Posts Tagged ‘Distribution of Income’

We put up our 1,000th post a little over a week ago. We’re now looking through everything we’ve posted, and are putting up “best of” lists in our most popular categories.

This is the sixth of our first-1,000 “best of” lists. We’ve already posted the Science Fiction, HumorMusicInterviews, and Addictions lists, and will shortly be putting up other “best ofs” in several other categories, including Anarchism, Atheism, Politics, Religion, Science, and Skepticism.

Best Economics Posts

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%.

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(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.)






WAGE LABOR, n. 1) Death on the installment plan; 2) The process by which those who work enrich those who don’t.

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–from the revised and expanded edition of The American Heretic’s Dictionary, the best modern successor to Ambrose Bierce’s Devil’s Dictionary

The Heretic's Handbook of Quotations coverby Chaz Bufe, editor See Sharp Press

(Note: I wrote this in 1914, and the figures for unemployment rate, etc., have changed since then. But there have been no major changes, and the arguments here still hold.)

In what passes for political debate in this country, one of the current hot topics is whether or not to raise the minimum wage (currently $7.25 an hour). Those arguing against raising the minimum wage express concern for low wage workers and speculate that paying them higher wages would somehow hurt them. Their argument is that higher wages would reduce the number of ultra-low-paying jobs.

Well, guess what. Wages have fallen drastically since G.W. Bush stepped foot in the White House, and that hasn’t produced a bonanza of jobs, nor income growth for those fortunate enough to have a job. In the period since Bush took office through 2011, median income fell a staggering 12.4%. And, since 1973, wages for the bottom 60% of working men have actually fallen. Especially since the start of the recession, almost all wage growth has benefited the top 1% of wage earners. According to the New York Times, in 1979 the top 1% received 7.3% of all wages; in 2010, they received 12.9%. As for the minimum wage itself, half a century ago it was $1.25 an hour, equivalent to $9.50 an hour today; a few years later, in 1968, it went up to its peak, $1.60 per hour, which is equivalent to $10.84 today. Today’s minimum wage of $7.25 is almost exactly a third lower than that peak minimum wage.

At the same time,  productivity per hour worked has been rising at a fairly steady rate of roughly 1.5% – 1.75% per year for over half a century. Increases in wages and productivity almost exactly matched from the end of World War II through 1973, when wages began to stagnate as productivity continued to rise. Since then, productivity has gone up roughly 80%, while wages have been nearly flat. As for wealth, the percentage owned by the top 1% has steadily risen since Reagan took office, and now exceeds 40% of total national wealth.

In other words, the “job creators” are doing just fine. So, where are the jobs? According to the Bureau of Labor Statistics, the official unemployment rate in February was 6.7%. The actual unemployment rate, counting “discouraged workers” and those involuntarily working part-time, is roughly twice that, and even that’s probably understating the matter. The percentage of working-age adults participating in the labor force is only about 63%, very near a historic low.

Given all this, let’s take a closer look at the argument that keeping wages at just above starvation level is somehow good for those looking for work.

Many on the right actually argue that there should be no minimum wage law, and that workers would be better off without it. They’re seriously arguing that wages already so low that many workers can’t even afford to rent a studio apartment (and instead must sleep in their cars or in homeless encampments) are beneficial to workers. And that workers would benefit from even lower wages.

They argue that earning $3 or $4 an hour is better than having no job at all. At the same time, they never argue against laws restricting labor organizing and tactics — Taft-Hartley, “right to work” laws, laws against boycotts and secondary boycotts, etc. In other words, they’re in favor of laws restricting the rights of workers, and against laws guaranteeing worker rights.

Let’s take the right-wingers’ argument a step further. If labor for any compensation at all, no matter how minimal, is preferable to unemployment, there’s an obvious solution to the jobs crisis. There’s a tried and true way to guarantee every able-bodied worker a job, food, and a place to live: slavery.

Some Republicans are already arguing for it.