The Fourth Turning Is Here

[Aaron]

For right or wrong, wages have stagnated due to women entering the workforce. Over the last 60 years the supply of labour has almost doubled.... Simple supply/demand dynamics at play.

As much as I should not discuss things I know little about. Wouldn't globalisation and shifting higher paying manufacturing jobs to the countries with the cheapest labour also have made a difference over the last few decades. You are not only competing with women but also the third world who will accept much lower pay and conditions.

I think the western world seemed quite surprised at the start of the pandemic when they realised they don't make much at home anymore and were not as resilient as they might have thought.

With remote working even white collar jobs should have increased competition from the third world.

I hope I don't sound greedy or envious or unaspirational but I think the top executives in the US have seen their remuneration keep up with inflation according to Moka's links.

Good informative post thanks Moka.

More importantly is NZ following this US trend? I know David Seymour has concerns that so few people pay so much tax so I suspect we might be following a similar path.

[blackcap]

As much as I should not discuss things I know little about. Wouldn't globalisation and shifting higher paying manufacturing jobs to the countries with the cheapest labour also have made a difference over the last few decades. You are not only competing with women but also the third world who will accept much lower pay and conditions.

With remote working even white collar jobs should have increased competition.

Correct, I was taking one thing in isolation. You are right, globalisation futher exacerbated wage conditions.

[moka]

For right or wrong, wages have stagnated due to women entering the workforce. Over the last 60 years the supply of labour has almost doubled.... Simple supply/demand dynamics at play.

Wages have stagnated according to the International Monetary Fund because of the decline of unions and collective bargaining in New Zealand which explains more of the rise in inequality than in any other advanced country studied.

https://www.americanprogress.org/article/lessons-from-new-zealands-new-sectoral-bargaining-law/

In the late 1980s and particularly the early 1990s, New Zealand made a series of changes to undermine sectoral bargaining and unions, leading to a labor system more akin to that in the United States, which has weaker unions and primarily worksite-based bargaining. Under its worksite-only bargaining system, New Zealand has suffered several decades of rising inequality, slow wage growth, and low productivity, contrary to the promises of business leaders and politicians that supported the neoliberal economic reforms.

In New Zealand, collective agreements covered between 60 percent and 70 percent of all workers in the 1980s, with sectoral bargaining agreements covering more than half of all workers until 1991, when legal changes essentially wiped them out.

For many decades, New Zealand had an industrywide arbitration system—a unique style of sectoral bargaining shared only with Australia—that led to wage growth, low levels of economic inequality, and strong unions.
State intervention is the determining agent of the fortunes of unionization and collective bargaining.

[Logen Ninefingers]

Seems in these ‘NEOLIBERAL’ times teachers can still get 14% pay rises, more than double the current rate of inflation! How ‘bout that!

[Aaron]

Seems in these ‘NEOLIBERAL’ times teachers can still get 14% pay rises, more than double the current rate of inflation! How ‘bout that!

Sort of proves Moka's point, teachers have a strong union with NZEI. Why would you not want good teachers in NZ?

Nicola Willis says teachers salaries should keep pace with inflation. I suspect the 14% you use is not an annual rise.

https://www.newshub.co.nz/home/polit...onal-wins.html

[Logen Ninefingers]

Sort of proves Moka's point, teachers have a strong union with NZEI. Why would you not want good teachers in NZ?

Nicola Willis says teachers salaries should keep pace with inflation. I suspect the 14% you use is not an annual rise.

https://www.newshub.co.nz/home/polit...onal-wins.html

Yes, working in the public service is certainly the way to go.

Of course we want good teachers in NZ.

[moka]

I hope I don't sound greedy or envious or unaspirational but I think the top executives in the US have seen their remuneration keep up with inflation according to Moka's links.

Good informative post thanks Moka.

More importantly is NZ following this US trend? I know David Seymour has concerns that so few people pay so much tax so I suspect we might be following a similar path.

https://www.epi.org/publication/char...ge-stagnation/
January 6, 2015

3. Factors driving wage stagnation and inequality
CEO pay grabs a larger share of wages

In a nation of increasing inequality, the most extreme wage disparities are between the heads of large American corporations and typical workers. This figure tracks the ratio of pay of CEOs at the 350 largest public U.S. firms to the pay of typical workers in those firms’ industries.

In 1965, these CEOs made 20 times what typical workers made.
As of 2013, they make just under 300 times typical workers’ pay.

This higher pay for CEOs does not reflect any increased contribution to corporate output: Other data show that CEO pay grew three times faster than the pay of the top 0.1 percent of wage earners and twice as fast as corporate profits. Moreover, the rising pay of executives was the largest factor in the doubling of the top 0.1 percent and top 1.0 percent share of overall household income growth. CEO pay gains help explain the growing divergence between pay and productivity.

[moka]

https://thehill.com/opinion/finance/4178829-how-to-better-tax-the-rich-men-north-and-south-of-richmond/

How to better tax the rich men north (and south) of Richmond

In Virginia, where Anthony Oliver is from, middle-class, working-class and poor families all pay a larger share of their income in state and local taxes than households in Virginia’s top 1 percent. That’s because the state relies more on sales taxes, which poor and working families disproportionately shoulder, and less on income taxes that better target the rich. Virginia lawmakers also let multinational corporations stash their earnings in tax havens to avoid state taxes, something local businesses can’t get away with. The tax laws in most other states create the same problems.

Nationwide, income from wealth gets a special lower tax rate, so someone whose money comes from their big investment portfolio pays less than someone who earns the same amount by working. And don’t get me started on the breaks available to the uber-rich, whose stock portfolios balloon until they pass them on to their children without anyone ever paying anything on the increase. Finally, wealthy corporations often dodge federal taxes — in 2020, we found that 55 of the nation’s most profitable corporations paid zero in federal income taxes.

We could better tax the rich men near and far from Richmond by getting rid of the special low tax rate on capital gains income and making it the same as taxes on work; by cracking down on tax avoidance by multinational corporations; and by turning state tax codes right side up, replacing sales taxes with new income tax brackets for earnings over $150,000, over $250,000, and over $1 million. This would generate the money needed to deliver more for working families — from child care, to health care, to affordable college. And it would raise that money from those who derive the most benefit from capitalism.

[moka]

For right or wrong, wages have stagnated due to women entering the workforce. Over the last 60 years the supply of labour has almost doubled.... Simple supply/demand dynamics at play.

When More Women Join the Workforce, Wages Rise — Including for Men

https://hbr.org/2018/01/when-more-women-join-the-workforce-wages-rise-including-for-men

Looking at Census data from 1980 to 2010, I studied how women’s participation in the workforce influences wage growth in approximately 250 U.S. metropolitan areas. Across various model specifications, I consistently found that as more women joined the workforce, they helped make cities more productive and increased wages.

Women's increased entry into the workforce has contributed to rising family incomes and greater economic growth.

If more women are choosing to work because attitudes about work have changed, then this would increase labor supply and actually reduce wages as more people compete for jobs.

But if women are joining the workforce because there are more job opportunities, then we should see wages increase because the shift in the labor participation is caused by increased demand.

More workers, more money for consumer spending, more demand for goods and services so more workers needed.

[moka]

The Fourth Turning

https://frankdiana.net/2022/08/15/the-final-stages-of-the-fourth-turning/

1. First comes a High, a period of confident expansion as a new order takes root after the old has been swept away.
2. Next comes an Awakening, a time of spiritual exploration and rebellion against the now-established order.
3. Then comes an Unraveling, an increasingly troubled era in which individualism triumphs over crumbling institutions.
4. Last comes a Crisis—the Fourth Turning—when society passes through a great and perilous gate in history. Together, the four turnings comprise history’s seasonal rhythm of growth, maturation, entropy, and rebirth.

Turnings come in cycles of four. Each cycle spans the length of a long human life, roughly eighty to one hundred years. Now, let’s trace the current cycle back in time – quoted right from the book – keeping in mind that the book was written in 1997.

HIGH: The First Turning was the American High of the Truman, Eisenhower, and Kennedy presidencies. 1945 -1963

AWAKENING: The Second Turning was the Consciousness Revolution, stretching from the campus revolts of the mid-1960s to the tax revolts of the early 1980s.

UNRAVELING: The Third Turning has been the Culture Wars, an era that began with Reagan’s mid-1980s Morning in America and is due to expire around the mid-2000s.

CRISIS: In 1997, the book predicted that the crisis period would begin in 2005. Each turning lasts about 20 years, placing the end of the cycle near 2025, or sometime during this decade. This Fourth Turning is a crisis, a decisive era of secular upheaval, when the values regime propels the replacement of the old civic order with a new one.

Sometime in the next few years America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II. The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule.
The rhythms of history do not reveal the outcome of the coming crisis; all they suggest is the timing and dimension. We cannot stop the seasons of history, but we can prepare for them. This message today is about preparing for a very uncertain – but sure to be transformative future.