On January 9, 2018, Aimee Picchu writes on CBS News:
The pay people take home after accounting for inflation fell 1.3 percent last year, a new analysis shows. The findings come a year after President Donald Trump signed the Tax Cuts and Jobs Act, with his administration promising it would deliver “immediate” wage growth to workers.
Yet many workers’ wages aren’t keeping pace with the cost of living, compensation-data company PayScale found. That’s concerning because it indicates more Americans are falling behind — despite seeing the lowest U.S. unemployment rate in nearly 50 years — and could struggle to maintain their standard of living when the next recession inevitably rolls around.
PayScale examined the difference between nominal wages — what you’re paid on paper — and a paycheck’s actual purchasing power after accounting for inflation, or what economists call “real” wages. If pay growth is lower than the rise in the cost of living, a worker will have less purchasing power.
That may explain why Americans reported an anxiety spike about personal finances last year, with nearly three-fourths of women and three-fourths of young adults ages 18 to 34 saying they were somewhat or extremely anxious about paying their bills.
The dip in real wages also is notable as it came during a year when corporations got generous breaks thanks to the Tax Cuts and Jobs Act. Instead of providing higher wages, however, many companies used the money to repurchase shares, which reached a record $1 trillion last year.
“Although there are positive macroeconomic indicators, it’s not a guarantee, and not everyone is experiencing the benefits,” said Katie Bardaro, chief economist at PayScale. “Wages aren’t moving at the rate they should be unless you are in in-demand jobs.”
Notably, wages in manufacturing — a sector that Mr. Trump promised to revitalize — suffered one of the largest declines in real wages, which slipped 2.4 percent last year. Transportation witnessed the biggest dip, with real wages losing 3.9 percent compared with a year earlier. At the same time, the tech sector roared ahead, with wages rising 2.7 percent.
The manufacturing and transportation sectors may be feeling the impact of the Trump administration’s trade war with China. Fewer imports would mean less demand for transportation to haul those goods across the country, for instance.
“We cannot underscore the impact that these trade policies have had,” Bardaro said.
PayScale’s study examines wages for full-time, private industry employees and education professionals.
Americans are also experiencing different wage growth by region, PayScale found. The strongest wage growth is being enjoyed in metropolitan areas on the coasts, such as San Francisco. But cities in the midwest and south are struggling.
Wages in Nashville slipped 0.7 percent in the fourth quarter while those in Detroit declined 0.6 percent, representing the lowest of the more than 30 cities tracked by PayScale.
“There is this dichotomy between the coastline and the non-coastline regions in the current political climate,” Bardaro said. “That could have real lasting effects on our country.”
Senator Bernie Sanders Comments:
The reality for American working families is that real wages for average workers are lower than in 1973, 80 percent of Americans live paycheck to paycheck, and half of older Americans have no retirement savings. We need to create an economy that works for all of us.
Gary Reber Comments:
The reality is that far, far less workers, as in a mass work force, will be necessary as economic growth is stunned by gutting our manufacturing capabilities through outsourcing supply chain goods and off-shoring manufacturing of finished products to countries with low-wage levels and non-regulated manufacturing, as well as tectonic shifts in the technologies of production, which reduce or eliminate the necessity for workers as production is shifted to the non-human factor––sophisticatedly advanced automation, computerization, robotics and AI.
This CBS News report highlights the reality for the vast majority of Americans, who are increasingly becoming low-wage job serfs, enslaved to full dependency on the wealthy capital asset ownership class or government for their income. They are propertyless with respect to owning wealth-creating, income-producing productive capital assets. The likelihood, without the reform of the system, is they will continue to have zero or negative wealth. Inflation is eating into their real purchasing power as a wage earner, with the government creating new inflationary money that is debt-based rather than non-inflationary money that is productive asset-based. Every deficit dollar created debases the value of the dollars that came before it.
As the economy, both domestic and global, grows, the already wealthy capital asset ownership class ––the top 1 to 5 percent of the population––is able to finance the creation and acquisition of the new productive capital asset formation by securing capital credit with past savings equity, which only the wealthy have, not working-class serfs. Yet workers remain workers, not capital owners, and become increasing dependent, as their real wage purchasing power declines.
Historically and in its present form, the labor movement continues to be destructive in that it agrees with the idea that propertyless people should exist to serve those who own property. The labor movement doesn’t seek to end wage slavery; it merely seeks to improve the condition of the wage slave. If it actually cared about human rights and freedom, it wouldn’t call itself the “labor movement” or the “$15 Minimum Wage Movement.”
The union movement should also expand beyond representing corporate employees and represent capital ownership empowerment for all propertyless citizens.
Our current system is a system rigged to continually concentrate the ownership of capital in the 1 to 5 percent of the population. Also exposed are the dire moral implications of the current system, which is presently propelled by greed in our society. A new system that would ensure equal opportunity for every child, woman, and man to acquire productive capital with the earnings of capital and broaden its ownership universally does not require people to be any better than they presently are, but it does enable our society to leverage both greed and generosity in a way that honestly recognizes and harnesses productive capital as the factor that exponentially produces the wealth in a technologically advanced society.
The resulting impact of our current approaches has been plutocratic government and concentration of capital ownership, which denies every citizen his or her pursuit of economic happiness (property). Market-sourced income (through concentrated capital ownership) has concentrated in individuals and families who will not recycle it back through the market as payment for consumer products and services. They already have most of what they want and need, so they invest their excess in new productive power, making them richer and richer through greater capital ownership –– the means used by the wealthy to become more wealthy. This is the source of the distributional bottleneck that makes the private property, market economy ever more dysfunctional. The symptoms of dysfunction are capital ownership concentration and inadequate consumer demand, the effects of which translate into poverty and economic insecurity for the 99 percent majority of people who depend entirely on wages from their labor or government welfare and cannot survive more than a week or two without a paycheck. The production side of the economy is under-nourished and hobbled as a result.
A major part of the solution (Bernie Sanders, are you listening) is to enact the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/wp-content/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/learn/capital-homesteading/ch-vehicles/capital-homestead-accounts-chas/
