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Friday, January 16, 2015

6 Reasons Not To Expect A Raise

What is this world coming to?  Today I read that a machine can partly replace an anesthesiologist.  See:  Sedasys-puts-challenge-to-anesthesiologists.  This is concerning.  It bothers me because my uncle, Ruben, is an anesthesiologist in Mexico.  It perturbs me because I'm aware that corporations are inflicting a mortal wound to humanity.  In their incessant race for profits, corporations are eliminating what humans must have in order to have the will to survive: purpose.

Without purpose and a sense of worth there is not much to bolster the human spirit.  Greed and technological innovation that targets human labor will be responsible for the next mass extinction.  Not a meteor from space.  Not a massive volcanic eruption that knocks out the sun.  Tension is building as our world population outpaces the meaningful activities humans can be employed to do.

Corporations and their greedy CEO's, boards, backers, must stop seeking ways to eliminate the human costs of doing business in order to improve their bottom lines.  They must stop this now! Smaller companies that feed these behemoths with software or gadgets that replace a person or a skill must cease and desist their operations.

Higher wages aren't coming back

Former Labor Secretary and best-selling author, Robert Reich, believes that "the link between falling unemployment and rising wages has been severed."  In an article, titled, Why Wages Won't Rise, Mr. Reich provided the following reasons why he believes higher pay may now be more difficult to come by:

1.  Outsourcing.  Why would a CEO (tasked quarterly with making his company's numbers) hire an American when he can get an Indian, Spaniard, Italian, Mexican, etc., to do the same job for less all at the click of a button?

2.  Robots.  Reich writes, "Meanwhile here at home, a whole new generation of smart technologies is taking over jobs that used to be done only by people."  There is a huge price to be paid when innovation and technology target people.  Mark my words.





3.  The jobless.  The government is sneaky.  They can fabricate seemingly positive jobless numbers by pretending millions of people don't exist.  That's right, there are millions of unemployed people no longer being counted.  Mr. Reich calls these people a "reserve army" of potential employees.  So again, why would a CEO raise wages when he/she knows there is always someone more desperate willing to do the job for less pay?

4.  Job Insecurity.  1 out of every 5 of today's workers is in a part-time gig!  You think they're going to go up to the boss and say, "Hey, boss, how about a raise?"  These workers are just glad to have a job.  They don't know how long they'll be at their post.  Two-thirds of ALL workers are living paycheck to paycheck!

5.  Pensions and trade unions are disappearing.  Today fewer than 7% of private-sector employees are unionized.  There used to be a time when a union could bargain with their management for higher benefits and pay.  Remember those days?  This is a powerful statement:

"None of these changes has been accidental. The growing use of outsourcing abroad and of labor-replacing technologies, the large reserve of hidden unemployed, the mounting economic insecurities, and the demise of labor unions have been actively pursued by corporations and encouraged by Wall Street. Payrolls are the single biggest cost of business. Lower payrolls mean higher profits." --Robert Reich

Would you believe that despite all of this America has become more productive?  From 1979 to today, America's productivity has risen 65%.  How has worker's median compensation fared during the same time period?  A measly 8% growth.




6.  I am adding this reason to the list.  It was not mentioned in the article by Mr. Reich.  The global economic prospect is bleak once again.  According to,  http://www.worldbank.org/en/publication/global-economic-prospects, overall global growth is expected to rise moderately to 3% in 2015.  CEOs will continue to the course, knowing that the world's economic pace is barely sputtering along.


Not a winning formula

There used to be a robust middle-class in this country.  Want to talk about our country's debt being unsustainable?  Ha!  The loss of a middle-class as the wealth gap continues to widen is also unsustainable.  How will corporations continue to make their earnings numbers when there are no more people they can dismiss or areas where they can cut the fat from their operations, but more importantly, when there are no longer people who can afford to buy their products?  Corporate strategy can only erode purchasing power for so long before there is a recoil moment.

"But from the limited viewpoint of the CEO of a single large firm, or of an investment banker or fund manager on Wall Street, it’s worked out just fine – so far.  Low unemployment won’t lead to higher pay for most Americans because the key strategy of the nation’s large corporations and financial sector has been to prevent wages from rising."--Robert Reich

Here is Mr. Reich's article if you would like to read it:  http://robertreich.org/

What to do?

If a raise is not in store for you, then it is time you look for ways to give yourself a raise.  Start by paying yourself an additional $20 a month.  That's probably what you are saving each month on gasoline.  Put this $20 bill and subsequent ones in a Money Market account and don't draw from it.  This fund will become your emergency savings.  It is tempting to buy more things with the little extra cash you have in your budget, but you're being given a gift right now (oil prices so low) and it's for you to better position yourself, not get materialistic.

An alternative would be to accelerate your debt payments.  Got credit cards or student loans?  Put a little extra on the top of your regular payment now that you have to spend less at the pump.

Do some free-lance work.  Set-up an account at www.elance.com and start applying for jobs.

Do network marketing.  This can be lucrative and completely replace your current job if you're good at it.  Make sure you do your research and find great network marketing companies to work for.

Don't buy crap you don't need.  Americans spend over $1,300 on apparel each year!  People, there are things called consignment and thrift stores.  Start shopping there!  See this site and place your cursor on the piece of the pie for actual figures: http://money.cnn.com/interactive/news/economy/us-spending/

I hope you are doing well economically and are in good spirits.  If not, don't give up!  Stay positive even if this blog post was depressing.  Take care!  Carlos
**Update on my father-in-law, Mr. Grimmett.  He is still at the hospital and not out of the woods yet.  His options will become clearer once doctors can remove some of the dead tissue on his leg.**

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