Who Does our Economy Serve?

Ed Luce with The Financial Times’ has documented the “crisis of middle-class America.” He notes the “median wage stagnation” that has hit most American families, and writes, “the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973....That means most Americans have been treading water for more than a generation.” At the same time, the Financial Times notes, America's CEOs have seen their compensation go up over a hundredfold. The result is a level of inequality not seen in this country since 1929, and the conversion of the middle class of 1940 to 1980, into the terrified working poor of the post Reaganomics era, the vast majority of whom live paycheck to paycheck, with no significant savings, and only a job loss and a few weeks from being homeless and on the streets.

The new GDP report shows our economic growth slowed to a 2.4 percent rate in the second quarter, too slow to put Americans back to work. Much more worrisome are details in this report pointing to a continued slowdown this year. According to a recent survey by the Employee Benefit Research Institute, workers are cashing in their retirement plans just to stay afloat. Their grim statistics show the percentage of American workers who have less than $10,000 in savings grew to 43 percent in 2010. Almost 25% of all workers have postponed their planned retirement in the past year. A CareerBuilder.com survey reports that 61 percent of workers are now living paycheck to paycheck, as compared to 43 percent in 2007. Meanwhile, Bankers at the big Wall Street banks wrapped up their best month in a year. This begs a question. Economic activity happens in America because government authorizes corporations and gives substantial benefits and limitations of liability to those few individuals who own most of corporate America. Thus the question: Is this economy our Government has created here to serve the wealthy people who own it, or did we bring it into being and do we support and maintain it so it can benefit average working people, and thus Democracy?

Comments

JenniferCedar 12 years 26 weeks ago
#1

In addition to treading water financially, middle class workers have also lost the 40 hour week. If you are a "professional" a line that is always being reassessed downward, then you are paid for 40 hour, but usually work much, much more for free. Why, because if you don't there are 200 more people in line to take your decent middle class job when you fall.

I submit that we could significantly reduce unemployment by eliminating the "professional" exemption for the 40 hour week. If everyone actually only worked the hours they were paid for, I am sure we could add at least 30 - 50% workers in this country. Of course, first you would have to eliminated the H1B Visa program, or all the additional jobs would be outsourced.

No politician EVER talks about free overtime in America. It's rampant, and it hurts the family unit. It needs to end.

polycarp2 12 years 26 weeks ago
#2

When incomes are high enough to purchase production...economies thrive and small business thrives. When it isn't, things begin to tank and rounds of layoffs begin.

The U.S. has utilized credit in place of wages to keep the economy functioning.. Credit is maxed out. Stagnant wages can no longer sustain the credit.

Billion dollar bonuses aren't spent...the bulk of them are thrown into financial paper. An extraction of money from the real economy most people live in..Billion dollar bonuses spread among the other employees of the firms would find its way into consumption...the stimulation of production, services and jobs.

Huge disparities of income...income not spent, ultimately throws economies into a downward spiral. That's been so ever since the invention of money. Our tax policy used to address that. with high taxes on income above the equivalent of around $10,000 a day....putting the money back into the real economy through government expenditures, social safety nets, etc. rather than having it sucked up by Wall Street...

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wmstoll's picture
wmstoll 12 years 25 weeks ago
#3

This is beating a dead horse. If CEO's with billion dollar compensation packages is the problem the govenment can simply cap the deduction for management compensation, defining compensation other than salary to favor the government. The problem I see is that most of the billionaires are from the investor class.

lollipopsinbensonaz 12 years 25 weeks ago
#4

For any distribution of wealth to change, the whole of our population will need something new to

dwell on. Because for as long as Coco Cola, Budweiser, Kraft, and Corporate Felon BP are getting us all to buy what they want us to...what motivation is there for them/anyone to change anything. Will they suddenly, for no reason, decide not to be sociopathic? To share their profits with us over their shareholders. It will need to be something that tickles ears, gives instant gratification, is easy and/or makes us feel good. Then maybe the lemming run will change.

What I know is that most people are overwhelmed with trying to be perfect, to fit the model that is handed down to us as our cultural norm and what we should be. Fitting in (whatever box we choose) is so tied into our personal self esteem and that in turn fuels what we choose to value. It's a matter of survival. Why else would a perfectly good looking woman destroy her body and risk death to appease the male of our species with faux beauty?

I have a friend who keeps an immaculate home, cooks several fabulous meals a day, does all the dishes, manages to keep up with all her many friends, supports her husband in his business in many, many ways, has a large family, and she is never far from knowing what I know about any current event. (And by the way, she is 80 plus years old. I don't know how she does it.) And I make a valiant effort to stay informed.

My house on the other hand is horribly behind in being managed. And I am single. I feel like I am doing something useful most of every day, but I let my house go to watch FSTV and read blogs by Thom Hartmann and ...walk my dogs, and scoop poop, change kitty litter, feed my canaries... oh, and run a very small, not yet going business. When I share what I know with my friends, relatives and customers, they will usually go so far (Glen Beck deep) to reciprocate on any topic.

Having taken the equity of my tiny house and invested it into a future of my making, I have a very small business. I couldn't work for Home Depot, Lowes, JC Penney anymore because there was nothing good anywhere there either. I was supposed to make people want things they didn't need and which were, for the most part, made in another country. I watched millions of dollars of perfectly good merchandise get crushed in compacters (liabilities if left in an open dumpster for someone to retrieve and make use of), one of my works of art included. ("Well, we paid you for it, didn't we?") I was told to go pour the toxic, leaking containers of pesticides, herbicides, etc. along the parkway. (I didn't do it, someone else did though, I complained) They only carried the beautiful plants so they could sell the chemicals.

Cashiers with new breast implants were getting $20 an hour while most of us struggled to get a 10 cent raise.

I was called a Design Homer when I was first hired for Home Depot. "We want you to sell the store. We will train you with the best of every department. You will never be required to down stock or throw freight. We want you to go out to customer's homes and sell the high-end products and add on items. We want you to dress nice and look like a designer. You will have regular hours and days off so clients will know when they can find you."

I was cutting carpet off the roll from a pile stacked 8 feet high by the third week. My fine clothes becoming saturated in sweat. (Those were the days when they didn't air condition.) "Well, there is no one else in that department. Be a team player." (Don't be a whistle blower).

I stayed 7 years so I could get my fully vested 401K money and run. Most of my associates didn't even take the match. "I can't afford to". I said, "You can't afford not to, it's free money" "I don't have time to learn about it...oh, well" they would say.

I managed to live corporate-employed-free for a couple of years while I tried to start my first decorating business. I couldn't compete with the big boxes. I sold my home which had nearly doubled in value (if I could have hung on for a few months more it would have probably been another 50% more in the housing bubble, and if the realtor hadn't been corrupt, I could have had a bidding war and gotten at least another $20K, but he had someone lined up and wanted both commissions and frankly, I didn't know any better).

So I headed off to be near my sister in AZ, not fully aware of the right to work conditions. After a year of trying not to work, I had to try Lowes for $9 an hour and 60 miles away until I finally got a decorating gig with JC Penney. $30K plus a year was a little better but it was still 50 miles one way to get there and another 100 miles running to clients homes. All they did was belittle efforts, compare us to each other (for motivation), add additional associates so they could get their share faster (leaving most of us with part-time employment like conditions because we were getting fewer leads) and take more and more incentives away and reduce benefits all the while putting more duties upon us. Time to leave again.

Now I am still trying to compete with mega corporations to sell items that are sustainable, useful, uplifting, will create industry among my fellow community members. But, most everyone spends their Sundays off communing at the local Wal-Mart. I can't convince them to "spend more and save the world". They say they can't afford to. I try to inform them that they are paying anyway to subsidize the employee benefits package (state sponsored medical), not to mention all the products that are subsidized (high fructose), and all the labor that is lost to off shore jobs manufacturing the biggest part of their stock. They seem to think that the $7-9 wages are "pretty good". "Well, Wal-Mart did bring in good paying jobs.”!!! What!!!

My little "Variety" shop is on a side street and faces the local Circle K. Streams of people file in and out of it all day. Each one leaving with a 6 or 12 pack of beer, cigarettes, coffee, slushy, potato chips, hot dog, candy, liquor, lottery tickets...there is nothing good in there. Styrofoam cups galore, bottled water...energy drinks, the local, much politicized newspaper, oh yes, and gasoline, gasoline, gasoline! Boom boxes blaring. All in a hurry to their next whatever. The local riff raff circulate a triangle between a "sitting" wall down from my shop, the visitor's center across the street and the Circle K. I know they are dealing drugs and drinking alcohol in their disguised containers. The cops drive buy and allow it to go on. Mind you, it does little to encourage business to my shop. The girl ahead of me at Circle K buys her soda fountain drink with her food stamp card. (I'm buying a pack of cracker cut cheddar cheese because any decent food establishment has gone out of business and I need something to offset the acid from the pot of organic coffee I brewed and drank) She is hanging around drunken most of the time. Sometimes her several children are following in her footsteps. Sometimes they are nowhere to be found.

Maybe sewing will make people feel good. It makes me feel good to sew, like it makes my friend feel good to cook and clean house. I'm teaching sewing classes thinking the local young girls who don't get it in school anymore might like it. And they do. In fact, they love it. It is like building a building. You follow instructions, develop skills, put something together and feel immense satisfaction at the accomplishment. And you even have something to sell. (Good luck) But I can't provide the materials because ....well, Wal-Mart.

What can change anything? Voting? Not fast enough. Getting Oprah to speak about it? Good luck. Well maybe Michael Moore. For sure Thom Hartmann. But I can't get anyone I know to watch him..."I don't have time", "He's a liberal"..."You know what Glen Beck said?"....

What am I going to do?! I just keep plugging along in my little shop for as long as I can and tell everyone I know, everything I can about Worlds Best Kitty Litter, Petcurian Pet Food, Yummy Earth Lollipops, Elaine's Toffee, Stampington's Green Craft Magazine, up-cycling, recycling, Loving Pets, Pet-N-Shape, Apple Cider Vinegar, herbal remedies, essential oils, hand-made, one-or-a-kind items and just hope that they will like to keep coming back and that maybe at some point, an influence will take hold and something will change.

I pin a flyer at the local Laundromat and everyone who comes in raves about how "cute your shop is" each one telling me his or her life story, and leaves with nothing. I have decided that we all crave a place to go where we can share our story, open our box and show people where we live, and feel the proximity of each other. We are social creatures. About the only contact we have with each other anymore is coming or going at Circle K and Wal-Mart or visiting in our inboxes and text messages, blogs, twitters and facebooks.

It still takes too long but you have to do something. It might as well be something you think is good.

What else can we really do?

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