The Rich Get Richer, And Everyone Else Is Screwed

Since it’s Labor Day we might as well get the reality for working people stated again, so CNN/Money magazine lays it out: GDP growth not reaching paychecks

NEW YORK (CNNMoney.com) — The economic expansion that began six years ago has failed to benefit most workers, according to a report from the nonpartisan Economic Policy Institute, released Monday.

Productivity growth, although slower of late, has been strong since 2000. After a sluggish start in the period, employment has picked up, although at a slower pace than in past recoveries. Yet, that growth hasn’t transferred to workers’ paychecks, particularly for workers at the lower and middle end of the pay scale, the report found.

After rising quickly in the second half of the 1990s, most workers real wages have been stagnant in the 2000s, especially since 2003.

While productivity jumped almost 20 percent since 2000, the real median hourly wage of all workers rose just 3 percent in the same period. Since 2003, productivity has risen 5 percent, while the median hourly wage fell 1.1 percent.

Women saw a bigger rise in wages between 2000 and 2007, up 4.7 percent. Real median wages for men during the same period were up just 1.1 percent.

Both high school and college workers saw hourly wage gains of about 2.5 percent since 2000.

Yet, in the period between 2003 and 2007, wage gains for median workers, male and female, as well as high school and college workers have all been flat or falling.

Not so for workers at the highest end of the wage scale. At the 95th percentile, real wages have risen 9.4 percent since 2000 and 5.1 percent since 2003.

The workers are producing more but the increased income is going to corporate profits and management. The people who actually make something get screwed.

Well, the good times and rosy news are over. Two-thirds of the GDP is based on consumer spending, and the workers are the consumers. The consumers are broke, busted, flat. They are scrambling to pay for the higher energy and food costs caused by the constant uncertainty about the Persian Gulf. If you are unhappy about $75/barrel oil, wait for the $500 if Iran is attacked. It isn’t going to be $9/gallon for gas, it will be $19+.

Consumers are scrambling to pay ARMs and credit cards, so they “ain’t gonna go to the store no more.”¹ The economy is just another item on the Hedgemony’s list of total failures.

1. With apologies to Willie Dixon.