Recover Our Spending Power
By ROBERT B. REICH
NYT
PRESIDENT OBAMA will have to devote a big part of his State of the Union address to the economy, but which economy?
Corporate profits are up, in part because of reduced costs, especially payrolls, so jobs and wages remain in the doldrums. People with lots of financial assets or who are deemed “talent” by large companies are enjoying a solid recovery, but most Americans continue to struggle. In order for the public to understand what must be done, Mr. Obama has to be clear about what has happened and why.
The Great Recession accelerated trends that started three decades ago: outsourcing abroad, automating work, converting full-time employees to temps and contractors, undermining unions and getting wage and benefit concessions from remaining workers.
Mr. Obama should point out that the United States economy is now more than twice the size it was in 1980, but the real median wage has barely budged; that in the late 1970s, the richest 1 percent of Americans got about 9 percent of total income, while by the start of the Great Recession the richest received more than 23 percent; that wealth is now even more concentrated. And the economy is bogged down because most Americans, unable to borrow as before, no longer have the purchasing power to get it moving again.
(More here.)
NYT
PRESIDENT OBAMA will have to devote a big part of his State of the Union address to the economy, but which economy?
Corporate profits are up, in part because of reduced costs, especially payrolls, so jobs and wages remain in the doldrums. People with lots of financial assets or who are deemed “talent” by large companies are enjoying a solid recovery, but most Americans continue to struggle. In order for the public to understand what must be done, Mr. Obama has to be clear about what has happened and why.
The Great Recession accelerated trends that started three decades ago: outsourcing abroad, automating work, converting full-time employees to temps and contractors, undermining unions and getting wage and benefit concessions from remaining workers.
Mr. Obama should point out that the United States economy is now more than twice the size it was in 1980, but the real median wage has barely budged; that in the late 1970s, the richest 1 percent of Americans got about 9 percent of total income, while by the start of the Great Recession the richest received more than 23 percent; that wealth is now even more concentrated. And the economy is bogged down because most Americans, unable to borrow as before, no longer have the purchasing power to get it moving again.
(More here.)
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