I just read an article from @zer0hedge about Walmart and Amazon and things they are doing that are signalling that they are aware of the demise of the middle class in the United States. That made me realize it was again likely a good time to talk about something I've spoken about in the past that I don't think many people consider.
I believe most people are aware of concepts of the middle class shrinking. It has been something I've been hearing about for at least 40+ years of my life. Yet, we tend to spend a brief amount of time thinking about it. We look for quick explanations. We look for quick suggestions on what we can do about it. Essentially we are looking for that big red EASY button. We want our information provided to us in an EASY way. We want any solutions to problems to be EASY. We want someone else to come up with those solutions so that it remains EASY.
The problem is that life isn't supposed to always be easy. We need some challenges to help our mind expand and grow just like we need different exercise to strengthen our muscles. Our mind needs exercise as well or else we risk it becoming stagnant, and more receptive to someone else making or decisions for us. In some cases it may even atrophy.
My interest in the middle class and what is happening there actually came from an odd direction. Coming from odd directions seems to be the norm for me. I find odd directional thinking refreshing, and adhering to the status quo as distasteful. I must be a rebel at heart.
My focus on the middle class actually came from considering the topic of MINIMUM WAGE. Now the normal discussions on minimum wage increases are that if the job becomes too expensive for the employer they will automate, or simply go out of business. Another common argument is that prices will eventually adjust as all those business have to increase their prices so they can afford to pay the new wages. It may take a bit but these price adjustments will eventually happen and we'll be back in the same situation where we have people demanding to increase the minimum wage.
Historically these things have indeed happened to varying degrees every time we have increased the minimum wage. Yet, my odd directional thinking gave me a glimpse at something else one day. It was something I've actually never seen anyone else ever talk about. Yet it is important. It ties directly into this entire Walmart and Amazon article posted by @zer0hedge.
Has anyone really emphasized what truly happens to the middle class due to minimum wage?
The middle class is clearly not the target for minimum wage increases. This would indicate that there likely is some proverbial line beyond which people are considered middle class. Everything below that is lower class in a purely financial scope of things.
My observation was that minimum wage increases cause erosion from the lower side of the middle class. In the long run I believe increasing the minimum wage is not only kicking the tin can down the road, it is in the long term creating more and more lower class by eroding them from the middle class.
If you happen to be on the lower part of the middle class and thus you get no wage increase from a minimum wage increase then as prices adjust and rise and inflate to compensate for needing to pay higher wages as they always do. Soon the lower class is back in the same position they were in before the minimum wage was increased.
Yet there are more of them. There are less middle class.
As the prices compensated and adjusted the purchasing power of ALL salaries/wages decreased. This included the people in the middle class. So the lower part of the middle class after this adjustment will now be in the lower class, and the middle class will be smaller.
We look for the easy solution. Keeping us lower class is beneficial to some entities, people, and organizations.
If you are poor and struggling the obvious easy answer is "I need more money". So when someone advocates for increasing the wages there is a cheer "Yes, increase the minimum wage". This cheer is not shouted just by the people that need the wage increase. Humanity as a whole tends to like to focus on how they are helping other people. We like to reach out and help others. We like to talk about how we've helped people, or donated to charities, etc.
So if someone proposes what seems like an easy solution and it feels good we have a lot of people cheering it. They usually don't actually stop to think things through. They don't really play out the scenario as a mental simulation and attempt to project what might happen over time. They don't really look at past implementations and see how the observations of the aftermath of those might impact these future simulated mental projections. That takes too much effort.
Instead they cheer on the "Easy" solution which it turns out really isn't a solution and in the long term seems to make the problem worse each new time the issue comes around.
People also operate on short term memories. They remember how when the minimum wage increased for a few months they could buy more food and do more things. That is enough. That is all they focus on. They don't really stop to wonder why if that was true they are right back in the same place asking for a minimum wage increase.
We have a population way too fixated on easy answers, easy questions, and feel good projects. We need a population that is not too lazy to actually seriously think about things. So how do we make that happen?
