New York Times Blames Workers for Unemployment?
When I read the headline "American Wages out of Balance" on page 2 of the New York Times business section, I figured it would be a well-reasoned piece about our obscene distribution of income. It would be good for the Times to describe how Wall Street profits and bonuses, derived from our bailout funds, will further exacerbate problematic wealth disparities.
No such luck. The Breakingviews.com column was all about how the American worker is overpaid! I kid you not. Edward Hadas, Martin Huchinson and Antony Currie inform us that:
American manufacturing workers should take average real wage cuts of as much as 20 percent to get into global balance.
They don't mention that the average non-supervisory worker has already taken an 18 percent cut in real wages between 1973 and 2007. What's worse, they claim that if workers don't take these additional cuts, these "overpaid" working stiffs will be the cause of another Great Depression, and I'm not overstating their claim. They write"
But if American wages get stuck above global market-clearing levels, as in the 1930s, the result could well be something approaching Depression-era levels of unemployment.
They are preparing us for the horrific rise in the unemployment rate that is still to come. But, like accidental time travelers from the go-go '90s who haven't learned that the current crash was manufactured by the financial sector, they predict the cause of any worsening in the situation will be those greedy workers.
In this they are recycling a theory that economists like Fed Chairman Ben Bernanke believe to be true: that the Great Depression got much, much worse because workers resisted wage cuts as deflation increased the buying power of their wages.
But blaming workers for their own unemployment is only possible if you adopt the deep logic of the Billionaire Bailout Society. In that world, financiers can do no wrong. In that world they deserve what they earn, because they earn it. In that world, wealth equals value, value equals wealth. By definition the super-rich are the most valuable among us. If their fantasy finance games eventually crash the entire system, we bail them out. Sure, they may have sent tens of millions to the unemployment lines, but that can't be helped. Wall Street must be free to innovate and to earn its rapacious profits and bonuses. So under this logic, when unemployment skyrockets, like now, you blame workers for being overpaid. You see, the markets will resume job creation if they are free to adjust. We don't want downwardly sticky wages caused by worker resistance to wage cuts. After all, wage cuts are for their own good and for the good of the unemployed. They must sacrifice for the good of their country.
Of course, even in this billionaire alternative reality, it's very hard to get workers to cut their wages, especially while Wall Street is gorging itself at the bonus trough filled with workers' tax receipts. So the authors suggest that "a moderate inflation to cut real wages and a further drop in the dollar's real trade-weighted value might be acceptable." In other words, we'll cut their wages by devaluing them and maybe they won't notice.
If these authors want to write about worker wages, then they owe it to their readers to at least mention the enormous gap that emerged between productivity and real wages. From WWII until the mid-1970s U.S. productivity rose year after year as did real wages. The two seemed forever linked. The steady rise of manufacturing real wages created the new middle class. It was the heart and soul of the post-WWII boom. But, starting in the mid-1970s, the two trends decoupled as we deregulated finance and changed the tax code to allow money to flow upwards the the top income groups. Productivity continued its rise, but real wages stagnated and then declined. (See Chapter 2, The Looting of America.)
The gap between these two trends lines represents real money -- more than three trillion dollars a year by 2007. Where did it go?
It went to create the new billionaire class. It went to the uber-rich on Wall Street. It was the fuel for the fantasy finance boom and bust. The gap in incomes and wealth grew and grew to proportions not seen since 1928-29. There is no evidence that suggests that rising real wages for the average person causes a depression. But there is a great deal of evidence to suggest that an extreme distribution of wealth creates tremendous financial instability.
The very last thing we need right now is to cut workers' wages and turn over more booty to the billionaire bailout class. That should be clear to all by now unless you have succumbed to billionaire bailout logic.
Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.
Follow Les Leopold on Twitter: www.twitter.com/les_leopold
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A good peasant is loyal, simpleminded, and full of misdirected anger. And that’s what we’ve got now, a lot of misdirected anger searching around for a non-target to mis-punish… can’t be mad at AIG, can’t be mad at Citi or Goldman Sachs. The real villains have to be the anti-AIG protesters! After all, those people earned those bonuses! If ever there was a textbook case of peasant thinking, it’s struggling middle-class Americans burned up in defense of taxpayer-funded bonuses to millionaires.
-- Matt Taibbi
The real culprits to our downfall are all those gays tryin' to get married. Disgraceful.
President Obama told a White House gathering of Wall Street econoterrorists that he was all that stood between them and the pitchforks. Well Mr. President, step aside.
Roll out the tumbrils.
Anyone have plans on how to build a guillotine?
Sharpen your knitting needles Madame Defarge.
This article might seem outrageous. But on the other hand that article makes it clear what they
are standing for. And it does a good job in taking away all possible wrong assumptions people
might have about the NYT for instance.
Apart from coming along with opinions like that, the newspapers in general, including the NYT,
are pulling off the wailing and Darfur -stunt every so often concerning their own revenue, income
and the like. ("Got a penny, a buck, a fiver, for the poor media?") Such wailing and whining stunts
can indeed have some impact for some time.
In that case, with that article, the truth is out and such mentioned stunts are offset. And passion
and charitable feelings re-directed if necessary to some other cause.
Michael Wolff wrote an impressive article not so long ago:
Why the media is taking so long to die
http://www.newser.com/off-the-grid/post/322/why-the-media-is-taking-so-long-to-die.html
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=7006371&mesg_id=7006371
NYT claims American workers are overpaid.
Lots of responses. People are increasingly frustrated... rightly so; I haven't read anything remotely outrageous in quite some time, believe it or not...
For over a year I've been writing about the "New Feudalism," and been roundly criticised as an extremist for it.
Many times I've suggested that the offshoring of our best industrial jobs, the encouragement by American Corporations in a number of Southern countries for unlimited illegal immigration, and the concurrent destruction of Labor Unions and the effects of price inflation and devaluation of the dollar on real wages would, in time, create the perfect storm whereby hourly wage earners would be reduced to third world status--right here in America.
Well, it looks like they are so certain of the success of their plan, put in place since the 1980's--that they are comfortable enough to come right out and say, "This is Globalism, folks. Wrap yourselves tightly in your rags, and remember to bow low to the coaches as they roll by filled with your betters!"
We are being made slaves in our own Country, and if you are waiting for Obama--or, and pay attention here: Any other President--to come along and strike off your chains, you'll be waiting a long long time.
American Workers have always been among the best paid. The country was strong, proud, vibrant! Any thing to the contrary is just Corporate propaganda. Believe it at your--and your children's--risk.
Weren't you aware? It's always the normal person's fault.
Trusted a businessman who gave you a bad deal? Your fault.
Trusted conservatives who told you about the 'ownership society'? Your fault.
Own a credit card? Your fault.
Contracted a debilitating disease? Your fault.
And so on. Clearly, if we're to buy into what conservatives tell us, we need to stop dealing with companies, ever, never get sick or need other goods or services. If we try to get goods or services, when we're scammed, it's going to be our fault again.
-conclusion-
Making the people who saved these guys' keysters with taxpayer-paid bailouts, tons of government subsidy before that, and a huge list of other amenities the scapegoats for everything is so low-brow that I had to dig a hole 400 feet to get my brows back.
We will be blamed for bailing them out, no doubt.
Damned if we do. Damned if we don't.
We'll take our share, but there is far more to the WHOLE than what is being said. And we are not scapegoats. Especially after we, thanks to the previous president, bailed them out.
http://www.youtube.com/watch?v=mn4daYJzyls
(the national debt is our fault too. We didn't vote in people who would not listen to the corporations to do their bidding instead of the peoples' majority, you see...)
Fanned!!!
Even SOME of the media - corporations blame us for spending too much, spending too little, saving too much, or saving too little.
They're blind to their own double-standards as well.
We lose jobs and livelihoods, which means we can't pay the mortgage. Yup, that's 100% our fault too!
If we don't have a job that pays well enough - always our fault.
If we can't pay cash for the high cost of education to get the well paying job that's being offshored for a lower cost because "'good enough is good enough'" - always our fault too.
If we have the best grades but don't have the experience - our fault. (And doing a church database is not quite the same league as being a DBA in a large corporation, let's get real.)
Corporations told us unions were no longer necessary. We believed them. Oops, that's our fault for TRUSTING THEM. (Gee, maybe that's why people are starting to dislike capitalism, eh??)
to be continued
Almost forgot to mention the other hot-button topic:
Obesity? That's all our fault too. (Gee, no time for exercise because there aren't 32 hours in a day and sleeping will be deemed a luxury too, popping antidepressants because of this environment they've set up for everyone to live in, and other factors... yet everybody only wants to talk about food - you know, where a pound of macaroni is 50 cents yet a pound of broccoli is $2. Part of the environment. Stress causes weight gain. So do antidepressants. We get blamed for every bleeping thing, every nuance, it's always us. I suppose we'll be blamed for letting them set up our economy this way too. Oh, lack of sleep CAN be a contributor to weight gain as well. As does a hypothyroid condition... not to mention high fructose corn syrup, though I agree drinking sugar-water is dumb. We're not hummingbirds, but I digress...)
Dear, Les. Years ago I worked for a large delivery company. We had a meeting one day and a district manager gave us a sermon about wages and the need to reduce them in America so that the playing field could be evened with the rest of the world. Americans need to realize the New World Order is about corporate globalism and the converting of the US and it's citizens to third world status. My point is that this program has been in the works for a long time. Like the off shore tax havens and the companies that are global entities enjoying not paying taxes. Your story fasts forward to today and shows the message hasn't changed. Corporate America is holding the labor force accountable for everything great that has been achieved by Americans since unions started. Much like the lauded Al Gore and his phony carbon tax agenda. It, too, will hold the American people financially responsible for living the way we do, while giving the rest of the world a free pass. They will tax us into poverty, all in the name of saving the Earth. Nice, coming from a guy with a 12000 sq ft home, telling me I need to reduce my carbon imprint on the world. Globalization is a ruse to turn small men into tax free kings at the expense of their own labor force. Thanks, Les for what you do.
If first world wages are reduced to third world wages world wide (that's the idea behind this), then buying power will, too.
how can the American worker drive consumption without money?
ah, yes, she borrows it. credit and mortgages.
the banks and the 'markets' are decoupled from productivity. They make money out of money, so it won't affect them.
The only people affected are the 99% who are not the super rich and the 'new billionaire class'. So that doesn't matter too much, it's only 99%.
Can't borrow any more. Pray for $4 per gallon gasoline so that manufacturing will be forced back on shores.
Yes. And more clearly if we consider the wealthy different from those who just have income. The wealthy will protect their wealth, even if it costs income for the economically vulnerable.
Here's an idea. Take the millions spent on bonuses paid for with bailout money, and give it to the people who work where the rubber meets the road. With the obscene amounts these high dollar "finest minds" that nearly wrecked the worldwide economy can channel their bonuses to the people who actually work for a livng.
And who would spend any money given to them, thereby recycling it through the economy. Sounds like the right trickle-down plan to me...
The Great depression was not caused by high wages for workers. Workers wages for the 1920's were pretty much flat line and averaged under $2000 a year, ($2000 a year was then the minimal wage needed for a family of 4 to avoid poverty). As a matter of fact these low wages were one of the direct causes of the depression because the consumer economy ran out of consumers. In today's much more globalized economy it is difficult for the American worker to keep a job at any wage when companies are allowed to outsource manufacturing to a country that basically uses slave labor, China. Many workers in China live in barracks on the factory site. They often end up owing their employer more for food and rent than they earn. They are, in reality, slaves not workers. There are no laws or unions to protect them and there are no laws, ( at least any obeyed laws), to protect the environment from industrial pollution. Can we compete with China? Yes, if our workers become slaves and we completely despoil the environment.
Lest we forget, this is the only country in the world where employers are saddled with paying for employees health insurance. Every other country has single payer government health care. As health insurance cost spiral out of control, the USA does not look like a good place to start a manufacturing business. The solution to that one is obvious, but the corporate wh*res in our government won't cut into the profits of the greedy AHIP crowd.
So why aren't GM and other big corporations on the side of single-payer, like how Senator Obama was in 2003? Why are they silent?
I hear ya and I agree, government paid-for plans would help a LOT. But another lobby is trying to fleece the system and us with it, what a shock.
http://www.youtube.com/watch?v=fpAyan1fXCE
Yes we can! Why can't it be? This is so much more effective (and less costly!) than even trying to de-tangle the mess our current system has become.
Very well stated.
So if we need to start cutting wages, let's start with those of two of the professions that deserve the treatment the most - economists and financial commentators, both groups having been enthusiastic cheerleaders of the rapacious financial system we have implemented in this country until it imploded.
And education. The price has to fit the return on investment.
If bankers can whine "If you cap my wage I'll lose interest", how dare they not think of the American worker, whose wages are being capped or eliminated? Yet taxpayers are bailing the banks and letting the workers drown. How very Christian a country we are. (or maybe not)
And why is it that so many people argue that for some to prosper others must suffer? Where is the morality in that?
Not in Christianity. The number of verses that say what happens to the greedy and the wicked are far more chilling... which is why so many pastors don't review those sections. Particularly in many upper-class areas, just in case any of them has a conscience that's trying to pull itself up by its own bootstraps.
Isn't this the perfect argument against unfettered globalization and maybe a bit of protecting of our own workers and way of life?
The way of life so laboriously built up by American workers?
Supposedly to benefit all of society and not just those at the top?
The incompetence of the Financial community is so far-reaching...that to
understand their logic, is to go back to a 19th Century model. Excuse me,
70 % of GDP= Consumers...Unemployment plus low wages=No Consumers. Do the Math!
Maybe somebody has and all of this is planned, ooga-booga, wear the tinfoil-hat...
(or maybe not; blind greed is the more likely explanation. Occam's razor.)
The right is really swinging away at the middle class! Screaming about socialism with health insurance reform (workers just don't deserve the same health care the CEO has!) and then blaming the American worker for being overpaid and thus the cause of recession/depression. Obviously, getting back to a feudal system with a few lords and everyone else at the serf level seems to be their ideal.
In some ways the workers are to blame, but not because of being 'overpaid'. The middle class, by apathy and lack of interest on one side to being too fatigued to get involved on the other, through learned helplessness or even through buying into the 'you, too, can get rich quick' fantasy, have allowed the government and industry to push them aside, abuse them through longer hours and ever increasing productivity demands, and, ultimately, outsourcing their jobs. We all bought into the marketing scam of 'your value = what you have', so we bought the RV, the boat, the monster TV, resulting in debt that chained us to jobs we couldn't afford to lose, thus empowering those in charge. The middle class needs to take back its power through selective purchasing, the ballot box, stockholder meetings and getting involved.
The right wing socializes itself -- at the expense of the people they berate.
Remember George Allen - senator from Georgia if I recall. He spat on the middle class and loved to vote for offshoring projects (offshoring the infrastructure of a country he claims to cherish???).
oh, then he calls the people he helped offshored those jobs to "macaca". Lovely representative of our country, is he not?
It was Virginia.
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