Friday, September 28, 2007

US Wages peaked in 1972, and other unamusing info.

Adjusted for inflation, you probably make less than someone in your exact position did in 1972. And the condo I now live in, 2000sq ft., built in the late 70's, was once a huge luxury flat. Go figure.

The Empire of Debt
From Adbusters #74, Nov-Dec 2007

...How did it come to this? How did America, collectively and as individuals, become a nation addicted to debt, pushed to and over the edge of bankruptcy? The savings rate hangs below zero. Personal bankruptcies are reaching record heights. America’s total debt averages more than $160,000 for every man, woman, and child. On a broader scale, China holds nearly $1 trillion in US debt. Japan and other countries are also owed big.

The story begins with labor. The decades following World War II were boom years. Economic growth was strong and powerful industrial unions made the middle-class dream attainable for working-class citizens. Workers bought homes and cars in such volume they gave rise to the modern suburb. But prosperity for wage earners reached its zenith in the early 1970s. By then, corporate America had begun shredding the implicit social contract it had with its workers for fear of increased foreign competition. Companies cut costs by finding cheap labor overseas, creating a drag on wages.

In 1972, wages reached their peak. According to the US department of Labor Statistics, workers earned $331 a week, in inflation-adjusted 1982 dollars. Since then, it’s been a downward slide. Today, real wages are nearly one-fifth lower – this, despite real GDP per capita doubling over the same period.

Even as wages fell, consumerism was encouraged to continue soaring to unprecedented heights. Buying stuff became a patriotic duty that distinguished citizens from their communist Cold War enemies. In the eighties, consumers’ growing fearlessness towards debt and their hunger for goods were met with Ronald Reagan’s deregulation the lending industry. Credit not only became more easily attainable, it became heavily marketed. Credit card debt, at $880 billion, is now triple what it was in 1988, after adjusting for inflation. Barbecues and TV screens are now the size of small cars. So much the better to fill the average new home, which in 2005 was more than 50 percent larger than the average home in 1973...

To put that all in one sentence, the reason we're always broke and in debt up to our eyeballs is that our wages are 20% lower than our parents was. So, it's not rocket science - we have less money, therefore we have more debt.

You can thank your handy-dandy congresspersons, who let the robber-baron CEO's strip this country of it's only viable economic base in the name of a false paradigm of "globalization" and even now are refusing to stop or even ameliorate the damage done by their greedy blood-sucking cohorts.

How much longer do you think those foreign nations are going to keep dollar investments when their value is falling like a rock and has no real prospect of doing otherwise? Not long, class.

And I hope you're not thinking that the recent rises in the stock market are indicative of anything other than the plummeting value of the US dollar. You don't seriously believe those companies actually increased in real value, do you? Of course they didn't. And any sane person can see that their prospects for that other false paradigm of unlimited upward "growth" is pretty slim, too. So what else could the stock market rise be reflecting? Financial soundness has improved dramatically? Ha! Debt has been drastically reduced? Ha! New products are being brought online that everyone will absolutely use their last dollar of discretionary income to obtain? Ha-Ha-Ha!

No, class. You should choke every time the stock market goes up - because it means your money is getting even more worthless than it already is. It means it takes more money to buy the same things. It means things are worse, not better.

And someone is going to have to pay all that debt we owe. And most likely, it's going to be us.

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