(Time Magazine) Rana Foroohar: Your Incredible Shrinking Paycheck

Before I started writing this column on why paychecks are likely to keep shrinking even if unemployment starts to inch down, I consulted Google to see if the term Marxism was trending upward. It was and has been ever since the end of December, the conclusion of a year in which workers’ share of the U.S. economic pie shrank to the smallest piece ever: 54.4% of GDP, down from about 60% in the 1970s.

No wonder Marx is back in fashion. It’s been more than 100 years since the German philosopher predicted that capitalism’s voraciousness would be its undoing ”” as bosses invest more in new technologies to make things more cheaply and efficiently and less in workers themselves, who, deprived of fair wages, would eventually rise up and revolt. That hasn’t happened, of course, though depressed wages certainly contributed to the revolution in Egypt, not to mention lots of other instances of public unrest over the past few years. But the fact that wages in the U.S. and most other rich countries have been falling since the 1970s and went off a cliff after the recent financial crisis is going to become a more pressing economic and political concern. Just think how hard it will be for Obama to sell himself in 2012 if salaries are still falling.

Read it all.


Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, Labor/Labor Unions/Labor Market, Personal Finance, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

3 comments on “(Time Magazine) Rana Foroohar: Your Incredible Shrinking Paycheck

  1. Bart Hall (Kansas, USA) says:

    Oh, is ‘Time’ still around? I didn’t go to the link because even one click-through increases their advert revenue, but from the two paras KH posted it’s obvious why ‘Time’ is in just absolutely terrible condition.

    Hey, Lady! The unrest across Tunisia, Egypt, Libya and elsewhere is a result of … repeat after me: [i]Rising food prices.[/i] Goodness, what an ignorant twit. And why might food prices be rising around the world? Because the current welfare democracy that calls itself the USA is spending far, Far, FAR beyond its income to purchase the continued support of favored political allies.

    And why are incomes falling in the USA? — because they were at artificially high, unsustainable levels before and are now returning to more reasonable levels. Does this poor woman even have the first idea what “market-clearing wage” is all about? Hint: when prevailing wages are above the market-clearing level you get … ta-da! … lots of unemployment.

    The capitalism she attacks is not a philosophy; it is the natural by-product of freedom. Please do not miss that key point. Attacks against “capitalism” are attacks against freedom, far too often from people who would remove your freedom and replace it with their “greater wisdom” in the name of offering you security, comfort (lie), and ease.

    I believe it was Churchill who said “The great problem with capitalism is its inequal distribution of luxury, but the great flaw of socialism (cf Marx, [i]et al[/i]) is its equal distribution of misery.”

    As I final twist of the knife, I’ll add that over the last five years manufacturing jobs have decreased by nearly 20% — in China.

    It’s called “productivity,” lady. You might wish to google it.

    And the least productive sectors of our economy — education, bureaucracy, and medicine — are even now coming under the same sort of productivity pressure that led British Luddites to attack mechanical spinners and looms. Those Luddites did not care that the result of rising productivity would be vastly more affordable clothing for the world’s poor. They wished to maintain their jobs.

    What’s happening with unionised government workers in Wisconsin and elsewhere is part of the same issue. Ms. Broohaha, or whatever her name is, quite obviously believes that more unions, more thoroughly distorted wage structures, government definition of ‘acceptable’ profit levels, and so on are the way of the future.

    She is thoroughly stuck in about 1887 (Bellamy’s [i]Looking Backward[/i]), or to be generous, maybe 1911 and the LaFollette Progressives: An interesting museum piece, little more.

  2. evan miller says:

    “Ms. Broohaha!” Oh my, I laughed until I cried. Thanks for that, Bart. And good comment otherwise as well.

  3. mari says:

    Amazing, yet the writer of this piece of horsepucky, doesn’t want the fact that the policies that have created massive unemployment, the outsourcing, the deliberate displacement of citizens from their jobs, by supplanting them with cheap foreign labor, illegal and through the exploitation of our visa programs, based on lies claiming a worker shortage, are all based on Marxism. The same left that wants to whip the poor up, claiming that the imposition of socialism and communism is what is required to protect them, are the same left that has assailed, attacked those same US citizen workers who spoke out against the left’s policies that demanded open borders and the importation of millions of foreign visa workers each year, all in the name of forcing the failed policies they’d imposed in Europe.

    Google the Cloward Piven strategy, the same corrupt policies the democrats and their leftist cohorts have been pushing now for decades, are part of the Cloward Piven strategy, it’s about breaking the economy of the US, bankrupting us, pouring untold millions of cheap foreign workers into the US to displace the citizen workforce, our resources bled dry, the imposition of dire poverty, homelessness and destitution, massive unemployment, the violation of our rights, all in the name of fomenting violent bloodshed and revolution in the streets. It’s all deliberate, and what is infuriating me even more, is the conservatives who asked to be regiven the majority in congress, claiming they would fight for our issues, are now back in bed with the same corporate interests who foolishly demand an ever increasing supply of cheap foreign labor, and on top of that, they are demanding taxpayer funded subsidies as “investments”, instead of paying their own business expenses.