IF ONE PERSON GRABS ALL THE MARBLES, THEN THERE CANNOT BE A GAME
Being a writer, I have always taken issue with the expression, “A picture is worth a 1,000 words,” but I have to admit the above graphic makes the point with a vengeance. I think it is a tragedy. Here is this wonderful, richly endowed country—and, essentially, it is being hogged by a tiny minority. Meanwhile, the majority—the 90%—are getting poorer by the day. That is a scenario that cannot end well.
I know most people hate statistics—and I am not exactly a fan of the statistical approach to economics myself—but the figures about where the U.S. is heading would scare a nun out of her habit (I grew up in the days when nuns wore such things—and then one day I encountered a nun in a mini-skirt at a school reception; and life has never been the same since). But back to the matter at hand.
Here are some details from a recent Robert Reich blog:
A newly-released analysis by the Economic Policy Institute shows that the super-rich have done well in the economic recovery while almost everyone else has done badly. The top 1 percent of earners' real wages grew 8.2 percent from 2009 to 2011, yet the real annual wages of Americans in the bottom 90 percent have continued to decline in the recovery, eroding by 1.2 percent between 2009 and 2011.
Not even the very wealthy can continue to succeed without a broader-based prosperity. That's because 70 percent of economic activity in America is consumer spending. If the bottom 90 percent of Americans are becoming poorer, they're less able to spend. Without their spending, the economy can't get out of first gear.
That's a big reason why the recovery continues to be anemic, and why the International Monetary Fund just lowered its estimate for U.S. growth in 2013 to just 2 percent.
Almost a quarter of all jobs in America now pay wages below the poverty line for a family of four. The Bureau of Labor Statistics estimates 7 out of 10 growth occupations over the next decade will be low-wage -- like serving customers at big-box retailers and fast-food chains.
If they were rational, the wealthy would support public investments in education and job-training, a world-class infrastructure (transportation, water and sewage, energy, internet), and basic research -- all of which would make the American workforce more productive.
If they were rational they'd even support labor unions -- which have proven the best means of giving working people a fair share in the nation's prosperity.
But labor unions are almost extinct.
The decline of labor unions in America tracks exactly the decline in the bottom 90 percent's share of total earnings, and shrinkage of the middle class.
In the 1950s, when the U.S. economy was growing faster than 3 percent a year, more than a third of all working people belonged to a union. That gave them enough bargaining clout to get wages that allowed them to buy what the economy was capable of producing.
Since the late 1970s, unions have eroded -- as has the purchasing power of most Americans, and not coincidentally, the average annual growth of the economy.
Last week the Bureau of Labor Statistics reported that as of 2012 only 6.6 percent of workers in the private sector were unionized. (That's down from 6.9 percent in 2011.) That's the lowest rate of unionization in almost a century.
The average pay of a Walmart worker is $8.81 an hour. A third of Walmart's employees work less than 28 hours per week and don't qualify for benefits.
Walmart is a microcosm of the American economy. It has brazenly fought off unions. But it could easily afford to pay its workers more. It earned $16 billion last year. Much of that sum went to Walmart's shareholders, including the family of its founder, Sam Walton.
The wealth of the Walton family now exceeds the wealth of the bottom 40 percent of American families combined, according to an analysis by the Economic Policy Institute.