Revaluing work
The loss of purchasing power of workers is hurting the economy
Politicians from both parties always praise the extraordinary productivity of American workers. However, the benefits of this work have been distributed in such a way that we are currently experiencing the largest income disparity gap in the history of the United States.
This did not happen overnight. For more than three decades, the elements that had shaped a solid middle class have changed. The purchasing power of Americans has deteriorated, and the Great Recession is not to blame.
First, taxation policy took a 180-degree turn. Instead of focusing on demand, under the principle that this is what moves the economy, it emphasized the business sector and people with the highest incomes-with the idea that the benefits of consumption and investment from this sector would trickle down to the rest of the population. This was a ferocious redistribution that hurt the majority of workers and is currently ongoing.
Second, there was a transformation in the business ethics where there used to be a relationship between the compensation bosses and employees received. For example, in 1965, the CEO of a corporation earned 26 times more than an average worker; in 1980, the number was 40 times more; in 2010, the difference went up to 380 times more. The distribution of earnings through payroll today exaggerates the value of management to the detriment of rank-and-file workers.
To these two factors, we should add the weakening of the unions that protected the standard of living of wage earners and the globalization that displaced American workers in the international search for cheap labor. In both cases, the argument in favor is controlling the cost of products; but this philosophy never reached the executive office.
This policy of cheapening labor is one of those responsible for today’s economic woes.
The lengthy decrease in the purchasing power of American workers, added to the current unemployment, prevents the development of a strong demand that moves the economy. The consumption of essential goods creates a more stable base than the luxuries of the wealthiest sectors.
This Labor Day arrives in the middle of a presidential campaign. Both parties have very different ideas on how to tackle the economic crisis. Voters must be aware of the great differences between both platforms.
We think workers must be revalued, both for their labor and their role as consumers.
