Posted by: Middleclass Search | March 16, 2017

History Repeating Itself

From 3100 BC to 332 BC the Egyptians civilization (kingdoms/Empire) out lasted invaders, internal strife and the usual ups and downs of a nation. This was because the nation was based on three precepts they were the role of the Pharaoh, the military and religion. The balance between the priest, the military and a strong Pharaoh kept the civilization going for 3000 years. When other nation’s would occupy the land (at least twice) they did not upset this balance until Alexander the Great introduced the Greek system who ruled Egypt like a business. Getting rid of the priesthood (from a business point of view they did not add any value. ) which had maintain the language for 3000 years replacing it with Greek language as the language of business and replacing the gods that had been worshiped for 3000 years.

Some would argue that similar actions are occurring today that American democracy is being replaced by the efficiency of business practices. It’s long been argued that the American government is not efficient but what has not been argued is that an efficient government is a dictatorship it’s the give-and-take of our political system, inefficient as it is, that makes it work for the majority of the people. Many of the new administration are billionaires who have made their fortunes’ in the business world where ethics and the art of the deal may or may not coincide.  Such systems have had a low survival rate in history. Starting out with good intentions they soon collapse under their own weight of trying to maintain the Status Que. That is one of our current problems of trying to maintain the 1960 in 2017.

Protest keeps the focus on a problem but often an administration will try to wait the protester out this works more times than not. What happened to the Wall Street protesters? – A major exception being the Vietnamese War.

Besides protest actions need to be taken on other fronts. If we call the system we follow today as Corporate Capitalism we need a system that unites workers and business where both can prosper. A system engineer has no loyalties to various disciplines like economics, political theory and etc. but only to having a dynamic working system.  A chapter in Middleclass Capitalism outlines the major responsibilities in a Middleclass Capitalistic system for the government, corporation/business and citizens and may be appropriate here since it outlines key issues that need to be addressed in a dynamic society. Many of these can be addressed by ordinary citizens and fit in with the current protest.

The responsibilities in a Middleclass Capitalistic system is not a manifesto but a list of practical things needed for a dynamic society today, they will change with time.

1 – The Government place in Middleclass Capitalistic System:

a – Provide a strong physical infrastructure water/sewer/electrical/highway/train.

b – Provide a strong independent energy sources.

c – Provide a strong educational system.

d – Lead by example on global problems. (exp. human rights, carbon emission and etc.)

e – Provide tax incentives to assure a corporations or business that operates in the nation pay a living wage for starting employees and a middle class wage for journey employees.

f – Control outsourcing and automation.

g – Get campaign finances under control.

h – Assure citizens have secure retirement including a stable social security system.

i – Provide for basic and applied research.

2 – A Corporation/business place in the Middleclass Capitalistic System:

a – Profit cannot be at the expensive of a nation’s natural resources or its citizens.

b – Pay a living wage as starting salaries.

c – Pay a middle-class wage to journey employees.

d – Work with a nation to preclude outsourcing and uncontrolled automation.

3 -A Citizen’s place in the Middleclass Capitalistic System:

a – Be a responsible citizen.

b – Be an educated citizen.

c – Don’t support the Status Quo

Simplistic as the responsibilities in the Middleclass Capitalistic system seem they provide guidelines to a dynamic capitalistic system for both corporations and workers.

Discussions of why the items above are considered key issues will be discussed in future post.

Posted by: Middleclass Search | February 6, 2017

Limits of Capitalism and the Advantages of Middleclass Capitalism

Capitalism is not an ideology it is a method to produce a product or service by private individuals to be provided to the free market for consumption. Nowhere in the Constitution is the concept of capitalism mentioned. Businesses like to muddle the two arguing that the Constitution assures freedom for everyone and a free market should not have any government controls (laissez-faire). What is often conveniently forgotten is the freedom in the Constitution applies only when you do not impinge on others. When you hear a business arguing against regulations you need to see if by removing the regulation individuals or society would be hurt in the short or long run. Every system social or mechanical needs checks and balances else it will get out of control and eventually destroy itself.

Middleclass Capitalism argues that under the right set of rules capitalism can benefit America’s labor force and can provide businesses with an environment to achieve a reasonable profit. The problem is that in laissez-faire capitalism, the form of capitalism that America has been following for the last 40 years, is all that most people know. In laissez-faire capitalism businesses and corporations have all the power the worker is just a resource in producing the product or service. This is contrary to the 1960s before globalization when labor and business work together to advance the economy and to do this worker needed sufficient wages to buy the products and services produced. Employee compensation was considered in a different light by corporations it was the necessary evil that allowed employees sufficient money to buy the corporations products.

A middle-class wage for the majority of the country’s citizens is essential to make the American Dream work again. Technically the definition of wage and salary differ where wage is tied to an hourly period or a fixed amount of work and salary is tied to a fixed time. But for this discussion the components of a middle-class wage are exactly the same as the components of a middle-class salary.

Wages/salary go back to prehistoric times Babylonian cruciform show that beer was used as payment for services and art in Egyptian tombs indicate that bread and beer was used to pay the workers. The expansion of Europe’s mercantile colonies required skills and pay was in terms of food, clothing, shelter and cash, land or part of profits.  As the industrial revolution gained energy in the 17 and 1800s the need for workers continually grew and compensation became more important.

A way to look at what should be included in the employee compensation is to consider the employee in the same light as an item of equipment needed to produce a product or service. The employee will need maintenance the same as a piece of equipment. The maintenance includes proper pay (power), healthcare (repair), updating (education), and proper disposal (retirement). All such costs are passed to the consumer in the product/service price for a piece of equipment. Why shouldn’t the employee’s “total maintenance cost” also be included the price of the product/service? (See the discussion of living wage in the Nov 6, 2016 blog.)

As globalization expands businesses have been trying to move the cost from the product or service to the general economy to cut production cost. In the end the consumer ends up paying for these shifted costs through higher taxes – like cleaning up businesses environmental problems. When businesses were local and small this did not cause a major problem since it could be addressed locally but with massive global corporations where products are sold worldwide local citizens end up subsidizing a company whose product they might not use.

The concept that all cost of a product/service should be passed to the consumer in the price of that product/service is the key to Middleclass Capitalism. Included in the cost of a product/service is a starting wage based on the living wage concept and a journeyman wage based on a middle-class wage structure.  This is the difference in a Middleclass Capitalistic System and that of our current Corporate Capitalistic System. Today’s concept of management is that all possible cost should be offloaded to the taxpayer. This short range approach hurts not only today’s workers but hurts future generations since the cost of cleanup of current industrial manufacturing is passed to future generations.

Middleclass Capitalism requires corporations to act responsibly.

Background:

Capitalism, as a system, is inherently incapable of pasting all its cost to society (current accounting practices do not quantify all the cost of a product or service). Laissez-faire capitalism attempts to externalize (move cost off corporate accounting sheet to labor or the public) labor cost like healthcare, retirement, to public sector instead of putting the cost in the price of the product or service.

Laissez-faire capitalism or today’s Corporate Capitalism’s does not take into consideration in the products or services cost the following:

The cost of the infrastructure to support the Corporation such as roads, utilities, Internet capability, basic education of the worker and etc.

The cost of pollutants from the production of the product or service.

The using up of nonrenewable natural resources (coal, oil and etc.).

Within capitalism its self-there is no concept of justice or fairness. Laissez-faire capitalism is simply incapable of dealing with world’s poverty rate and destitution. Neither Middleclass nor laissez-faire capitalism measures social well-being. Laissez-faire capitalism depends on constant growth to survive.

Actions:

Review each business that you purchase a product or service and determine if they meet the following criteria.

  1. The Corporation pays a living wage to all employees.
  2. All cost of producing a product or service is in the price of the product or service.

If they do not meet the two criteria determine if you can find the product or service at a corporation that is more responsible.

Capitalism has its limits that are not being addressed currently. If we are to provide an environment where the American Dream will be available to our children and grandchildren every individual needs to take action wherever he or she can to support only corporations that favor Middleclass Capitalism as opposed to Laissez-faire Capitalism (Corporate Capitalism).

This is not government’s job it’s the American citizens’ job.

Additional research:

Three selected web articles list below discuss the limits of the current capitalistic system to accurately price the product or service resulting in society supporting American corporations.

Article 1 – In a February 14, 2014 National Review article Jonah Goldberg.

Article 2 – In 2011/06/02 US News and World Report.

Article 3 – On the website Davidttilfiker.com. This is the most concise list of limits of capitalism I have seen.

 

 

Posted by: Middleclass Search | November 6, 2016

Middleclass Capitalistic System a Talk on keeping the American Dream Alive

(This is a draft of a YouTube talk)

This is a discussion on how we can keep the American Dream alive while implementing new technology. Basically it is made up of three parts two of which are how American employees should be compensated and the third is how corporations should operate in United States in order that a middle-class wage is paid to employees. We might want to think of this as a Middleclass Capitalistic System. The “System” would work better with “Political” support especially the minimum living wage. It is well document the pressures politician are under to keep the Status Quo. It is hope that pressure on offending corporations by citizens and citizen groups will give legislators “cover” to act.

The key to a sound Middleclass Capitalistic System wage is that all the cost of a product/service should be passed to the consumer in the price of that product or service. The cost should include material, equipment and labor. If the wage paid is less than the cost of a worker to support her/his self you do not have a capitalistic system you have some form of a socialist or corporate socialist system. In America if the wage paid is less than the living wage in an area the difference is provided by the taxpayers via various social programs.

Work is changing along with the compensation for that work is changing, to preclude the change from driving the wages of the new workforce lower than a Middleclass Wage we need define what we expect from businesses and corporations. We don’t want to define what the new work is or the structure or shape of a new organizations but we do want to define wages if a corporation sells products or services in United States we want to assure that corporation has a middle-class wage scale.

The concept of a minimum or maximum wage has been around for centuries in the 1300 because of the black plague which killed many workers; King Edward III set a maximum wage. In the 1600s King James I formalized the minimum wage for textile workers. In earlier times minimum wage was synonymous to living wage, that is a wage that would pay an individual for food, medical, housing, transportation and other basic essentials. Adam Smith talked about the need for employees to receive a living wage. And in 1909 Winston Churchill commented in the House of Commons “it’s a serious national evil that a class of his Majesty’s subject should receive less than a living wage and return for their utmost exertions”

Since the end of the feudal system and before the beginning of the Industrial Revolution scholars and businessmen have been debating what a fair wage should be.  We now have a tool that can calculate what wage one adult requires for food, healthcare, housing, transportation, taxes, child support, and other basic necessities. The tool is the living wage calculator developed by a group many of which are now located at MIT. The number is based on seven factors using federal and state data. Although this number varies from state to state with Maryland being the highest and Mississippi the lowest it provides a floor for wages in any location in the nation. For the first time we can move from philosophical to an actual number of what is required for an individual to maintain the basic necessities in the United States. From my viewpoint the cost of retirement needs to be included as an eight factor to the calculator. (Financial planners estimate that 70% to 80% of preretirement income is needed to maintain the same lifestyle.[1] To achieve the financial planner’s general guidelines requires saving 10% to 15% a year starting in your 20’s.[2]  Until the “experts” factor retirement into the living wage a good estimate would be to add 12% {about ½ way between 10% and 15%} to the living wage for retirement.) Using the living calculator and adding the additional cost of retirement we can produces a number that we will argue is the minimum wage an individual should be paid if we are to maintain the American Dream. It is interesting to note that in 1960 a list of individual’s expenditure for tobacco and alcoholic beverages are listed as individual’s expenditure but retirement is not.

In addition we can use the calculator to determine what the journeyman salaries should be if we are to maintain our current population. The number of children that families has often depends on their wages, to maintain the current population 2.1 is the number of children required anything less and America’s population will fall. The floor for the journey persons wage is the salary for two adults (one working) with 2.1 children which can be calculated using the living wage calculator with retirement added.

The floor for a minimum wage is the living wage plus retirement for one person this should be legislated so the companies don’t try to find ways to subvert. Before legislating a journeyman’s middle-class wage attempts to use social media pressure on corporations to pay journeyman’s middle-class wage should be tried. Some corporations realize that paying a middle-class wage is in their own interest.

Besides wages the third social pressure should be brought on corporations to provide jobs in a country that at least equals the sale in that country. Example if 70% sales are in a nation than 70% of the workforce of that corporation should be in that nation. Corporations that use tactics like the use of H1B visas to lower salaries should join the” Blacklist” of corporations that do not pay a middle-class wage.

Other nations may follow our lead which is fine. It will bring us to a time where good corporations need to be great and solve problems not using congressional influence and financial management to stay in business.

Instead of complaining or joining the silent majority citizens should insist that their congressional delegates support the living wages defined above and corporations operating in America support the concept of a Middleclass Capitalistic System.

This is an extract from a forth coming book titled Middleclass Capitalism – Keeping the American Dream and the American Middleclass Alive. A book which numerates way individuals and citizen groups can influence the future of the middleclass without involving (or minimum involvement with) the current political system.

 

 

[1] FCS7251/FV 1355 edis.IFAS.UFL.EDU

[2] http://money.cnn.com/retirement/guide/basics…basics.money.mag/index7.htm

Posted by: Middleclass Search | August 9, 2016

Bread and Circuses

Since ancient Rome politicians have used bread and circuses to influence the electret.  The concept has continued to today’s elections. Is there any hope that American citizens will realize they have been duped for 40 years and demand that the middle class wage be addressed in this election? In a forth coming book titled Middleclass Capitalism – Keeping the American Dream and the American Middleclass Alive it is argued that the Golden age for the middle class ended in the early 70s. Since that time, 44 years ago and 11 presidential election cycles, the wages of the middle class have declined. In these elections, while the economy and middle-class jobs were being moved to other countries have been discussed by the candidates, with little change, no candidate has addressed the continuous erosion of the middle class wage.  Instead of meeting the wage issue, an issue that affects every citizens, politicians and lobbyists have argued issues that have divided citizens such as tax laws, abortion, gay marriage, racial inequality, immigration and many more all important issues to various constituencies but the one that every voter is concerned about, wages, has rarely been brought up.

For the last 40 years American workers have been in a non-declared labor dispute – at least from the workers point of view. Corporations have been reducing compensation using the scare tactics of globalization. One of the results of the long suppression is that the wage issue has bubbled up in our current election cycle via jobs being exported, immigrants taking jobs and the falling expectations of the middle class. We see a candidate getting support of a large number of citizens by promising to change the current system. There is an opportunity to bring the wage issue out in the open in this election. Change can be made without destroying the current government as in Britain’s opting out of the European Union or by Americans electing an unqualified candidate.

If we consider the erosion of the middle class wage as a simple labor issue the solutions are that of a labor dispute. While in the long run change in government policy will help correct the erosion of the middle class wage but in the short range individuals with all the existing social tools can take action to begin to correct the wage erosion. So instead of supporting yet another “bread and circus” election cycle individuals may want to opt for action.

The key to a sound middle-class capitalistic system wage is that all the cost of a product/service should be passed to the consumer in the price of that product or service. The cost should include material, equipment and labor. If the wage paid is less than the cost of a worker to support her/his self you do not have a capitalistic system you have some form of a socialist or corporate socialist system. In America if the wage paid is less than the living wage in an area the difference is provided by the taxpayers via various social programs.

Doing the current election cycle considerations should be for Senate and House candidates that support the Middleclass. The candidates should support; a minimum or a living wage; reviewing existing taxes to determine if they are too high or too low; actions to keep jobs in America; corporations that move their Headquarters out of America; and should question companies that make excess use of H1B Visa to replace American workers. Many current legislators will fail the above simple test. To have a strong middle-class capitalistic system that pays a middle-class wage these legislators should be replaced this election cycle.

If you are interested in a long-term approach a simple Google search will identify a number of a corporations that do not have long-term interest of America let alone the middle-class in their approach to business. These corporations do not pay minimum/living wage; they have gender pay discrepancy; their journeyman wage is lower than the average middle-class wage; they use H1B visas to replace American workers. These are some of the indications that a corporation does not have America’s interest as part of their business plan. Select a company and using your social media contacts organize some type a boycott. (There’s and app for this) Traditionally boycotts may have little impact on a global corporation’s bottom line unless participated in by many nations. But boycotts sometimes arouse factions of stockholders to become more active in addressing American issues in a global corporation. One small step at a time.

Voters need to do something about wages in America.  Another election cycle should not pass without getting the wage issue in to the conversation. No matter of your age if you’re 18 or 80 research the wage issue in America for the last 40 years and I’m convinced you will do what you can to get the subject of an American wage to be a part of the 2016 political campaign.

Enough Bread and Circuses more responsible legislators!

 

 

Posted by: Middleclass Search | February 16, 2016

Common Core Standards

Reviewing education in America for a book on the middle class the subject of Common Core Standards was prominent in the literature. Being an engineer any encouragement to support a systematic approach to improving education should not be missed. When the basic research for information was made there was found a dissent for the approach and use of Common Core Standards. An article in the Washington Post by Valerie Strauss on January 18, 2014 where she quotes a speech given by Diana Ravitch (an one time Assistant Secretary of Education)on January 11, 2014 to the Modern Language Association. After reading the article the first time it appeared that the doctor was an academia trying to justify keeping the education process of the past. The article did list more concerns than you would expect from a thoroughly designed and implemented system. Much research later it is obvious that Dr. Ravitch speech (article) provides a very precise history of a good and simple idea gone awry. I do not agree with her conclusions, we do need standards but many issues some interacting and some just happening concurrently are casting doubt on the Common Core Standard and are threatening a successful implementation.

The list of issues includes:

1 – The development and implementation timeline;

2 – The government implementation of a $4.35 billion grant program;

3 – The change in methodology of learning/ teaching mathematics which was integrated in the new standard but had not previously been presented;

4 – The relationship of some of the developers of the standards and the testing, implementation;

5 – Testing of Common Core Standards;

6 – The requirement that the Common Core Standards test would require computer equipment;

7 – There was no discussion of subjects not included in the standards (social studies, arts and American/ world history).

The first issue is the development and implementation timeline that included a change in methodology of learning/ teaching mathematics which was integrated in the new standard but had not been previously announced to the education community. A concise timeline:

2007 – At the Annual Policy Forum of the Council of Chief State School Officials (CCSSO) a discussion on standardizing states educational standards was put forth.

2008 – CCSSO and the National Governors Association (NGA) collaborated on a report to upgrade educational standards.

2009 April – NGA and CCSSO convinced state government and educational of advisors to commit to develop common standards.

2009 May – Common Core Standard development starts.

2009 June – 48 states, two territories and Washington DC, some providing expertise, began developing Common Core Standards.

2009 September – First draft provided for public comment. One thousand responses.

2009 November – First draft of K – 12 grade by grade Common Core Standards completed.

2010 January – Review of revised draft of K – 12 grade by grade Common Core Standards.

2010 February – Revised version of Common Core Standards provided to states

2010 March – Comments received on Common Core Standards

2010 June – Final draft of Common Core Standards released.

2011/15 – A majority of states, four territories and Washington DC work to replace existing standards with Common Core State Standards. Some states are considering dropping out after having implementation problems, cost of assessment concerns and a few are concerned that Common Core Standards is the prelude to a national education program.

The time line is not unreasonable for implementing a system but when one adds to the Common Core Standards the changes of a new way mathematics is to be taught and these changes were not publicized prior to the standards it easy to see how mistrust of Common Core is coming from many fronts. The mathematic change itself normally would’ve taken 2 to 4 years to implement. The normal approach would be to introduced the idea, teachers would be trained, parents would introduced to the new method so they could help their children adjust and then and only then the new approach would have been put into practice.

A second issue causing concern in implementing Common Core Standards is that in July 2009 the Department of Education announced the “Race to the Top” a grant program of $4.35 billion for satisfying certain educational policies of performance based evaluation of faculty based on measures of educational effectiveness. Although adopting Common Core Standards was not required by this program some (most) states linked the two. This link real or imagined added to those concerned that the Federal Government was trying to dominate what was taught in local schools.

The third issue is the change in methodology of learning/ teaching mathematics which was integrated in the new standard but had not previously been presented, this was a significant change in mathematics teaching equivalent to the change attempted in the 1960s and 1980s which was referred to as “New Math”. The attempted change to math teaching in the 60s/80s did not succeed with more preparation then the Common Core math change. From a systems integrator point of view I can’t explain the logic of why the Common Core math (for lack of a better name) was introduced to school systems this way. If the Common Core math is better for American students we should not penalize them for the approach used for its introduction. We as parents should help to improve the introduction by working with our local school system. Parents can provide tutorials for both students and other parents on the subject, work with teachers to help struggling students, do what it takes to make it happen.

An issue that is a concern to some in the education community and others outside it, is the relationship of developers and the educational testing community. As an example, just recently it was announced that the 2016 SAT exam has undergone the first major change in 30 years when the changes are compared to the Common Core standards they match the new requirements. A reasonable future goal but the exam has changed before the Common Core Standards are fully implemented. The President of the College Boards since late 2012 is David Coleman who left the Common Core development team to become President of the College Boards.

The fifth issues the testing of Common Core Standards has several concerns. Under the current approach all school systems will be paying for their students to take the Common Core Test. Two testing consortiums have been set up to administer test to measure the effectiveness of the standards. The  time the test places on the students’ class time might be more beneficially used in learning rather than measuring. It would make more sense to link the Common Core testing to the daily, weekly and monthly testing that goes on in a school system via the local school systems metadata. The information for the Common Core statistics can be “data mined” from existing information, in the long run this will save money (money that can be used locally and not going to a testing consortium) for the school system, do away with testing stress and do away with “teaching to the test”.  Since the College Boards are integrating the standards in their test the measurement of the 11th/12th grade college bound students will be available in the College Boards database.

Another testing issue is that some states and some administrators want to use the test as a measurement of a teachers’ ability to teach and some politicians have jumped on this simplistic idea. One governor wants to make the results be 50% of a teacher’s evaluation. The idea of using the results of the Common Core test to be a major factor in grading a teachers is enough of an argument to negate any testing. (I’m not an educator but I was a manager for many years and I did not need a test to rate the engineers that worked for me.)

The issue that Common Core Standards test would require the purchased of computer equipment. There doesn’t appear to be any validity that testing would require individual computers for students at least in the beginning. That’s not to say that some school systems may have used Common Core implementation for justification of additional computers. This argument would go away if alternate methods to measure the implementation of Common Core Standards other than standard test are used.

The seventh issue which was brought up back in 2009 in some of the feedback was that there was no discussion of subjects not included in the Common Core Standards (social studies, arts and American/ world history). The answer has never been adequately addressed by any of the organizations responsible for the standards. Common Core Standards were and still are funded by large corporations who want an educated workforce something that few would disagree with but some members of society have argued that the common core is focused too much on what corporations need for good employees and not what a country needs for good citizens. The concern that teaching the items in Common Core Areas would not allow time for other subjects should be looked at by each state.

From an engineering point of view, Common Core appears to be a system that was implemented to quickly without proper peer review. The designers got review of their design but from a selective group of individuals which the designers chose, the number was very small when you consider there are a little over 3.6 million teachers in public and private elementary and secondary schools.

There is much more that can be said on the subject but the function of this article is to highlight problems that harm the middle-class where joint action by citizens can solve. Common Core Standards is a good idea but one that needs to be implemented for the long haul. The system design and implementation had too much money, too little time, a lot of naivety about system change and just maybe too much arrogance that the system developers know better for the citizens of our country then the citizens.

I’m concerned that the current approach of implementing Common Core Standards will end up just as prior attempts to implement “New Math” in the 1960s and again in 1980s both times a lot of buzz, a lot of complaints were generated but eventually mathematic teaching went back to the prior approach.

States should not abandon the idea of Common Core Standards but develop a better implementation program along with a better and cheaper information gathering methodology (testing).

Action: Citizens can get involved and help school districts work through the problem. Ask questions: Are the teachers trained in teaching the new approach to mathematics? Do the parents understand the new approach to mathematics? Do the Common Core standards provide a “well-rounded” citizen? Are there better assessment techniques then standardize test?

Remember that school administrators via CCSSO have a vested interest in the current approach to implementing Common Core so changes to the process at the local level may not come easily.

Posted by: Middleclass Search | August 31, 2015

Where is a Middle-class Candidate?

The Republicans have 16 announced presidential candidates while the Democrats have five most of the candidates in both parties proclaim that they want to improve America’s middle class. But all of these candidate’s approaches are stuck in the 1960s when America had a strong middle-class. Since the 60s the world’s population has doubled, markets are now global and almost all voting citizens have access to the Internet. Rather than patch a capitalistic system that was developed when most Americans would have argued that ”… what was good for General Motors was a good for America” we need a candidate(s) that recognize that if we are to have a strong middle-class the Americans capitalistic system needs to be geared to the middle-class not corporations.

What changes need to be made to our current system to provide us with a strong middle-class? Looking at the America’s economic/political system from a System Engineer’s point of view – a middle-class capitalistic system would need to address at a minimum the following:

1 – It would require that any corporation or business that operates in America pay a starting wage that equals a living wage. Any wage less than a living wage results and the taxpayers supporting the corporation’s employees (and the Corporation) via various subsidies.

2 – The laws and regulations would support businesses that employ American workers, pay a middle-class journey person wage. A middle-class wage should provide a middle-class standard of living including healthcare and a secure retirement plan.

3 – Updates to America’s infrastructure will keep us competitive in the global market and will be paid for via responsible taxation.

4 – A stabilize retirement system with a stable Social Security program.

5 – Borders secure from terrorists and violent offenders while integrating existing immigrants into America’s culture and society.

6 – A responsible taxation program that will eliminate the National Debt.

7 – A strong renewable energy policy.

8 – A change to campaign financing so that middle-class candidate could run for any office.

9 – An automation policy.

America’s role in the world is changing we cannot impress our will on other nations by intimidation we need to lead by example. This will require that we temper our gun slinging past and show that with the right incentive capitalism can benefit more people then it harms.

In the past two or three decade’s politicians and the media have portrayed the elections to be between conservatives and liberals but in reality it has been between two approaches to our capitalistic systems. The current system provides incentives to corporations at the expense of the middle-class. The incentives should be changed to reward corporations that provide a middle-class employment.

By now many traditionalists will be shouting that this is socialism or communism or some other ism but in reality it is “pure” capitalism not the corporate/cronyism form of capitalism that Americans have become to take as what we should expect.

America’s future is boundless it is only limited by politicians without vision pandering to individuals living in the past and fearing the future.

In the past when America has been in a crisis leaders have emerged with new approaches to solve the country’s problems. There must be a candidate with a positive comprehensive vision of the future for the American Middleclass.

Like the line from the old TV game show” will the real” candidate that supports a strong American middle-class “please stand up.”

Posted by: Middleclass Search | November 3, 2014

Rand Paul’s Request for Support

I recently received a letter from Senator Rand Paul requesting support for the National Right to Work Act which has been introduced to Congress to repeal labors power to force workers to pay union dues. The letter listed – in inflammatory prose – the evil of union. I concur with some of Doctors Paul’s concerns but if Dr. Paul had spent more time studying history he might have found that unions have been instrumental in workplace safety, child labor laws and over all workers’ salaries in the United States.

Not mentioned by Senator Paul is that in a free market system the only way wages are protected are by collective bargaining (unions) and the minimum wage both of which Senator Paul opposes. The attack on labor by Senator Paul is only one of several attacks on the National Labor Relations Act by Republican Senators. During the golden years of the middle-class union membership accounted for about 25% of the workers today it accounts for 10%. In this time frame wages have stagnated and the minimum wage has fallen behind inflation.

Any system works the best when it has self-correcting features built into its operation Senators Paul’s and the other Republican senators that support actions that strengthen businesses and weaken labor are not favoring true capitalism instead they want to strengthen the socialistic business model that they have created in the past four decades. The American Dream and the American Middle-class can exist and thrive in a true capitalistic system but has a problem in Senator Paul’s world.

An issue brought up in Senator Paul’s letter was that labors power was deadly to millions of small businesses since it forced businesses to address employees concerns and that might cause the business to fail. This argument is often used against collective bargaining, if a company is forced to change its business model it will become noncompetitive. History has shown that if a company is that close to failure the company’s business model is unsustainable and it will fail eventually. In fact this argument could have been used to continue slavery since doing away with slavery caused the “Plantation Model” to be radically changed.

Senator Paul’s tunnel vision which system engineers see all the time in system implementation is the sub optimization of an individual part of the system for the detriment of the total system. Senator Paul’s along with other senator’s attack on National Labor Relations Board is attack on the middle-class. Their argument that limiting unions would provide more jobs may be true but the jobs they would provide would be of the lower quality and lower pay. Senator Paul’s obsession with big government doesn’t recognize that there is little difference to the individual if he is forced to live in a factory town environment (caused by big corporations) or a gulags type environment caused by a big government. It is time to insist that our representatives represent what the majority of American citizens want which is to be able to pursue the chance of the American Dream and not the return of a society where we are ruled by an elitist group who believe in their divine right to govern as did the Kings of old.

A national election season is in progress once again both political parties are espousing their policies support the middle-class but if you look at our political and economic system from the viewpoint not as a politician or an economist but as a system engineer it is clear that both political parties’ policies are hurting the middle-class.

Posted by: Middleclass Search | August 21, 2014

Why the American Dream has gone away (Part 1)

For several years I have been looking at the American middle-class from the point of a system engineer trying to understand why middle-class wages have stagnated while corporate profits have increased.

Like any system capitalism can be looked at in various ways. We can divide a capitalist venture into three parts: the business part, which is the idea for a product or service and how it is developed and manufactured; the financial part, which is how the product or service will be financed and the consumer part, the user of the product or service. After World War II America created a unique capitalistic system that balanced the business/financial/consumer parts. In the middle-class Golden Age the American Capitalistic System was somewhat of a closed system. Businesses hired employees which they paid adequate wages so the employees had money to consume the products the businesses manufactured (creating demand) and also to purchase stock in the businesses. The system provided a strong middle-class. All three parts working in their own interest supported one another.

As the stability of foreign countries increased businesses that were having concerns because the scarcely of labor in America that was driving cost looked to moving jobs out of the country. Corporations soon realized that with globalization businesses could get labor, financial support and consumers from anywhere in the world. The need to court American workers was no longer needed they became just another resource. (See System model below.) The unique capitalistic system that created a strong middle-class and made the American Dream possible was destroyed.

Capitalistic System Model (The Golden age)

—–Business ———-Product or Service ————–Resources —————————————————————————————-Material . mostly from USA
—————————————————————————————-Machines
—————————————————————————————-Labor . USA Employees
—–Financial———-Sell Stock . USA Employees

——Consumer———-USA Employees

Figure 1

The model shown in figure 1, while very simplistic, helps explain several things. One thing it explains is the reason why many in the world dislike a capitalist system. In many parts of the world businesses go to a country remove natural resources using the countries citizens to supply the labor then take and use their profits elsewhere in the world leaving the country with nothing but depleted resources. The Important thing it explains is what happened to the American middle-class once businesses were no longer dependent on American employees to create the consumer demand there was no need to provide the strong middle-class.

Doing the Middle-classes Golden Age the political system established an environment that favored the Corporation with the concept that what was good for a corporations was good for the middle-class. In a global economy this is no longer true but many politicians still advocate and support the Corporation over that of the middle-class. Not needing the middle-class businesses began moving many of their cost to the employees and sometimes to the taxpayer. The two most obvious cost moved to the employee were retirement and healthcare. Dozens of other costs that are not so obvious were also moved; an example is keeping the cap on minimum wage which allows the corporations to pay employees below what it is required “to stay alive” which then forces the taxpayer to contribute to the employee welfare and indirectly to the corporations profit. Companies moved their corporate headquarters out of the US so they can lower their taxes but they still use Americans trade missions at foreign embassies to promote their businesses and still use America’s military might for “protection” in the foreign market area. The taxpayer now rewards these companies by allowing them the same privileges as corporations that remain in America and who pay their fair tax. There are many more open and hidden support that politicians have allowed corporations to pass on to the taxpayer. It is time for the politicians to change their priorities.

The above is a distillation of several larger essays. With the new political cycle beginning we need to look for candidates that believe in the American Dream for the Middle-class that want a country “of the people and for the people” and not a country of the Corporation. A country with a strong Middle-class will be able to adapt to the multitude of changes that will be required for our nation to survive. It starts with the belief that we can have a political system that works for the average individual and not just the wealthy, where political decisions are made for both the middle-class and corporations. It is easy in our busy lives to believe that we cannot influence an entrenched political system but in today’s world of instant communication, with a little effort from each of us we can breathe life back into the American Dream.

If you are interested in maintaining the American Dream and the American middle-class here are questions you may want to ask your candidate in the upcoming election.

1. Do you know what the middle-class wage should be in our district?
2. What are you doing to encourage businesses to pay employees a middle-class wage?
3. What are you doing to assure the tax rates paid by each citizen in your district are fair and equal?
4. Do you support increasing taxes on the upper ½ %? If no, why?
5. Do you support increasing the minimum wage so taxpayers do not support corporations that pay the minimal wage? If no, why?
6. Have you signed a pledge not to raise taxes? If yes why?

Posted by: Middleclass Search | April 10, 2014

Minimum wage as a requirement and not a way of distributing wealth

As a system engineer I have a problem with the concept that the minimum wage is a way of distributing wealth – with that logic any wage is a way distributing wealth. If it is goal of the United States to support the American Dream (which is defined as a middle-class lifestyle) then there is a need for a wage that provides the basics for an individual. Adam Smith recognized this stating “A man must always live by his work, and his wages must at least be sufficient to maintain him.” From the systems point of view even in the most laissez faire economic system there is a need for a minimum/living wage to maintain a stable system. Without a “bottom wage” and with a non-fully employed economy (caused in part by globalization) theoretically wages could fall to a level where gulags become commonplace throughout a nation.
A common alternative often proposed to the minimum wage is the earned – income tax credit while this is a more targeted solution than a minimum/living wage it begs the problem which is the price of a product or service must include all the costs required producing it. The earned – income tax credit approach transfers some of those costs to the taxpayer. From a systems point of view this method complicates the long term goal of building an economic system that promotes a broad-based middle-class.
If we are to have a truly capitalistic system with a strong middle-class, economists need to address minimum wage/living wage as a requirement and not away of distributing wealth.

Posted by: Middleclass Search | November 19, 2013

Healthcare and the Middle-class.

In our definition of the middle-class wage we noted that the cost of healthcare is included. Healthcare is one of the elements that need to be include in all wages so that it’s costs can be placed in the price of the product or service produced. If we are to maintain our middle-class it is essential that we make the current Affordable Care Act work otherwise the American middle-class wage will continue to decrease.

Those that oppose health care for any reason cannot argue that they support the middle-class. Why many in the House of Representative’s opposed the Affordable Care Act is incomprehensible and why their constituents continue support them is perplexing since they are destroying their own and their children’s future life style.

From a system engineering point of view the implementation of the Affordable Care Act could have went better (I have had some “nail biting” systems implementation but thankfully none as bad as this one.) But instead of flatly of the opposing affordable healthcare and using the implementation problems as a reason to scuttle the program, Congress needs to find ways to fix and to improve the program (not weaken).

A different way to look at what should be included in the employee compensation is to consider the employee in the same light as an item of equipment needed to produce a product or service. The employee will need maintenance the same as a piece of equipment. The maintenance includes proper pay (power), healthcare (repair), updating (education), and proper disposal (retirement). All such costs are passed to the consumer in the product/service price for a piece of equipment.  Why should not the employee’s “total maintenance cost” also be included the price of the product/service?

In order to compete in the global economy the nation needs a good health care plan. Most of the nation’s we compete with provide healthcare either through private plans or through the government.

Healthcare is a necessary expense to have an American middle-class. Urge your congressional members to support it – our children and grandchildren deserve it.

 

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