Economic Indicators for Working Households

notes by John Manimas Medeiros

 

First principle:

            Corporations do not create jobs.  All business entities exist and pursue financial success as a logical response to effective demand.  Effective demand drives the economy and effective demand means the needs and desires of customers who have the two necessary qualities of an effective customer: 

            1) the desire to obtain a good or service, and

            2) enough income to buy it.  Therefore, the economy is not driven by economic desires only, or by purchasing power only, but drives a healthy economy by means of the power of effective customers. 

            What business entities do, that looks like creating jobs, is they hire people as an investment that will return a profit to them.  Before starting a business, any business big or small, simple or complex, the investor or entrepreneur makes an assessment of the projected return on investment (ROI).  This concept of ROI means simply that the investor or investors have made the judgment, based on economic conditions, that there is a demand to be met (for products or services) and production will be successful because there is a predictable body of effective customers.  No one is hired as a service to the community or a contribution to society.  Whatever amount of money is paid to an employee is, and must be, less than the ultimate value of his or her labor.  And, this is the source of the profit margin for the business operation:  the difference between what is paid to employees, and what is paid for all other business capital such as land, buildings, and machines, and the gross income from business sales.  That difference is net income of the business. 

            This is the economic reality that was emphasized by Karl Marx and other socialists and communists.  The first and the biggest and most common of "transfer payments" is when the profitable labor of the employees is transferred to the profits of the investors.  This is why capitalist investors have constantly engaged in class war by discrediting communism (Marx) and socialism -- because socialism exposes the transfer of labor profit from the employees by the investors, the "capitalists."  According to the socialist viewpoint, capitalists justify taking the profits produced by labor on the grounds that they, the capitalists, own the means of production -- the buildings and the machines.  Capitalism works well in many cases, such as when colonial invaders are stealing a continent, but not when investors make the claim that they are the source of the economy and jobs. 

            Everything in the industrial and agricultural economy is paid for by the customers.  Everything.  Everything including all government activities and all the profits taken from the business activities of all business entities.  If you are an employee, you are a customer, hopefully an effective customer who can afford to makes purchases, and you are the source of all economic activity.  You should be respected, and you have a natural right to exercise control over your economy.

 

Second principle:

            Information about products and services, the compensation paid and the business practices of corporations are all marketing information of importance to the sovereign customers in a free market economy.  Economic facts should be collected and published toward the purpose of informing ordinary citizens about the conditions that have an impact on the management of their household budgets, the economic effects of business activities and decisions, and the characteristics and behavior of business entities that trade on the open free market.

 

Third principle:

            Just as corporations gather personal and private identifying information about consumers and customers, the sovereign customers have a right to gather identifying information about corporations.  Just as corporations transform private information into marketing information for their own profit, customers can use corporate information to enable them to make practical decisions in support of their household budget plans.

 

Organization and Productivity:  Household Economics Association

Any American citizen willing and able to participate can contribute research information.  Participants will identify and share the resources that add to the group knowledge base of economic facts and concepts of a working household.

 

Types of statistics/information to be gathered and posted:

A. Composition of a household for purpose of budgeting to meet the needs of a    household and the household members.

B. Typical and special household needs: basic physical needs.

C. Typical and special household needs: security, insurance, health and medicines.

D.  Sources of income and employment needs.

E. Educational needs for voting, community and political participation.

F. Accounting measurements and statistical information, analysis and projections.

 

Sources of economic facts and statistics:

The types of statistical information listed immediately above are available free from government agencies such as the United States Census Bureau.  There are several government and non-governmental organizations that provide this kind of information free of charge.  It is not necessary to subscribe to a service for a fee.  The quickest way to get started is to search for "cost of living statistics" with your browser search engine -- or in a public library.  Keep in mind that these kinds of records may not be on file for the current month but will be from previous months and possibly for the previous year.  A common type of record is the estimated "cost-of-living" in a particular town, city or region.  A local cost-of-living estimate or projection might include specific information about what kinds of household expenses are likely to be higher than average, such as the price of a home or the cost of food and transportation.  The best way to find what you want is to change and refine your search keywords.  Examples:  the cost of a pair of shoes, or an automobile, or cost of groceries or cost of clothing, or wage rates in a particular area.  These kinds of facts are meaningful economic indicators for working people.  The stock market numbers are information for rich people who make their living gambling.  The cost of living and the wage rates are far more meaningful in revealing the financial circumstances of people who work for wages or salary.  The information of great importance to a working household is the estimated household budget, the cost of maintaining one's household, for example:  two adults and two children.

 

Writing the household budget and the source of household income:

(Budget) for Household of Two Adults and Two Children