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Posted by HughBeaumont in General Discussion (1/22-2007 thru 12/14/2010)
Thu Apr 23rd 2009, 02:32 PM

Today’s venture for clarity revolves around a rather puzzling facet of conservative economics, where it is written that:

(In best George Will voice) “In order for competing companies to remain more and more and more and more competitive to compete in today’s ever competitive markets, corporations must competitively search for the most competitively effective and above all, lowest possible costing labor. The displaced labor must, in turn, be ever more competitive themselves. They must be willing to . . . adapt, re-think their directions and career paths. They must be willing to put themselves through four, maybe eight, years of schooling if possible in order to (are you ready) compete in today’s ever-changing econo . . ..”

Er, wait a second, Mr. Bean Counter freak. Where’s the reassurance that their new career isn’t going to follow the previous ones offshore?

“(hrrrrrmpgh) Well, there isn’t . . . you do research, or develop hindsight . . . look, life is full of risks. The reality of LIFE is you have to be willing to take risks in order to be . . . competitive.”

Well, that’s stupendously empty. Whatever . . . how exactly does the “displaced labor” pay their bills, much less for the schooling for this supposedly secure career field, in the meantime? Are we assuming they have several thousand dollars tucked under their mattresses?

“Wal Mart’s hiring. So’s Target! So’s Red Robin! I see “Help Wanted” signs everywhere! A job’s a job’s a job! Rugged individualism . . . personal responsibility . . . move to service economy . . . adapt or die . . . and all that . . .”

Hooooooooooo-kay. You know, because THAT’ll cover the rent and utilities. Yeah, so going back to that whole “lowest possible costing labor” thing . . . are you saying that American labor is too expensive?

“Absolutely. Expensive as an AIG bailout! Sheesh! Icky poo! How do you expect the corporations to pay for these ridiculously high American wages and still make a profit? How do you expect them to be co . . . “

“Competitive” blah blah blah, right. See, that’d be correct if you were trying to sell that Forbesian chestnut to your Teabagger moran lobotomy patients. The reality is that it’s a baldfaced LIE. The American wage in real dollars hasn’t risen since 1979.

Here is a chart of real change in family income from the post-War boom of 1947-1979. Pretty even distribution, with the upper percentile a little below the rest thanks to their higher tax rates at the time. It seems that the slow, boring way (Regulation and a progressive tax system) led to steady economic expansion and a great manufacturing base, which in turn leads to more participants in your consumer based economy.

And now arriveth the horrorshow known as Reaganomics:

As you can see, the wealthy, thanks to Reagan’s ridiculous tax redistribution (among other methods of gladhanding the wealthy and screwing the lower percentile), saw their after-tax incomes rise exponentially, while ours . . . pretty much remained on the same level throughout: stagnant. As tax burden shifted in favor of the upper 5%, all of the risk and loss shifted onto US. Pretty soon, companies didn’t see the need to follow the sacred tenet of “paying your workers so they can afford your products”, which in turn led to this:

Wowzers. Talk about Flatliners. Here are some more sobering stats for production and non-supervisory workers (mind you, all figures are in 2005 dollars):

Remember also that between 1947 and 1979, the dollar bought far more than it does now. Homes were about 1.5 to two times that of the average income, there were no McMansions and products had a far longer shelf life than today’s disposable Chinese trinkets. Regulation and a progressive tax rate assured a steady and most importantly a balanced economy.

So what this graph shows us is that from 1979 to 2005, the average wage (in 2005 dollars) rose thirty-three cents. In 26 years.

New data from Stephen Greenhouse’s book The Big Squeeze shows that wage decreasing even further in 2008; the average worker now actually makes LESS than they did in 1979. As pointed out earlier in another thread, when wages are flat, the consumer, to make up for it, has to go into debt to be able to afford housing, health care expenses, education, various necessities, etc.

And what does that lead to, among other things? THIS:

The savings rate, thanks to rampant joblessness (a product of Friedman economics), a soaring cost of living, “free markets/free trade”, no universal health care and above all, a flat wage expected to pay for it all, has gone negative for the first time in decades.

Retire? Yeah. Good luck on that one. “Pay yourself first”? OK, so . . . do I not eat or skip the mortgage this month?

So let me see if I got this right. Conservative economists expect the economy to recover by paying Americans (you know, the ones that are still lucky enough to be employed) a consistently inadequate wage; one that’s relatively the same amount no matter WHAT year it is, for decades. . . and you expect this flat lining wage to cover everything from mortgage to car repairs to health care costs to groceries and retirement savings and many other things that are only going up in cost? You expect your workers to be happy with playing employment musical chairs, costing them money, stress and time and corporations’ money and time thanks to adaptation for new hires? You expect them to be able to buy your products so you can remain in business? You actually expect, after all of this you’re laying on them, to be a regular participant in this house of cards economy?

Seriously … logically explain to me how that works.

OK, so since he’s dead, can someone explain this to me like I’m a COMPLETE idiot because I don’t get it?

How does cutting the legs off of the wage earner help the wage payer? How in Gawd’s name does this help the economy??
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