It's All About the Wages -- Our Economy Would Be Fine If Everyone Made Their Fair Share is a lengthy article on how America's wages have declined and helped hurt the middle class by Robert Reich.
In Alaska, we are lucky enough to have a minimum wage above the federal level at $7.25 an hour. But this still doesn't meet the needs of America's standard of living. The cheapest place in Anchorage'll probably run you 6-9 hundred dollars a month. Which is one whole paycheck devoted to rent.
Hopefully you don't have too many bills and other expenses that have to be paid for, something has to be cut.
Some can go without electricity, some without heat, some without food or water. It just doesn't have to be like this.
The puzzle is why so little was done to counteract these forces. Government could have given employees more bargaining power to get higher wages, especially in industries sheltered from global competition and requiring personal service: big-box retail stores, restaurants and hotel chains, and child- and eldercare, for instance.
Safety nets could have been enlarged to compensate for increasing anxieties about job loss: unemployment insurance covering part-time work, wage insurance if pay drops, transition assistance to move to new jobs in new locations, insurance for communities that lose a major employer so they can lure other employers. With the gains from economic growth the nation could have provided Medicare for all, better schools, early childhood education, more affordable public universities, more extensive public transportation. And if more money was needed, taxes could have been raised on the rich.
Big, profitable companies could have been barred from laying off a large number of workers all at once, and could have been required to pay severance -- say, a year of wages -- to anyone they let go. Corporations whose research was subsidized by taxpayers could have been required to create jobs in the United States. The minimum wage could have been linked to inflation. And America's trading partners could have been pushed to establish minimum wages pegged to half their countries' median wages -- thereby ensuring that all citizens shared in gains from trade and creating a new global middle class that would buy more of our exports.
Here is a chart that ties the minimum wage to the poverty line up to 2007:
Multiplying the minimum wage by a work year of 50, 40-hour weeks gives the annual earnings that can be expected from a minimum wage job. The real annual income from a minimum wage job is the blue bars. The red line is the poverty level real annual income for a family of four. Minimum wages have never been sufficient to raise a family out of poverty, if only one member of the family works.
Here is another from the same link above, detailing the minimum wage starting from 1938 to 2013:
A federal minimum wage was first set in 1938. The graph shows nominal (blue diamonds) and real (red squares) minimum wage values. Nominal values range from $0.25/hr in 1938 to $6.55/hr as of July 2008. The graph adjusts these wages to 2007 dollars (red squares) to show the real value of the minimum wage. Calculated in real 2007 dollars, the 1968 minimum wage was the highest at $9.47. The real dollar minimum wage (red squares) falls during periods Congress does not raise the minimum wage to keep up with inflation. The period 1997-2007, is the longest period during which the minimum wage has not been adjusted. The minimum wage increases in three $0.70 increments--to $5.85 in 2007, $6.55 in mid 2008, and to $7.25 in mid 2009. The real values after 2007 are projected for future decline in purchasing power.
It sucks when you hear people say things like, "Keep that up, and you'll be flipping burgers your whole life."
Well, that'd be okay if America, during the 1970's, didn't begin to re-distribute the nation's wealth towards the top tax brackets. Wages would have been steady growing and fast food jobs wouldn't have that stigma attached to it.
There is a problem when a a group of individuals can get together and have more money than over 50% of any nation.
But starting in the late 1970s, and with increasing fervor over the next three decades, government did just the opposite. It deregulated and privatized. It increased the cost of public higher education and cut public transportation. It shredded safety nets. It halved the top income tax rate from the range of 70-90 percent that prevailed during the 1950s and '60s to 28-40 percent; it allowed many of the nation's rich to treat their income as capital gains subject to no more than 15 percent tax and escape inheritance taxes altogether. At the same time, America boosted sales and payroll taxes, both of which have taken a bigger chunk out of the pay of the middle class and the poor than of the well-off.
Everything, and I mean damn near everything has gotten better in this country but, the few social safety nets we have for our citizens. People who complain about how dumb America is, blame the elites who don't give a fuck about anybody but them and theirs.
I bet if Democrats acted to raise the minimum wage, you'd hear cries about businesses leaving America because of their anti-business attitude. Which of course is just bullshit, not every American corporation and company, but it seems quite a few of them value their profits over America's workers. They see us as spoiled, they see us as expensive, we aren't even humans to them anymore, we're capital.
Companies were allowed to slash jobs and wages, cut benefits and shift risks to employees (from you-can-count-on-it pensions to do-it-yourself 401(k)s, from good health coverage to soaring premiums and deductibles). They busted unions and threatened employees who tried to organize. The biggest companies went global with no more loyalty or connection to the United States than a GPS device. Washington deregulated Wall Street while insuring it against major losses, turning finance -- which until recently had been the servant of American industry -- into its master, demanding short-term profits over long-term growth and raking in an ever larger portion of the nation's profits. And nothing was done to impede CEO salaries from skyrocketing to more than 300 times that of the typical worker (from thirty times during the Great Prosperity of the 1950s and '60s), while the pay of financial executives and traders rose into the stratosphere.
"And nothing was done to impede CEO salaries from skyrocketing to more than 300 times that of the typical worker"
Let's try that out, a typical worker who gets paid 7.25 an hour, 40 hours a week:
Your gross income would be $15,080, and $1,256.67 in a month, before expenses, with no state tax added on.
Social Security takes out a chunk, which leaves you with $13,926.38 in one, whole year.
Times that by 300, and you get $4,177,914 in one year. But that's not enough, so everybody who doesn't frequent the clubs they do, the people who don't have wealth like they do, they can all suffer and die in the streets.
That's what is possible if the Senate doesn't pass these unemployment benefits. I get $432 a month off of my UI benefits, I'm very fortunate for that too.
But where I stay, everything together cost about $1500, so you see the
last thing I would want is to stay on unemployment insurance.
Everybody is looking for work, 5 applicants to every job, that makes getting a job a competition even more than it already was. Now, it's possible to be too qualified for a job.
But it doesn't have to be like this, there was one in Congress who understood.
Feel his roar