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Wages at 40 Year Low

Introduction

 
The New York Times posted a commentary on wage and profit growth, probably inspired by a warning last week from Fed Chairman Ben Bernanke.

Greenhouse and Leonhardt wrote that most worker's real wages have fallen to their lowest point since 1966. Meanwhile, those making more than $80,000 - the top 10% of all incomes - continue to enjoy record increases in wages, salaries and benefits.

This is not unexpected in a Capitalist society that is not a Welfare State ...

 

 

The major thesis of this article is simple enough: you get what you pay for. An application of that saying is the economy is what you make it.

Capitalists would have you believe that in this, the best of all possible worlds, everything is determined by an Invisible Hand. Since they believe this is the best of all possible worlds, whatever is the outcome must also be the best outcome. Because each event is connected to every other event, "best" means the outcome which best fits all the other outcomes. Again, if the outcome changed in some way, all the other outcomes would also have to change in less than optimal ways, so what you get is "locked in." In other words, you get what you get, and there's nothing you can do about it.

It's easy to see the purpose of the foregoing gobbledy-gook is to convince the gullible that nothing can be changed. (Notice, among other things, that "best" is never defined.) Invisible Hands, Gods and other deus ex machina are the classical sleight-of-hand devices used by autocrats, priests and others determined not to respond to any inquiry about the "natural order." Those who believe the story are unlikely to revolt, strike or otherwise upset the Established Order, which suits its major present beneficiaries, Capitalists.
 

I have presented free market ideology in stark terms, so it would seem unlikely anyone would believe it. But miracles never cease, at least not in the United States, where a majority of the population actually accept that hokum as truth, besides believing in miracles to boot. Of course, what else would you expect when over 50% of the population not only believes in a God, but also an actual Devil (Satan) going about and causing evil. Around 2/3 of U.S. residents have beliefs about the world in which they exist comparable to those of ancient Egyptians and modern Islamic Jihadists.

What has this to do with the low state of the lowest among us? It invites historical comparisons, based on the old Russian saying, "A man is not a pig; he'll eat anything."

Slavery was probably not common before the invention of agriculture and urban society, as hunter-gatherer societies did not have the extra resources required to police a subservient population. During those caveman days, slaves were unlikely to go out unguarded and unfettered in the service of their masters; they would just escape. Chained slaves probably make lousy hunters. So, our hunter-gather ancestors probably just murdered their enemies and captives. Ritual cannibalism was probably common as well.

It is only with the advent of village and urban society based on agriculture that people were enslaved or enserfed. Agriculture brought about the surplus which makes possible one man benefitting from another's labor; i.e., one does the work while the other eats. Those who control enough slaves are able to live off the surplus product of labor without having to live "like a dog." The forms of society which we characterize as "ancient" or "medieval" existed during most of last ten millennia, perpetuated by the brutal rule of the mighty over the fearful, dispossessed and unarmed. 'Might makes right' worked because there was no other alternative. Once such a system was established, it lasted until some mightier force overthrew it. The masters were better fed, housed and pleasured than the slaves and common people, so were in better physical shape to enforce their will on disunited others.

Common reasons for the end of despotic regimes, whether classified as theocratic, autocratic, Imperial or some other form of tyranny, were famine, foreign invasion, war and coup d'etat. None of those traditional causes of national or social collapse had much to do with ideology, or anything intellectual or cultural. In fact, the cultures of many regimes survived economic, political and social collapse for hundreds and thousands of years. The worship of Amon-Ra persisted in ancient Egypt over many 500 year dynasties. The Catholic Church survived in Europe as the "True Church" of both winners and losers from the days of Constantine until the Reformation. What people fought about before modernity was land, wealth and sex, not principles. War and raiding were seen as easier methods of making a living than actually bending one's back over the hoe and plow.

Before modern times, priests and intellectuals worked for all sides. Especially in Medieval Europe, the Pope's blessings and dispensations were available for a fee. Galileo, the  revolutionary physicist, was also for sale, building war machines for the Medici and other high bidders. Unlike modern scientists, who are ideological and physical captives of their employers, Galileo and others of his time were free to roam. Enslaving people by capturing their minds is a modern invention.

The Renaissance, Enlightenment and Industrial Revolution progressively transformed economic, political and social relations. Machines made possible the abolition of serfdom and slavery because they increased productivity dramatically. Even today, one can see the huge difference between those areas of agriculture which are not still not mechanized (e.g., strawberry picking) and the automated harvesting of corn, cotton, soy, wheat and hundreds of other staple crops. Taking a ride through agricultural areas during the harvest exposes hundreds of temporary, usually ill kempt, migrant laborers in one field, and a few people operating a busy machine in another. The same is easily observed in tours of the factories that make everything we use, from cars to shoe laces. The more automated, the less human labor.

This, at last, brings me to reduced standards of living. One might think, in a "rational" society, that the products of an incredibly productive, highly automated economy would be commonly available to everyone. But, alas, that is exactly what is not so in Capitalist societies. While Adam Smith, a moralist, thought he invented a system, Capitalism,  which harnessed a positive evil - greed - for the benefit of all, in fact what he accomplished was letting loose all restraints on greed. (Another instance of "the road to Hell is paved with good intentions.") Early in the progress of Capitalism, Dickens had to invent Christmas in A Christmas Carol, and expose the abuses of Capitalism in Oliver Twist and other allegorical accounts of Victorian life, in the hope of relieving the rampant cruelty of the times. The late Victorian period was rife with abuses of men, women and children, which continued until World War I.  Most of those now living never learned that striking workers were shot by Pinkertons and the National Guard during the Pullman and other strikes. Strikers were once considered fair game for execution without judicial review. That policy continued even into the New Deal, until the notorious UAW occupation and insurrection at a Dearborn, Michigan auto factory in 1938. It took many deaths and injuries to establish the right of workers to strike and bargain for wages. In the United States, those rights were only firmly and legally established following World War II.

Conservatives, who are usually Capitalists, have been trying to undermine workers' rights gained since the New Deal. Amazingly enough, they have been largely successful, with Union membership down to only 10% of the workforce. At its peak, in the 1960s, some 45-50% of all workers were unionized. While correlations are not formally cause-and-effect, so we cannot ascribe the ever-decreasing wages and household incomes of the working class to declining Unionization, it should be obvious that the lack of bargaining power has something to do with unpleasant condition of the lower classes. Unless an employee is one of the lucky few whose skills are in short supply, the employee is just another sardine in a sea of sardines ready for canning. Even in remote, small towns, there is almost always a large surplus of unskilled or wrong-skilled labor which leaves the Capitalists (and their agents in management) in charge. So, without collective bargaining, one approaches the employment office, cap in hand, begging for whatever gift might be granted.

The lack of Unionization does not explain everything about our present circumstances, because there are other, mind-boggling factors in play. For example, somewhere between 1/6 and 1/4 of the workforce believes it will become rich, if only one works hard and obeys the rules. Such beliefs are contrary to the established facts of social mobility, which is near an all-time low. Recent studies show that members of the lower 60% of households by income will, at best, retain their current rank. It is far more likely that ordinary people will sink than they will rise in American society. Despite the facts of rigid social stratification, the myth of the American Dream is endlessly shouted  throughout the world, encouraging foreigners to emigrate to the United States to get rich. Of course, it is almost certain they won't get rich, even if conditions in America seem better than they were in the Old Country. When the workforce isn't humble, docile, intimidated or illegal, Capitalists just outsource the jobs to elsewhere, where suitable groveling can be found.

So, the lack of Unions and collective bargaining, legal and illegal immigration, outsourcing and the dream-like imaginations of the living dead all contribute to the declining standard of living. I remind the readers this sort of thing afflicted Great Britain until after World War II. Then, finally, the British people woke up to the fact that the Empire was gone and they voted in Labor. Labor governments changed things with a vengeance; for example, socializing medicine. I remember reading the bitter complaints of the British upper classes in the 1950s and 1960s, some of whom emigrated to the United States. They did not like being dispossessed, but I never heard or read a single apology for the trials, tribulations, maiming and deaths imposed on their working class subjects. Despite Margaret Thatcher, and the back-peddling of "New Labor" PM Tony Blair, England is still highly "socialized" to this day. I think most English subjects remember lessons learned the hard way, aided by constant reminders from still-haughty Aristocrats.

Maybe we need an Aristocracy of sorts in the United States, a group of would-be betters who stick it in people's faces everyday, thereby arousing anger and resentment. We sure need something other than resignation and submission. We need some fight.

WalterB - clock 18:13:27 - Monday, 08/28/2006

Last update: 11/11/2007

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