“So what can we learn from this study? On the data side, we see that everything is proceeding as planned. Nobody’s paying $50 for a burger at McDonald’s, or $16 for a can of tuna at Safeway. Employers wish their profits were higher, and workers are glad they got a raise, but they wish they made more money. Three years after Seattle started down the road to $15, everything is as it should be. Those apocalyptic claims of destruction and business closures haven’t been proven true. One thing the study didn’t explain was why the sky didn’t fall as promised. Why weren’t workers laid off in droves, or replaced with robots? Why didn’t prices skyrocket? Why does Seattle have more restaurants now than at any point in its history? It’s because those workers who saw a raise now have more money to spend in the city around them. Those restaurant workers are eating in more restaurants. They’re buying more groceries. They’re buying more clothes and cars. That increased consumer demand is creating jobs, and more than paying for the increased minimum wage. The $15 minimum wage established a positive feedback loop that created growth in Seattle by including more people in the economy. In other words, it worked exactly as intended.”
Sorry to deliver the news, but it’s time to worry about the next crash.
The combination of stagnant wages with most economic gains going to the top is once again endangering the economy.
Most Americans are still living in the shadow of the Great Recession that started in December 2007 and officially ended in June 2009. More have jobs, to be sure. But they haven’t seen any rise in their wages, adjusted for inflation.
Many are worse off due to the escalating costs of housing, healthcare, and education. And the value of whatever assets they own is less than in 2007.Which suggests we’re careening toward the same sort of crash we had then, and possibly as bad as 1929.
Clear away the financial rubble from those two former crashes and you’d see they both followed upon widening imbalances between the capacity of most people to buy, and what they as workers could produce. Each of these imbalances finally tipped the economy over.
The same imbalance has been growing again. The richest 1 percent of Americans now takes home about 20 percent of total income, and owns over 40 percent of the nation’s wealth.
These are close to the peaks of 1928 and 2007.
The underlying problem isn’t that Americans have been living beyond their means. It’s that their means haven’t been keeping up with the growing economy. Most gains have gone to the top.
But the rich only spend a small fraction of what they earn. The economy depends on the spending of middle and working class families.
By the first quarter of this year, household debt was at an all-time high of $13.2 trillion. Almost 80 percent of Americans are now living paycheck to paycheck.
It was similar in the years leading up to the crash of 2007. Between 1983 and 2007, household debt soared while most economic gains went to the top. If the majority of households had taken home a larger share, they wouldn’t have needed to go so deeply into debt.
Similarly, between 1913 and 1928, the ratio of personal debt to the total national economy nearly doubled. After the 1929 crash, the government invented new ways to boost wages – Social Security, unemployment insurance, overtime pay, a minimum wage, the requirement that employers bargain with labor unions, and, finally, a full-employment program called World War II.
After the 2007 crash, the government bailed out the banks and pumped enough money into the economy to contain the slide. But apart from the Affordable Care Act, nothing was done to address the underlying problem of stagnant wages.
Trump and his Republican enablers are now reversing regulations put in place to stop Wall Street’s excessively risky lending.
But Trump’s real contributions to the next crash are his sabotage of the Affordable Care Act, rollback of overtime pay, burdens on labor organizing, tax reductions for corporations and the wealthy but not for most workers, cuts in programs for the poor, and proposed cuts in Medicare and Medicaid – all of which put more stress on the paychecks of most Americans.
Ten years after the start of the Great Recession, it’s important to understand that the real root of the collapse wasn’t a banking crisis. It was the growing imbalance between consumer spending and total output – brought on by stagnant wages and widening inequality.
The movement for a $15-an-hour minimum wage got a boost earlier this month when Amazon – which has drawn criticism for its pay practices and working conditions – announced it would raise its base pay for all U.S. workers to $15 an hour. The new minimum wage takes effect Nov. 1 and will affect some 250,000 full- and part-time employees, as well as the 100,000 or so seasonal workers Amazon expects to hire in the next few months, according to the company. (The raises will be offset, at least in part, by the phasing out of bonuses and stock awards for hourly workers.)
How much of a real improvement those workers will see in their daily lives, however, depends very much on where they live.
Working off of the labor of others, only there because of being born into capital and pre-existing familial or business relations? Yep
And people still try to defend this shit with ‘Well they MUST work REALLY HARD to earn THAT kind of money!!!’
I assure you they don’t. I assure you the people earning the least money are working the most. I don’t see CEO’s doing 60 hour weeks just to keep food on the table. They don’t do that, because they don’t have to, because they get paid so much they aren’t desperate enough to have to.
If you follow me, reblog this. It is an important piece of data. I would love to see one for the annual tax expenditure of minimum wage versus CEO’s as a proportion of their annual income.
This is the aggregation of labor. This is what it looks like. It has happened before. It will likely happen again unless it is changed.
For many poor families in America, eviction is a real and ongoing threat. Sociologist Matthew Desmond estimates that approximately 2.3 million evictions were filed in the U.S. in 2016 — a rate of four every minute.
“Eviction isn’t just a condition of poverty; it’s a cause of poverty,” Desmond says. “Eviction is a direct cause of homelessness, but it also is a cause of residential instability, school instability [and] community instability.”
Desmond won a Pulitzer Prize in 2017 for his book, Evicted: Poverty and Profit in the American City. His latest project is The Eviction Lab, a team of researchers and students at Princeton University dedicated to amassing the nation’s first-ever database of eviction. To date, the Lab had collected 83 million records from 48 states and the District of Columbia.
“We’re in the middle of a housing crisis and that means more and more people are giving more and more of their income to rent and utilities,” Desmond says. “Our hope is that we can take this problem that’s been in the dark and bring it into the light.”
In a recent podcast interview with David Axelrod, former NBA star Charles Barkley talks about how NBA legend Bill Russell persuaded Barkley to stop publicly complaining about how much income tax he paid (transcription by Steven Greenhouse).
Bill Russell called me one time… He says, “Charles Barkley.” I said, “Yes, sir, Mr. Russell.”
“You grew up in Alabama. Right?” I said, “Yes, sir.”
He says, “Did you go to public school?” I said, “Yes, sir.”
He says, “Did the cops ever come to your neighborhood?” I said, “Yes sir.”
He said, “Any of the houses ever on fire and the firemen come?” I said, “Yes, sir.”
He said, “I don’t want to see your black ass on TV complaining about your taxes anymore.” I says, “What do you mean?”
He says, “So now that you got money you don’t want to help other people out, but when you were poor, other people took care of you.” And I says, “You know what, Mr. Russell, you will never hear me complain about my taxes again.”
And it was a very interesting lesson for me, because I do think rich people should pay more taxes. I’m blessed to be one of them, and we should pay more in taxes. I learned my lesson. I never complain about taxes.
I think Bill Russell needs to make a few phone calls to Congress…
House of Brat 