Robert Reich: Worker Pay Is Rising at the Slowest Rate Ever Recorded
Worker pay is rising at the slowest pace ever recorded. But it's worse than that because the new data include everyone who's paid -- including top CEOs and Wall Street moguls. The fact is, most people's pay is stagnant or dropping when adjusted for the costs of living, including rents that are going through the stratosphere.
Conservative Republicans like this. They've long said that Americans are living beyond their means and that the best way to revive the economy is for pay to drop. That's why they don't want to raise the minimum wage, why they advocate so-called "right-to-work" laws that destroy unions, why they're in favor of outsourcing jobs abroad through "free trade" policies like the Trans Pacific Partnership, and why they're happy for companies to shift from hiring people full time to relying on independent contractors and part-time workers.
But Republicans have it completely backwards. When pay stagnates or declines, people don't have the money to buy beyond necessities -- which causes the economy to slow, as it's been doing (the latest report showed the U.S. economy grew at an annual rate of 2.3 percent in the latest quarter, but the Commerce Department also marked down its growth numbers for prior years). Add to this the record share of workers who don't know how much they'll earn from week to week or even from day to day, because of the increasing reliance on part-time and independent contract work. That uncertainty is also holding back spending, which, in turn, retards the economy.
Repeat after me: Higher wages for middle and low-income workers are good for the economy. Lower wages are bad.