In Response To Congresswoman Kate Porter on JP Morgan Pay – The Livable Wages Myth

I saw this video online the other day and I thought we should straighten some things out.

While there is a very serious problem with trying to make a living in today’s world with a single form of income, government continues to try to direct the blame to corporations and wages instead of who’s really at fault here — government

One can quickly see that government is the issue with just a few google searches.

Let’s try “inflation rate since 1950” and “cost of living in 1950” so that we can establish a base timeline.

If you don’t know what inflation is that’s a whole other topic for another day, but basically with any fiat currency (paper money) the government can increase or decrease the value of money at will.  

Everytime the government prints money and adds more money to the supply it devalues the existing money(inflation).

They frequently do this for welfare programs, bailouts, and other debts. It’s like a hidden tax on all of the existing cash that they don’t talk about but is controlled by the Federal Reserve.

As expected the google results are mind blowing.  

In this video Congresswoman Katie Porter uses an example of someone making over $35,000…wait what???

Even adjusted to inflation this is well beyond what the average person in 1950 would be making today ($29,000) adjusted for inflation.

I thought they said our wages have been going down?

This clearly shows that it’s NOT a wage problem but rather a cost of living problem which has nothing to do with Chase Bank or any employer whatsoever.

To be more specific, we have a housing problem.

Did you notice in the video that the rent is astronomical in comparison to this employees salary.  California is famous for artificially high real estate prices but it is a phenomenon that has spread into many areas of the country.

Elevated real estate prices are due to a failure of policies and government intervention, among other things.

The housing bubble that popped didn’t actually go far enough as real estate continues to be held artificially high. An adjustment would cause a lot of heartache for homeowners net worth and destroy a lot of “wealth” in the real estate market (again).

While most goods haven’t really risen in price (in fact most have come down when adjusted for inflation), we also have problems with healthcare and childcare costs rising exponentially in relation to wages.

If you take a million dollar house of out California and move it to a different area it quickly can become a $100,000 house or even less.  

What happened?  

Magic?

The reality is that same  $35,000 bank job probably pays similar no matter what Chase Bank you work at in the country and someone working that job probably shouldn’t be living in California in the first place where the cost of living is that high.  

People leaving California in mass because cost of living is too high would single-handedly lower the cost of living in California and raise the wages for businesses that need to stay in California as the supply of available workers goes down — but it’s unlikely for a Californian exodus anytime soon.

You see, it is not a jobs job to pay for your living expenses.  

When a business looks to hire employees or contractors it essentially becomes a consumer.  Consumers, for the most part, are interested in getting the best quality work at the cheapest price. This is why places like Walmart and Amazon.com have done so well.

If you look at the reality of the situation and realize that these businesses or places of employment are shopping for the best and cheapest deals, it may help you understand why wages are the way they are.

If you have $500 to spend on groceries but could get by on $250, you aren’t going to go spend $500 just for shits and giggles.  You’re most likely going to spend $250 and use the other $250 for something else.

Businesses comprised of individuals making decisions operate in the exact same way.

Beyond the destruction of our money and the housing/healthcare/childcare crisis, there are also other factors at play here.

The value of what a business can deliver to the marketplace, and more specifically, the value of a specific role or job function to that business.

Businesses have to profit in order to stay in business.  

If the goods or services they are selling or providing are only worth so much money to consumers the business will not be willing to pay employees more if it means cutting into expected profits or losing money each year.  

This is why an administrative assistants pay range is so large. It can be the exact same job but which company you work for can make all the difference.

The supply and demand of the workforce.  The more people qualified for any given role, the less money that role will generally pay, as more people are competing for the same job which creates a surplus of workers.

If everyone is able to do the same job as you are, expect lower pay, because you are replaceable (cough fast food workers).  

The more irreplaceable you become via knowledge and skills the more money you will attract.  The less people who can do what you do, the better your pay will be, period.

In Summary — congress needs to stop pointing fingers at wages and figure out why the cost of housing, child care, and health insurance is so high.

It is completely unreasonable and unethical for government to expect businesses to fork over more cash for their failures.  It’s time for the government to own up to their wrongdoings and stop blaming others for their mistakes.