Les Leopold, writing in Alternet, has provided an excellent, graph-driven account of why we have an Occupy Wall Street (OWS) movement today. They are demonstrating for the same reasons that each of us might offer about the financial condition of our country and why we see so little opportunity for job prospects now and into the future. For those people that have jobs, they are finding it difficult to make ends meet, many are loaded with student loan debt and and large numbers of Americans are being evicted from their homes, with many others teetering on the brink of foreclosure. Government has not only failed them, but participated in the actions that reduced employment opportunities to a shadow of what is needed for a healthy society. The government bailout has been directed to the wealthy, many of whom caused the economic meltdown in the first place. Our culture and economy have been hollowed out by those still in charge, yet these same players continue to generate new high risk investment “instruments” and still send jobs overseas. If the OWS demonstration doesn’t grow into a national crescendo, it’s because we will allow it to fail–it is our turn to step in, support the movement and facilitate their energy to build a national consensus for making a new economy that works more effectively for people, with enhanced wages, reduced costs for education (do you remember when tuition at the University of California was free until Ronald Reagan introduced tuition charges which have now soared to all time highs?), reversing our expensive, privatized culture and do so with a progressive tax base that stabilizes our society and allows us to rebuild a very broken economy–one that includes vitality in its support of a stable, social safety net. These are not impossible goals. The economy needs to work for all of us, from top to bottom and for too long we have neglected the latter in favor of the former. We need our country back, the one we assumed we had all along, the one that slowly eroded without our notice because of the small incremental steps that were too subtle for human detection. In retrospect however, we went over a cliff.
We have a long way to go before we achieve a sense of national focus on the right target and the means to achieve these objectives. But the OWS movement got the place right. The financialization of America has been a bad turn of events, not a good one. The wages vs productivity in America graph [taken from lepold's article] illustrates what happened to the wages of the American worker over the past several decades and why there is an Occupy Wall Street movement gaining momentum today. Throughout most of our history [United States] there existed a tight relationship between worker productivity (economic output per hour of labor) and wages (weekly wages in the graph have been inflation adjusted to 2008 dollars). When expressed in this way, you can see how the wages and productivity tracked one another, but began to deviate in the late 1960s, at which time wage earners’ weekly income fell flat ,though productivity continued to grow: on this scale the highest weekly wage was $746 a week in 1971-1972 ($2008), but could be, in today’s $ more than $1000 per week had the relationship between productivity and wages continued at it’s pre-1960s relationship. What happened quite simply was that management stopped rewarding workers for their increase in productivity and started to use the additional profits from gains in productivity to plow them back into the organization, reporting them as increased profits which led to enhanced value for publicly traded stock. A rise in the value of the stock enhanced the personal gain of management and made them look like geniuses, when all the while it was in reality a transfer of wealth from workers to management. Stock purchases increasingly became part of the CEO salary picture and eventually could be back-dated to insure a handsome golden parachute. Simultaneous with the development of the golden parachute for management, the gold watch for employees went the way of the Dodo bird. The wild merger mania that occurred during the Reagan years led to a decrease in plant efficiency, compensated by downsizing, robbing retirement packages and selling off assets of companies. Mergers led to a decreased competition and upward movement of prices. Eventually local stores would be replaced by Wal-Mart, whose low wages were supplemented by the social safety net at public expense. Wall-Mart continues to be a government-subsidized operation and has contributed to the third world-like feminization of labor.
The figure on the right, also from Les Leopold’s article in Alternet illustrates how the loss of worker’s compensation helped to elevate the top 100 CEO salaries based on the average worker’s annual salary. Here you see an explosive growth in CEO salary from 45x in 1970 to 1723x in 2006. You can argue that this massive salary increase was created by taking the salary deserved by workers for their increased productivity and then diverting it into corporate income and stock values. This change did not happen by accident. It happened when the neoliberal movement began to change the nature of our economy and culture, to emphasize free market conditions and globalization, as national borders began to melt and multinational corporations begin to emerge with huge influence on the laws that regulated business and capital markets. The flaw that exists today in Wall Street is continued belief in the idea that a free market is a perfect instrument and, in time, will solve all problems. These same neoliberal capitalists also express the idea that a financial crisis is good once in a while to wipe the slate clean and get a fresh start. Increasingly, from the dotcom crisis of 2001 and the Great Recession of today have reduced labor costs substantially. The Republicans are voting to maintain the current crisis to further reduce labor costs of the American work force. Indeed, for each crisis created by capitalism, a labor surplus is created which allows the capitalist class to manipulate working conditions further by having an excess of labor such that labor lowers their demands and becomes more pliable.
Did it ever occur to you that despite the fact that for decades we have been aware of the salary inequities between men and women, who earn less for the same work, the situation has not really changed, despite social pressure to establish gender equity in salary. That is the nature of neoliberal policy–keep women’s salaries as low as possible and move more women into the work force, thus reducing total labor costs. We may want to think that the feminization of our work force was done in the name of gender equity, a noble cause, but neoliberal policy means that a net reduction in labor cost is achieved when more women enter the work force, such that maintaining women’s salaries below their male counterparts reduces labor costs as the proportion of the work force increases in female representation. If you look at the global labor situation, where a more informal manufacturing has taken place in some industries, such as making shoes or clothing in third-world countries, often localized in Export Processing Zones (EPZs), more and more women have entered the work force, some with children, who can adapt to flexible hours of work consistent with their needs for child care, particularly in single parent families. Neoliberal strategies for cheap female labor have also led to slave labor prostitution among very young women and this is a growing world-wide problem, which is also found in the United States.Print This Post
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