Monday, May 30, 2016

"Where did our wages go?"

Discontent of the Electorate
Driving Movement to the Fringe

They are still asking "Why?" Why is it that Donald Trump is the presumptive Republican nominee for President of the United States while Bernie Sanders is giving Hilary Clinton a run for her money." I continue here to provide at least one answer. Keep this answer in mind when you think about how you will vote in the election. Keep in mind who or what is more responsible for wealth inequality in our country. And by all means, get out there and VOTE.

Reliable statistics support the conclusion that 80% of the workers
in this country are either voicing or have quietly eating away at them the belief that their take home pay today gets them no further than it did any number of years ago. We could go back even thirty years and that would be a fact.

In 2014 the Pew Research Center reported, "...for most US workers, real wages - that is, after inflation is taken into account - have been flat or even falling for decades, regardless of whether the economy has been adding or subtracting jobs." 2014 wages had the same purchasing power as 1979.

In 2014 Fortune Magazine published an article entitled Wealth Inequality in America: It's Worse Than You Think written by Chris Matthews. Extrapolating from the Pew statistics he wrote, "In real terms average wages peaked more than 40 years ago: the $4.03 an hour average rate recorded in 1973 had the same purchasing power as $22.41 [an hour average] would today."

Since the year 2000 weekly wages have fallen 3.7% on average with the lowest 10% of wage earners experiencing a 3% decrease while the top 10% enjoyed an increase of 9.7%.

Matthews went on to report statistics compiled by Emmanuel Saez and Gabriel Zucman of the London School of Economics. They reveal that while the share of total income of the top 1% of earners was 10% of all American wages in the 1970s, it now exceeds 20% of the total of earned wages in the US.

In terms of net family assets the top 1% includes 160,00 families each with total net assets of 20 million dollars or more. Meaning that the top 1% own more than that the 145 million families in the following 99%. As bad as the wage inequality reported may be, asset inequality is ten times worse statistically.

Why has the inequality of wages and assets increased? Saez and Sucman offer a few reasons:

Trend of making taxes less progressive since the 1970s

Changing job market (loss of manufacturing and trade agreements) forcing blue collar workers to compete with cheaper labor abroad

Deregulation of financial institutions making it easier for families and individuals to accumulate debt

Stagnant wage growth

Decreasing savings rate of the middle class

After citing the social repercussions of these disparities, Matthew's concludes: "In other words there's evidence that rising inequality and many other intractable social problems are related. Not only is rising inequality bad for business, it's bad for society too."

AND NOW, on to the Presidential Election

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