The Elites Are Unanimous: Lower Everyone's Wages and Standard of Living -- Except They Don't Say it Out Loud
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The squeeze is not limited to workers in export or import-vulnerable industries. Wages and salaries are now falling across the board, in services and manufacturing sectors, among women and men, young and old. Health and pension benefits are being slashed and businesses are getting their work done with part-time and temporary workers, often supplied by labor contractors whose own survival depends on hiring labor at the cheapest rate possible.
Moreover, going to college is no longer the escape route for the vast majority of young people without elite connections or rich parents. The Bureau of Labor Statistics projects that between 2010 and 2020, nine out of 10 of the largest and fastest growing occupational categories will not require a college education. And the tenth, which includes medical professionals and college teachers, are likely to suffer dramatically in the coming age of fiscal austerity. The bright college graduates working as retail clerks at the Apple Store for $12 an hour are beginning to sense that their jobs do not represent a pause on the way up the professional ladder, but rather are a taste of their long-term future.
In the first few month of his term, Barack Obama signaled that he understood that the crisis of the middle class was more than a temporary condition of the business cycle. “We cannot rebuild this economy on the same pile of sand,” he said. “ We must build our house upon a rock… a foundation that will move us from an era of borrow and spend to one where we save and invest.”
The building blocks of a new high-wage foundation are reasonably clear: 1) large government-led investment in infrastructure, education and new technologies that can create demand for jobs in both the short and long run; 2) Strict regulation of Wall Street and new trade policies to re-channel the country’s private capital away from short-term speculation and back to long term investment in producing high value-added goods and services in America; 3) a shift in national security policy away from world dominance and toward a a narrower definition of national defense.
Three and a half years later we are still stuck in the economic sand pile. The prolonged recession has further weakened the economy’s underpinnings and the failure of a “liberal” president to restore growth has discredited government – the institution that must lead any successful transition to a new economic path.
Certainly, most of the blame lies with the reactionary Republicans whose fear of their lunatic fringe trumps loyalty to their country. And there’s been some bad luck, such as the European crisis. But Obama shares some culpability. He took up the Bush plan for no-strings Wall Street bailouts, expanded unregulated trade, cold-shouldered his union base, and has now adopted fiscal austerity as his economic priority. Whether you think the president is a wimp, a willing tool of Wall Street or a political saint mugged by right-wing thugs, the fact remains that he could or would not engage in all-out battle for the economic transformation he so eloquently promised.
The last four years have demonstrated that, taken together as a governing class, the leaders of our two-party system are currently unwilling to do what is necessary to reverse declining standards. As for the next four, given the choice, Obama is clearly the better option. Under Democrats, the slide will be less steep and rough. Whoever the “real” Romney might be, the extinction of Republican moderates among the Party’s pool of potential policymakers means that his administration will be largely staffed by conservative fundamentalists and corporate fixers who can’t wait to return us to the dog-eat-dog labor markets of the pre-New Deal.