Wage Suppression and “Prosperity”

Wednesday, February 5, 2020

“Well, I’m off to the brain factory,” I sometimes say to my spouse as I pick up my backpack and head out to the car at 8:30 a.m. Though it may seem as if I’m joking, the reality is that knowledge produces wealth, and college trains people to strive for and employ professional knowledge. In case one is skeptical about my proposition, consider the opposite: “Ignorance produces wealth.” Actually, there’s some truth in that statement, too, for those who have wealth know that other’s ignorance gives them immense advantages in creating yet more wealth.

In the long run, though, knowledge promotes a common prosperity, and if the long expansion of the economy after the Great Recession has surprised many people, it shouldn’t. It’s a convergence of two factors, the first being that things got so bad between 2007 and 2010 that this rebound still does not proportionately address the social deficit imposed by the grandiose gamble of finance capital between 2000 and 2007. And make no mistake about it: many families are still feeling the shortfall of those years. The question isn’t “Are you better off than three years ago?” The question is whether you are THREE TIMES BETTER OFF than three years ago.If not, then you’re been left behind — far, far behind.

Indeed, the primary reason for the current “prosperity” can’t be explained the old models of economic oscillations. The massive encroachment of computers into our daily lives, including our jobs, is the primary factor in this economy’s economic acceleration. Compact efficiency creates immense savings in work time, and computers will dominate the first half of this century in the transmutation of knowledge into wealth. This might seem to be an obvious correlation, but when was the last time you heard the current occupant give computers their proper credit. In fairness, all politicians enjoy claiming credit for this “prosperity,” though they have very little to do with it, other than accepting the “bribe” of campaign donations as a retainer for their services. This applies to both major political parties, though it should be noted that Sanders and Warren are both engaged in a “hostile takeover” of the Democratic Party in hopes of rectifying the imbalances that prosperity will continue to accumulate.

And make no mistake about it: “imbalance” is a mild term for the distortions of this “prosperity.” A mere 162 billionaires, including Facebook’s Mark Zuckerberg and Amazon’s Jeff Bezos, have the same wealth as the poorest half of the world.

There are 2,153 billionaires globally, and, in 2019, they held more wealth combined than 4.6 billion people on this planet. Since the total population is 7.53 billion, the combined wealth of all 2,153 billionaires is equal to the wealth of sixty percent of the world’s population. This disparity is not particularly visible to the 39 percent of the world’s population above the majority’s benchmark.

But for many of those who do the service work needed to facilitate the daily lives of that 39 percent, the travesty of wage suppression has created a month-to-month, hand-to-mouth existence.

“The stock market is near record highs, but working class Americans (often defined as those without college degrees) continue to struggle. If you’re only a high school graduate, or worse, a dropout, work no long pays. If the federal minimum wage in 1968 had kept up with inflation and productivity, it would now be $22 an hour. Instead, it’s $7.25.

THE New York TIMES, Sunday, January 12, 2020; Sunday Review: Ideas, Opinion, News Analysis; page 4
“Who Killed the Knapp Family? — OPINION by Nicholas Kristof and Sheryl Wudunn, the authors of the forthcoming TIGHTROPE: American Reaching for Hope, from which this essay is excerpted

If you wonder why that wage is still that low, just remember who campaigned on changing things: Bill Clinton and Barack Obama. The sad part is that it will take someone of their political caliber as orators to defeat Trump. But if someone did have that rhetorical aplomb, rest assured that they will bait-and-switch, and workers will be no better off than before.

Sanders’ constant scolding, no matter how justifiable, wears thin very quickly. He is a doctor who has the right diagnosis, but absolutely no bedside manner whatsoever. The Massachusetts and Minnesota senators have no more chance than Walter Mondale did in 1984. Joe Biden? Please….. He has no loyalty to working people whatsoever. It’s all posturing with him. I guess I would vote for Biden, if it came to that, but I wouldn’t eat before I mailed my ballot in because I would just end up vomiting. As for the aspiring mayor from the Midwest, check back in four years. It’s always possible that he could pull off one of the great upsets in American political history this year, but the odds will favor him in 2024, when the economy has subsided, and inequality finally causes swing voters to seethe at the GOP for the pleasure it takes at gloating over those who are less fortunate in this country, particularly those with the pre-existing conditions of childhood poverty.

Footnote: “On average, real wages have risen at just a 0.8 percent rate under Mr. Trump, compared with 1.3 percent over a similar period under Mr. Obama.”