The Concept Of Income

Who Are You Really
Working For?

Over the past hundred years the American population has changed demographically from a rural society into an urban one. Much of this migration occurred as a result of industrialization and the attraction of employment in the factories and production centers of the country. Family farms and local businesses have been replaced by the conglomerates and retail chains that have become the common landscape.

When the industrial revolution was in full swing and labor markets were local people benefited from the high paying production jobs. The new global economy has brought about many changes that are benefiting the multinational corporations. Unfortunately those changes also include factory closings, foreign labor, and outsourcing. Poorly planned trade policies have reduced the average urban worker's options to low paying service jobs that allow for only the most basic existence.

As the high paying production jobs vanished over the last few decades people were forced to settle for lower real wages. The service jobs now widely available do not pay enough to support the lifestyle that is considered acceptable. Enter the era of the credit supported lifestyle.

As real wages continued to decline over the last few decades the income gap to support that lifestyle was filled with debt. This debt took the form of revolving credit and a cycle of home refinancing enabled by artificially increasing real estate prices. That cycle has now ended and a new financial paradigm is emerging.

 

The Servant Society

In 1965 it took the average CEO two weeks to earn a worker's annual pay. Now that same CEO earns more in one day than their average employee earns in a year. Retirement benefits in the form of corporate paid pensions are nearly extinct and health care benefits are following close behind. The simple fact is that a great deal of corporate profits have shifted from worker salaries and benefits to paying the management and stockholders.

A growing percentage of the cost of the corporate goods that we consume is going to top management and owners. In addition to more of our income flowing to the wealthiest side of society we have seen the taxes that we pay increase from about 6% of our income in 1900 to over 30% in 2008. In essence people are working for lower wages, paying higher taxes, and watching the majority of their income flow to large corporations, lenders, and bureaucracy.

Add the increasing cost of energy such as the cost of a gallon of gasoline and interest paid to lenders and only a small fraction of personal production is actually left to the producer. It may just be time to go back to the farm.

Pionomics Vs The Employee/Consumer

Pionomics is the movement away from the status quo by redirecting personal work related activities to the benefit of the individual. It is the decision to create the majority of goods and services through personal production rather than purchase them from corporate sources.

A true master of Pionomics would own their own land outright, build their own home, grow their own food, and produce their own energy. Only the goods and services that could not be duplicated or that were more cost effective than self-produced goods would be purchased. Sound impossible? Throughout history and until the industrial revolution this was the norm, not the exception. Now that living wage production jobs are facing extinction it may be worth learning some lessons from the past.

Working in today's consumer oriented economy as an employee generates income. This income is eroded by taxation at the federal and state level to the combined tune of about 30% on the average. The remaining income is normally dedicated to paying for housing, food, utilities, health care, and interest.

In many cases interest is as high or higher than taxes. Don't believe it? Start adding up the interest component of your mortgage payment, auto loan, and credit card interest. If you are like many people it will become increasingly apparent that interest is a big part of the reason you get up and go to work every day. It's not uncommon to discover that 25% of your expenses are in the form of interest.

Your energy costs include such items such as gasoline, electricity, natural gas, fuel oil, etc. It would probably be conservative to say that another 12% of your income is spent on energy. This percentage will continue to grow rapidly as long as we continue to depend on others for our energy.

The cost of food and water also take a substantial chunk of the average worker's income. 10% would be an understatement in anyone's home with teenagers or for those that eat out more often.

Don't forget your generous donation to corporate profits. That's right. Every time you exchange your after tax income for goods and services you are paying someone's profit margin. Average corporate profit is about 8%. If you purchase most of your goods and services you can subtract this 8% from your eroding income. Using these estimates 85% of the production value of the average employee/consumer is consumed by the process or working for someone else and purchasing goods and services with the proceeds.

This is the situation that will exist for those that choose to remain working as an employee/consumer. Take some time to see how close to this example you are. The remaining 15% is left to cover insurance, health care, education, clothing, and any other expenses. At the end of the day most people have little or nothing left to save and many are financing any shortfall hoping things will get better.

The Renaissance Of The Pioneer

The activity of working for yourself is much different than that of an employee. "Working for yourself" in this context does not mean self-employed. It means using the same time that you would spend working as an employee to sustain yourself. It means erecting your own structure to live in, growing the majority of your own food, using modern technology to provide most of your energy needs, and working in your own business part time to provide enough capital for those things that you cannot provide for yourself such as health care and higher education.

When our forefathers left the farm and traded the rural landscape for the cities and factory jobs it was a fair and equitable trade for a better lifestyle. Today that situation no longer exists for the average worker. In the span of a few generations most people have lost the skills and knowledge necessary to survive on their own. Pionomics is about rekindling the pioneer spirit and merging modern technology with that spirit to create a new lifestyle that once again benefits the individual rather than multi-national corporations.

By retaining the production value of your individual labor and providing the majority of your essential goods and services your expense structure would look much different.

Although taxes are necessary for needs such as national defense and other social services if everyone were self-sustaining and personally responsible for their own welfare chances are we could lower our tax burden substantially. Those that choose to disconnect from a dependent lifestyle can also reap the benefit of an immediate reduction in personal income tax. There is no personal tax due on services that you provide for yourself. No one charges you taxes when you grow food in a garden, paint your house, or mow your lawn. However if your earn wages as an employee and pay for these services you have to pay for the services and the tax on your income. On the average this gives you a 30% increase in any services that you provide for yourself.

Interest is the next expense that can be eliminated. The largest major purchase you would make using the principles of Pionomics would be raw land. Depending on the climate, rainfall, and soil characteristics 3 to 5 acres should be more than enough to meet your needs. Saving capital to pay cash for your land would eliminate a huge interest expense, perhaps as much as 25% of your current budget.

Using a personal energy production method such as solar, wind, or one of the alternatives outlined in the energy section of this site would eliminate at least another 12% of your income paid to corporate sources. Grow your own food and you save another 10%. Any other goods and services that you choose to provide for yourself would reduce your expense by 8% in the form of corporate profit.

Of course even if you do provide these goods and services for yourself they will not be entirely free. You will still have to purchase some basic materials and tools to get the job done but in the long run the savings can mean a drastic change in your life. Imagine waking up one morning and choosing what you will do based on your needs rather than making your life's decisions based on your debt. This is the goal of Pionomics.