Last modified: 7:58 AM Saturday, 14 January 2017

“The question is not how to get good people to rule; the question is how to
stop the powerful from doing as much damage as they can to us.”

Karl Popper

A ‘recovery’ for some

Productivity and corporate profits have risen steadily over the past decade. So has unemployment, although not as steadily, while underemployment creeps inexorably ever upward. Is the U.S.’ economy recovering or continuing to implode?

Mouthful of money

“Mmm! Nothing like a nice crisp salad!”
[ Image Source ]

The answer, as you might infer from the preceding paragraph, depends on whom you ask.

In actuality, to the extent that the “recession” has affected industry, it was little more than a speed bump. Transnational corporations have never enjoyed greater prosperity and influence than they do today. Getting more work out of fewer employees for wages that have all but stagnated since the early 1980s, with expanding control of cultural and media environments and growing freedom of action in the political sphere, they have reaped unprecedented profits, and their senior executives have been compensated beyond the most optimistic imaginings of their predecessors.

But all this gain comes at a cost. Workers, meanwhile, are ever more overworked and stressed, and live in constant dread of losing their jobs. There is good cause for this, since in order to achieve the suppression of labor costs that accounts for much of their profit, their bosses have been steadily laying off their co-workers or transferring their jobs overseas to developing countries where people will work for pennies a day.

The effect of this restructuring of the labor force has been predictable: Since 2000, U.S. unemployment has risen from approximately 3.8 percent to 9.4 percent as of December 2010, as the following chart illustrates.

U.S. unemployment, 2000-2010

“Going up”: U.S. unemployment, 2000-2010.
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This, however, presents too optimistic a picture. The reality is depressing: Unemployment figures are based on a “workforce” consisting of those employed or actively seeking work; they make no allowance for laid-off workers who have given up because their communities are bereft of jobs (and who can’t afford to “move somewhere else,” as they are often admonished for failing to do) or for the many who, unable to find full-time work, eke their subsistence from part-time jobs.

U.S. union membership, 1948-2004

“Going down”: U.S. union membership, 1948-2004.
[ Image Source ]

Still worse, since unions have been under crushing pressure from corporations, government (particularly since 1981, when a newly inaugurated President Ronald Reagan made it his first priority to show the new direction of the country by destroying the air-traffic controllers’ union) and a hostile and dismissive media, fewer of the remaining jobs are unionized. In part for this reason, fewer jobs offer substantive benefits, and pay has been flat; in fact, real median income has fallen slightly.

U.S. median income, 2000-07

“Slipping, slipping, slipping, into the future”: U.S. median income, 2000-2013.
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That this “real” income doesn’t appear to have dropped sharply is statistically rooted in the assumption that inflation is near zero (in fact, as of 2010, Social Security recipients have been denied cost-of-living adjustments for the second straight year on the pretext that the cost of living has not risen). This is predicated on a consumer price index that explicitly does not account for the costs of food, energy and housing, all of which have continued to rise.

The growing income gap

“Pulling away”: Income for the top one percent has
now entered the Van Allen Belt.
[ Image Source ]

But don’t feel too bad about your collapsing standard of living. After all, it’s an ill wind that blows no one any good, and your sacrifices have not gone in vain: CEOs and other executives are now more prosperous than ever before, making on average 331 times what their employees take home (and 774 times minimum wage). And in 2013, eight corporations paid their chief executives over 1,000 times as much as their average employee, with J.C. Penney’s Ron Johnson topping the list with a ratio of 1795-1 ($53.3 million/$29,688).

Originally published as a review of a Pravda article on plutocracy.

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