I am totally in support of some tax increases on the upper class and some reductions to the lower/middle class tax burden. But that's a subject for another thread. I think this plan in conjunction with some income tax changes could do wonders for the economy.

The last time i argued with Rota about how to solve poverty... he gave me this.... ^

[fleabird]

I do enjoy your ideas, Rota. But however much I would like to agree with them, I just can't. I just can not agree that it would be fair to tax business owners even further so that they "fully utilize" their employees.

My main concern is this: How could anyone without a huge amount of capital go about starting a small business? I worry that no matter the greatness of their ideas/innovations, the dedication of their time, the fairness of their prices, they would just never be able to afford to pay an employee in order to grow a business. Many small-businesses can only afford to grow in small increments, first hiring one part-timer, then maybe two. After a few years, they may have enough work for full-time employees. Long-term consequences: less innovations, less competition, and more McDonalds and WalMarts.

It should be up to the owner of a business to decide how best to fully utilize the resources of said business, because they have invested their money, time, mental and physical energy into creating it. If it profits, they profit. If it fails, they lose. In a rational world, they would do everything to ensure the most efficient use of all resources, including labor, without the use of government coercion. Of course, I realize this is not the way things are done in our current irrational system and agree the current system is broken. For some reason, it seems a benefit to employers to under-hire, fill their ranks with part-time high-schoolers, and discard educated "over-qualified" applicants in favor of social-security recipients who need to supplement their meager income so they can pay their electric bill. I too am a recovering college student.

I would really like to know your thoughts on laissez faire capitalism. I believe if we lived in a truly laissez faire society, you would already be in charge. But instead of being hired as ruler of the world, you are only offered a job as a bank teller. I find this to be the greatest tragedy of our current economic system.

Once again, I thoroughly enjoy your writing Rota. Keep it coming!

[Alzar]

Good question.
The social security payment burden is now being taken entirely by the employer, so every employer has a legitimate reason to cut everyone's pay by 7.5% when this new system is implemented.

If the baker in question made $50k gross, then the employer could reasonably change that to $46,750 without affecting the take-home pay. The 50k + 7.5% cost of his pay now is $53,250. The new cost of his salary to the employer would be $46,750 + 12,588 = 59,338 under the new system.

If the baker in question made $50k take-home, then the employer could reasonably change from $53,250 to $50k without affecting the take-home pay. The 53,250 + 7.5% cost of his pay now is $57,244. The new cost of his salary to the employer would be $50k + 12,750 = 62,750 under the new system.

In my youth I actually worked at a bagel shop. We made them the old fashioned way, no par-baked garbage that you just need to heat up. Every morning our baker showed up at 3am to start making the bagels. If the salary of the baker cost an extra $5,500 or 6,000 it would not have affected the cost of food. If the owner had to live with $100 less profit per week, he would still be able to afford his 5 bedroom house.

The new system would not affect anyone else in the shop, since the rest of the staff was part-time service employees that all qualify as "registered students" for the rebate.

Will the new cost structure take some adjustments? Yes. The whole point is to change behavior to fully utilize employees. If we tweak the new system to have the same costs as the current one, then nothing will change. I would hope that the new system would prompt changes like the one that actually occurred in that bagel shop.

Here is what happened...
The baker who had some sort of food-type associate's degree got hired by a local nursing home to be their nutritionist. She plans and organizes all the menus and prepares special meals for special needs like diabetics. She also got a healthy raise. The new system rewards this nursing home for fully utilizing her.

The owner took over baking 2 days a week and hired a part-time baker for the other 4 days. She was a single mom, so she would qualify for the "rebate" as well. It was nice for her to spend the wee hours working and have the whole day free to be with her kid.


Will adjustments have to be made? Yes
Can adjustments be made? Yes


As for your tax comment, I am totally in support of some tax increases on the upper class and some reductions to the lower/middle class tax burden. But that's a subject for another thread. I think this plan in conjunction with some income tax changes could do wonders for the economy.



You should read my other thread then. The solution to poverty.
Economic fixes are going to take many changes to many parts of the system. This thread is only about one possible tweak to one part of the system. You can't expect one magic button to fix every issue.

The last time i argued with Rota about how to solve poverty... he gave me this.... ^

Thnx for the advice Wn1 now i know who not to mess with!! I had enough lectures in my childhood i am good.

[Pieman]

Alzar... do you even know what this is about??

[Rota]

I do enjoy your ideas, Rota. But however much I would like to agree with them, I just can't. I just can not agree that it would be fair to tax business owners even further so that they "fully utilize" their employees.

My main concern is this: How could anyone without a huge amount of capital go about starting a small business? I worry that no matter the greatness of their ideas/innovations, the dedication of their time, the fairness of their prices, they would just never be able to afford to pay an employee in order to grow a business. Many small-businesses can only afford to grow in small increments, first hiring one part-timer, then maybe two. After a few years, they may have enough work for full-time employees. Long-term consequences: less innovations, less competition, and more McDonalds and WalMarts.

It should be up to the owner of a business to decide how best to fully utilize the resources of said business, because they have invested their money, time, mental and physical energy into creating it. If it profits, they profit. If it fails, they lose. In a rational world, they would do everything to ensure the most efficient use of all resources, including labor, without the use of government coercion. Of course, I realize this is not the way things are done in our current irrational system and agree the current system is broken. For some reason, it seems a benefit to employers to under-hire, fill their ranks with part-time high-schoolers, and discard educated "over-qualified" applicants in favor of social-security recipients who need to supplement their meager income so they can pay their electric bill. I too am a recovering college student.

I would really like to know your thoughts on laissez faire capitalism. I believe if we lived in a truly laissez faire society, you would already be in charge. But instead of being hired as ruler of the world, you are only offered a job as a bank teller. I find this to be the greatest tragedy of our current economic system.

Once again, I thoroughly enjoy your writing Rota. Keep it coming!

Excellent feedback.
You're right about this hitting small businesses fairly hard.

I will point out that truly small business like that bagel shop, which employ less than 20 people account for less than 20% of the total employment in America. Also, these businesses contain a hefty portion of part-time employees that would qualify as "exceptions" for the rebate(students and whatnot).

I don't doubt that if this idea was implemented, there would be quite a lot of griping from small businesses(legitimately). Big business would hate it too. This plan does not improve the position of the "employer" in almost any situation. But, I think the good for the vast majority of the country(the employees) outweighs the pain that employers will feel.

There are plenty of valid employer-biased arguments against this plan. I don't deny that.


Thanks again for the well thought out response. +reps for you.

[Violation_s51]

The third couple profiled was a pair that worked 2 part time jobs EACH (that's a total of FOUR jobs for those of you counting at home ) for a total of $46,000 in income. This family also had two children. Neither tax plan really affected this family by more than a few hundred dollars either way. By far the third couple spent far more time away from home for the least amount of income. I understand there is a market value to all occupations and that an hour of someone working the grill at a fast food joint is not worth the same as someone working an hour at a cancer research laboratory. I'm not going to argue that the top earning couple should be paid less and the bottom earning couple should get a raise.

Now the seed has been planted, and my brain starts it's gears working. At a glance there seems to be something unfair going on. But, there really isn't. If only the employers would be more accommodating, or a little more generous, or something. I don't know what.

The consumer decides the pay for a job. When an employee applies for a job the employer looks for a few traits. Some to mention are: 1, will they come to work ("reliability"); 2, will they bring the talent bench ("ability"); 3, and will they apply that talent bench ("sellable").

Now, if you are reliable, able, and sellable then you are a great candidate for an employee; however, not all of which are trained in our school system. I actually have attended a UC Davis graduation in the last decade that 3 blow-up dolls were tossed around and over 20 people had crude comments on the tops of their hats (the graduation is on the basketball court so the audience can see the top and most of the people near them cannot). These people on average will make an extra 2x the amount that the last mentioned couple would make. (U.S. Census Bureau, Current Population Surveys, March 1998, 1999, and 2000, High School Graduate makes 30k/year, Master's Degree makes 62k/year).

Why? That is a good question. What can be done? That is a soup question (Finding Forrester, 2000). So the why is basically obvious to a person who can break down the fore mentioned group: ability. They have the talent bench; they have been trained. This group jumped through the hoops needed and gained the knowledge that was a minimum to be able to complete the job. That is one of the three requirements. Secondly, they stuck with it from start to finish. Going through the work to get a Masters is not an easy task, it takes a show of discipline to make each of your classes and not be late (most teachers will doc you points/grades for being late after the 1st absent class in college, my experience was more than 10 minutes late was considered absent). College students must learn the hard way through many things -- stress/lack of sleep/caffeine!!! -- to get where they need to be, when they need to be... this sounds like a show of reliability (not credited to the school system for teaching them; however, the fact they have a diploma SHOWS they were able to complete that requirement).

The final, and last of the three, is sell ability. I will assure you I have never met someone that was taught how to be a sales person and sell themselves and what they were talking about. Moreover, those who have that charisma and style tend to be more successful in their jobs. Strangely enough this seems to be only a factor in some jobs, due to the fact that some people will stand in and be a Public Representative for a person/company and show the charisma that person/company may lack, it is negated in our society to hear something from the source as we are taught that cited sources are enough. In Example, PR makes a statement, ?Mr. Jones says he will complete this by Wednesday at 3 o?clock? and the listeners will wait for Mr. Jones to complete the job because his elected spokesperson has said it was so.

In short, the only way to fix this is to make education easier/more affordable and providing these families a way to gain the education they need to have the talent bench and the paper that shows the dedication to a cause. Everything else will generally ?fall into place? as it is said.

Lucky for the US, tuition programs are being made available for minorities, single parents, the unemployed and illegal immigrants (who do not pay into the system they gain financial benefit from, hence the term illegal as it is required by living here to pay tax) none of which are going to help your example family hope this helps to shed light on the issue and give clarity to your understanding.

p.s. my samuri will beat your ninja in a fight to the death...