The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.

Sunday, October 12, 2014

The Shrinking Pay Check And Its Deep Roots


Earlier in the week, New York Times writer David Leonhardt keyboarded a piece about our shrinking paychecks in The Great Wage Slowdown of the 21st Century.”

A good piece.


The essence of the piece echoes the reality of the shrinking hourly wage during times of consuming inflation. I suggest there are factors that contribute to shrinking pay checks that did not make the NY Times piece, We shouldn't forget to factor fewer jobs into the equation as well as a political party that refuses to advance pay increase and pay protection measures through the US Congress. Yet, there is little need to visit the obstructive policies of the GOP, you are already  aware of that, right?


Let's take a look at a chart from the New York Times piece.


(Source: The New York Times)
The complete New York Times piece...


The piece accurately depicts erosion since 2000. Leonhardt adroitly delineated some factors that currently contribute to hourly wage erosion. He ends his piece with the very common cautions and calls-to-action regarding factors that work to erode wages and shrink middle class pay checks. 
Excerpt 
It’s certainly possible that we’re on the verge of a pay surge, much as we were in the mid-1990s, when the situation also seemed bleak. It’s also possible that the forces behind the great wage slowdown – from globalization to our often-sclerotic government to (at least for many workers) technological change – are still more powerful than the positive forces. In that case, the wage slowdown won’t end until the country makes much more progress in improving education, cutting medical waste and energy costs and creating a more responsive, nimble government. 
Either way, the great wage slowdown, or the end of it, will help set the tone for American life in the coming decade. It has already done so in the century’s first 15 years, causing widespread unhappiness with the country’s direction and leading voters to shift partisan directions multiple times. The political turmoil isn’t likely to end until the economic reality changes.
Who was elected president in Year 2000? Yes, correct on the first guess. George W. Bush was selected for President via voter suppression, a conservative SCOTUS, his brother Governor Florida Jeb), a GOP State Attorney General, and failed campaign strategy from Al Gore. Consequently, life in our nation economically devolved until March of 2009 (1.5 months after Barack Obama became president).

The New York Times piece stands for itself, the problem however, has roots in economic policy promulgated by none other than Ronald Reagan: Trickle Down/Supply Side Economics. The phrase "trickle-down" stands next to the phrase "Southern Strategy" as phraseology that has shaped US history as much as the Civil War, Women's Rights and Civil Rights. I should add the latter phraseology contributed to a great nation with promise of a flourishing future. The references to GOP policy ("trickle-down", "Southern Strategy") exist in a diametrically opposite reality that has proven deleterious to all, but the nation's top 20% wage earners. 

I offer one of the most well publicized chart since George W. Bush left office in 2009. 




Who was president in late 1981/1982 as the chart trend lines started to separate? Yes, the father of modern conservatism: Ronald Reagan. GOP economic policy as steadfast as the current GOP "War on Women" and "Voter Suppression", is coming to fruition and ripening without any degree of slippage. Unfortunately "ripening" means shrinking pay checks for the American working class.

As per Leonhardt....
.....It’s also possible that the forces behind the great wage slowdown – from globalization to our often-sclerotic government to (at least for many workers) technological change – are still more powerful than the positive forces. In that case, the wage slowdown won’t end until the country makes much more progress in improving education, cutting medical waste and energy costs and creating a more responsive, nimble government.
I posit the answer to the shrinking pay check isn't the simple listing of and reference to "our often-sclerotic government". The matter cuts deeper and includes a national focus on GOP and conservative economic 3Ps ( Paradigm, Policy and Practice). 

Globalization is inevitable. International production of and marketing involves off-shoring American jobs and funding industries in foreign lands. A reality that has had a diminutive affect on wages in the United States. Failure to maintain a minimum wage that could have kept pace with years of wage and earning separation as well as failure to enact cost-of-living adjustments to the minimum wage could also have worked to shrink middle class earnings. How can any concerned writer over look the downside of executive compensation heavily influenced by success at "penny-pinching" operation expenses? Trimming the workforce is inherent in such goal/performance rewards (beyond salary). The American executive will perform any measure to secure his/her bonus. 

The eroding pay check spans far beyond globalization health care issues and surface factors often delineated by writers and people who are highly compensated to posit and offer opinion. It seems they at times skirt the deep attention garnering issues that if not handled gingerly could result in a barrage of hell from managers or editors who are connected in the Top 1% networks that run all US corporations.

Ultimately, the shrinking pay check is a problem for any American who earns under $200,000 per year. depending on one's metropolitan area of residence such a earners level could mean high-end middle class. You may earn well below hourly paid workers, but your pay has a associative relationship. The equation is simple. If the company paid the hourly employee more, the company would be forced to avoid pay compression via boosting your earnings proportionately. Yet, many run to the voting polls and pull that Republican lever as habitually as the basics associated with operating an automobile.


You vote for a party and ideology that is abhorrent to increasing corporate expenses via increases in pay and compensation. 

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