Economic theorists--help: Is the TRICKLE DOWN theory dead or what?

Question

We have LOW unemployment, BOOMING stock market. Classic theory states this should boost wages as employers would need to pay a premium for workers, put signing bonuses in effect, and make their workplace more desirable. But layoffs are constant, many 'degreed' people are working menial jobs or now 2 jobs, and the avg corporate workplace is a stress zone. Any intelligent ideas on what is wrong with classic economic theory, or does the TRICKLE DOWN theory no longer work?

THANK YOU ALL SO FAR! So what is the OPPOSITE of 'trickle down?' Simply handing money out--or more gov't programs--seems too socialistic, and I don't see socialism working. Henry Ford WAS able to pay better than avg to make cars affordable to his workers! Everyone benefitted. Weren't the Clinton yrs and most of Reagan yrs marked by prosperity for everyone (the 'rising tide')? What was diff then? Why not now? Our health care is great, but even professionals--like teachers, Dr's & nurses-are now stressed & squeezed, so it's not just 'uneducated' laborers. So WHAT is our problem here, folks? Thanks!

Answer 1

The "trickle down" effect is non existant or at the most works only to a higher level. Just like the theory of "a rising tide lifts all ships" only works for ships that are afloat. The rest only get in deaper over their head!

The "less fotunate" people have been effectively "expropriated" by the "right to own property" which gives housing and property to the highest bidder and leaves the loser go empty. Winner takes all! That's our capitalistic society, which ignores that there are no winners unless there are losers.

Justice (our "law") is dictated by people in power to perpetuate THEIR status and rights. According to them people are poor because the fail to "get off their but" and kick someone else's.

Answer 2

Cassandra, you weren't paying attention in your economics class. What do banks do with the money? The lend it out and people use it to fund investments that create more jobs and more wealth. That bank interest doesn't just come from thin air.

It's true that as our economy becomes more globalized, companies will outsource more work to other countries. That means if you want to be successful, you have to do something that can't be outsourced. People need professionals they can see face to face, but they don't care where their car was put together. People need reliable workers that can work on their cars and houses. Businesses need people that can make sales and other types of business happen. If you're in a job that's being shipped overseas, either get training to do something else, or follow the job.

Who's hurt the most? People who didn't save and relied on a union to keep a cushy job that most other people in the world would do for much much less. The only solution for those people is to retrain, get a higher education, or accept less pay (and it usually means they need to move).

Answer 3

You ask is it is no longer working, the fact is it never has worked. As our economics teacher told us, they give money to the rich thinking it will be spent and passed down through the economy to the poor. The rich people are well...gready and instead of spending it, they put it in a bank somewhere and gain interest off it, making them richer and the poor not being effected.

Answer 4

it trickles down into the top 10% pockets!

Answer 5

I don't think things are as bad as you think they are.