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OpEdNews Op Eds    H2'ed 4/14/13

The New Feudalism: Big Corporations and the United States of Ever-growing Inequality

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In Silicon Valley, where one fourth of the population now earn an average of about $19,000 dollars a year, median rent for a decent 1-BR apartment is about $20,000 a year, and that difference adds up to homelessness for many.   So, in the shadow of Google, in the shadow of Oracle, in the shadow of Apple Computer, you have people who are homeless and hungry.


The Valley is still generating successful people on the high end of course--engineers and scientists and the programmers who write code.   But the support positions, like in manufacturing, have largely disappeared.   Most of that work is now done in very low-wage countries where environmental laws and corporate taxes are virtually non-existent.


For every 5 jobs corporations were adding in the Valley, they were building 2 units of housing.   So that jacked up the housing prices to what has become, right beside that of NY City, the most expensive in the country.   People who had blue-collar jobs were getting paid 10, 15, 20 bucks an hour, and when their jobs went away, usually to Asia or Mexico, and they lacked the skills to participate at a higher level, so they had to take jobs that paid $8 an hour, which has been the minimum wage in San Jose for the past 15 years.   But on those wages, you can't rent an apartment, you can't buy food, and you can't handle the expense of driving to work and back.   So, increasingly, you find people living three or four families to an apartment, or you find people moving into homeless shelters, or into tents along the creeks or in parks -- mostly where other people, and the police, aren't going to see them.   The problem remains largely hidden.


In spite of a booming economy and record profits by stock holders and big corporations, inequality in America is now at the greatest level in modern history and shows no signs of abating.   But how to explain this disconnect?   When the market goes up, it often means that corporations are benefiting from the new efficiency and productivity that comes with new computer applications and ever more sophisticated automation.   And this means they can fire workers in order to increase investor profits, and so they do exactly that.   Not surprisingly then, the latest figures show that the number of employed has barely risen, while ever more rank-and-file Americans have simply gone missing from the job market altogether and are no longer even being counted as unemployed.   Most significantly, the Commerce Department reports that personal income fell 3.6% in January -- the biggest one-month drop in twenty years -- which gives rise to one burning question:   As technology, off-shoring and production efficiency continue their unstoppable advance, just how many of us will eventually be on the road to serfdom and poverty in this new "feudalist,' corporate-dominated society?


Which brings us to our nation's capital -- rich in alabaster symbols of representative government yet shamelessly cynical in writing laws and bending rules (especially in the tax code) that massively favor corporations and the top 1%.  


Corporate profits are at record highs.   But have those companies invested any of those profits in new jobs?   No, of course not.   Why not?   Two reasons:  


1.     With wages shrinking and decently paid jobs increasingly scarce, most consumers have ever less spending money in their wallets and so they are buying ever less stuff.


2.     But even if consumers were still buying at the level they did when credit and high-capacity credit cards were easier for most folks to come by, corporations really don't need nearly as many workers as they once did.   Why not?   As already explained, but well worth repeating:   With the benefit of the incredible new efficiency and productivity that comes with ever newer and more advanced computer applications and ever more sophisticated automation, companies simply don't need as many workers as they once did in order to produce a given amount of product or service.


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Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)

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