A Semi-Honest SS Proposal

[Joe Guy]

You've misunderstood what I wrote. I suggested that the SS benefit for 62 yr olds would be changed to be a lesser amount than they would be eligible to receive now at age 62 and that the maximum benefit eligibility age would be raised to a higher age than it is now.

This can't be current law since it is a suggestion to change the current law.

[Scooter]

As for the unfairness of the system if the normal retirement age is increased, there are all sorts of inequities in the program, starting with the main problem that the system was never funded -- a worker's "contributions" are directly paid to retirees and are never invested to pay for the worker's own retirement. If there is a surplus (as there was from 1983 to now), the surplus is used to fund other government programs, and again, there are no assets to call on to pay for the worker's retirement when needed.

It didn't have to be that way.

For years after it was established, the Canada Pension Plan suffered from the same funding weaknesses - retirees who had only limited contributions after the Plan's inception were eligible for full pension as if they had contributed for 40 years or more. Provincial and federal governments would borrow money from the Plan at very low interest rates as a cheap source of financing deficits, and there was no real oversight of the investment and management of the Plan by someone who did not have competing interests. So in the 1990s contribution rates were raised - substantially, repeatedly. An investment board was established that would make investment decisions based on earning their target rate of return on Plan assets, and management of the Plan funds was brought in house, by hiring some of the best minds in the business, which has both saved administrative costs and brought a rate of return that is well above the average of private sector pension funds. There are steep penalties for those wishing to retire early, and even steeper incentives for those who choose to defer retirement beyond 65. Those who are collecting CPP but still working recently got the option to continue making contributions on their employment earnings which will get them increased benefits if they are not maxxed out (relatively few people get the maximum benefit, which would generally require someone to work at least 40 years at the maximum pensionable earnings. All of which has worked to keep the Plan fully funded into late in the century.

This is a defined benefit type retirement plan, the old-style pension plan.

You say that as if there is something "new", and by implication better, about defined contribution plans or other pension alternatives. It's bad enough that the myth is being widely propagated that defined benefit plans are more expensive, which is, of course, untrue. If a defined contribution and a defined benefit plan earn the same returns, then the contributions over the life of the plan must be equal in both in order to earn the same pension. The only difference is in who is seen as better able to plan for and deal with the cyclical fluctuations that affect every fund's investment performance. Should two employees who both contributed the same amount received vastly different pensions, because one retired at the peak of the stock market and the other could not retire until six month later after the market crashed and lost 30% of its value? That is the potential consequence of a DC plan, and comes nowhere close to being just.

[Andrew D]

How about a defined contributions plan for workers' wages? Each worker is paid what her or his work adds to the value of what is produced. Less 5% for a reasonable profit.

Productivity has skyrocketed. Wages have stagnated.

Who is getting all the benefit created by that increased productivity? And why?

Tie workers' wages to workers' productivity. When workers' productivity goes up by 80%, workers' wages go up by 80%.

Simple. Fair. And the rich continue to get richer.

Why not?

[Crackpot]

As much as I like the concept not all productivity increases are due to workers. Tech is one major factor alone.

[Andrew D]

Why should none of the profits gained from workers' increased productivity due to technological advances go to the workers' whose productivity is thereby increased?

[oldr_n_wsr]

Why should none of the profits gained from workers' increased productivity due to technological advances go to the workers' whose productivity is thereby increased?

A certain amount of the productivity is due to company investment in technology. Need to subtract the "new equipment" that had a hand in increased productivity.
The calculator made the engineer more productive, but it was the investment in the calculator that did that, not the engineer. The company bought the tool.

[Crackpot]

I didn't say that they shouldn't benefit but there are far to many variables to directly tie productivity directly to wages. What about pressure to keep (and lower) prices? Upkeep upgrades and training on infrastructure? Should workers also be held responsible for decreases in productivity? What if the company has been neglecting upkeep upgrades and training? Should they price themselves out of the market to increase wages?

It isn't that simple

[Andrew D]

The amount by which workers' wages have increased while productivity has increased is zero (or perhaps less).

Fine, we need to take other things into account. I agree.

But the way in which we should take them into account is by starting with the assumption that all productivity increases are due to workers' increased productivity. If someone can demonstrate otherwise, fine.

But the way it is now, the workers whose productivity has increased get nothing -- zero of the increased profits due to their increased productivity. Nothing.

If someone can demonstrate by clear and convincing evidence, that none of the increased profits is due to workers' increased productivity, fine. If the increased profits are due solely to factors other than workers' increased productivity -- if they can be clearly and convincingly shown to by due solely, exclusively, absolutely, utterly, entirely due to factors unrelated to workers' increased productivity -- then the workers are not entitled to any share of the profits resulting from the increased productivity.

But until such a showing is made, our present regime of allocating none of the profits gained from increased productivity to the workers whose product is increased is indefensible.

[Sue U]

... our present regime of allocating none of the profits gained from increased productivity to the workers whose product[ivity] is increased is indefensible.

Welcome to the DSA (or, alternatively, SPUSA).

[Crackpot]

As I said at the outset I agree with the concept. I know for a fact that the only reason my wages have increased 25%+ over the past ten year is ironically since I've been laid off repeatedly and I was able to increase my wage and my classification each time I was hired (even though I was doing the same if not more difficult work 10 years ago)

The treatment of the American worker over the last 10-15 years has been atrocious. You have no idea how happy I am to be working at a private company now. Even as a contract employee I at least get treated a a human being and I actually have a real chance to get hired in direct.

My time here has led me to believe that the corporate model is seriously broken if not inherently flawed. The emphasis on immediate shareholder profit above all else is not only short sighted it's counter productive.

[Sue U]

My time here has led me to believe that the corporate model is seriously broken if not inherently flawed. The emphasis on immediate shareholder profit above all else is not only short sighted it's counter productive.

What will it take to finally get you to join the Red Team?

[Andrew D]

Well, Sue U, the SPUSA

where working people own and control the means of production and distribution through democratically-controlled public agencies

is definitely not my cup of tea. And if that is also what the DSA believes -- I cannot tell immediately from the website, and I do not feel like rummaging -- then it is not my cup of tea either.

We demonstrate every day that a government mandated minimum wage does not require that "working people own and control the means of production ...." It seems to me that tying wages to productivity would likewise not require such a regime.

[Crackpot]

Change something that may be broken for something that is broken?

[Lord Jim]

Okay, let me put together a hypothetical here...

I'm Mr. Spacely of Spacely Sprockets, and on my assembly line, I have assembly line workers assembling sprockets...(Except of course for George Jetson, who's kind of a manager and I keep promising to make him a Vice President, but I never follow through..that's another story)

I have 100 workers on my assembly line, and each day, putting in an eight hour full day's honest labor, they are able to turnout 100 sprockets...

Now one day, an industrial spy I've planted over at my competitor, Cogswell Cogs, comes to me with some information about a new technology that will automate 50% of the sprocket production process...

But in order to take advantage of this, I have to make a substantial investment; I have to compensate the person providing me the technology, I have to retool my assembly operation to accommodate the technology, I have to re-train my assembly line workers to make sprockets using the new technology...

And this investment also carries with it risk, because if somewhere along in the process it turns out that everything doesn't work out the way I anticipate, or it winds up being more complicated to implement than I planned for, glitches arise that I didn't anticipate, then I could either wind up losing my investment, or it could wind up being a lot more expensive than I expected...

But let's say we get past all those hurdles, and now the Spacely Sprocket assembly line workers go back to work turning out sprockets...

But with the new technology that I bought and took the risk with, putting in the exact same eight hour full day's honest labor, the sprocket assembly workers are able to turn out 200 sprockets a day...

Well that would mean that their productivity had increased 100%...

But nice, good, hardworking people that they are, the fact would remain that in real terms, they had nothing to do with that productivity increase....

And on top of that, there still has to be a number sprockets sold, before the investment that was made to increase the productivity is even recovered...

And to make matters even dodgier, now that we're turning out 200 sprockets a day, if the market gets soft I may have to reduce the sprocket price, (and therefore the profit margin) in order to stay competitive in the market place...(remember, I'm still having to deal with folks over at Cogswell Cogs...)

In fact, if the economy got weak enough that demand for sprockets reached a point where it was no longer profitable to turn out 200 sprockets a day, I might have to let some of those nice, good, hardworking people go and only produce 150 sprockets a day....

I'd hate to do that, but it could happen...

[Andrew D]

Fine, we need to take other things into account. I agree.

I have to make a substantial investment

With funds no small part of which come from your workers' productivity.

I have to compensate the person providing me the technology

With funds no small part of which come from your workers' productivity.

I have to retool my assembly operation to accommodate the technology

With funds no small part of which come from your workers' productivity.

I have to re-train my assembly line workers to make sprockets

And even though your workers have invested their time and energy into that retraining, you intend to compensate them not at all.

they had nothing to do with that productivity increase

Only in right-wing never-never land.

[Big RR]

[quoteWell that would mean that their productivity had increased 100%...

But nice, good, hardworking people that they are, the fact would remain that in real terms, they had nothing to do with that productivity increase....
][/quote]

Nothing? who were the people who worked (extra) hard to learn the new system, and who also participated in implementing it? the people who had to learn the intricacies of a system you bought, probably without even considering what they are, and who had to develop a new work regime to produce those 200 sprockets a day? Certainly, not all the increase in productivity was due to them, but clearly some was. And shouldn't this be recognized, at least as a part of the picture?

I've worked on assembly lines and in plants, and I've yet to see a production system that was turn key; indeed, the workers are the ones who intricately know it and work out ways to may it work within the plant. Those innovations go widely unrecognized, but they are of considerable value in many cases. Most people take their jobs seriously and want to do good work.

[Lord Jim]

And even though your workers have invested their time and energy into that retraining, you intend to compensate them not at all.

Of course they're compensated...

I wouldn't them expect to go through their training on their own time, unpaid...

Nor would I expect them to work any longer hours than they would when they were just assembling sprockets...

Of course, during this training period, we wouldn't be producing sprockets, (or at least we wouldn't be producing as many sprockets as we would once everyone is trained on the new system)

Which makes the training an additional cost, (or investment) on my part, hopefully to be recovered once everyone is working effectively with the new system...

Now, as this new system is implemented might there be some assembly line workers who pick it up more quickly than others? Would I see a value in having them help train the others who weren't picking it up as quickly? Quite possibly...

In which case I would compensate them to incentivize them to use that training skill...(Which of course would represent another investment on my part)

Look I admit I'm giving a pure, (or extreme) example here to illustrate a point...

In real life situations it would be rare where the front line workers contributed nothing to an increase in productivity...(the real world is more complicated than my Jetsons model....)

But what I am illustrating here, is that it would not be at all unusual (or unfair) for there to be a wide gap between an increase in "worker productivity" (which is kind of a misleading term, because a lot of folks want to interpret that as meaning the workers are working "harder", or doing a "better" job, which isn't necessarily the case) and the workers contribution to that increase in productivity....

So if you have a situation where "worker productivity" went up by X% and worker compensation only went up by Y%, (with Y being considerably less than X) that doesn't inherently mean that there's something unfair or exploitative at work...

You have to drill down beyond that to the specific business situation to determine whether or not there's genuine unfairness taking place. You can't justifiably make a blanket assumption that just because there's a significant gap between increases in worker productivity and worker compensation that something nefarious is afoot...

[Crackpot]

Just as it's equally valid to say that worker productivity is often hampered by deteriorating working conditions

[oldr_n_wsr]

For the middle few months I was employed here (I started in june 2012) I was tasked with "improving" a product line which was experiencing a 40% failure rate either at final check or in the field. They are now down to below 1%. The same people are doing the same jobs but the process flow was documented, the procedures were corrected, improved and where there were not any, they were written. No additional work for hte workers, in fact their load was lessened as there were far less failures they had to "fix". Not their fault as it was mostly a "process" problem. Do they deserve a raise? any kind of compensation? I might give them something if I were the boss, but the gains the company might have made were somewhat taken up by my salary and benefits (there was no one doing this before).

Should I ask for more money (they have already given me a raise and a bonus) as I have made one line more efficient by major margines. I am supposed to start "fixing" another line but have been sidetracked to work on other things. I get the credit and the possible rewards although I do not epect nor demand them as this is my job.

[dgs49]

Joseph, the statistic you cite is for Black males BORN TODAY. The average for middle-aged Black men today is lower.