Thursday, September 9, 2010

Your Wages Are Still Too High

I've been working on a post regarding why the economic "recovery" hasn't occurred, focusing on the fact that the Way Things Are is Policy and that Changes Underway are Strategic and Structural.

Well, Meteor Blades over at dKos has beat me to the punch. Perhaps he's not as distracted as I have been lately. Whatever the case, his post touches on, but doesn't really get into the fact that a great deal of deliberation has obviously gone into the ongoing unemployment crisis.

After all, if there had been any real jobs programs implemented years ago -- or even months ago -- the army of unemployed would have been reduced, conceivably even eliminated. But no. There were no jobs programs at the outset of this Endless Recession and there are none now.

The reason? Simple. American wages are "too high."

Many working Americans have already taken huge pay cuts -- 10%, 15%, 25% is routine if you want to keep your job; 50% pay cut is not unusual any more. But as President Obama has said many times, he wants American companies to be able to compete globally "on a level playing field." He never quite says what he means by that -- though it is widely interpreted to mean raising global standards to American ones. But I submit that's not what he means at all; what he means -- which should be obvious from the economic policies out of the White House -- is that he intends to reduce American standards (wage standards at the very least) to global standards.

50% pay cut apparently isn't enough.

I don't know what would be enough. Since wages in China, India, and even Vietnam are rising, perhaps there is a Global Median that could be reached, let's say $10-15 a day for an average American worker, about the same as in Russia today.

As the AEI flack cited by MB proposes, with an "appropriate" wage scale, American employers would be hiring again, but damn if there aren't all these impediments, like minimum wage laws and overtime and other nuisances that get in the way.

No, the Market Must Rule.

And that means you are being paid too much. Give it up. Now.


  1. che,

    I understand that making $10-20 a day would make life impossible by today's prices, and workers would not want this.

    But, what is to stop them?

    There doesn't seem to be anything going on that would or could stand in the way of this kind of "race."

    People aren't going to act quick enough to prevent a drop in wages. It will happen gradually so they won't notice, or it will happen all of a sudden so they won't be able to organize a response.

    I'm pretty depressed about the thing today...

  2. Ché,

    How's it going?

    Yeah, I agree with ya. The goal is to reduce wages across the board. But that's been the goal of the big shots since at least the early 70s. How else can we explain the incredible rise in inequality along with the huge drop in tax burdens for the wealthy? How else can we account for the fact that ownership, during the middle class boom years (1947-1973) generally paid itself 20-30 times the rank and file . . . but now pays itself more than 400 times as much?

    The money is there for higher wages. Trillions of dollars are there for higher wages and jobs. But it's been sucked up by the top of the heap which once was satisfied with a far, far lower ratio of ownership to workers' wages.

    As I've mentioned before, the biggest real "tax" Americans face today does not come from any government. It comes from employers. They've been suppressing wages for nearly 40 years, and that means the loss of trillions of dollars for the American worker. The government, in fact, can't compete with the private sector when it comes to "confiscatory" taxation. The private sector is in a whole 'nuther league.

    Thing is, capital will always chase after the lowest wages, so the only way to keep American wages from falling through the floor is for wages to rise rapidly around the world. And the only way for that to really happen is for "Labor" to organize internationally.

    But you know that already. And you know the great songs, too, and how long they've been sung . . .

    Hope all is well --

  3. Steven and Cu-hool,

    I'm literally getting livid about this issue -- among a variety of others.

    Wages for ordinary workers -- assuming they have and can keep a job or jobs -- have been flat or falling for decades. Since the start of this Endless Recession, workers' wages have fallen substantially, or for millions, ceased altogether. Income at the top of the pyramid, of course, has been rising exponentially, and after the slightest dip at the start of this Endless Recession, it has risen smartly ever since.

    Unemployment is unconscionably high, and it is being maintained at these unconscionable level by a combination of increasingly outrageous behavior by the corporate and financial sectors (who see their profits doing just fine, thank you very much) and by the disinterest of the government sector, which has adopted the bankers' point of view on everything. It may as well be 1932. Only it is the Democrats doing this, not the Republicans. And in fact, the Republicans are actually poised to take over Congress and take Bold Steps.

    Their steps will make the situation worse. The problem is that the Democrats aren't making things better. AEI says cut/eliminate the minimum wage. Expect it to happen. The whole point is to get American wages down to "global" levels. Once they are down there, then, maybe, there will be some hiring again. Maybe.

    This is pure Hooverism. And it comes out of a banker's mindset.

    There is no FDR on the horizon. Lots of little Hitlers, though, and plenty of would-be Mussolinis.

    As for you, Cu-hool, have you been all right? Missed you around Salon...

  4. Good summary, Ché.

    Absence from the forums . . . Basically, have been very busy, and I decided to detoxify from all politics for a bit. I stayed away from the news, other than sports and cultural stuff. Didn't read or listen to anything political for several weeks.

    It felt great. Fresh air and sunshine, literally and metaphorically. Going to do a lot more of that in the future . . .

    Again, hope all is well --