In his book of the same name, ["Collapse"] professor Jared M. Diamond points to the policies of a nation's leadership
as the principal cause of the collapse of ancient (and not so ancient) societies.
The bottom line of Mr. Diamond's work is an urgent plea for sustainability. Societies that pursue unsustainable growth ultimately exhaust the resources they covet and collapse...with devastating effects upon that society.
The Eeyores among us (myself included) believe our current leadership is driving our society off the very same cliff that the Romans fell off of...a monumental collapse ignored in Mr. Diamond's book because the causes were political rather than environmental.
In fact, Mr. Diamond ignores the collapse not only of the Romans but also the Greeks and the Egyptians, all three of who, ruled the `known world' during their reigns...kind of like us today.
Today's offerings will be used to illustrate this point. First up we have This piece which sparks a trip down memory lane, when $5.00 an hour was a `man's wage'.
Editorial
Will Fair Pay Have Its Day? Published: November 15, 2006
At his first post-election news conference last week, President Bush said that he believed he could find common ground with the new Congress on Democrats' longstanding drive to raise the federal minimum wage. That is welcome, but long overdue. The minimum wage has been stuck at a miserly $5.15 an hour since 1997, with Republican lawmakers blocking repeated attempts since then to raise it. Adjusted for inflation, the purchasing power of the wage has dropped to its lowest level since 1955.
Funny thing history, how far back do you think we'd have to go to arrive at a time when $5 an hour was considered `big money'?
How about as recently as the Early 70's, a mere 35 years ago. My peers and I were still in High school and the minimum wage at the time stood at around $1.50 an hour. We were all bag boys at the local supermarket and we were earning $1.55 an hour.
In contrast, adults weren't getting much more. Starting wages at most private sector jobs ran about $2 an hour...so when one of my friends dared to `dream' of making $5 an hour, we all thought he was crazy! Back in the early Seventies $5 an hour was outrageous money, the equivalent of commanding a hundred dollars an hour today...
But here we are. Today someone being paid that early 70's `princely sum' of $5.15 an hour can barely afford to pay attention (much less anything else.)
I'm no spring chicken...but I'm not ancient either. That said, I am the youngest child of a man born in 1910 and a woman born in 1921 so it was my parents who lived through what is soon to be known as `the not so great depression'.
I remember my mom telling me she used to work 65 hours a week at a dry cleaners for .15 cents an hour...and she was goddamn happy to get it because times were tough!
The point I'm driving at is it's not how much you make but the purchasing power of what you're being paid.
Mom may have only made fifteen cents and hour but a trip to the movies cost a nickel so she made the equivalent of three movies an hour vs. today's minimum wage worker who has to work nearly two hours to go to a show. (And if they want popcorn and a soda to enjoy with the show this figure doubles!)
In the thirty-five years between my mom entering the labor force and when I entered, wages had jumped by a factor of ten. In the intervening thirty-five years since the time I entered the workforce the minimum wage has risen by a factor of slightly more than three.
Clearly, the bottom is falling out for the nation's estimated 5.6 million minimum-wage workers. That's bad for the economy. Even Wal-Mart, not exactly an advocate for high wages, favors raising the minimum wage to support consumer spending.
Sadly, good citizen, the rest of this piece is equally as pathetic. As I noted in yesterday's piece, a minimum wage and a living wage are two entirely different animals...and there's no damn excuse for it!
Time to flip the wage rock over for some more economic `happy talk' regarding prices!
Prices Fell Sharply in October
By JEREMY W. PETERS Published: November 15, 2006
Wholesale prices fell at a record rate last month as two economic forces that rarely move in the same direction -- the costs of gasoline and light trucks -- both plunged.
Can you believe this? Not only are gas prices on the rise again as this article hit the paper (up a nickel in the past five days) but where's the `magic' regarding the declining price of light trucks?
They can't give light trucks away so naturally the price is falling!
However, take a gander at how `dramatic' this news is:
Wholesale prices as measured by the producer price index, a seasonally adjusted gauge of the prices businesses charge one another just before they are sold to consumers, fell 1.6 percent in October, matching the steepest decline on record, set in 2002.
The core wholesale inflation rate, a measure that does not take into account the frequent gyrations in energy and food prices, declined 0.9 percent last month, its biggest fall in 13 years.
The overall picture of wholesale inflation last month was heavily colored by plummeting prices for light trucks, which include sport utility vehicles, pickups and minivans, and declining oil prices. Light truck prices fell 12.4 percent, the biggest year-over-year decline since the Labor Department began tracking them in 1964.
It's a miracle I tell ya! Cheap gas AND cheap trucks that resulted in the biggest decline in wholesale inflation in 13 years! What a huge buildup for a number that dropped less than a whole percent...whoop de do!
And yet again we see the `innocent' disclaimer stating that food and energy prices aren't included when calculating inflation.
Well, the media may not want to report it but here in the Northeast we've seen a 25% increase in the cost of food over the past year...and I didn't get no 25% freakin' raise!
A rising...or declining standard of living is not measured by annual income but by purchasing power. You can make a million dollars a day but if lunch costs you two million, how well off are you?
Flip that over and you can make just a dollar a day...but if a loaf of bread costs a penny and your rent is only two bucks a week I think you can see my point.
How strange is it that the more you make the less you earn? Ironically, this is what the CPI was designed to track but the Consumer Price Index is being gamed big time. Not only are the items being measured `shuffled' to produce the lowest rise in inflation but they also make a big deal out of meaningless statistics like the falling price of light trucks at a time when the cost per mile of operating such a vehicle has doubled over the past year!
One could consider this a media problem, a failure to report the truth...or a government problem because the media is just faithfully regurgitating what the government tells them.
Let's turn our attention back to my initial assertion, collapse.
We have two `issues' (low wholesale inflation and the `low' unemployment rate) here that report how wonderful the economy is...but this isn't the reality on the street, is it?
No. In the past thirty years we've seen the length of the average mortgage stretch from twenty years to thirty and the length of the average car loan stretch from two years to five.
Quite naturally we have to ask why this is and the answer is because the price of both items has risen dramatically while wages haven't.
There are fifty million more people in this nation today than there were in 1990. Logic would dictate that more people means more workers and more workers would mean greater production...but that's not what's happening.
There's no shortage of goods but we definitely have a shortage of jobs when one out of three working aged US citizens are listed as not in the labor force.
Then we have the labor force itself...if someone pays you a buck a week, you're counted as employed!
Still looking for collapse? Population is rising, commodity prices are rising--in some cases like housing they've risen dramatically and wages...wages are going backwards!
If we look at the income distribution index (how many people actually make how much) we see the fifty percent of working aged males earn less than $27.5k while fifty percent of working aged females make less than $15k!
Another damning statistic is the average workweek, which currently stands at around 33 hours. What this means is a huge percentage of the labor force doesn't reap the benefit of overtime...if they need more money they need to get a second job.
Understand what this means.
If the `average' person is surviving on $27,500 how do you justify NINE DIGIT CEO compensation? The very existence of the CEO blows the purchasing power of the average citizen right out of the water!
The more THEY make the less YOU earn because prices rise based on how much money is in the whole system, not how much you get!
So you see good citizen, the more `disparity' in income, the worse this situation gets.
Inflation is defined as `too much money chasing too few goods'. Well, there seems to be plenty of goods so the `problem' leaks back to `too much money' (Executive compensation) and prices that reflect these `freak' compensation packages!
30,40,50 year mortgages and 5 year car notes...think about it. If they didn't `stretch `em out' you wouldn't be able to afford either a car or a home.
Thanks for letting me inside your head,
Gegner