Productivity, Wages, Distribution of Wealth and Income–Why the Work Week should be MUCH shorter (Part 1)

Posted: August 7, 2015 in Capitalism, Economics, Livin' in the USA
Tags: , ,

by Chaz Bufe, publisher See Sharp Press

American workers work longer hours and get far fewer vacation days than workers in other industrialized countries. The average American work week is 47 hours, with fully half of employed American workers working in excess of 40 hours per week. At the same time, Americans get no paid maternity leave and far fewer paid days off and vacation days than workers in other industrialized nations.  In the U.S., the average number of paid days off/vacation days is only 13. In Austria it’s 38, in Portugal 35, Spain 34, France and Italy 31, and 30 in Belgium, Germany, and New Zealand.

To make all this even more bothersome, productivity in the U.S. has soared decade after decade, averaging over 1.75% annually since 1973, the high point of real wages in the U.S.  Compounded, that equals an 80%+ increase in productivity since 1973, which means that to maintain the same average standard of living we should (figuring a 40-hour work week in 1973) only be working 22 hours per week now, had wages kept pace with productivity increases. They haven’t. Even the rosiest estimates of wage increases in that period peg them at only 10% (New York Times), while Bureau of Labor Statistics figures reported by Pew Research indicate an approximately 9% decrease in wages. Pew also reports that wages for the top 25% of wage earners have increased somce 2000, with the wages of the top 10% rising approximately 10% in the same period (though they haven’t kept up with productivity increases, which averaged 2% per year); at the same time, real wages for the bottom 50% declined.

Where has all of the money gone? Most of it has gone to the top 10% of the population, and especially the top 1%. The higher you go, the greater the increase in wealth.
As of 2010, the top 1% owned 42% of financial (nonhome) wealth, and currently the top .1% own as much as the bottom 90% combined–and almost all of the bottom 90%’s wealth is concentrated toward the top; the bottom 50% of the population own essentially nothing beyond an old car, household goods, and if fortunate a heavily mortgaged home. And this situation has only grown worse in recent decades. In 1983, the top 20% owned 91% of financial wealth and the bottom 80% owned 8.7%. By 2010 that figure was 95.6% for the top 20% and 4.7% for the bottom 80%.  By 2012, Forbes reports that the the top 1%’s financial wealth had increased another percentage point to 43% of the total.

Apologists for the economic status quo often assert that it would make little difference if wealth were equally divided. But that isn’t true. As of 2014, total U.S. wealth was $81.5 trillion and the U.S. population approximately 319 million. That works out to average (not median) per capita wealth of over $250 thousand per person. How many families of four do you know worth more than a million dollars? And would that much wealth make a difference in your standard of living and in how much you’d feel forced to work? I know it would make a big difference in my life.

In terms of income, there’s also a large disparity between the top income brackets and everyone else–not as wide as the wealth chasm, but still large. Fortune reports that from the late ’70s through 2012 the percentage of income received by the top 1% more than doubled, from under 10% to over 20%; and in 2012 the top 10% received more than 50% of all income in the U.S., with most of  the bottom 90%’s income concentrated toward the top. To aggravate matters, between 2000 and 2011, median income in the U.S.  dropped a staggering 12.4%.

In 2014, the U.S.  GDP was $17.7 trillion. That equals production of over $46,000 in goods and services per person. That works out to $185,000 for a family of four. How many families of four do you know with anywhere near that much income?

Clearly, most of what we produce is not going into our pockets. We’re being worked to death for the benefit of the top 1%.

* * *

(It gets worse. We haven’t even touched on the massive waste in the U.S. economy, nor the grossly unfair taxation system here. We’ll cover those matters tomorrow, and will also estimate how many hours we should be working to maintain our average standard of living.)

 

 

 

 

 

Comments
  1. […] Part I, we saw that the distribution of income and, especially, wealth in the U.S. is extremely […]

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  2. […] Productivity, Wages, Distribution of Wealth and Income–Why the Work Week should be MUCH shorter (Pa… […]

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  3. […] Part I (distribution of wealth and income), we saw that the distribution of income and, especially, […]

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  4. […] Why the Work Week Should Be Much Shorter (Part I) […]

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  5. […] Why the Work Week Should Be Much Shorter (Part I–productivity, wages, the distribution of weal… […]

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