The rich continue to plunder the middle class

[Evil_Captor]

An article in todays’ New York Times gives further proof to what I have been saying all along on this board:

The rich are augmenting their wealth by gutting the wealth of the middle class. The proof is in the pudding: the article cites stats showing that real wages are going down while productivity is going up. Corporate profits are going up, too, an upswing that led one financial org to delcare this, “The golden age of profitability.”

To sum up: real wages are going down. Productivity is going up. Corporate profits are going up. And interrestngly, wages at the top – the fatcat CEOs and their cronies – are bucking the trend by going up, way up.

If you are middle class, you are being robbed blind.

The ripoff is so raw that even the Fed chairman is calling for an more equitable distribution of wealth.

If you know any moderates or nonstupid conservatives and they start mouthing off about what a great job Bush is doing on the economy, be sure and give him a truckload of the info in this article from the New York Times. (You’ll need a free subscription to read it.)

Here’s a few choice quotes:

The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity — the amount that an average worker produces in an hour and the basic wellspring of a nation’s living standards — has risen steadily over the same period.

As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s. UBS, the investment bank, recently described the current period as “the golden era of profitability.”

Until the last year, stagnating wages were somewhat offset by the rising value of benefits, especially health insurance, which caused overall compensation for most Americans to continue increasing. Since last summer, however, the value of workers’ benefits has also failed to keep pace with inflation, according to government data.

At the very top of the income spectrum, many workers have continued to receive raises that outpace inflation, and the gains have been large enough to keep average income and consumer spending rising.

Conservatives on this board have consistently maintained that this sort of thing is the natural result of the free market and any attempt to shift the benefits of free-market captialism more to the middle class are meddling that will cause a hyperdimensional warp in the economy, destroying us all in a fiery blast of inflation.

I maintain that they are full of it. So do the numbers.

[Voyager]

This is exactly why the Republicans are so upset that the American public is not giving them credit for this great economy - it’s not so great for most people. The money doesn’t seem to be trickling down the way it used to. Now that the housing bubble is losing air, it is going to get interesting.

I suspect the response you get is that the middle class doesn’t deserve more money anyhow, and you’re encouraging class warfare.

[John_Mace]

@Evil Captor

An article in todays’ New York Times gives further proof to what I have been saying all along on this board:

The rich are augmenting their wealth by gutting the wealth of the middle class. The proof is in the pudding: the article cites stats showing that real wages are going down while productivity is going up. Corporate profits are going up, too, an upswing that led one financial org to delcare this, “The golden age of profitability.”

To sum up: real wages are going down. Productivity is going up. Corporate profits are going up. And interrestngly, wages at the top – the fatcat CEOs and their cronies – are bucking the trend by going up, way up.

If you are middle class, you are being robbed blind.

In order to be robbed, someone must take something that belongs to you. Can you tell us what that something is in this case?

Conservatives on this board have consistently maintained that this sort of thing is the natural result of the free market and any attempt to shift the benefits of free-market captialism more to the middle class are meddling that will cause a hyperdimensional warp in the economy, destroying us all in a fiery blast of inflation.

Strawman. Unless, of course, you can show us a quote from one of the so-called conservatives you speak of saying that.

If you actually want to have a rational debate about this subject, might I suggest you avoid the hysterical hyperbole at both ends of the spetctrum?

[ultrafilter]

I don’t think you can pin this one on the rich. Productivity is rising because of better technology, including the automation of many processes that used to require significant worker involvement. Wages for relatively unskilled are dropping because that same labor can be done much more cheaply in other countries. Even if we were willing and able to reverse those trends (and that’s another debate in and of itself), is there any reason to believe that the increase in wages wouldn’t be offset by the increase in the price of goods?

[LonesomePolecat]

@ultrafilter

Wages for relatively unskilled are dropping because that same labor can be done much more cheaply in other countries.

The savings, however, go to the rich. Similarly, illegal immigration holds down labor costs, but it also erodes the quality of life for people like me. The rich benefit. Working people don’t.

The rich are the scum of the earth in every country. --G.K. Chesterton

[BrainGlutton]

@Voyager

I suspect the response you get is that the middle class doesn’t deserve more money anyhow, and you’re encouraging class warfare.

[shrug] So let’s encourage class warfare. A class war has been going on in America at least since 1980 anyhow, but up to now it’s been entirely one-sided – the rich against everybody else.

[BrainGlutton]

@ultrafilter

Even if we were willing and able to reverse those trends (and that’s another debate in and of itself), is there any reason to believe that the increase in wages wouldn’t be offset by the increase in the price of goods?

Has the decrease in wages been offset by a decrease in the price of goods?

[Caridwen]

Has the decrease in wages been offset by a decrease in the price of goods?

Not according to the article.

In order to be robbed, someone must take something that belongs to you. Can you tell us what that something is in this case?

from the article-

In another recent report on the boom in profits, economists at Goldman Sachs wrote, “The most important contributor to higher profit margins over the past five years has been a decline in labor’s share of national income.”

[ultrafilter]

@BrainGlutton

Has the decrease in wages been offset by a decrease in the price of goods?

Even if it hasn’t, the changes I described will raise both wages and the price of goods.

[Icemann]

@BrainGlutton

Has the decrease in wages been offset by a decrease in the price of goods?

I can only answer from my personal experiences. As it pertains to company departments which have been outsourced to save money, this has been done to hold the line on prices.

With costs rising and competitive pressure, it is almost impossible to raise the cost of our products. But, our costs do increase, mainly healthcare.

Increases in productivity SEEM to come from everyone just working that much harder.

[Caridwen]

@ultrafilter

Even if it hasn’t, the changes I described will raise both wages and the price of goods.

According to this article, it’s because the wages haven’t kept up with the rising costs of health care, energy prices and benefits not keeping up with inflation.

Even for workers at the 90th percentile of earners — making about $80,000 a year — inflation has outpaced their pay increases over the last three years, according to the Labor Department.

At the very top of the income spectrum, many workers have continued to receive raises that outpace inflation, and the gains have been large enough to keep average income and consumer spending rising.

[LonesomePolecat]

@ultrafilter

Even if it hasn’t, the changes I described will raise both wages and the price of goods.

So you’re saying that you don’t mind if tens of millions of people take a major hit in their standard of living? It doesn’t matter that many American workers might eventually be reduced to Third World conditions?

In the nineteenth century we were told that economic reality meant that children as young as six or seven had to work ten hours a day six days a week in mines and factory for near-starvation wages. You’ll have to pardon me if I’m somewhat skeptical of lasseiz-fair economics.

[ultrafilter]

@LonesomePolecat

So you’re saying that you don’t mind if tens of millions of people take a major hit in their standard of living? It doesn’t matter that many American workers might eventually be reduced to Third World conditions?

No, I never said anything like that, and I don’t think you have any reasonable basis to infer that. What I am saying is that what sounds on the surface like a reasonable fix will most likely have unintended consequences.

[LonesomePolecat]

@Icemann

I can only answer from my personal experiences. As it pertains to company departments which have been outsourced to save money, this has been done to hold the line on prices.

With costs rising and competitive pressure, it is almost impossible to raise the cost of our products. But, our costs do increase, mainly healthcare.

Increases in productivity SEEM to come from everyone just working that much harder.

And who do you expect to sell your products to, if everybody else outsources?

It’s a race to the bottom.

[elucidator]

The rich don’t actually plunder anyone. They have people for that sort of thing.

[John_Mace]

@ultrafilter

I don’t think you can pin this one on the rich. Productivity is rising because of better technology, including the automation of many processes that used to require significant worker involvement. Wages for relatively unskilled are dropping because that same labor can be done much more cheaply in other countries.

Bingo. I think our OP is assuming that workers “own” this increaded productivity, but that’s only true if it comes about because of skills that they possess themselves. When I was a kid, I had a job as a cashier one summer. Those old style cash registered meant that I had to able to do accurate data entry, figure out change, and then pay the customer back. Today’s cashier only has to be able to move product in front of a scanner and then pay the customer the change that the machine tells him. And guess what-- that guy is more productive than I was, even if it takes less skill to do the job.

This is a tough problem, and the solution is not to just require employers to pay unskilled workers more-- unless you want to force the elimination of even more unskilled jobs either thru automation or outsourcing.

[Icemann]

@LonesomePolecat

And who do you expect to sell your products to, if everybody else outsources?

It’s a race to the bottom.

I am not being flip when I say that this has not been a problem. Many people, even here where I work, Have brought up the same question and I believe that this has some validity.

Primarily we need to stay in business. Without cutting some costs, the projected increase in expenses will eclipse profits. Granted this is the short story version.

[Gangster_Octopus]

BTW, not just “rich” people bebfit from increased profits. Many, many middle class people have reitrement funds and other general savings in the stock market or mutual funds.

[LonesomePolecat]

@John Mace

This is a tough problem, and the solution is not to just require employers to pay unskilled workers more-- unless you want to force the elimination of even more unskilled jobs either thru automation or outsourcing.

But it isn’t just unskilled workers who are affected. A lot of engineering and programming work is being outsourced. It isn’t just unskilled labor which is affected by all this.

[cmkeller]

Is there some sort of collusion amongst “the rich” that prevents corporations from offering workers more money in order to poach them from competitors?

The problem is that at the moment, there is not a lot of competition for labor in most industries…one guy quits, he can be easily replaced. So workers will put up with declining wages in order to keep their jobs.

But unless there’s some form of collusion (and how could there possibly be, with so many companies across so many industries?), there’s nothing going on that’s wrong. And I’m speaking here as a salaried worker whose raises since 2002 have been a pittance. I (for the moment) knowingly choose the security of my steady job, leaving myself open to the possiblity of low salary increases and (thus far minor) lifestyle sacrifices, rather than throwing myself to the uncertainty of the open labor market or entrepeneurship. And I imagine most of my fellow specimens in your quoted statistic would say the same thing.