I read a lot these days about wealth disparity. One frequently sighted statistic is that the top 10% of households control 75% of the total wealth in the US. Dig even deeper, and the to 1% control 35% of the total wealth in the US. I have no reason to dispute these numbers.
A billionaire has roughly 10,000 times as much money as I have. But, does that make him 10,000 times better off? Can he buy 10,000 times as much health care? Perhaps he can afford 10,000 cars; good luck driving all of them. Is his television 10,000 times as large as mine? Does he have 10,000 times as much food? As much clothing? It seems to me that there is a point where extra wealth runs up against the wall of practical reality. He probably could buy his wife a wedding ring 10,000 times more expensive than the one I bought Cheryl, and maybe he could own some rare painting worth more than all the houses combined in the small town I live in. But, rings and paintings have value mainly because of subjective cultural factors. Practical things you need to live, like food, can be extremely expensive, but, from a nutritional standpoint, your body burns steak and potatoes from a high dollar restaurant exactly the same as it burns a taco from a food truck.
A billionaire and I have access to exactly the same books, movies, and music, at least what's recorded. I suppose people with a lot of wealth can hire their favorite musicians to play their children's birthday parties.
It is true that wealth can purchase experiences beyond my income. A billionaire could travel around the world on his or her private plane whenever the whim struck; I can barely afford a couple of trips a year to a beach in the next state. It's not just the money I can't afford, but the time. Working for an employer, I'm allowed only a certain number of days off each year, and these have to be approved in advance. Of all the things I envy most about great wealth, it would be the freedom to do what you wish with your time without asking permission. But, even the free time produced by wealth runs into some limits. We all get the same number of hours in a day and days in a year. I might chafe at the constraints placed upon me by holding down a steady job, but I'm sure wealthy individuals have their own headaches and hassles and wonder where all their time goes.
So, if there's a point where wealth has brought an individual pretty much everything that's available to own or experience in the world, does it make sense to allow a small sliver of the population to keep accumulating wealth? Or, would it be more beneficial to spread some of that wealth around?
Maybe I've been listening to too many Billy Bragg songs, but there is something appealing to the notion of taking a billionaire's wealth and dividing it up among, say, 100,000 families. An extra 10 grand for most families would be a pretty significant windfall. But, would it be moral to just take the money? What exactly is the ethical principal that says it's okay to take someone's property against their will and give it to someone else, even if the person you give it to really, really needs it? If I had bad kidneys, and there was a compatible donor who didn't want to give up one of his, would it be ethical for a doctor just to go ahead and take the involuntary donor's kidney anyway because it will save my life without causing permanent harm to his? One could argue there's a huge difference between body parts and money, but, I don't know. The money I have I've paid for by exchanging lots and lots of hours of my life, countless heartbeats and breath, lots of sore muscles and burned out brain cells. Taking my money is kind of stealing my body.
But, maybe it's all just a matter of what analogy you choose to use. Suppose there was a huge fire at my neighbor's house, and I had a swimming pool in my back yard, and the fire truck started pumping my pool dry, despite my protests of, hey, that's my water! I think only the most hardened libertarian would say that the firemen were in the wrong.
One last rambling thought: Is our wealth disparity possibly protecting the environment? While so few people control so much wealth, there are practical caps on how much they can consume. That billionaire can't realistically drive the 10,000 cars he could afford. But, divide up his wealth among 10,000 poor people, and suddenly they might all be able to afford cars, and bigger televisions, and find themselves eating higher up the food chain, consuming more meat and fewer backyard tomatoes. Distributed wealth would inevitably result in increased consumption. We don't notice a lot of the environmental harm our consumer society produces because we've outsourced a lot of our pollution. Not many American cities still have smokestacks, but China puts out enough smoke and dust you can see it from space. Could we survive even a hundredfold increase in our consumption? My gut instinct tells me we'd muddle through. It also tells me I'll probably never find out, since there's zero evidence that the wealth accumulation trends are going to change anytime soon.
Friday, August 16, 2013
Sunday, August 11, 2013
Our Economic Future: Ecclesiastes 1:9
On Friday, I was given my annual performance appraisal. It was pretty positive all around, with high marks for my troubleshooting prowess and my ability to innovate and improve. Our center led the company in a lot of areas, and the appraisal gave me credit for figuring out a way to utilize our machines more profitably, credit I fully deserved. If the whole network adopts my idea, it will probably save the company tens of thousands of dollars a month.
I should have come out of that performance appraisal feeling pretty good about myself and my role in the company. Instead, my review was intensely bittersweet--I was being given a performance appraisal for a job I no longer had, written by a boss who no longer had his job either, since higher ups in the company had closed down our workplace in an effort to streamline the production network. The fact that our location consistently was at the top of rankings for various quality and profitability measures couldn't save us from the fact that, on a map, we were a bit too close to a few other production centers to justify renewing out lease.
Luckily, I was able to find another position inside the company, with a small cut in pay, and doubling of commute time. But, at least I still have a full time position that qualifies for benefits. Most of the positions being advertised these days in my company are part time. Which, if you read any economic news at all, you'll recognize as part of a larger economic trend, as a sizable majority of jobs being created these days are for part time positions.
I was tempted to just take the severance package and try to make a living solely by writing. But, writing income is lumpy; I get some monthly income from Amazon, but a sizeable chunk of my income still arrives as advances, and often these advance payments are months late. For instance, I was due an advance in April that didn't arrive until near the beginning of July. Unfortunately, my bills arrive every month.
Yet, I still might have been tempted, if not for health insurance. Going onto my wife's plan was a huge expense to lump on top of a loss of a steady income, and securing my own insurance was an even greater expense. I'm almost fifty and I've watched friends younger than myself battle with cancer and heart disease and seen some of the resulting bills, so, even though I'm in excellent health at the moment, I know that getting sick without health insurance would have the potential to wipe out every dime I've ever saved.
Our health care system has become a sort of giant reverse lottery. One day, your number comes up, and, boom, you have a $100,000 disease. If you don't have health insurance, you're bankrupt. If you do have health insurance... sadly, you're probably part of the reason health costs keep climbing. We've built a system where the person who purchases the services isn't the person who pays for them. So, most of us don't really pay attention to our hospital bills, we just let our insurance companies deal with it and pay whatever we're told to pay. When our insurance costs keep rising year after year, we blame the greedy insurance companies, not the rising health care expenses.
In reality, while I'm taking a reduction in my wages to stay with my company, next year I'll probably cost them a little more than I did this year because they'll be paying more for my insurance. According to statistics you can google for yourself, large employers like the one I work for are going to see an increase in premiums of about 6.3%. A little of that will be passed on to me, but, on total, the company will still be paying more to keep me employed next year than they did this year. My wages have been grown at a rather lackluster rate for most of the last decade. A 3% raise was a good year; some years, I got nothing. But, every full time employee was getting invisible raises in the form of the company paying ever more for our health insurance.
Knowing that insurance is going to be an ever growing expense, it makes sense for a large employer to look for every way they can to reduce the number of people they have to insure. The location I now work at was once staffed by over twenty people. Now, there are under ten. Small things we used to do like ringing people up have been replaced by automated pay stations that operate with a credit card. Big things we used to do like long, involved consultations to coordinate large projects have pretty much been eliminated. A lot of the document creation work that used to be done on site is now done by a separate company with a staff mostly located overseas. When I look around, I think, well, they can't cut the staffing any further. But, of course, they can. There are a half dozen branches within a twenty mile radius. Trimming one or two of these locations could probably be justified. Within the branch, a lot of time is spent shipping packages, with an employee standing at a station typing in the shipping information. How long before the computer gets turned around and it's the customer typing in their own information?
Think your industry is safe? There are technologies and social changes in the pipeline that can disrupt nearly every industry imaginable. Walmart makes a lot of dough selling us stuff cheaply; but in twenty years, 3d printing might be so advanced and so cheap, there's no point in going to the store to buy a new toothbrush; you can just print a new one at home. The masses of people working in factories overseas to supply us with toothbrushes and blue jeans and cell phones will one day look back at todays era as the golden age of jobs, the way people in Detroit fondly recall previous decades.
Even if technology doesn't wipe out an industry, there's always cultural changes. There was once a time when you couldn't drive through North Carolina in the summer without passing miles and miles of tobacco fields. This year, we noticed a tobacco crop while we were driving through South Carolina and marveled at how long it had been since we'd seen anyone growing the plant. Coca Cola still sells billions of gallons, but sooner or later the war on sugary drinks will move from being championed by a big city mayor or a first lady and be a major line item on a presidential agenda, and we'll see that industry humbled.
Right now, there's an energy revolution thanks to fracking, with plentiful oil and gas projected out for decades. But, we also have tons of coal; we just don't burn as much as we used to do to changing environmental regulations. Within a decade or so, someone will engineer a superefficient battery that lets an electric car cruise for a thousand miles between charges and gas stations will disappear. Or maybe a solar panel will be improved to be a hundred times more efficient than what's available today. Suddenly, digging energy out of the ground will be a quaint, obsolete technology, something that a caveman might do.
Even the health care industry, with it's ever rising profit margins--one day, someone is actually going to figure out a cure for cancer. You'll swallow one custom printed pill that will have an eye-popping price tag, but, after that, you're cured. You don't have to go to the hospital every week for chemo. You don't have years and years of scans and blood work looking for recurrence. It will be one and done, and the legions of people currently handling the paperwork required for billing all the thousand little expenses incurred in caring for you will suddenly be surplus employees.
Or, before a cure is found, people get so disgusted with the status quo that they just accept a single player health care plan, and the legions of people who currently work in the health insurance industry find that they're out of work, though at least they don't have to worry about losing their health insurance.
All of this sounds negative, perhaps even a little scary. But, I predict we'll like the world to come. As an author, I hate driving past places that used to be bookstores and seeing them vacant. As a reader, I like laying in bed and downloading a free novel to my kindle. I'm reading easily two or three times as many books as I did just a few years ago because there's no longer any real barrier between thinking about a book I'd like to read and acquiring it. The same is true of music; I buy more music today than ever, obscure bands like Beruit and Neutral Milk Hotel whose CDs would never have been stocked at my local record stores, back when there were local record stores. Beyond a few elitist audiophiles, does anyone really miss actual records? I'm told that the music I stream on Spotify has a lower sound quality, but I grew up in an era where I listened to music on distant FM radio stations, or through a tape deck in the dash. I suppose if I only listened to music in a dark room wearing headphones, I might detect some subtle difference in the quality, but under real world listening conditions, I honestly can't tell the difference.
The air will be cleaner. The streets will be quieter. You won't have to deal with crowded parking lots or long lines at stores. Younger workers growing up in this new economy will probably like their jobs. Electric bills will be a thing of the past, as most homes will produce their own power. Even the dreaded ever growing cable bill will probably vanish, as everyone starts streaming only the shows they actually want to watch, probably at some trivial fee. Instead of huge media companies raking in all the profits, small indy media will carve out profitable little micro niches, where a few thousand fans can provide enough income to make a project worthwhile.
The challenge will be for people of my era. I'm way too young to retire, but old enough that returning to school and learning a new career where I'd have the skill levels of a twenty something intern as I'm launching a new career in my mid-fifties seems daunting. Ah well. I imagine wagon drivers had much the same worries the first time they saw a locomotive chugging down tracks. A few decades later, passenger train engineers must have gazed up at the airplanes high overhead and felt a gnawing sense of that their days were numbered.
Ah well.
What has been will be again,
what has been done will be done again;
there is nothing new under the sun.
I should have come out of that performance appraisal feeling pretty good about myself and my role in the company. Instead, my review was intensely bittersweet--I was being given a performance appraisal for a job I no longer had, written by a boss who no longer had his job either, since higher ups in the company had closed down our workplace in an effort to streamline the production network. The fact that our location consistently was at the top of rankings for various quality and profitability measures couldn't save us from the fact that, on a map, we were a bit too close to a few other production centers to justify renewing out lease.
Luckily, I was able to find another position inside the company, with a small cut in pay, and doubling of commute time. But, at least I still have a full time position that qualifies for benefits. Most of the positions being advertised these days in my company are part time. Which, if you read any economic news at all, you'll recognize as part of a larger economic trend, as a sizable majority of jobs being created these days are for part time positions.
I was tempted to just take the severance package and try to make a living solely by writing. But, writing income is lumpy; I get some monthly income from Amazon, but a sizeable chunk of my income still arrives as advances, and often these advance payments are months late. For instance, I was due an advance in April that didn't arrive until near the beginning of July. Unfortunately, my bills arrive every month.
Yet, I still might have been tempted, if not for health insurance. Going onto my wife's plan was a huge expense to lump on top of a loss of a steady income, and securing my own insurance was an even greater expense. I'm almost fifty and I've watched friends younger than myself battle with cancer and heart disease and seen some of the resulting bills, so, even though I'm in excellent health at the moment, I know that getting sick without health insurance would have the potential to wipe out every dime I've ever saved.
Our health care system has become a sort of giant reverse lottery. One day, your number comes up, and, boom, you have a $100,000 disease. If you don't have health insurance, you're bankrupt. If you do have health insurance... sadly, you're probably part of the reason health costs keep climbing. We've built a system where the person who purchases the services isn't the person who pays for them. So, most of us don't really pay attention to our hospital bills, we just let our insurance companies deal with it and pay whatever we're told to pay. When our insurance costs keep rising year after year, we blame the greedy insurance companies, not the rising health care expenses.
In reality, while I'm taking a reduction in my wages to stay with my company, next year I'll probably cost them a little more than I did this year because they'll be paying more for my insurance. According to statistics you can google for yourself, large employers like the one I work for are going to see an increase in premiums of about 6.3%. A little of that will be passed on to me, but, on total, the company will still be paying more to keep me employed next year than they did this year. My wages have been grown at a rather lackluster rate for most of the last decade. A 3% raise was a good year; some years, I got nothing. But, every full time employee was getting invisible raises in the form of the company paying ever more for our health insurance.
Knowing that insurance is going to be an ever growing expense, it makes sense for a large employer to look for every way they can to reduce the number of people they have to insure. The location I now work at was once staffed by over twenty people. Now, there are under ten. Small things we used to do like ringing people up have been replaced by automated pay stations that operate with a credit card. Big things we used to do like long, involved consultations to coordinate large projects have pretty much been eliminated. A lot of the document creation work that used to be done on site is now done by a separate company with a staff mostly located overseas. When I look around, I think, well, they can't cut the staffing any further. But, of course, they can. There are a half dozen branches within a twenty mile radius. Trimming one or two of these locations could probably be justified. Within the branch, a lot of time is spent shipping packages, with an employee standing at a station typing in the shipping information. How long before the computer gets turned around and it's the customer typing in their own information?
Think your industry is safe? There are technologies and social changes in the pipeline that can disrupt nearly every industry imaginable. Walmart makes a lot of dough selling us stuff cheaply; but in twenty years, 3d printing might be so advanced and so cheap, there's no point in going to the store to buy a new toothbrush; you can just print a new one at home. The masses of people working in factories overseas to supply us with toothbrushes and blue jeans and cell phones will one day look back at todays era as the golden age of jobs, the way people in Detroit fondly recall previous decades.
Even if technology doesn't wipe out an industry, there's always cultural changes. There was once a time when you couldn't drive through North Carolina in the summer without passing miles and miles of tobacco fields. This year, we noticed a tobacco crop while we were driving through South Carolina and marveled at how long it had been since we'd seen anyone growing the plant. Coca Cola still sells billions of gallons, but sooner or later the war on sugary drinks will move from being championed by a big city mayor or a first lady and be a major line item on a presidential agenda, and we'll see that industry humbled.
Right now, there's an energy revolution thanks to fracking, with plentiful oil and gas projected out for decades. But, we also have tons of coal; we just don't burn as much as we used to do to changing environmental regulations. Within a decade or so, someone will engineer a superefficient battery that lets an electric car cruise for a thousand miles between charges and gas stations will disappear. Or maybe a solar panel will be improved to be a hundred times more efficient than what's available today. Suddenly, digging energy out of the ground will be a quaint, obsolete technology, something that a caveman might do.
Even the health care industry, with it's ever rising profit margins--one day, someone is actually going to figure out a cure for cancer. You'll swallow one custom printed pill that will have an eye-popping price tag, but, after that, you're cured. You don't have to go to the hospital every week for chemo. You don't have years and years of scans and blood work looking for recurrence. It will be one and done, and the legions of people currently handling the paperwork required for billing all the thousand little expenses incurred in caring for you will suddenly be surplus employees.
Or, before a cure is found, people get so disgusted with the status quo that they just accept a single player health care plan, and the legions of people who currently work in the health insurance industry find that they're out of work, though at least they don't have to worry about losing their health insurance.
All of this sounds negative, perhaps even a little scary. But, I predict we'll like the world to come. As an author, I hate driving past places that used to be bookstores and seeing them vacant. As a reader, I like laying in bed and downloading a free novel to my kindle. I'm reading easily two or three times as many books as I did just a few years ago because there's no longer any real barrier between thinking about a book I'd like to read and acquiring it. The same is true of music; I buy more music today than ever, obscure bands like Beruit and Neutral Milk Hotel whose CDs would never have been stocked at my local record stores, back when there were local record stores. Beyond a few elitist audiophiles, does anyone really miss actual records? I'm told that the music I stream on Spotify has a lower sound quality, but I grew up in an era where I listened to music on distant FM radio stations, or through a tape deck in the dash. I suppose if I only listened to music in a dark room wearing headphones, I might detect some subtle difference in the quality, but under real world listening conditions, I honestly can't tell the difference.
The air will be cleaner. The streets will be quieter. You won't have to deal with crowded parking lots or long lines at stores. Younger workers growing up in this new economy will probably like their jobs. Electric bills will be a thing of the past, as most homes will produce their own power. Even the dreaded ever growing cable bill will probably vanish, as everyone starts streaming only the shows they actually want to watch, probably at some trivial fee. Instead of huge media companies raking in all the profits, small indy media will carve out profitable little micro niches, where a few thousand fans can provide enough income to make a project worthwhile.
The challenge will be for people of my era. I'm way too young to retire, but old enough that returning to school and learning a new career where I'd have the skill levels of a twenty something intern as I'm launching a new career in my mid-fifties seems daunting. Ah well. I imagine wagon drivers had much the same worries the first time they saw a locomotive chugging down tracks. A few decades later, passenger train engineers must have gazed up at the airplanes high overhead and felt a gnawing sense of that their days were numbered.
Ah well.
What has been will be again,
what has been done will be done again;
there is nothing new under the sun.
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