It's All About the Wages -- Our Economy Would Be Fine If Everyone Made Their Fair Share

[G_j]

http://www.alternet.org/economy/147531/it%27s_all_about_the_wages_--_our_economy_would_be_fine_if_everyone_made_their_fair_share/

Robert Reich's Blog / By Robert Reich

It's All About the Wages -- Our Economy Would Be Fine If Everyone Made Their Fair Share

When virtually all the gains from growth go to a small minority at the top, the result is deep-seated anxiety and frustration.
July 13, 2010 |

Missing from almost all discussion of America's dizzying rate of unemployment is the brute fact that hourly wages of people with jobs have been dropping, adjusted for inflation. Average weekly earnings rose a bit this spring only because the typical worker put in more hours, but June's decline in average hours pushed weekly paychecks down at an annualized rate of 4.5 percent.

In other words, Americans are keeping their jobs or finding new ones only by accepting lower wages.

Meanwhile, a much smaller group of Americans' earnings are back in the stratosphere: Wall Street traders and executives, hedge-fund and private-equity fund managers, and top corporate executives. As hiring has picked up on the Street, fat salaries are reappearing. Richard Stein, president of Global Sage, an executive search firm, tells the New York Times corporate clients have offered compensation packages of more than $1 million annually to a dozen candidates in just the last few weeks.

..more..

[SocialistLez]

1. It's not JUST wages

When we buy things, many of those things need to be made in the USA by American citizens.

[Warpy]

2. We wouldn't need to buy Chinese made stuff with poor quality control

if we made enough to demand better from the stores. We don't.

We wouldn't be in such desperate straits if we made enough to see a doctor when we're sick with ordinary stuff. We don't.

We wouldn't be in so much trouble personally and as a country if our wages were high enough for us to get what we need without charging up credit cards. We're in trouble.

The lines outside food pantries and the overflowing homeless shelters wouldn't be a national disgrace had the minimum wage been indexed to real inflation. It wasn't.

The race to the bottom started in 1969 when liberals went out of power and wage suppression became official policy.

Many of the problems in this country stem from the massive wealth transfer from labor to the rich. The massively bloated Pentagon budget is to protect this theft by the rich.

Reich is correct in that if we want to nurse the economy back to health, all these trends will have to be reversed.

[BuelahWitch]

4. We're a debt based economy now

Buying on credit what we can't afford to pay for upfront. The trouble is when your wages keep reducing or disappear altogether you can't pay the damn credit bill either.

[Warpy]

6. That's one of the problems with debt

another being that there is a finite amount a worker can assume before servicing it by paying the minimum every month cuts into subsistence, things like food and shelter.

Another problem is that while income can be intermittent, the creditors always have their hands in your pockets. That debt has to be paid, whether or not you have money coming in, or you start to lose things you think you need, like your transportation or your home.

The far right didn't care. They felt as long as the economy was on the artificial life support provided by endless credit, they could grab their ill gotten gains and decamp to the Caribbean. Most of them weren't able to grab quite enough for that and they all pretty much went into debt over the last ten years, but oh well.

The bills are all coming due now and maybe Reich will eventually be listened to.

[G_j]

11. they are coming due alright

almost like the perfect storm, as boomers reach 'retirement' age.
scary stuff

[The2ndWheel]

8. Why would that one aspect of society be different?

Everyone is about efficiency these days. Getting more for less. Why would business be any different than everything else in society? If a company can get the same production for less money, or fewer workers, why wouldn't they do it? Sure, you're dealing with people and their bills, not, for example, our desire for more efficient cars, but even customers want efficient service from the employees of whatever company. Everything is about efficiency. If we're going to live by it, we're going to die by it.

[The2ndWheel]

3. Global economy vs. Regional government

One of those has to give.

[Phoebe Loosinhouse]

5. We should have tied minimum wage to inflation years ago. nt

[Romulox]

7. Americans want higher wages to buy more imported crap.

:hi:

[xchrom]

9. recommend

[The Magistrate]

10. Exactly, Sir