During the last year Americans have witnessed the collapse of Wall Street and the Banking industry as well as the nations auto industry. The recession which came on strong when gas jumped to 4.50 a gallon put the hurt on all types of business in a big way. Consumers stopped purchasing or in many cases could not even make their mortgage payments. What it really boiled down to was the fact that consumers, or better named the working class, just ran out of credit. The decades of abuse by corporate interests which beat down wages to the point were working two jobs and borrowing from Peter to pay Paul finally came to its inevitable end.
The quest for wage reduction by business is something that never stops and is never truly satisfied, even complete slavery has the cost of providing food which can cut into profits. The past few decades American wages have been reduced substantially by outsourcing, which breaks unions, Illegal immigration, which create a surplus of workers, and the visa program, also surplus of workers. As the plan to increase profits by reducing wages sees its fruition the long term effects start to unfold and that is a dramatic reduction in sales.
With the government bailout of the Auto industry and the financial sector a lot of tax payer funds are riding on the success of Americas economy in order for a return on investment to be realized. Union auto workers, who many view as overpaid, have made wage concessions and now start at $14.00 an hour. With wages like that will any be able to afford a new car? Most of Americas working class have also been victim to ever lower wages with $8.00 to $12.00 an hour being the norm. Construction workers are also earning less as is the case for most jobs whether blue collar or white collar.
What will get Americas economy back on track? I say higher wages for the working class and wage reduction for upper level management. Whatever trade protections or government regualtions needed to boost wages will have to be put into effect because when Joe Average American has money to spend he or she will spend it. And it needs to be spent on American made goods to sustain our economy for the long term.
American business needs to realize that good wages make for a good economy, if the continue on their current path they will wind up as a victim of self strangulation.