There’s a beautiful story in Salon about an “unskilled” high school graduate in 1965 who took a night shift job shoveling taconite in a steel mill so he could move out of his parent’s house and buy a car. Why is that a beautiful story? Because he could. As a teenager. Today, he’d be a 30-something college graduate still living at home.
Part of the reason America is Restless is because America doesn’t work any more. The numbers don’t work. As Salon points out, today’s equivalent of a teen-age steel mill worker would be a fast-food restaurant worker. Those jobs — when adjusted — pay less than half the wages of an entry level night shift job at a 1960s factor. Heck, that factory job actually paid more than many entry-level dot com gigs today. Really.
I’ll leave the argument about unions for another day — you can read the rest of Salon’s story for that — but in a more fundamental way, here’s the reality. The pay rate for a decent job hasn’t kept up with the cost of a decent living. That fact becomes even more curious when you look at the profitability of U.S. corporations. The roaring stock market is an imperfect proxy to measure that. There are better ways.
Henry Blodgett, the former Internet carny who runs Business Insider and has become an articulate critic of American corporations, made this case recently on his site. In short, profits as a percent of gross domestic product are up, while wages as a percent of GPD are down. Way down. Far lower than in the 1950s. You should read his piece, called “Why Does The Economy Stink? Because America’s Owners Are Greedier Now Than Ever Before.”
Others have made this same case. James McGeever made it for Reuters earlier this year. He added the fact that wage growth is the lowest it’s been in half a century. Remember, corporate profits are soaring.
You will hear some voices of dissent on this message, such as this piece at Forbes, which argues that Blodgett’s magic charts don’t include costs like health care insurance, which if counted as wages would make the picture for workers’ pay look less bleak. It’s a specious argument, given the spectacular profitability of corporations. And it does nothing for the key point of this discussion: Why do so many people feel like they are living on the edge?
If you aren’t connecting the rise of huge profits and the stagnation of wages, you really need to revisit math class. Even Standard & Poors recently noted that the disappearance of decent jobs and and income inequality as having a negative impact on America’s economy during the next decade. So something is up. Really.
If you’ve not yet watched this incredible short video about where America’s money goes, now’s the time. It’s been viewed 15 million times, so odds are you *have* seen it, in which case I’ll make this point. I’ve always worried that folks who argue for increasing the minimum wage hurt their cause by making their case too narrow. OK, great, raise the minimum wage to $10. That would help one segment of the economy. OK, raise it to $15, like Seattle. Sounds like a lot! Let me remind you that’s a mere $600 per week. We are spitting in the wind here. Wages (and vacation time, and retirement benefits) are low for the vast majority of Americans. The “minimum wage” argument should be the most popular cause in history, given the reality of the chart above. The political minimum wage fight is a distraction from the real problem, which is that wages suck.
Please note, I am not against successful people enjoying their success. The problem isn’t that some folks have a lot of money. Good for them. The problem is that, for an incredibly wide swath of America, the numbers don’t work. Folks with two perfectly good jobs can’t afford homes in neighborhoods with good schools, let alone pay for their kids’ college.
Sometimes, in any system, things get out of whack, and adjustments are needed. If you think the free market will work this out — well, it might if we had a free market instead of corporate welfare — reality argues with you. There are no signs America is solving this problem on its own. It needs more than a nudge. It needs a re-org.
Step 1: People need to understand why they feel like they are going crazy. Here’s why: You feel like you are working more and more for less and less. Because you are.