Home > Uncategorized > Economic growth leaves many Americans behind

Economic growth leaves many Americans behind

from David Ruccio and Jamie Morgan and the current issue of RWER

What we’re seeing then, especially in the United States, is a self-reinforcing cycle of high profits, low wages, and even higher profits. That’s why the labour share of business income has been falling throughout the so-called “recovery”:[1]

Eric Levitz in a July 2018 article in New York Magazine states that in the end this is political, as “American policymakers have chosen to design an economic system that leaves workers desperate and disempowered, for the sake of directing a higher share of economic growth to bosses and shareholders.”[2] Productivity, automation, etc. on which economists focus are simply issues within that system. American workers (and workers in general) are being “ripped off”. Nowhere is this seen more clearly than in ratios of CEO-to-average-worker-pay.   read more

 

[1] https://anticap.files.wordpress.com/2018/07/fredgraph.png. The graph maps the precipitous decline in the labor share during the past decade (from 103.3 in the first quarter of 2008 to 97.1 in the first quarter of 2018, with 2009 equal to 100), but the trend is longer: from 114 in 1960 or 112 in 1970 or even 110.2 in 2001.

[2] http://nymag.com/daily/intelligencer/2018/07/oecd-study-labor-conditions-confirms-that-u-s-workers-are-getting-ripped-off.html

  1. James Beckman
    November 20, 2018 at 9:38 am

    Historically, who ever claimed that some wouldn’t be left behind. Consider the English enclosure movement starting in the 12C & industrialization commencing in the 18th. These surely made many better off–and others worse off, even to the point of starvation. Yet humans have brains, so that at some point –whether for ethical or political reasons–a society can make adjustments to the “natural order”, which is where we are now it seems to me. Certainly we must act, more in some places than another.

    • November 21, 2018 at 7:27 am

      “Natural order” for what? Jackals? Well, yes. Some “humans” are not.

  2. Helen Sakho
    November 21, 2018 at 2:52 am

    Unfortunately, it is too late for action in most parts of the world. The only solution is to be realistic about our models, assumptions, and the way forward. And to teach and learn globally.

  3. December 1, 2018 at 8:28 am

    First, a culture develops that divides workers and bosses. No such existed for the first 99% of Sapiens time on the planet. So, the first question is how and why was such cultures created? There’s not a simple answer. But anthropologists have pointed out that the evidence indicates that somewhere around 8000 to 10,000 BCE Sapiens are found living in stratified communities. The best housing locations, hunting, and fishing sites, etc. are reserved for some but not other members of the tribe. Some anthropologists surmise these are the results of two factors. First, the expansion in size of human settlements. Second, the willingness and ability of some members of the tribe to pass along the favored status to progeny. After several generations these cultural changes became fixed.

    In this setting, any change in the relationship between bosses and workers has the potential to harm both workers and bosses. But harming the latter seems unlikely since they can control most cultural changes. So, the flex point in this relationship, the partner upon whom stress and harm is most likely to the placed is workers. Except in situations in which bosses give up control, workers can make cultural changes serve their needs only by force. Either persuasive or political force, or physical force. Fixing the inequality described by David Ruccio and Jamie Morgan thus requires either a return to Sapiens’ egalitarian communities of 10,000 BCE and before, or political or physical force applied to bosses.

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