Wednesday, July 14, 2010

Economic Stability and Wage Equity

Wage equity does NOT mean that everyone makes the same amount of money.

Rather, the point here is that our economy has become as unequal as Mexico's and gross inequality stifles aggregrate demand and produces economic havoc. This is why Robert Reich has been arguing so strenuously about the need for greater economic rewards for the bottom, because the bottom 80% of the population (!) has been losing out for 30 or so years now.

Robert Reich: "It's All About the Wages -- Our Economy Would Be Fine If Everyone Made Their Fair Share"
When virtually all the gains from growth go to a small minority at the top, the result is deep-seated anxiety and frustration.

Missing from almost all discussion of America's dizzying rate of unemployment is the brute fact that hourly wages of people with jobs have been dropping, adjusted for inflation. Average weekly earnings rose a bit this spring only because the typical worker put in more hours, but June's decline in average hours pushed weekly paychecks down at an annualized rate of 4.5 percent."

Majia Here: America simply cannot prosper if the top 20% of the populace get richer while the bottom 80% get poorer.

Now, I understand that the entire population may need to "downsize" expectations because our past rate of consumption was simply unsustainable. However, when approximately 1/8 the of our population is eligible for food stamps, it is time to reconsider allowing the "market" to solve all of our problems, particularly unemployment.

Unfortunately, due to "regulatory capture" our government is not responding to the pressing needs for economic and energy reforms....

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