I did a little web search. Terms were “total us wages graph”. It gives some nice enlightening pages and graphs that illustrate what I’ve said before in words. We The People are not out spending and getting the economy going again because WE don’t have the money. This stagnation will continue as long as the Real Economy is in that state of funk. No amount of “Monetary Policy” can fix it, as it is based on bad Fiscal Policy, bad Regulatory Policy, and bad laws (“treaties” exporting our jobs and factories to ‘free trade zone’ areas) that destroy economic gain for the bulk of us to the benefit of a very few very rich.
I am, at my core, a Libertarian Free Market Capitalist. I’m happy with competition and free markets.
I’m very much NOT happy with “Socialism For The Rich” and they get bailouts while we get screwed.
I’m very much NOT happy with “All The Laws You Can Buy” and they get sweetheart laws while we get jail time for a joint or a few drinks too many.
In a nutshell, that’s why BOTH Bernie and Trump are pulling in the crowds. It is just two sides of the same coin. The “Enough Already, screw them all” vote. “If I can’t win, I can at least screw them.” directed at the Powers That Be. Frankly, I’d love to see a Trump / Bernie ticket. You’d get about 60% of the voters in one go. (Some 30% from each end of the “Just Screw You” voters).
So with that preamble, lets look at some data and charts (shamelessly lifted from their author sites, with attribution, as Political Fair Use speech):
Wage Stagnation in Nine Charts
By Lawrence Mishel, Elise Gould, and Josh Bivens | January 6, 2015
Our country has suffered from rising income inequality and chronically slow growth in the living standards of low- and moderate-income Americans. This disappointing living-standards growth—which was in fact caused by rising income inequality—preceded the Great Recession and continues to this day. Fortunately, income inequality and middle-class living standards are now squarely on the political agenda. But despite their increasing salience, these issues are too often discussed in abstract terms. Ignored is the easy-to-understand root of rising income inequality, slow living-standards growth, and a host of other key economic challenges: the near stagnation of hourly wage growth for the vast majority of American workers over the past generation. Countering that by generating broad-based wage growth is our core economic policy challenge.
With a group of simple charts, this paper brings the challenge we face into sharp focus, and lends clarity to the steps we must take to meet it.
I’m particularly fond of this one:
Which is the direct and proximal cause of this one:
Now the first whack with the Clue Stick comes when you realize that the poor spend all they have. Look at that bottom line. The poor are now spending 5% LESS than they did before simply because they don’t have it. There are far more low wage earners than high wage earners.
So where did all those “productivity gains” go? NOT to the people who spend money. Very Rich folks don’t spend as much of their income as the poor. This is the fundamental basis of capitalism driven growth. As anyone gets rich, they invest more and consume less AS A PERCENTAGE of their income. Make more of us all rich, you get ever more investment and ever more economic growth.
Yet that economic escalator of Capitalism has been strangled by Crony Capitalists (or more accurately, Crony “Third Way” Socialists) lifting a ton of favors from Big Government via things like “To Big To Fail” and bank bailouts. (Why else would the To Big To Fail banks have been “cured” by making them bigger and driving out their competition with strangling regulations?)
Then there’s that flood of H1B Visas. Nice way to force down wages in those areas where We The People had a job making decent pay. (AND why I can’t fully support Rubio. I like a lot of what he says, but his advocacy for more low wage pressure via importing tens of thousands from the “3rd World” is NOT good for the economy.)
So look at the middle line. 6% growth over 25 years of the graph. And dropping in the last half dozen years. Now add in the huge loss of savings and wealth during the (government induced) Housing Bubble and Burst, and that 6% “more” is clearly not enough to even cover the higher cost of food and make up the the artificially buggered (low) inflation numbers. We’re going nowhere, folks, and we know it.
Finally, that top 10% of wages goes to the top tier of the well connected. Washington Lawyers. Corporate Cronies. Lobbyists and Media Stars. You get the picture: Not US.
And that is why 90% of the Electorate is “Mad as Hell and not going to take it anymore”.
And that is why despite massive “stimulus”, folks are not out “buying”.
There can not be a consumer lead “recovery” when the consumer is already spending all they have.
The Fed, flooding the banking world with liquidity and driving interest rates to zero, but then via Dodd-Frank and similar regulatory overburden, forcing that money to sit in bank vaults or only be loaned to mega-corporations does nothing at all to increase liquidity for The Average Joe and Jane, nor does it let them buy more, recover their Bubble Busted wealth (what little they had), pay off their kids college debt, nor let them even sleep well at night.
It just puts a ton of cash in bank vaults and drives “paper assets” like the stock market up, for a few years. So a literal TON of wealth is accumulated by the Wealth Class who own almost all the assets of the nation.
Now that makes THEM feel all warm and happy, but it does NOT stimulate the general economy. It doesn’t make jobs, it doesn’t raise wages, and it doesn’t let consumers consume more. When you have fewer folks employed, making less stuff, and consuming less, that’s a recession. It does not go away if Jimmy Diamond gets a $10,000,000 bonus or if Citi Bank has a massive reserves increase. It does not fix OUR economy if Warren Buffet buys a giant factory in Mexico.
What “stimulus” giveth, regulation, inflation, NAFTA and taxation taketh away.
But what about The Future? We’ve “invested” massive amounts of (borrowed) money into Higher Education. Surely that will pay off in lots of highly paid highly educated workers? Well, no. It mostly paid off in lots of overpaid college professors and administrators getting the better part of $1/2 Million a year to “be in charge”. (My Public Alma Mater pays their President somewhere over $400,000 last time I checked)
UC President Napolitano to Receive $570k Base Salary
July 20, 2013 By Josephine Djuhana 1
Janet Napolitano Homeland Security SecretaryJanet Napolitano is now the new president of the University of California system, despite her lackluster track record as the secretary of Homeland Security and the glaring fact that she has virtually no educational experience under her belt whatsoever.
Nice work if you can get it.
No experience? No Problem! Starter wage of over $1/2 Million / year…
THAT is what Johnny is in debt for.
So how’s that wages angle working out for our kids?
The heading says falling since 2000, but to me the peak looks to have been about 1997 and downhill for almost 20 years now.
Oh, and realize that at a Federal Minimum Wage of $7.25 that bottom tier is about double minimum wages and the top is not quite 3 x minimum. I suppose it is better than flipping burgers, but it isn’t going to be paying for that new BMW… $32,000 / year is ALMOST enough to pay for an apartment, food, TV, and mass transit to work in most of our big cities (where most people live).
So just who has benefited from all those Student Loans? The student who has to find a way to get $100,000 out of a bit over minimum wage, or the “Inexperienced Executive” being gifted $1/2 Million for being Politically Correct? Hmmm?
Thus the students saying “Bernie! He’ll dump our debt!!” in droves. With professors in the UC System now hauling down over $100k / year too, hey, how about we just put a special tax on higher education salaries and use THAT to pay off the student debt of anyone who can’t get a job paying over 4 x minimum WITH the provided degree? A little “pay for performance” adjustment on the advisers who said “sure a degree in Social Justice Warrior Ethics is a ticket to success” and the Sociology Professors who were lavishly rewarded for teaching it? Sounds good to me.
(Of course, since the Engineering Department and the Business Department graduates are making decent money, their Professors ought to be measured against their work product of Makers…)
There’s a lot more at that link, including the erosion of benefits packages (like dumping health care coverage now that Obama has “fixed” it). But just to show it’s not just one article:
U.S. Household Incomes: A 47-Year Perspective
September 17, 2015
by Doug Short
Nominal Mean Incomes
The next chart adjusts for inflation in chained 2014 dollars based on a research variant of the Consumer Price Index, the CPI-U-RS. In other words, the incomes in earlier years have been adjusted upward to the purchasing power of the most recent year in the series. We’ve also highlighted recessions to show the correlation of household incomes to the business cycle.
Look carefully at those lower lines. EVERYONE below $100,000 / year is dropping. Yes, it’s slow. Yet since about 1997, there’s been LESS each year in real terms for “most of us” to spend. We just can’t go buy more cars, shoes, whatever. We must buy less.
Personally, I’ve done a LOT more shopping at Walmart over the last decade than before, simply in an attempt to keep the basics more or less unchanged. It is now a rare treat to buy groceries at the regular Safeway or Lucky’s and even more rare to go to Whole Foods. That is “coping”, it is not “growth”. And I’m not alone in it. All the rest of us are doing the same, to greater or lesser degree.
At that $200,000 line, things are roughly stable. The $350,000 line is a little droopier and a lot more volatile (bonuses, don’t you know) but no great shakes. So who is to do the buying?
The money flow of all that stimulus and printing and spending and all has been entirely consumed by mega-corporations and the super rich. THAT is why the economy is no great shakes. It is also why We The People are increasingly P.O.ed at BOTH major parties and their constantly growing Lap Dog of Government Lackeys sucking at the money tit of the Federal Budget (please pardon my obscenity of saying “Federal Budget”…)
Essentially, if YOU are not pulling down $1 Million or more / year, then YOU are a LOSER in this rigged game.
Thus the anger at large this political year.
I could put up more links showing the same data from other sites. I’ll leave that for you all to explore as you like.
The key ‘takeaways’ for me are pretty simple:
1) The Game is very very rigged when Banks and GM get bailouts, and We The People pay for it, despite having been fleeced. Bernie taps into that.
2) The Game is NOT working for me when my wages drop for a decade and / or I’m unemployed. Trump taps into that.
3) The Game is strongly against me when Fed Agencies and Regulations destroy my job (coal miners anyone?) and put business out of business, and / or reward Friends Of The Clintons and Friends Of Obama (or in the past, Friends Of Bush) with big gains and mandated “must buy” rules; or subsidize their friends crazy ideas (Solindra anyone?) at my expense on my diminishing real wages. BOTH Trump and Bernie tap into this one.
4) When Over Regulation and regulatory burden destroy wealth and wealth creation, and when massive spending by The Federal Government drives debt up by $Trillions in a couple of years; that prevents monetary policy from doing any good at all. There is only about a 3% increase in our technical ability to produce, per year. That’s IT. ANYTHING that results in a dead weight loss of more than that per year will result in negative real growth. This is just reality. Technology and “know how” only advance slowly and that’s the limit. Waste ANY of it, we are all made more poor. That is the message of those wage graphs. The FED fails to recognize this (as is true of all the Central Banks for Europe, Japan, etc…) This is why The Fed can print all it wants, and the economy stays stagnant. The money doesn’t get to “We The People”, it gets diverted into Crony Socialist Schemes and that is NOT where that 3% of new advance is to be found and nurtured. Few folks recognize this; though the Conservative Candidates at least have clue that too much regulation is a bad thing. (They still ‘need work’ on that whole “crony capitalism is bad” angle just like the Socialists need some help understanding “crony socialism is bad”…)
5) When wages at all levels are stagnant or dropping in real terms, bringing in a flood of illegal immigrants, and a flood of H1B Visa workers does NOT improve things. Tell me you are for MORE H1B visas, I hear “I want to destroy your job, cut YOUR wages, and assure that no child wants to study that area in school as the jobs won’t be there when they graduate.” Economic Law is NOT subject to rulings or edicts or any other act of man. More supply WILL drive down wages and it WILL result in folks going into other fields. I advised my son (Honors Math…) to avoid I.T. work and instead go into a non-I.T. field precisely because of the H1B Visa issue. MORE H1B Visas will result in FEWER home grown I.T. folks. It already has. Rubio ought to stop listening to his Establishment Friends demanding more of them and instead start listening to the voters who are out of work.
Disney accused of misusing H-1B visa program to boot American workers
POSTED AT 4:01 PM ON JANUARY 26, 2016 BY JAZZ SHAW
Things are not quite so chipper in the Land of the Mouse these days. A number of workers in the Disney empire lost their jobs and they’re none too happy about it. In the current economy that’s not much of a shocker, but these folks seem to have a very specific complaint. According to the the allegations heading to court, Disney got rid of a number of American workers in order to replace them with lower cost foreign workers using the H-1B visa program to get into the country. (Orlando Sentinel)
When Disney is doing it, you can be sure that others less moral have been doing it for a lot longer and a lot more…
So the bottom line is just that We The People are not so dumb that we can’t tell that the grocery basket is no longer full when we spend $100, and that we have fewer of those bills to spend. ( I used to fill the cart at the Name Store for $100. Then at Walmart. Now, even at Walmart, it’s about 3/4 full at $100…) We are not so dumb as to not notice that Washington is awash in OUR money, and that their Corporate and Collegiate Friends are rolling in the stuff too. We may grit our teeth and mutter about it; things hard to see from D.C.; but that doesn’t mean we have not noticed.
Now along comes The Burn(ie) and The Donald (Trump) and we have a choice. A “Screw you!” candidate, or the Same Old Same Old. We’ll take “Screw You!” (of either stripe).
Run Bernie Sanders against The Crony Republican, I’m voting for Bernie.
Run The Donald against Hillary, I’m voting for Trump
Run Jeb (in many ways the best Governor running) against Sanders, I’ll toss a coin between reason and anger.
Run Hillary The Liar In Chief against Jeb! the competent, I’ll likely vote Jeb!, but might write in Trump…
What has been done for the last 1/4 Century doesn’t work. It puts too much power in the hands of too few, rolls all the money up hill, and screws over We The People. Call it Crony Capitalism, Crony Socialism, “Third Way” Economics, whatever. It’s ALL the same scam.
Money and power belongs in a much larger swath of society. Either that happens, or the economy will grind to a halt. (See Greece as just one example. Or most of Latin America. Or much of the rest of Europe for that matter). No amount of Central Banking Games can fix it if you have the wrong tax policies (too much going to D.C. from We The People) and the wrong Fiscal Policies (spending a $Trillion here and a $Trillion there to benefit your friends and ‘donors’ and putting it on The People’s Credit Card).
The end game is pretty simple. We Just Stop. We “Go Galt”. College kids going to the beach instead of to work. Collapse of your loverly tax base as small and medium businesses go out of business. Stop buying the products of your Mega Corporations as we don’t bother with the money economy (not having much anyway). It all starts that spiral decay into Revolution. While Socialists and Communists just love that final “workers revolution”, I’d much rather not “go there”. Greece has not been pretty. Egypt was a mess. Spain isn’t any great shakes either, but not quite in a disaster yet. We won’t talk about Cypress…
The Better Way is well known.
A) MASSIVELY reduce government intrusion at all levels into our lives. We can do just fine without it, thanks. Chuck whole agencies if possible. ( I got a much better education PRIOR to the existence of a Federal Department of Education than anything done since, as one example.) Gut regulations that only benefit mega-corps and that crush medium and small businesses. This lets the economic engine run and all the wages and jobs follow. Small and medium businesses will start to grow again.
B) MASSIVELY cut taxes and the Federal Budget. Anything over about 15% of GDP is obscene and starts to cause the spiral decay cycle. Yes, cut them both. None of this lie of not raising taxes a LOT and calling a smaller increase a ‘cut’. None of the lie of spending like crazy on an out of control budget and saying “Look, we’re just borrowing the money!”… Reality does not care about nor know about your lies. ALL that matters is that too much in government hands causes the economy to stagnate. Monetary policy can NOT fix broken Fiscal Policy (too much spending and too much debt). Cutting taxes will have all sorts of folks deciding it is ‘worth it’ to start a business and try to grow things. Taxed as we are now, mega-corps are even packing up and leaving.
C) Stop Screwing Around with the money supply. Keynes works for very short (2 years or less) periods and ONLY if during good times you run a budget surplus to offset the deficit in bad times. Since NOBODY will do that, just stop the whole damn charade. You want 2% inflation “on average” to keep things out of deflation land? OK, have the Treasury print 2% of the money supply each year as Treasury Notes and spend them. Other than that, leave the damn money supply alone. The Fed mostly just results in acting cyclically (rather than the Keynesian counter cyclical actions) due to the inability to run a surplus in good times AND NOT SPEND IT. So just stop it. Better to not have the Fed driven bubble and burst cycles than to have them.
In short: Just get the hell out of the way and stop sucking our blood.
Failure to do so is likely to result in a Socialist States Of America or a New Imperial President cramming things down your throats. Or a “Gone Galt” economy with little blood left for you to suck. Your choice…
Me? I’m holding out a bit of hope that I can find an I.T. contract somewhere (though the flood of H1B folks has made that hard…) and maybe work for a living for the next few years. But if not, well, I’m ready to buy an old Caravan and spend my remaining years on The Dole (aka Social Security) and fishing. Hell, IF I don’t produce anything, nobody will be taking it away from me…
And that’s the basic problem right now. Loads of folks facing the desire to be productive but without the means, and willing to be NINIs in the Spanish model. Get The Government out of our way, we will build businesses and wealth and jobs (the Trump approach), don’t do that, we’ll stop producing and hop in the wagon (pulled by whom?…) and enjoy the Bernie Lifestyle. Thus the two blocks of Angry Voters.
So just don’t tell me that the Same Old Same Old is going to fix it, “this time for sure!”. We’re over that lie.