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Title: The 400 Question Author: Jon Bekken Date: June 25, 2016 Language: en Topics: questions, economics, US, Anarcho-Syndicalist Review Source: Retrieved on 28th January 2021 from https://syndicalist.us/2016/06/25/the-400-question-getting-by-after-50-years-of-economic-stagnation/ Notes: From Anarcho-Syndicalist Review #67, Summer 2016
The Federal Reserve Bank’s annual “Report on the Economic Well-Being of
U.S. Households” (released in May 2016) reports that 31 percent of
Americans say they are “just getting by” or “struggling”; 22 percent
have been forced to take a second job; and 46 percent would be thrown
into financial crisis by an unexpected expense of just $400 – forced to
borrow money (likely from a payday lender, at usurious rates) or sell
something. This, the central bankers report, represents improved
economic well-being.
Fifteen percent of the U.S. population is officially poor, and in their
new book, $2.00 a Day: Living on Almost Nothing in America, Kathryn Edin
and H. Luke Shaefer report that nearly 1.5 million American households
receive less than $2 a day in cash income. That figure has nearly
doubled since 1996 – the year Bill Clinton and a Republican Congress
agreed on a major welfare “reform” bill that tied cash benefits to
strict work or training requirements and limited how long benefits could
be received.
Pundits and polytricksters proclaimed the reforms a wild success. Many
people did get jobs, typically part-time gigs that paid wages too low to
support even a single person with any measure of comfort. Because there
aren’t enough jobs at the bottom of the labor market to go around, it’s
difficult to find full-time jobs, and even more difficult to pair one
part-time job with another given the rise of just-in-time scheduling.
As corporations have consolidated, increasing the dominance of handful
of players in most industries, the newly empowered bosses have slashed
wages and benefits – pocketing much of the savings for themselves, but
also passing it along in the form of higher profits. In transportation
and warehousing, for example, the 50 largest firms increased their share
of industry revenue by 11.4 percent over the last 15 years, and slashed
the share of income going to workers by 7.6 percent. In health care,
where concentration rates declined slightly, workers saw an extremely
modest 1.8 percent increase over those 15 years. So the better off the
bosses are, the worse off the rest of us – at least in relative terms.
“Party Like It’s 1973.” That’s how Business Week headlined a May 2016
piece heralding the return of prosperity, as indicated by the fact that
first-time unemployment claims had fallen to their lowest level since
November 1973. Actually, they hadn’t: as the graph that followed showed,
the current figure is 2.1 million, compared to 1.8 million in 1973. A
series of statistics meant to reassure us that times are good followed;
all making 1973 look good. The official unemployment rate is higher
(though it’s since fallen to 1973 levels, but only because millions of
people have given up looking for work), payroll growth was twice as
strong in 1973, inflation-adjusted hourly wages were higher, and annual
GDP growth was two-and-a-half times higher.
This is I suppose encouraging news for mainstream economists, but it
reinforces the point made in ASR 64 about how workers are no better off
today than we were 50 years ago. We said it a year ago, and now Business
Week concedes the point. They seem to think this is a good thing, but
while we’re invited to wax nostalgic for 1970s salaries and fashions
(don’t even think about the benefits) the bosses are reveling in the
Roaring ’20s, with unprecedented income disparity and so much money
rolling around that some parasites can think of nothing better to do
with their stolen wealth than to eat it (in the form of gold sprinkled
on their food – it’s flavorless and has no nutritional value [quite the
opposite], but makes a statement of a sort).
The U.S. Bureau of Labor Statistics says workers have set a new record
for the percentage still working in our not-so-golden years. Some 20
percent of people aged 65 and up are still working, the highest level
since they started counting many decades ago. (The proportion would
likely be much higher were it not for those forced to take early
retirement during the great recession, and now unable to claw their way
back into the labor market.) A Bloomberg report conceded that the main
reason workers are postponing retirement is simply that they can’t
afford it, but ended on the cheery note that maybe retirement just isn’t
as much fun as it used to be. And, of course, if you had to refinance
your home to keep afloat, lost your pension in the recession, and face
the prospect of privatized Medicare, retiring may well not look too
attractive. But a study by the Employee Research Institute found that
while overall satisfaction with retirement is indeed declining, the
wealthier you are the more you enjoy retirement. Indeed, the super-rich
find retirement so much fun that some are starting in their 40s.
Payday lenders and other “nontraditional” financial services firms see
opportunity in all this, of course. Once limited to pawn shops, credit
cards and high-interest mortgages, there are now a host of financial
instruments designed to part the unwary from their money – and steal
their cars, homes and paychecks (or at least anything the cops didn’t
seize first through asset forfeiture and high-fee probation programs) in
the process.
Rather than adopt measures that would get the government out of the
union-busting business, the Obama administration is proposing
regulations on the industry that would take effect next year: making
sure borrowers are able to pay off a two-week loan in two weeks, that
loans can’t be endlessly rolled over to generate new fees, and that a
borrower can’t take another payday loan if he or she paid one off less
than 30 days ago. (This, of course, would do nothing to address the
desperation that forced workers to turn to the loan sharks in the first
place; it will simply incentivize the vultures to find new schemes to
take advantage of them.)
And many are desperate indeed. Average U.S. life expectancy has dropped
in recent years, driven by drug overdoses and suicide. As income has
stagnated and the cost of living has continued to climb, many workers
have slipped into debt. One study says the average U.S. household with
credit card debt is now $15,762 in the hole, with no conceivable way of
digging out. (Add in car and student loans, and there are lots of
workers who couldn’t clear their debt in five years even if they devoted
100 percent of their income to debt payments.) And since the average
household with debt pays $6,658 in interest per year, they inevitably
fall deeper into debt with each year that passes.
In today’s mail I see an appeal from Habitat for Humanity which begins,
“Did you know there is no county in the entire United States where a
family with two minimum wage incomes can afford to pay the rent? Not
one!” Some of these families are homeless, others couch surf, a lucky
few live in (often dilapidated) public housing, and many are crowded
into tiny apartments, always a step or two from eviction. If they manage
to find a place where they can manage the rent, it’s probably run-down,
likely poisoning their children with lead paint, in a dangerous part of
town, far from jobs and quality food and decent schools. Financial
catastrophe is always knocking at the door – a couple days home from
work sick (or with a sick kid), a car repair, an emergency room visit or
a dental bill. That leads to the $400 question.
As organized labor has collapsed, an extreme individualism has stepped
in as the alternative – a go-it-alone perspective narrowly focused on
getting an education or specialized training, going to where the jobs
are (what does it matter if you have a family?), and pulling yourself up
by your bootstraps. Of course, there’s no support to make this possible,
and growing numbers of our fellow workers find themselves mired in an
economy of contract work, low pay, and few, if any, benefits.
We are told that our problems are individual failures, and our successes
the result of hard work or, perhaps, a reward from god. But hard work
has nothing to do with it. Very few of those pulling down million dollar
salaries work anywhere near as hard as the low wage workers whose labor
supports them. Developing skills or getting an education only helps you
get ahead as long as the boss can’t find a way to outsource or automate
the work, and even then only as long as those particular skills are in
short supply. Many of those who were persuaded to get degrees in
information technology, for example, find themselves on the industrial
scrapheap as soon as a new software program comes along or the boss
finds workers (perhaps halfway across the globe) who can do the work for
half the cost.
The occasional wage slave can escape, but for workers as a whole our lot
is simply to toil and to die. Escape is possible, but only if we work
together to make it happen. Our problems are not individual problems;
they are the inevitable result of our present social and economic
arrangements. The solution also is not individual – it will require
organization, concerted action, solidarity. Until we come together to
make a new world, too many of our fellow workers will remain $400 from
financial catastrophe.