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Forum Post: If you are poor, it's because you want to be or because you're stupid

Posted 2 years ago on April 21, 2012, 8:34 p.m. EST by Misaki (893)
This content is user submitted and not an official statement

Most people think they're above average, although some cultures are different. This is not as ridiculous as it sounds, since competence is often difficult to measure, but it has important implications for economic inequality in a democracy. While you may think you deserve more money (unless you're already part of the top 1%), you probably think that other people who are just as poor as you don't deserve anything from the government at all.

This is the height of stupidity. If this is you, you're poor because you're stupid. Many rich people don't really mind if the government raises taxes as long as it's done fairly. The opposition to this has, in fact, mostly come from the poor themselves, due to the fear that the money from honest taxpayers will be spent on welfare or given to corporations instead of efficiently creating jobs.

"the revenue per employee at S.&P. 500 companies increased from $378,000 in 2007 to $420,000 in 2011." "the top 1 percent pocketed 93 percent of the gains in 2010. 37 percent of the gains went to the top one-tenth of one percent. No one below the richest 10 percent saw any gain at all." If you're poor and don't want to be poor, the money is there. All you need is a solution that your above-average friends will support, which this message attempts to describe, and a firm resolution to change your life.

CONTENTS

1) Courses of action

2) The solution to unemployment

3) Overall effects on the poor

4) Types of businesses

5) Benefits for the rich

6) Smart people stuff

1. Courses of action

You can use this message by reading enough to understand how it works, then getting your friends to read it and agree with it. Businesses that could benefit can adopt the suggestions immediately, while nationally it either becomes a law or politicians get voted out of office.

2. The solution to unemployment

Americans can do some things very well. Other things are simple enough to be done by anyone with some training, and have been outsourced to people in other countries who are willing to work for less. But there is always work which does not result in a finished product that can be transported on a ship, and this is what the nation can focus on instead of trying to undercut Chinese competitors on price.

The reason jobs are scarce is because we have become so efficient that it takes fewer people to do the available work than are looking for jobs, and people with jobs have no incentive to work less than full time. Working long hours is seen as a mark of dedication by an employee, but the reality is that laziness can also be a virtue. According to Kurt von Hammerstein-Equord, German Chief of Army Command from 1930 to 1933,

"Those who are clever and industrious are fitted for the high staff appointments. Use can be made of those who are stupid and lazy. The man who is clever and lazy is fit for the very highest commands. He has the temperament and the requisite nerves to deal with all situations. But whoever is stupid and industrious must be removed immediately."

Businesses that qualify can take advantage of this by giving an incentive to employees to work less when there is no further useful work to be done. Taken from the full proposal,

Work concept

A third major way to determine employee compensation, in addition to a monthly salary or hourly wages:

The first 20 hours are paid at 1.2 times the normal hourly rate for full-time work.

Work beyond 20 hours in a single week is paid at 0.8 times the normal hourly rate.

3. Overall effects on the poor

If enough people take the option of working less, unemployment would go away and income inequality would decrease, meaning that the poor would no longer be poor unless they choose not to work.

Controlling other costs of government would be done in other ways, but access to a job for those who are able to work would allow the government to eliminate many types of inefficient practices or programs that serve only to compensate for income inequality or joblessness.

The adoption of this system would eliminate inefficiency in the economy in several ways:

  1. businesses that used it would see more efficient workers, less need for layers of internal bureaucracy, and would avoid costs of rehiring or training when demand temporarily decreases or increases.
  2. money would be spent more attentively on average, which increases the utility of any purchase by avoiding unnecessary costs, products or services.
  3. more use of private services instead of public ones due to lower income inequality, in cases where a private provider is more efficient, or the elimination of government spending that serves only to create jobs.

All of these would increase the real standard of living of anyone with a typical-sized income from working and would allow tax money to be diverted to where it is needed.

4. Types of businesses

Not all businesses would have a reason to adopt this system. The three main benefits to employees that a business could extract profit from are efficiency increases for employees that value their time, more dedication to the business for employees that value the option to choose how much to work, and lower hiring costs for employees that value stability in a time of economic depression over continuing to work full time.

One example of a type of business that would not directly benefit from this concept are logistics companies that operate warehouses for online retailers, where hiring costs are minimal, efficiency is reached by firing employees who don't meet productivity targets, and forced overtime allows a low base wage rate by keeping total income of employees at a reasonable level.

Other businesses might have exemplary management practices that have allowed them to avoid inefficiency and keep profits high, or as high as is possible given competition. While these businesses might not see any immediate benefits from this system, they might use it to retain skilled workers during low points in the business cycle instead of being forced to fire workers for short-term profitability targets.

Sales jobs that work by commission or are otherwise already rewarded by the quality of their interaction with customers, and jobs that include periods of inactivity, would also not have any efficiency increase from using this concept.

For other businesses, the possible efficiency increases can be understood through the concepts of auftragstaktik which emphasized the intent of a command and workplace empowerment with a similar goal of greater autonomy, as well as to some extent flexitime which has been gaining popularity in the United Kingdom.

5. Benefits for the rich

Since this would cause their income to go down relative to the rest of the nation, the rich would benefit mostly from a healthier society and a reduction of all the problems that poverty causes such as crime and poor provision of public facilities and infrastructure.

In some cases, the strategies for becoming rich would change since being honest would be more rewarding, so business in general would seem more ethical to the casual observer. This might affect who decides to participate in markets or the leadership of corporations.

6. Smart people stuff

A larger number of people with lower incomes from working less would change the demand curve for many products, forcing prices down in cases where prices are significantly above the levels required for profitability. For example both airlines and breakfast cereal makers benefit from economies of scale, but breakfast cereal makers are more profitable because their customers are less sensitive to price.

The effect on businesses that sell to corporate customers is more difficult to predict, but there are likely many opportunities to save costs which are currently not taken simply because corporate profits are already so high that the utility from using a familiar product is often worth the additional cost.

In general, much of the profits of many businesses are the result of this 'monopoly' on the product which their customers desire to use, instead of any kind of productivity advantage over their competitors. When selling to consumers this monopoly is often in the form of a brand, with American brands such as the iPhone having a reputation for individualism that can lead to people selling body parts or experiences to obtain them. It seems unlikely a change to support greater individual freedom, by working less at a competitive wage rate, could lead to a reduction of the reputation of the United States or the power of its brands.

Improvements in the objectivity of people who are given the option of working less would lead to additional benefits such as greater accuracy from the democratic process and a reduction in conflict throughout the world. While this type of result could happen through other means with the design of other systems that people will encounter, the need to introduce contradictory goals when designing standards of measurement is not obvious because the assumptions of people interacting with those standards will depend on their experiences outside of that system. It is easy to assume that the only thing needed is an accurate measurement, since the external benefit to society of a more complex system is difficult to predict.

12 Comments

12 Comments


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[-] 1 points by luparb (290) 2 years ago

The whole purpose of Business IT and automation is to reduce costs by removing jobs from the economy.

It doesn't matter how energetic and motivated you are, a company will do anything to prevent hiring more people.

Nobody can afford to work less with the rising cost of living.

[-] 2 points by Misaki (893) 2 years ago

The rising cost of living is because people are willing to pay that much.

Housing generally costs about 30% or less of a household's income. If someone can't afford housing, it's because other people easily can.

The same is true of things like health care. 5% of Americans Made Up 50% of U.S. Health Care Spending ... "The top 5% of spenders paid an annual average of $35,829 in doctors' bills. By comparison, the bottom half paid an average $232 and made up about 3% of total costs."

...possibly more on this in the future, but work conservation would fix this problem as long as enough people decide to work less, no matter what level of education they have. We have an education glut as this recession has proved.

[-] 1 points by shooz (17684) 2 years ago

Have you brought this up in the business week forums?

I'd be curious to know how they react to paying lower wages for anything over 20hrs.

How's that work in a 12hr day environment?

[-] 1 points by Misaki (893) 2 years ago

I made a post and hopefully I will find out.

You would normally expect wages to equalize toward the amount of work done. A separate argument explains why this can achieve things that "piece work" or performance reviews can't:

A key recognition is that while higher productivity itself is good for a business and can lead to higher rewards for an employee, it can be bad for society when the share of profits going to workers decreases and capital owners are unable or unwilling to reinvest this money in a socially beneficial way. Therefore, it helps to have a system where higher productivity by some workers can be rewarded without giving the management of a business any excuse to lower wages for less productive workers because it allows the more productive workers to feel that their efficiency, or doing tasks that go unrewarded but reduce inefficiency for all workers, is not harmful to society.

Another post mentions how incentives are somewhat distorted in current society:

3) The importance of income to getting messages on dating sites. "if you're a young guy and don't make much money, cool. If you're 23 or older and don't make much money, go die in a fire. It's not hard to see where the incentive to exaggerate comes from."

So the varying wage rate is only important if people choose to work less. One example is a friend of mine, who was working sometimes 60~70 hour work weeks. She was fired and despite finding some work, spent something like 6 months unemployed before finally getting a job where she works with students. She says that despite a lower income she makes about the same hourly (since she isn't working 70 hour work weeks anymore) and doesn't really mind the drop in income.

So it really depends on the preferences of the employees. Maybe the thread on business week will have something interesting tho.

[-] 1 points by shooz (17684) 2 years ago

Business would "seem more ethical" to the casual observer.

Not that they actually would be.

So get a job in PR?

[-] -1 points by Misaki (893) 2 years ago

Many people think that corporations frequently commit unethical actions now (see the movie Wall Street (1987) which I haven't seen, or the TPS reports from Office Space (1999)) yet poor people and the unemployed are much less likely to vote in elections than the middle class.

If businesses are unethical, why are people so apathetic about doing anything to change that? As the thread title says, if you're poor it's because you're stupid.

So while a casual observer might say that businesses are currently unethical, the casual observer is incorrect except in cases where the law is actually violated (such as Enron).

edit: and while laws are probably broken on a daily basis by corporations in the pursuit of profits, it happens less frequently than some people might think. Most corporate profits are entirely legal, since a lot of it is from money circulating between the rich and corporations.

[-] 1 points by shooz (17684) 2 years ago

Why would you want business to only "seem" more ethical.

Wouldn't it be better if they actually were?

[-] 1 points by Misaki (893) 2 years ago

They WOULD be more ethical, read the link just before the part you quoted.

But people will always disagree on what's ethical, just look at religious prohibitions against different types of meat or things like organic foods and the treatment of food animals. This would get business practices much closer to an acceptable standard of behavior though.

As another example, inflation exists in part because economists say it's "healthy" for an economy by keeping employment high. But inflation also means that people have to invest in the stock market when saving for retirement, which can lead to things like the recent financial crisis where some people lost 25~75% of their retirement funds (and financial companies like Goldman Sachs profited enormously). By adopting this concept which would keep employment high even during low points in the business cycle (as people simply work less instead of being fired; corporate profits were certainly high enough during the past few years for full employment to have been possible), there might be no need for the government to encourage inflation.

[-] 0 points by jrhirsch (4714) from Sun City, CA 2 years ago

There was a man who died in poverty, his debts far greater than his assets. He left nothing to his heirs. But this man left a legacy that cannot be measured in dollars. He was not paid a penny for his most important work. A mans worth is not a matter of money. It is a matter of what he has given, not what he has taken. This man was Thomas Jefferson.

[-] 0 points by Misaki (893) 2 years ago

I'm sure the rich appreciate you financing their private yachts, airplanes, [artificial] islands, etc... and that the 'awakening' of the 99% isn't anything to be concerned about.

[-] 0 points by gestopomillyy (1695) 2 years ago

are you schizophrenic?

[-] 0 points by Misaki (893) 2 years ago

Are you stupid?