Tuesday, October 26, 2010


Via Huffington Post we get this from David Cay Johnston:

Every 34th wage earner in America in 2008 went all of 2009 without earning a single dollar, new data from the Social Security Administration show. Total wages, median wages, and average wages all declined, but at the very top, salaries grew more than fivefold.

In graph form the data kind of looks like this ...

The primary culprit according to Johston are favorable tax policies for corporate America, which are designed to secure campaign contributions, rather than focus on good public policy.

We have created a tax system that changes continually as politicians manipulate it to extract campaign donations. We have enabled ''free trade'' that is nothing of the sort, but rather tax-subsidized mechanisms that encourage American manufacturers to close their domestic factories, fire workers, and then use cheap labor in China for products they send right back to the United States. This has created enormous downward pressure on wages, and not just for factory workers.

Combined with government policies that have reduced the share of private-sector workers in unions by more than two-thirds -- while our competitors in Canada, Europe, and Japan continue to have highly unionized workforces -- the net effect has been disastrous for the vast majority of American workers. And of course, less money earned from labor translates into less money to finance the United States of America.

This policy focus helps to explain why income inequality in America has crawled to a point that it is now worse than before the market collapse of 1929 ...

... while total debt has also risen to all-time highs.

As you can see, none of this started under President Obama but, rather than work together to solve these issues, the Republicans are going to make sure that he gets blamed for it. For a peak at what the Huffington Post sees as the "10 Scariest Charts of the Recession" check out this list.

- Mark

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