Neo-Liberalism and Wage Suppression
With all the hullabaloo over the coming Presidential election, I have held off posting this essay while we seem mostly engaged in current events. In addition, this essay posed a struggle for me because economics is certainly not an area in which I have expertise like gjohnsit and others here, so the research was a little more tedious than usual. Hopefully readers here can help fill in the gaps where necessary and expand upon the information presented in this essay. Today's topic is wage suppression.
For those who may be interested in previous essays in this series on neoliberalism, below are the links to those essays. If you read only one essay, I recommend Week 3 on the myth of meritocracy. It explains a lot about how the neo-liberal elite view themselves and the rest of us.
Week 1 - The Curse of Neo-liberalism
Week 2 - Neo-liberalism Part 2
Week 3 - The Neo-liberal Myth of Meritocracy
Week 4 - Characteristics of Neo-liberalism
Week 5 - Neo-liberalism - Obama and the Clintons
Week 6 - Neo-liberalism - The Legacy of Bill Clinton
Week 7 - Neo-liberalism - Lack of Empathy
Week 8 - Overview of the Impacts of Privatization
Week 9 - The Rule of the Market
Week 10 - Effects of the Neo-liberal Push for Deregulation
Week 11- Cutting Expenditures for the Social Safety Net
Week 12 - Neo-Liberal Commoditization of Education
Week 13 - Impact of Neo-Liberalism on Higher Education
Week 14 - Neo-liberalism and Our Crumbling Infrastructure
Week 15 - Why Our Infrastructure Deficits Matter
Week 16 - Neo-Liberalism and the Elimination of the Concept of Public Good or Community
In one of my first essays in this series on neo-liberalism, I referenced an excellent article titled What is Neoliberalism? This article was written by Elizabeth Martinez and Arnoldo Garcia and published by Corp Watch. This article provided an excellent definition of neo-liberalism as well as a listing of the five characteristics of neo-liberalism. Among the five characteristics of neo-liberalism is the Rule of the Market. One of the goals of the rule of the market is to reduce wages.
THE RULE OF THE MARKET. Liberating "free" enterprise or private enterprise from any bonds imposed by the government (the state) no matter how much social damage this causes. Greater openness to international trade and investment, as in NAFTA. Reduce wages by de-unionizing workers and eliminating workers' rights that had been won over many years of struggle. No more price controls. All in all, total freedom of movement for capital, goods and services. To convince us this is good for us, they say "an unregulated market is the best way to increase economic growth, which will ultimately benefit everyone." It's like Reagan's "supply-side" and "trickle-down" economics -- but somehow the wealth didn't trickle down very much.
Wage suppression is a mostly corporate driven effort based upon the neo-liberal ideology of liberating private enterprise by reducing wages as a part of the costs of business. Surprisingly, small businesses pay their employees better than large corporations in comparable businesses.
Many small businesses already pay more than minimum wage to attract better workers, so a higher minimum wage isn’t necessarily something that would restrict their hiring. In fact, most small-business owners are in favor of raising the minimum wage.
Most minimum-wage workers are employed by large corporations like Walmart and McDonald’s, not your local mom-and-pop burger joint or clothing store.
As a result of the neo-liberal corporate effort to reduce wages, household incomes for all but the wealthiest have been dropping since the mid 1970's and more and more people are falling into or are on the brink of poverty. In the three decade period following World War II, worker's wages roughly kept pace with productivity. Since 1973, productivity has risen 74.4%, but workers' wages have stagnated, rising only 9.2%. In the same time frame, wages for the top 1% have risen a staggering 138%.
The Economic Policy Institute issued an outstanding paper, titled "Raising America's Pay," in 2014. This paper details the lack of wage growth, wage suppression, and wage theft in the United States. Here is just a brief snippet from that paper, but I would urge everyone to check out the link above to that paper.
While we touch on some of these influences in this paper, Raising America’s Pay seeks to give overdue recognition to the labor market policies and business practices that have suppressed wage growth by robbing American workers of key protections and diluting their bargaining power. As just noted, the most obvious examples of corrosive policies and practices are the continued erosion of both union coverage and the real (i.e., inflation-adjusted) value of the federal minimum wage. But a range of other, less visible factors have also undercut pay, from the inappropriate classification of employees as independent contractors to increasing incidence of “wage theft” that occurs when workers–particularly low-wage and immigrant workers–are not paid for the work they have performed. Indeed, those looking to boost the bargaining power of employers have fought efforts to allow certain low-wage workers to qualify for overtime pay and have tried to impede institutions that help thwart wage theft.
Wage stagnation is one of the primary causes of shrinking of the middle class. According to the Economic Policy Institute, the average middle class household lost nearly $18,000 in potential income in the ten year period between 1997 and 2007 due to the growth in inequality. What this means is that most of the economic gains were funneled upward away from the middle class, with the top 1% capturing the vast majority of economic gains. In other words, had not nearly all the gains in income gone to the top earners, but had been shared equitably, the average middle income household would have gotten nearly $18,000 more per year in income than they actually received.
But it gets worse. While middle income earners suffered wage stagnation with income growing only at a rate of about 0.2% per year from the period between 1979 and 2013, low wage earners actually lost income in that same time frame.
The wages of middle-wage workers were totally flat or in decline over the 1980s, 1990s and 2000s, except for the late 1990s. The wages of low-wage workers fared even worse, falling 5 percent from 1979 to 2013. In contrast, the hourly wages of high-wage workers rose 41 percent.
Nearly 30% of all hourly workers in the United States are minimum wage workers. This equates to approximately 21 million Americans. The current federal minimum wage is $7.25 per hour, last adjusted in 2009 And while twenty nine states and the District of Columbia have a higher minimum wage, none of them approach a living wage, so the calculations below are based upon the current federal minimum wage of $7.25 per hour.
If a worker works full time at the federal minimum wage, his gross earnings would be a little over $15,000 per year. 0r approximately $1,257 per month, before taxes. After federal taxes, the take home pay of a full time minimum wage earner is approximately $1,160 per month or $267.80 per week. Most states also have a state income tax in addition to the federal taxes paid by workers, but these calculations do not include state income taxes, so this a general scenario being presented here.
Even for a single person, this amount ($1,160 per month) is not enough to cover rent, utilities, groceries and transportation without assistance or extreme sacrifice on the part of the wage earner. According to one source, the federal minimum wage does not begin to meet what is the average cost of living for a single person with no children in the United States. (note: my bolding added to the quote below)
For a given week, at the federal minimum wage of $7.25 and assuming a 1.5 times increase in hourly wage after 40 hours for overtime, a single adult with no children would need to work 64 hours in a week to be above the United States's cost of living threshold of $548 per week.
Looking at who employs the majority of low wage workers, the National Employment Law Project (NELP) issued a report in July 2012 that found that one in four jobs in the United States is considered a low wage job ($10 per hour or less). These low wage jobs were concentrated in five major industries (food services; accommodation; retail trade; arts entertainment & recreation; and administrative services) with 2/3 of low wage earners being employed by large corporations, such as McDonald's, Yum Brands (Pizza Hut, Taco Bell, & KFC), and Walmart, rather than by small businesses. Moreover, most of these corporations are very profitable and could afford to pay their employees a higher minimum wage.
But beyond just cheating their employees out of a living wage, these companies actively cheat the American taxpayers into subsidizing their profits. Walmart is an excellent example. Walmart is the largest private employer in the United States. In a report prepared by Americans for Tax Fairness, Walmart was singled out as one of the biggest beneficiaries of the welfare system in this country due to their paying their employees such low wages.
Walmart is the largest private employer in the United States, with 1.4 million employees. The company, which is number one on the Fortune 500 in 2013 and number two on the Global 500, had $16 billion in profits last year
on revenues of $473 billion. The Walton family, which owns more than 50 percent of Walmart shares, reaps billions in annual dividends from the company. The six Walton heirs are the wealthiest family in America, with a net worth of $148.8 billion. Collectively, these six Waltons have more wealth than 49 million American families combined.
Below is summary of the key findings of the Americans for Tax Fairness report on how much Walmart is costing the taxpayers due to their failure to pay their employees a living wage. What is shows is that wage suppression not only is harmful to the low wage employee, but it is also very costly to the taxpayers.
Cost to taxpayers in the form of food stamps, Medicaid, and subsidized housing for workers because their wages are so low is $6.2 billion per year. Add to that the cost of federal tax breaks benefiting Walmart with is another $1 billion per year. Walmart also receives another $70 million in state and local subsidies each year. And finally the Walton family receives an additional $607 million per year in preferential tax breaks on Walmart stock. All of this adds up to taxpayer subsidies of $7.8 billion per year to Walmart. In addition, it is estimated that Walmart earns an additional $13.5 billion in annual revenue from food stamp sales.
These are costs borne by United States tax payers for subsidizing Walmart's wage suppression of its own employees. Walmart is the largest example of employer wage suppression, but wage suppression is rampant among large corporations, particularly in the food and retail industries.
In my next essay, I will discuss how wage suppression has created a housing crisis in this country.
Comments
This is a wonderful summation of what Americans are
up against. Many thanks.
According to the Federal Reserve, 56% of American families cannot come up with $400 to pay for an emergency without selling something or borrowing.
You chose the correct wording in my view: Wage suppression, intentional, government assisted suppression of wages that people with only their labor power to sell must accept.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
Thanks duckpin
I always look forward to your comments because they add to the discussion. Feel free to add more.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
Federal Reserve does it too.
By tipping policy toward low inflation over full employment thus maintaining a labor glut and helping to keep bargaining power low.
Compensated Spokes Model for Big Poor.
This is something
I believe most of us do not know. I recently read an article in which that point was made. I hope someone will expand upon it because we really do not completely understand just how much the Fed's policies can affect every day people.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
The Federal Reserve has the dual mandate of full employment &
keeping inflation in check. The law know as the Humphrey-Hawkins law affirms that full employment is the goal of the economy and this should put employment ahead, in my view(not in the H-H law) of keeping inflation down.
The Federal Reserve at this moment is keeping interest rates at near record lows. This does several things. One of them is to lower the standard of living for retirees who followed the advice to "save for your retirement." Instead of a steady income of 5% - 8% on a prudent investment portfolio, which includes treasury bonds and federal Ginny Maes, retirees are seeing 2% to 3% returns and are having to dip into their principle to maintain their living standards.
On a larger scale, prudently managed pension funds are based on an approx. 7.5% return to fund retirees in defined benefit plans. They cannot make anywhere near this today, thanks to FED actions, and waves of insolvency and lowered monthly pension checks are in the offing. This will adversely impact vulnerable people and the neoliberals will come closer to getting their wish for ending defined benefit plans and replacing them with defined contribution plans with no guarantee of a specific pension. States like Illinois fall into this catagory but many cities do too.
The lower the interest rate, the greater the risk of corporations borrowing for speculation; stock buybacks(illegal until 1970 or so); mergers; and other non productive actions.
Monopoly Capital tends toward secular stagnation - also called low growth in most of academia among the apologists for capitalism - and today, many if not most, corporations are awash in money that cannot find a productive outlet. I think this is fortunate to the extent to keeps corporate borrowing. Global corporations are still very wealthy and are able to move governments in the global north to benefit their narrow money-centered goals which involves exploiting people and resources in the global south, or non-industrialized world. The USA has a military presence in most countries of sub-Saharan Africa for just this purpose.
We are seeing Monsanto and Bayer trying to get permission to merge, eliminating even the fig leaf of a competitive claim they make. I don't think the USA will stop it. Will the European Union nix this corporate union?
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
I did not make it clear that key elements of the H-H law expired
in 2000 but some of it lives on as witnessed by the twice a year testimony of the FED chair before Congress which was part of the law.
It's also important to note that the same president - Carter - who signed the bill into law, also appointed Volker who allowed the unemployment rate to top 10% in order to help the bankers achieve their goal of lowered inflation.
Full employment, 3% for people over 20, has been the expressed goal of Congress since the Truman administration up until the demon of big finance took over.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
You nailed it
and then they say that they can't fund the pensions and then raid these
so called under funded pensions, all to the detriment of the people, the
CEO's still get their "golden parachutes". It's all pretty much out in the open blatant thievery.
The Fed action of ZIRP is the first salvo in eliminating savings, if SS is
privatized that would be the second.
"The Federal Reserve at this moment is keeping interest rates at near record lows. This does several things. One of them is to lower the standard of living for retirees who followed the advice to "save for your retirement." Instead of a steady income of 5% - 8% on a prudent investment portfolio, which includes treasury bonds and federal Ginny Maes, retirees are seeing 2% to 3% returns and are having to dip into their principle to maintain their living standards.
On a larger scale, prudently managed pension funds are based on an approx. 7.5% return to fund retirees in defined benefit plans. They cannot make anywhere near this today, thanks to FED actions, and waves of insolvency and lowered monthly pension checks are in the offing. This will adversely impact vulnerable people and the neoliberals will come closer to getting their wish for ending defined benefit plans and replacing them with defined contribution plans with no guarantee of a specific pension. States like Illinois fall into this catagory but many cities do too."
I never knew that the term "Never Again" only pertained to
those born Jewish
"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"
Heard from Margaret Kimberley
Thanks. I agree with you that Social Security is still in the
sights of Big Finance. Capital is used to setbacks and they always consider them temporary.
Obama did not get his way in cutting into our Social Security but it's still on the agenda for Wall Street and we have to be vigilant and then active when the next threat comes.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
This series of comments
is so enlightening. Thank you both for adding so much to this discussion and for helping educate me and others here.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
Your essays are very thought provoking and it's a privilege to
read them as well as a mental exercise(meant in a very good way) because it causes readers to think on their own and realize just what is happening to us and why things are going wrong for the 99%.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
Thank you and
one of these days, I hope to see you post an essay or three. Many of your comments are worthy of an essay themselves. I always learn from your comments and learning from comments is a big part of my writing these essays.
I am also learning
a lota ton from having to research this series. It is frightening at just how much of our lives are dictated to and controlled by the neo-liberal ideology. I blame it for the coarsening of our human empathy values too. I just hope people will come to the realization that it does not have to be this way.Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
First, we have to learn how the neoliberal world works and why
a few prosper and the many are lucky to eke out a living. Once we learn, then we can focus on effective actions to remedy the situation.
These people are out to steal our livelihoods and our pensions(if we're fortunate enough to be in a defined benefit system) and our Social Security.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
Where Obama didn't get his way
clinton will surely try, wasn't it Paulson who said I'm not voting for Trump cause he won't go after SS.
Her heinous is nothing but a WS lackey and wants nothing more than to represent their wishes.
I never knew that the term "Never Again" only pertained to
those born Jewish
"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"
Heard from Margaret Kimberley
I find I can't believe anything Trump says but he does say
that he will protect Social Security. False statement probably but we know Clinton will definitely try to chisel away at SSA.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
Well, as you mentioned, duckpin, we 'know'
that FSC will go after Social Security--per Bowles-Simpson's recommendations.
Don't trust Trump, either, but neither of the two budgets that he's presented, reflect cuts to monthly SS benefits.
The top marginal tax rate that Trump just called for was 33%. Contrast that to Senator Ron Wyden's negotiation in June 2014 for a top individual and corporate tax rate of 23%. (He said this at a Forum, while being interviewed by Gerald Seib of the WSJ.)
About PBO not cutting Social Security--don't forget that the Dems passed as major cut to millions of 'couples'--File And Suspend--during the last Lame Duck session/Budget Deal. (Naturally, it passed with majority Dem votes.)
Over a lifetime, the loss could cost couples as much as $50,000.
Amazingly, some so-called left-leaning senior advocacy groups either argued in favor of this cut, or completely looked the other way.
Mollie
“I believe in the redemptive powers of a dog’s love. It is in recognition of each dog’s potential to lift the human spirit, and, therefore, to change society for the better, that I fight to make sure every street dog has its day.”
--Stasha Wong, Secretary, Save Our Street Dogs (SOSD)
Everyone thinks they have the best dog, and none of them are wrong.
Thanks for the memory jog about about the File and Suspend.
And, didn't Bill Clinton fiddle with the cost of living to the disadvantage of those either getting benefits or hoping to live long enough to get SS benefits?
(One of the few regular donations I make is to the ASPCA - I love dogs and the bullmastiff breed in particular)
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
He sure did fiddle with the CPI formula/COLA, duckpin. Here's
a BLS brief on incorporating a new geometric mean formula into the CPI [upon which COLAs are calculated].
Here's an excerpt and link to
Hey, always nice to see another dog lover. Hope you'll consider posting a photo of your favorite Bullmastiff, sometime.
The last time that we got to see and interact with one, was about 5 years ago. He had a wonderful temperament, and was very handsome and dignified.
Mollie
“I believe in the redemptive powers of a dog’s love. It is in recognition of each dog’s potential to lift the human spirit, and, therefore, to change society for the better, that I fight to make sure every street dog has its day.”
--Stasha Wong, Secretary, Save Our Street Dogs (SOSD)
Everyone thinks they have the best dog, and none of them are wrong.
I have to plead techno-ignorance. I only have a hand-me-down
laptop and it has an out-of-date program to run it.
I have one bullmastiff, Camille, and she's a very good friend and very smart. She was raised from a puppy. The previous bullmastiff, Holly, was a rescue. Our other dog, Archie, is also a rescue. My wife and I return the dogs' devotion. I am glad to indicate you like dogs so I took the opportunity to post what I did.
You can only train most bullmastiffs by gaining their confidence - no corporal punishment(which I wouldn't do anyway). They like to be talked to and rapidly learn a fairly impressive vocabulary - 200 words maybe, depends on how much an owner wants to talk to them.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
It was Paulson who said he wouldn't vote
for trump IRT SS, but ya I as well have heard trump saying we should protect SS, I hope it wasn't BS though.
I never knew that the term "Never Again" only pertained to
those born Jewish
"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"
Heard from Margaret Kimberley
ggersh, You say,
When the election cycle Kabuki ends, I plan to post a blurb at The Evening Blues on the beginning (I fear) of the dismantling of the federal retirement system. Just this year, a Federal agency has moved to transition their defined benefit retirement system, into a 401K matching system--retroactive to 2014, IIRC.
In the mid-1980's, the Feds began the transition to a 'hybrid' pension system. Luckily, was grandfathered into the original defined benefit pension system. Of course, this Administration has further diminished that reformed system, by legislating a higher employee contribution for future federal employees. Patty Murray helped engineer that cut during one of the budget deals--with Paul Ryan, I believe.
[There are two federal retirement annuitants in my household--from both sides of the taxpayer ledger. So, we're trying to follow federal pension 'reforms.']
Thanks for bringing up this trend in states and cities. If the Courts don't strike down the above-referenced federal pension 'reform,' I figure that most, if not all, of the states will follow suit (in time).
Mollie
“I believe in the redemptive powers of a dog’s love. It is in recognition of each dog’s potential to lift the human spirit, and, therefore, to change society for the better, that I fight to make sure every street dog has its day.”
--Stasha Wong, Secretary, Save Our Street Dogs (SOSD)
National Mill Dog Rescue (NMDR) - Dogs Available For Adoption
Update: Misty May has been adopted. Yeah!
Everyone thinks they have the best dog, and none of them are wrong.
Mollie, sorry but I didn't highlight that
correctly but that was in GG's original essay I cut and pasted to retort, but it is correct.
I don't have a pension, I took SS early and am looking for some p/t work as I type this, hopefully that will happen. -g-
But still SS, state pensions, damn all pensions are on WS radar. WS supposedly the "best and brightest" that our country has are only master
criminals, and all these best and brightest know is how to steal.
I do look forward to your coming blurb.
I never knew that the term "Never Again" only pertained to
those born Jewish
"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"
Heard from Margaret Kimberley
Hey, my bad--a bit short of time this evening,
and quickly read the essay. So, my comment is amended to give Nancy credit for the quote [which I took as yours].
Mollie
“I believe in the redemptive powers of a dog’s love. It is in recognition of each dog’s potential to lift the human spirit, and, therefore, to change society for the better, that I fight to make sure every street dog has its day.”
--Stasha Wong, Secretary, Save Our Street Dogs (SOSD)
Everyone thinks they have the best dog, and none of them are wrong.
The quote was actually something duckpin wrote (n/t)
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
LOL, its gone circular.
I never knew that the term "Never Again" only pertained to
those born Jewish
"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"
Heard from Margaret Kimberley
To prevent full employment, and thus
potential wage price inflation, the federal reserve increases interest rates in hopes of discouraging employers expanding by taking on more debt in order to hire more workers.
Monetary policy is crap at addressing the issue of full employment. We need a job guarantee.
And we're the ones who are branded as takers
and people who want the gov't to give them free stuff.
"You can't just leave those who created the problem in charge of the solution."---Tyree Scott
The real welfare queens
are the large corporations. Their share of federal revenues has steadily decreased over the last decades. The fact that we the taxpayers must subsidize their lack of paying a fair living wage should be a source of anger for everyone. It is immoral and unethical, but then the capitalist system is immoral in that preys upon real living human beings in its pursuit of profits at all costs.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
Waltons - Arkansas - Clinton
And HRC sat on their board of directors.
I've seen lots of changes. What doesn't change is people. Same old hairless apes.
Excellent essay GG, brilliant as per usual
Now imagine what America and the economy would be like today if wage stagnation hadn't been foisted on the masses. Neoliberalism and meritocracy are both failures, yet should clinton succeed in becoming pres we ain't seen nothing yet, we will all need to fasten them there seatbelts.
"Wage stagnation is one of the primary causes of shrinking of the middle class. According to the Economic Policy Institute, the average middle class household lost nearly $18,000 in potential income in the ten year period between 1997 and 2007 due to the growth in inequality. What this means is that most of the economic gains were funneled upward away from the middle class, with the top 1% capturing the vast majority of economic gains. In other words, had not nearly all the gains in income gone to the top earners, but had been shared equitably, the average middle income household would have gotten nearly $18,000 more per year in income than they actually received.
But it gets worse. While middle income earners suffered wage stagnation with income growing only at a rate of about 0.2% per year from the period between 1979 and 2013, low wage earners actually lost income in that same time frame."
I never knew that the term "Never Again" only pertained to
those born Jewish
"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"
Heard from Margaret Kimberley
Thank you
Your comments have been excellent too and that is a big part of this series.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
"You work three jobs?"
So spaketh George W. Bush on Feb. 4, 2005. Strangely, he forgot to add, "Is this a great country, or what?"
I'm voting for "what".
inactive account
Yes,
I remember this conversation and how clueless W was at how much this woman was struggling just to keep herself and her family's heads above water. It is obscene that in the richest nation the world has ever known, so many people are struggling because the game is so rigged against them.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
Cause and effect. If one assumes there's only so much to
go around, the more that goes to the top means there's less to spread out down below. It just doesn't appear that most of the public is grasping just how fucking rich the rich are getting and how fast their wealth is piling up. A system truly out of control.
A symptom of what you say: Barrons, a weekly for investors,
began a periodic insert "Penta" aimed at people worth $5 Million or more. With ads and stories like "What private jet is right for you" I'd say much of it is for people worth $100 Million or more. If a large circulation weekly like this has identified a cohort large enough to direct a splashy insert at, then there are way too many people with way too much money.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
Been telling people for some time now, we're going to
have trillionaires. Then I ask, do you want trillionaires? No one has answered yes so far. Maybe it's the way I ask.
And the rest of us can get poorer.
Hey! my dear friends or soon-to-be's, JtC could use the donations to keep this site functioning for those of us who can still see the life preserver or flotsam in the water.
The Word "Savings" Has a Completely Different Meaning When
people make more money.
Interesting thought while reading this essay. Higher wages means mom and pop can compete in the marketplace because the vast majority of customers can only afford the lowest price.
I started a retail dog shop in 2005. It was a sweet little shop with great products and services. The problem was we could not compete on price with the Big Box stores. My wholesale was 10-20% higher than the Big Box retail. There was no competing with them on price.
But we were in a pretty decent place, higher median income than the surrounding areas, so it wasn't too terrible. We did have a shit ton of browsers, though, that surely went and purchased from a Big Box after not being able to afford our products.
To the title:
When did "saving money" turn into "spending less". Saving money used to mean not spending. I would submit that saving money became spending less when the "recovery" in the 80s reduced wages. This really took hold during the continued wage depression of the 90s and 00s.
If people on the bottom make more money, then the meaning of savings has a chance to change again. Saving money could become not spending everything you have for vital goods and services. It would also get rid of the miserable and malleable "basket of goods" calculation of inflation that has hidden the real effects of the policies of our neoliberal paradise.
“Tactics without strategy is the noise before defeat.” ~ Sun Tzu
Excellent comment
overall, and your observation was the same as mine when I read that small businesses pay better than large corporations.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
Whether or not chickenshit Libertarians will admit it,
they have the society they want. Government has been reduced to the point in which it can no longer act, businesses and the robber-barons are free to do what they want, when they want, where they want to whoever they want, and individuals are 'free' to just sit there and take it. Libertarians are just too chickenshit to admit this because the big 2 stole their ideas.
Modern education is little more than toeing the line for the capitalist pigs.
Guerrilla Liberalism won't liberate the US or the world from the iron fist of capital.
We just aren't getting it
All of you who want inflation for some reason are forgetting the 1970s. Inflation does not help. Period.
In 2005 Elizabeth Warren gave a speech that was a revelation: https://www.youtube.com/watch?v=akVL7QY0S8A
She points out that since 1970, the cost of most things - food, clothing, durable goods, has not inflated, in fact, it has gone down for things like clothing and gasoline. Cars cost something like half in real dollars. What then is causing "the coming collapse of the middle class"? (the title of her lecture) Housing costs, health, (insurance) transportation, (though a car cost less in 1980 than it did in 1970 to pay for higher rents without a raise in hourly wage families had to take on 2nd incomes - if Mom had to work as well she needed a car to get to it, and what if that wasn't enough and Junior had to go to McDonald's as well?) and (believe it or not, though this is me, not Warren) taxes. (not the tax rate, but it's impact on low wages., especially the FICA tax, which is effectively highly regressive - in the late 1980s I made less than $15k and paid 23% in taxes, because of a crippling 15% "Self Employment tax" - thanks, Ronnie and Daniel Patrick Moynahan!)
It is not lack of inflation that is causing our woes, and it is not even lack of income. It is our societal bias against low income work and inflation in things that we cannot avoid.
And as long as I'm ranting I'll take on another myth - that "it is a myth that Americans won't work at some jobs no matter how much they pay". People have always admired those who did not have to work, and since the advent of television that prejudice has become a conscious, ubiquitous indoctrination. "get an education so that you won't have to work with your hands". When the carpenters went on strike even the carpenters thought, "Fuck them, I'm taking night classes so I'll get a job as a bank manager next year." That is why union membership has dropped so low - people do not want to admit that they are in a union.
Income inequality and inequality in social status within the middle class is a well designed tactic of the wealthy to entrench their power. Got it?
On to Biden since 1973
Got a Link?
How about homes?
Healthcare?
Communications?
I think you, and Warren, are wrong about inflation. It's happened, it just hasn't been accounted for in an honest manner. It's been manipulated to hide the part of inflation that allows for debts to be repaid easier.
The whole historical money and inflation argument is completely polluted via baskets of this or that, indexed to inflation, and a host of other maddening accounting variables. This makes creating and defending an honest and simple argument almost impossible.
“Tactics without strategy is the noise before defeat.” ~ Sun Tzu
About the link you asked for
the comment you quoted is roughly a quote from Warren's speech. It surprised me, but referrs only to purchase price, not insurance and maintenance. Generally I agree with you - iirc both Carter and Reagan fudged inflation numbers, making a true comparison as difficult as possible.
On to Biden since 1973
I Know She Said It, But From Where Did It Come?
I'm pretty sure the numbers are bunk on that quoted claim. I would be willing to bet that they are based off of some kind of standard inflation adjustment.
Give me the raw numbers so I can compare apples to apples...
My comment was pretty snarky, no disrespect intended.
“Tactics without strategy is the noise before defeat.” ~ Sun Tzu
She said she got it from the federal government
her explanation is at the beginning of the lecture. I recommend it.
On to Biden since 1973
A Friend Posted This Piece on FB:
https://fee.org/articles/there-is-no-such-thing-as-trickle-down-economics/
My response:
“Tactics without strategy is the noise before defeat.” ~ Sun Tzu
Corporations pervert labor markets under guise of freedom
The free market and the law of supply and demand is the god of capitalism. However, as Chomsky has noted, corporations don't want free markets and competition particularly in the area of labor markets. Look at free wheeling free market loving Silicon Valley where there was collusion between well known companies to cooperatively prevent engineers from moving one company to another. They actively perverting labor markets by denying their employees freedom of movement within labor markets. And this is not the only example. America's H1b visa program is the same--give companies access to cheap foreign labor markets to avoid uncontrolled labor markets which would following the law of supply and demand have raised salaries of high tech workers.
Until People Can Move With the Same Freedom as Capital
we're screwed.
“Tactics without strategy is the noise before defeat.” ~ Sun Tzu
Love this, thanks!
Had hoped to catch the back essays after we returned but not looks like we are off again before I will finish. Homework! :}
A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.
Thank you, DO!
If you can only read one essay, please read week 3 on the Myth of Meritocracy. It explains why these people are the way they are.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
Eventually, this shell-game
Eventually, this shell-game based house of cards has to crash.
So long, and thanks for all the fish
Great essay GG
Thanks for writing it. Believe it or not, most of economics is not that hard - people just like to scare you with jargon so you won't look too hard.
The other aspect of wage suppression that I didn't see mentioned is wage theft. Just because you are working 40 hours doesn't mean you get paid for it.
This problem can also show up in strange and non-obvious ways. Back in the 90s I had a roommate who worked as a shoe salesman at a local department store. One of the unpaid chores they had to do was clean up the inventory room before their shift. My roomie was a dedicated go-getter type (he's not selling shoes any more) and wanted the inventory organized so he could help his customers better (and faster) but because it was unpaid work, none of the other salesmen did it. He ended up doing it all and thereby being exploited not simply by his employer but also by his own co-workers.
We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg
Wage theft
was only mentioned in one quote. There is so much more that could be written on this subject and perhaps it may return again. Thank you for adding to the conversation.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
According to the shillbots, wages are relatively low now
because we are more egalitarian now. The "reasoning" is that wages seemed high in the late sixties, early seventies only because minorities and women were not getting a piece of the pie and not because the wealthy now have more of that pie than ever before. And not because the wealthy have always had most of the pie. Apparently, the only way to let others share the pie is for the 99% to keep re-distributing their tiny piece of it.
I almost upchucked.
Thank you again for your efforts and steadfastness in this series.
Upchucking while laughing
at the absurdity of their reasoning.
Thank you for reading and commenting. I am beginning to wonder IF this series will ever end. There is so much more to slog through and I will continue to do so as long as folks here are interested.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
We're interested, but you should not be so
self-sacrificing. I post that as someone who has started series (not here) that turned out to be much more than I had anticipated when I began. In fact, they usually start out to be a single post, then end up being ten installments. If you are doing it only for others, it gets dead tedious. Life is too short. We all have google. But, if you are enjoying it, too, go for it.