Following up on the previous post, two columns in the New York Times look at the problem facing far too many Americans: stagnant wage grow coupled with rising prices that combined put them in a worse financial situation with each passing month and year. The Trump/GOP tax cut did little for most working Americans and the pro-big business policies of Congressional Republicans and Trump/Pence offer no relief in sight. The first column looks at the wage stagnation problem. Here are excerpts:
Paul Ryan tried to brag about the economy last week, and it didn’t go so well. . . . If the Trump economy were so wonderful, why would the speaker of the House feel the need to traffic in disingenuousness? Because the Trump economy isn’t actually so wonderful. For most Americans, it is downright mediocre, and it has deteriorated somewhat since President Trump took office, despite the healthy G.D.P. and unemployment statistics. . . . hourly wages are suffering through a Trump slump.[Trump] deserves some blame for it. Worst of all, he is doing virtually nothing improve the situation, instead enacting policies that will ultimately hurt workers’ ability to earn a decent paycheck.
[N]ominal wages — that is, the numbers people see in their paychecks, before taking inflation into account — are growing. . . . Over the past year, the average hourly nominal wage has risen 2.7 percent.
There are two problems, though. First, 2.7 percent isn’t a great growth rate for nominal wages. It was rarely so slow in the entire second half of the 20th century, for example. These days, though, most workers don’t receive their fair share of economic output. An outsize share instead flows to corporate profits and the rich.
Second, nominal wages by themselves can’t buy a higher standard of living. Prices matter, too. When the prices of good and services are rising faster than nominal wages, people end up with less buying power. And that is exactly what’s happening now.Add it all up — faster inflation plus mediocre nominal-wage growth — and you get a stagnation in real wages. Welcome to the Trump wage slump.
[T]here is no reason to think that most Americans are on the cusp of truly healthy pay increases. They face too many obstacles: Companies that are larger and more powerful than they used to be; unions that are weaker; and, thanks in large part to Trump, a federal government that keeps siding against workers, be it on overtime pay, work rules, health care costs, for-profit-college scams or tax cuts.
Right now, Trump is presiding over precisely the wage growth that he deserves: zero.
The second column looks at the growing flirtation with socialism by some who have been left behind by the GOP/Trump give all the gifts to the rich and big business agenda. If big business finds such flirtation disturbing, they need to look in the mirror as to a good part of the cause. Here are excerpts:
I’ve been fretting lately about the state of mind of America’s capitalists. All these socialists coming out of the woodwork must have them in quite a lather. So I write today with some friendly advice for the capitalist class about said socialists.You want fewer socialists? Easy. Stop creating them.
Every once in a while in history, cause and effect smack us in the face. The conditions under which the czars forced Russians to live gave rise to Bolshevism. The terms imposed at Versailles fueled Hitler’s ascent. The failures of Keynesianism in the 1970s smoothed the path for supply-side economics.
And so it is here. As I noted recently in The Daily Beast, the kind of capitalism that has been practiced in this country over the last few decades has made socialism look far more appealing, especially to young people. Ask yourself: If you’re 28 like Alexandria Ocasio-Cortez, the New York congressional candidate who describes herself as a democratic socialist, what have you seen during your sentient life?
You’ve seen the United States go from being a country that your parents — or if you’re 28, more likely your grandparents — described as a place where life got better for every succeeding generation to a place where for millions of people, quite possibly including you, that’s no longer true.
As that happened, you’ve seen the rich get richer, and you’ve perhaps noticed that the government’s main response to this has been to keep cutting their taxes . . . . You witnessed the financial meltdown of 2008, caused by big banks betting against themselves. Capitalists might want to consider how all that looked to a young person who came from a working-class family and who probably knows someone who lost a job or even his house, while some of the bankers who helped create the mess walked away with golden parachutes, like that of Countrywide Financial’s Angelo Mozilo, which The Times valued at $88 million. . . . .You’ve watched corporations horde profits, buy back their stock and not reinvest in their workers the way they once did as they move jobs to Central America and Bangladesh.
Back in the days when our economy just grew and grew, we had a government and a capitalist class that invested in our people and their future — in the Interstate highways, the community colleges, the scientific research, the generous federal grants for transportation and regional development.
And, funny thing, during all this time, socialism didn’t have much appeal.
So, back now to our 28-year-old. She was born in 1990. She will probably remember, in the late ’90s, her parents feeling pretty good about things — median household income did go up under Bill Clinton more than they had under any president in a long time, even more than under Ronald Reagan. But ever since, the median income picture has been much spottier, hardly increasing at all in inflation-adjusted dollars over 18 long years. And those incomes at the top have shot to the heavens.
So if you were a person of modest or even middle-class means, how would you feel about capitalism? The kind of capitalism this country has been practicing for all these years has failed most people.
Sadly, I suspect the last thing the vulture capitalistsBut I understand completely why it’s happening. Given what’s been going on in this country, it couldn’t not have happened. And if you’re a capitalist, you’d better try to understand it, too — and do something to address the very legitimate grievances that propelled it.