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Labor Day Lament – Where is Our Economic Shame?

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Someone asked "How come gasoline prices are dropping like a stone – and before the Labor Day holiday weekend?" What a coincidence that it is happening when a ton of disturbing data on our economy has been coming out, and when things are going terribly bad in Iraq, Iran, North Korea, and all around Israel.

As I keep yearning for a revolt by abused and suffering Americans, I collect economic data that any sane person would interpret as all the motivation necessary for the revolt. So, on this Labor Day I share with you, fellow discontented patriots, some of the best – that is, disturbing – data.

Hard to believe but, adjusted for inflation, men's earnings were lower in 2005 than they were in 1973.

Of employed adults, 61 percent say that are not experiencing the benefits of an improved economy in their work lives, up 14 percent from 2005. But in a nation with some 300 million people, workers over age 16 total just 151 million.

According to a new Commerce Department report, corporate profits are at nearly unprecedented levels. So what is driving this corporate boom? Surprise! – it is a result of sinking wages and salaries. Since 1970, the share of gross domestic product going to wages and salaries has shrunk 8.3 percent. If the 2006 American economic pie were divided into 1970-sized slices, with workers today receiving the same share of gross domestic product workers received in 1970, each American household would receive about $9,600 more in paycheck income this year. Sounds like a little much needed economic justice.

In 2005 Wall Street's top five investment banks paid out $20 BILLION in bonuses. This may help explain why the number of apartments in New York City costing more than $10,000 a month has increased by 54 percent in just a year.

The fraction of the poor who are very poor has risen. People are considered in deep poverty if they have half or less of the yearly income of those at the poverty line. In 2005 half the poverty line for a family of three was $7,788; for a family of four it was $9,985. And in 2005 43.1 percent of poor people lived in that deep poverty -- a record since 1975, when the government started collecting such statistics. How many of the very poor do you think are reading about such data? Do they have enough free time to think about revolt?

As to just regular poverty, the 2005 poverty rate was 12.6 percent, higher than it was in 2001 during a recession, when it was 11.7 percent, and in 1973 when it achieved its lowest level of 11.1 percent. In the six economic recoveries since the early 1960s, this is the first time the poverty rate was higher in the recovery's fourth year than it was when the recession was at its worst. Don't even think about the static minimum wage and the rising prison population, they might upset you. Moreover, there are a lot of conservatives arguing, as someone from the American Enterprise Institute did in a long article in yesterday's Washington Post, that today's poor are doing just fine.

We hear so much about productivity. The real issue is this: who benefits from increased productivity? Since 2000, incomes for typical U.S. families have dropped 2.9 percent. At the same time the economy has experienced a remarkable 16.6 percent gain in productivity. American workers are more productive than ever, but are losing ground when it comes to income and wealth creation. By the way, inflation is running at an annual rate of 4.8 percent so far this year, higher than any yearly increase since 1991.

To address illegal immigration we should advertise Norway in Mexico. Among the world's developed nations Norway now has a higher per capita income - that's total income divided by total population - than the United States. But America's stands out when it comes to levels of poverty. In the United States, 17 percent of families take home less than 50 percent of the nation's median income. The comparable figure in Norway is only 6.4 percent! In the United States, 21.9 percent of children live in poverty. In Norway, 3.4 percent! I think citizens of Norway probably think they have a pretty good democracy, and without economic shame. Their national wealth is not being pissed away in Iraq.

Speaking of senseless military actions and our military-industrial complex, in 2005, CEOs of Pentagon contractors averaged $7,737,400 in compensation, over 44 times the $174,452 pay of Army generals with 20 years experience - and over 190 times more than the $25,085 annual pay of an Army private in combat. In the four years right after the 9/11 attacks, top defense industry executives saw their pay double over their take-home in the four years before 9/11. Where is our economic shame? Certainly not in the Bush White House.

Economic nostalgia: Between 1984 and 2004, incomes of typical American families increased at about half the rate that typical family incomes increased between 1954 and 1974, a drop from 119 percent to 63.1 percent.

Looks like revolt is not quite ready for prime time. According to a scientific random-sample survey released last week by the Pew Research Center, about a quarter of all workers are unhappy with health insurance benefits (27 percent), their retirement plan (28 percent), the amount of money they earn (24 percent) and the level of their job stress (27 percent). Be patient; these numbers are surely heading towards 50 percent. Since 2000, premiums for health insurance have gone up 73 percent. The number of Americans without health insurance rose to 46.6 million in 2005, up from 45.3 million in 2004 and 41.2 million in 2001. The proportion without insurance is up from 14.6 percent in 2001 to 15.9 percent in 2005. Let us give thanks for compassionate conservatism. Here are some more interesting data concerning the answers to the question "Compared to 20 or 30 years ago, what do you think about the average working person?" In 2006, 45 percent of people thought that their benefits were worse; in 1997, just 30 percent felt that way. Conversely, in 2006, 26 percent thought that benefits were better, compared to 41 percent in 1997. So, from a patriotic yet cynical perspective, we are heading in the right direction for revolt. No pain, no change.

Better news came from a survey of female workers – 97 percent were most concerned about not being able to afford health care, and 90 percent were more worried and concerned about the future of young people going into the workforce than they were hopeful and confident. Maybe our democracy will be rescued by a woman – but not Hillary.

Inflation is running at an annual rate of 4.8 percent so far this year, higher than any yearly increase since 1991.

As to what I believe is the best revolt-explaining economic parameter: U.S. income inequality grew last year, as the richest fifth of households took home 50.4 percent of all income, their largest share since the government began tracking the data in 1967.

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Joel S. Hirschhorn is the author of Pandemic Blunder: Fauci and Public Health Blocked Early Home COVID Treatment, Delusional Democracy - Fixing the Republic Without Overthrowing the Government and several other books, as well as hundreds of (more...)

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