Every time I pick up a newspaper or magazine or read an article on-line it seems as though somebody is advocating for the US Congress to pass a new law that establishes more regulations that govern how all businesses, big and small, must provide compensation and benefits for their employees.  I find this topic extremely irritating and a prime example of why the US has been in decline for decades.  Too many people in our country are looking to the Feds to become a party to their employment relationship.  They want Federal regulations to solve many of their life problems involving their relationship with their employer.

We have minimum wage, health care laws and many regulations that impact compensation and benefits.  All of these laws put constraints on individual attempting to start or build businesses.  They apply across all forms of businesses and locations of those businesses.  The government has determined that it should decide how an owner of a business should compensate it employees.  

I am not objecting to tax laws or regulations related to child labor, work place safety, discrimination or other items that don't relate to compensation and benefits for adults.  Those are a completely different set of issues that have the own positives and negatives.  Why should the Federal government be involved in a transaction between two adults concerning the value of a person's labor?  What right does the Federal government have in determining how an individual business owner values the labor of any individual and what benefits to provide for that person?  There is no requirement that any person take any specific job from any potential employer.  Every individual makes a personal decision to take a job because they want the job with the compensation and benefits that go with it.  Why should the Federal government have any say in the matter? 

I have no objection with the Federal government establishing the compensation and benefit plans for its own employees.  I have no problem with the Federal government establishing compensation and benefits requirements for the employees of contractors that work exclusively for the Federal government.  I have no problem with the Federal government establishing compensation and benefits requirements for employees of organizations that receive federally funded grants of all types.  But there is no reason for the Federal government to insert itself into an work place agreement between individuals where the work has nothing to with the Federal government.  At a minimum regulations on compensation and benefits should be left to state and local governments, if they wish to take any action. 

Some people say that this or that country has certain wage plans or benefits that the US should copy.  None of these other countries has a heterogeneous population spread over a vast diverse geographical area close to what exists in the US.  The US is unique in the world with the extent of its diversity.  We need to let employers decide what compensation and benefits that wish to provide to their employees as they compete for the work force they need to make their businesses function effectively. 

Why should the Feds regulate our lives?

TPM 

Read a newspaper, a magazine, a book, a Twitter news-feed, Facebook posts, material on websites, research documents or a government report on any topic from any source that interests you.  How much of what you read is actually factual?  How much of the material you read or information you received is actually true?  Is it true in one context but not another context?  Is there any absolute fact in what you read? 

Is the material you read really just opinion, not based on facts?  Is the author lying to you for some reason?  Does the author have an agenda they are not revealing to you?  Does the author have any motivation not tell you the truth?  Does the information one author gave you match up with information you received from other sources?  Are the sources really independent or are they a rehash of one source?  Are we living in an era where we believe most people are truthful or do you think most of what people telling each other really isn't true or its context is hidden for some unidentified purpose? 

If one thousand people tell the world publicly about an experience they have experienced, can we reasonably conclude that at least one of them is telling the truth to the very best of their capability.  Is it logical for us to believe another person that tells us that all one thousand people are wrong, misguided, dreaming, or making up the information they have provided to us because that person claims to be an expert on the topic?  Who decided the so-called "expert" has the proven track record to support their claim of expertise?  What body of knowledge does the expert possess that makes them an "expert"?  Who proclaimed the "expert" expert? 

In today's world individuals have access to information in a manner that has never before existed.  There is both good news and bad news as a result.  We can access a lot of information at the source without resorting to so-called experts to reveal it to us.  There is also the opportunity for people to present information to the general public that is purposely false.  So we have to be careful in understanding the quality of the source.  If the source is a big name or an "important person" doesn't necessarily mean the quality of the information is any better than information provided by some random person that is truly an expert.  Who is really the "expert" on any topic? 

Who is really providing factual information so we can determine what is true? 

TPM 

If you like progressive rock music from new indie bands that take a different point-of-view on life, you should try out the new album from The Apple Zed, http://theapplezed.com/.  Their first album is The Fruits of Their Labors, which is available on http://theapplezed.bandcamp.com/.  You can also check them out on You Tube, https://www.youtube.com/user/TheAppleZed. 

The Apple Zed is Matthew Scarborough, Eric Michaels and Jim Mattingly, three guys that met at the Oberlin Conservatory of Music. 

TPM 

Sometimes new insights come from very unexpected sources.  I was recently given a copy of Nicholas Carr's new book, The Glass Cage - Automation and Us.  It is unlikely that I would buy this book in a book store or on-line.  However, the book turned out to be very thought provoking and I recommend it to everyone that is interested on the impact of computers, automation and the Internet on our lives.  The book is in part very analytical and in other parts very philosophical. 

The author begins his story at the beginning of the industrial age when machines began to augment the capability of people in a variety of production processes.  Early machines redefined the way work was done and resulted in the elimination of certain types of jobs.  The story continues into the beginning of the automation age, when computer aided machines were specifically designed to replace workers, exemplified by automated machine tools and then robots on assembly lines.  The story advances to today's world where the computer based intelligence flies airplanes via autopilots, provides medical diagnosis and designs buildings through computer aided design systems.  Many peoples lives are directed by their constant attention to their smart phones, where internet based apps influence many of their life decisions. 

Much of the philosophical aspects of the book relate to the impact of work on our lives.  If we don't work what do we do with our lives?  Are we really human if we don't work and just let machines take control of everything we do?  Do we lose our humanity?  One can get lost in deep philosophical thought on this issue.  There are many outstanding quotes from the author or others that he quotes in the book.   While the philosophy is interesting I believe there are many practical real life aspects of this issue that are worth thinking about. 

Mechanization and automation have made most people in the world's life better.  There is no question in my mind that without all the benefits of mechanization and automation the world's population would be much lower than it is today because we couldn't feed everybody without the long term benefits of mechanization and automation.  The author makes the point that there are some aspects of automation that have gone too far.  Automation becomes too limiting on our creativity and eventually results in a reduction of our skills in critical areas.  I certainly agree with author on many of his points.  I have rejected certain types of automation in my life while other people embrace them.  Mr. Carr discusses many examples where continuing increases in automation improvements can ultimately prove to be limiting and not necessarily a long term benefit. 

Mr. Carr doesn't discuss the economic impact of his concerns over the continuing advance of automation in the global economy in any detail.  But as I read the book I kept trying to correlate his points into real economic terms.  For example,  all businesses that produce information technology related goods and services (both for consumers and business to business) need automation to continue to grow as a percentage of our lives in order for those businesses to be successful.  Most of the business superstars of the past 30 years come from "high tech" (computers, automation and the Internet).  Without naming names, Mr. Carr asks if the work of these people and these companies really made our lives better, even though they certainly made our lives easier.  Is easier always better?  Are we going backwards as human beings as a result of technical progress.  I believe the answer is sometimes yes and sometimes no.  There is no clean easy answer to this question.  Should governments attempt to stop or manage "progress"?  I don't see how that is possible. 

I believe The Glass Cage is a warning to all of us.  Technology can go too far.  We don't need or should desire everything that it is possible for technology to do for us.  Do we really want the programmers of automated system to govern how we live?  We need to be careful.  We need to think twice before we embrace new technology.  It may not be in our long term best interest.

TPM

Yesterday, minimum wage increases went into effect in 21 states.  Each state government made decisions about the minimum wage they felt were appropriate for workers in their state.  The US federal government continues to debate the federal minimum wage which currently applies to 21 states.  The District of Columbia and 29 states have minimum wages above the federal minimum wage effective on January 1, 2015.  This data was obtained from the National Conference of State Legislatures, http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx. 

Today I was watching two young guys on CNBC arguing about the impact of the minimum wages increases.  It was the classic argument from both sides.  The individual supporting higher minimum wages argued for the improved quality of life of the impacted workers and increasing consumption from those workers benefiting the economy.  The guy against the higher minimum wage argued that the higher wages would reduce the number of jobs over time by forcing employers to find ways to reduce their number of employees to control their costs or risk having to increase prices and lose customers resulting in job losses.  Both claimed that economists back up their positions.  I am sure you can find economic analysis to support almost any position since economics is an art, not a science. 

Nobody discussed the real issue on CNBC today and the real issue is almost never discussed because it is extremely difficult for people to accept and even more difficult to solve.  The real issue is that the US and most developed countries have a major oversupply of unskilled and limited skilled labor in comparison to the number of jobs that are available that people want.  Market wages for these low skilled jobs are the outcome of the imbalances between supply and demand.  The oversupply of labor created by people in the work force with limited eduction and skills plus millions of low skilled immigrants has created a long term supply and demand imbalance that frustrates people on all sides of this issue.  The minimum wage is simply a government mandated non-market approach to transferring purchasing power from haves to havenots.  Big government progressives support this approach as part of their overall strategy.  Since business owners that hire people at this level and their supporters know that the minimum wage is a non-market approach for setting their labor costs and the profit potential of their businesses, they get angry and frustrated at those that want to control a critical aspect of their businesses.  It is amusing some times to read or hear reports about areas of the US with labor shortages where low skilled jobs pay far above the federal minimum wage and above almost all higher state minimum wages.  In these locations the law of supply and demand for labor is working.  What a shock!

Since we now have a global economy the competition between workers is now global.  There is no such thing as a job whose value is fully protected from global competition.  The impact is indirect in some cases but the entire wage structure of the US has been impacted by global competition.   As individuals we may like or not like globalization.  The reality is that the impact of globalization on wages of workers in all nations, including the US, is very real and it is not going away anytime soon. 

The debate on the US minimum wage will continue in 2015.  Both sides will be screaming at each other in many venues.  Congress is unlikely to pass a bill to raise the wage at the Federal level.  Each state can evaluate its own situation and make its own decisions.  This is my preference because the economies of the states are radically different and in many states it would be more logical for minimum wages to be set on a local level by a city or county.  On this issue gridlock in Washington is probably the best outcome. 

I just wish that when the debates on the minimum wage take place, the debaters would put the issue in its proper context and begin to deal with the issues created by globalization.

TPM

Many times when I read posts on Twitter or comments on blogs, well meaning people express their desire for someone to implement policies that will return us to the good old days of sometime in the past.  Since today is the first day of 2015 I thought it would be appropriate to make some comments on wishing for the good old days. 

My first point is whose good old days are we talking about?  The good old days for someone in the world was probably not the good old days for some other person or group.  I understand that many Americans look at the US role in the world today, both economic and political, and wish we could go back to 20, 30 or 50 years, when our economy was stronger relative to other nations and we were politically more dominant.  A few years ago I wrote an article, End of the Post World War II Era, http://www.thepurplemuse.com/id30.html, where I expressed my views that US citizens must realize that the world had fundamentally changed and we must all adapt to the world as it is today. 

As the world continues to evolve it becomes even more imperative that we prepare ourselves and our families for the world that is to come, not the world that once was.  We can learn from history, but we can't repeat it precisely.  We must adapt to the world that exists now.  We need to look forward to meet the future that will come.  We have the opportunity to shape the future.  There is no point in wishing to return to a time that has past.  Leaders must initiate the debate about goals and objectives for the future that have a realistic global context of the future. 

We have more people on the planet every year.  They require food, water, energy and other essentials of human life.  Birth rates are highest in economies with the lowest education levels and are least able to provide for their people.  The world continues to develop more unskilled, low wage workers every year.  These are fundamental issues that will challenge the planet.  How do advanced economies deal with their own economic imbalances, much less global economic imbalances?

Our leaders need to paint a vision of the future and lead our nation to achieve that vision.  They need to be consistent in their actions.  They need to honestly address what can and can't be done.  Unlimited borrowing from the future to make the lives of many citizens better today is grossly unfair to those who have long lives ahead and must deal with the debt being accumulated.  We need to treat people fairly, but fairly doesn't necessarily mean people get a free ride. 

Everybody needs to look forward.  There is no way we can return to the past.  Have a Happy New Year!  We need to get started making our world a better place for all of us.

TPM