Trickle Down Economics

Trickle down economics is a dirty word for many readers. Apparently, the notion is that trickle down economics only benefits a certain segment of the economy. However, my experience has been that trickle-down economics benefits more individuals then it hurts. I have experienced trickle-down economics first hand. I am neither poor nor am I wealthy. I consider myself middle class. I have been middle class since birth. Yes, México has always had a middle class, at least in my life time, from the 1970’s on through today. I have seen the middle class grow in México, through the trickle-down economics of NAFTA and I see how trickle-down economic is working today in the United States.

The problem, in my opinion, is that today’s workers have a notion that they do not have to adopt to the changing economics of the world. A factory worker, always a factory worker seems to be the idea. Many of those complaining about a tightening job market seem to focus on factories moving overseas or jobs changing making them unemployable. The idea that jobs should cater to the worker is why there are unemployed.

Today’s smartphone is not yesterday’s cell phone. The cell phone has evolved as technology has evolved. Because technology evolves, so do jobs. Yesterday’s blue-collar work is not today’s blue-collar work. As technology supplants manufacturing, then the jobs evolve towards new techniques. That is the nature of evolution. Just like we don’t eat the raw meat our ancestors ate before the introduction of fire, we don’t work the same way either.

As the Christmas holiday gets into full swing, look carefully and you’ll see how trickle-down economics is working as it should.

Look closely at the truck’s sign. Do you see how the budget truck is being used by UPS to deliver the Christmas gifts? That’s trickle-down economics in a nutshell.

Let’s look at it closer.

It is likely that many of the packages on that Budget rental truck are Amazon packages. That’s where the trickle-down economy starts in our economic model today. Amazon is nothing more than a hub for its own services and products but for many small businesses across the globe, as well. Trickle-down economics starts with the mom-and-pop entrepreneurs that depend on Amazon to distribute the products they make. But the trickle-down economy is more then just one chain, the links in the chains increase the further the process goes down. Amazon needs people at its warehouse to put the packages in bins to go out to UPS and other shippers. UPS is another chain in the trickle-down economics created by Amazon. The UPS company, its annual labor force and its temporary Christmas workers are all part of the trickle-down economy created by Amazon.

As buyers spend more at Amazon, the trickle-down economic engine increases. In our example model today, the orders being delivered by the Budget rental truck has economically benefited the Amazon worker pool, the people who are shipping holiday packages to their clients, and Budget truck rentals, as well as UPS and its work force.

Yes, that’s how trickle-down economics work. The Budget truck rentals company is an example of how money trickles down in a free economy unimpeded by government and workers expecting things to remain as they are. The Budget truck rentals company’s employees and shareholders are seeing an increase in the use of their rental trucks leading to higher annual revenues for the company. The employees benefit, as does the truck manufacturers who will likely be delivering new trucks to Budget and to UPS to shore up their product inventory, for Budget, or ability to perform their revenue generating work, in the case of Amazon. As more money enters the economy, more money trickles down to others. The revenues generated by that Budget truck trickles down to the gasoline station, the convenience store where the driver gets a snack and on down to the restaurants or grocery stores that the Budget truck driver now has the money to take their families to.

However, like everything else, trickle-down economics also has its downside. For trickle-down economics to work, people need to evolve to serve the evolving markets. Amazon did not come unto its own until the last five or so years. You can track Amazon’s evolution through the decline of retail box stores and half-empty shopping malls. The retail workers lost their jobs as box stores closed and shopping centers declined as Amazon and similar companies grew. But, the workers had two choices, evolve into new work arenas or hope to keep the retail clerk job as it declines around them.

It is those hoping that the retail jobs do not go away that are the ones who decry trickle-down economics. Those, like the warehouse workers working at Amazon warehouses or the drivers delivering holiday gifts are the workers benefitting from trickle-down economics.

Jobs were never meant to remain stagnant. Workers need to be prepared to evolve along with the economy. Today’s retail clerks will likely be tomorrow’s Amazon help-desk telephone operators. To do so, the worker needs to educate themselves. They need to be computer literate and the more languages they speak, the better wages and job security they will command. But, if the workers just want to be a clerk, or a blue-collar worker for the rest of their lives, then the trickle-down economy will just fly by them on the way to serve those workers willing to evolve.

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