Don't think that declining wage growth is a side effect of the economy -- it's the intended effect

[brentspeak]

Today, it's being reported that wage growth has slowed to its smallest pace since 1982.

But the elite which runs Washington -- the Obama administration, most of the GOP, and a select group of "New Democrats" -- aren't really agonizing over it -- they're actually applauding it.

That is because the general consensus on Wall Street and in corporate boardrooms is that Americans "make too much", best exemplified by Alan "Housing Bubble" Greenspan's frank support to "suppress" wage levels by means of importing as many cheap labor foreign tech workers as possible:

http://www.boston.com/business/globe/articles/2007/03/14/greenspan_let_more_skilled_immigrants_in/

Greenspan: Let more skilled immigrants in

By Bloomberg News | March 14, 2007

WASHINGTON -- Former Federal Reserve chairman Alan Greenspan said allowing more skilled immigrants to work in the United States would help keep the income gap from widening.

Inequality of incomes is the "critical area where capitalist systems are most vulnerable," Greenspan said yesterday in Washington at a conference on maintaining the competitiveness of US capital markets convened by Treasury Secretary Henry Paulson. "You cannot have a system that we have unless the people who participate in it believe it is just."

Allowing more skilled workers into the country would bring down the salaries of top earners in the United States, easing tensions over the mounting wage gap, Greenspan said.

"Our skilled wages are higher than anywhere in the world," he said. "If we open up a significant window for skilled workers, that would suppress the skilled-wage level and end the concentration of income."

And don't think that Greenspan's opinion is a lone one. Overall wage suppression is spoken about quite openly behind closed office doors by all the major pushers of the TPP, right-to-work laws, Wall St. deregulation, etc.

Even Obama's public support for an increased minimum wage is spoken with a forked tongue: the Larry Summers'-type economic advisers who surround him don't mind if fast food workers make $15/hour, just as long as everyone else' incomes stagnate to what they consider to be "acceptable, global-leveling" levels.

[AzDar]

1. K & R

[Populist_Prole]

2. Oh hell yes. To the PTB, It's a feature, not a bug.

Talk to any conservative about how to "fix" the economy, peel back the layers of their bullet points...and it all points to the same thing: "What you need is a pay cut".

-It could take the form of:

-Increased H1b visas ( as you pointed out )

-Busting unions

-Pushing global wage arbitrage ( free trade agreements )

-Raising interest rates due to fear of inflation every time the working class' wages actually do rise

Desperate people spinning the hamster wheel at full speed just to get by are going to have a hard time organizing and formulating threat to the PTB's hegemony. Loose labor markets are a plutocrat's dream.

[kath]

10. Ya beat me to it. Definitely a feature, not a bug.

[erronis]

11. Good points. Another way to say "We want more."

[newthinking]

21. They are worried about..get this... "income inequality". huh?

So humongous income inequality is ok between the 10% and the rest of us but OMG, we can't risk allowing the poorest to move up?

I sure hope people are finally waking up. Everything now is happening in full daylight.

[SusanCalvin]

38. ^THIS^

They don't care if we starve (either figuratively or literally), but they do care if we organize.

[GoneFishin]

3. It goes way beyond wages. Everything they do is about amping up the stress level for average

Last edited Sat Aug 1, 2015, 07:25 AM - Edit history (1)

Americans so they will be focused on feeding their families and keeping a roof over their heads, and won't have any time, energy, or money left to engage in politics to challenge the status quo.

It's why they fight access to contraception. It's why they demand the birth of babies to women even if they don't feel like they can support them. It's why they are ok with high medical costs. It's why they are thrilled that average Americans who want a college education will start their careers straight out of college with a $100,000 ball-and-chain loan to weigh them down for the rest of their lives.

Low interest rates are another perfect example. There was a time when a modest savings interest was 7%.

* A kid with a paper route who had $500 in the bank would make $35 a year just by putting it into a common savings account.
* If you had $2000 in the bank you could make $150/year by just letting it sit there.
* If you were saving for a down payment on a home purchase and had $10,000 you could make $700/year leaving it in the bank, now you'd be lucky to make $50 per year.

The banks found that they can borrow all the money they want from the Federal Reserve essentially for free, then loan it to us for between 7% and 30%. Assuring that only the connected can use money to make money, OUR money that is, which they borrow for free from the Fed.

[canoeist52]

31. Accurate. This should have it's own OP.

It's a crime what has happened to our savings, whether bank accounts or investments.

[PATRICK]

33. Banking our misery

Burying hope in vaults. Its not the gold standard anymore. It's the blood standard alone that gives the growing fantasy numbers real value.

[SusanCalvin]

39. Amen.

I am so sick of going through the mental stress of mutual funds for the return you used to get for a savings account. (Well, sometimes more, but then there's the possibility of loss.)

Yeah, I know - first world problem...

[world wide wally]

4. And ultimately the two class system;

The aristocracy, and the working poor who will gladly wash their limos for a bowl of soup.

[pansypoo53219]

5. damn straight. why they kill unions.

sharing HURTS.

[AgingAmerican]

6. The race to the bottom

nt

[closeupready]

8. What do CEO's make in China or Nepal or Somalia?

Does that mean our CEO's "make too much"?

[Arugula Latte]

15. Tsk, tsk. That's completely different!

US CEOs deserve to rake in tens of millions every year. The market has spoken!

[closeupready]

19. Ah yes, but of course!

It's always 'different' when it's about THEM. When it's about US, well, 'don't take it personally', 'pull yourself up by your bootstraps', 'stiff upper lip', 'it's just business', etc.

[JDPriestly]

18. They make a lot there too. And they hide their money in the West, especially Switzerland.

Chinese are among those buying a lot of real estate in California. I don't know whether their money is coming from China. Probably money that is earned on the sale of goods made in China that is not taken back to China? I'm just guessing.

Meanwhile our balance of payments deficit is so large it is sickening.

[newthinking]

22. Actually, the system is bribing leaders throughout the world.

The club has room for more. Especially in emerging economies. Those at the top make out like bandits. Meanwhile every institution is being quietly compromised and corrupted through the new "legalized" corruption scheme.

[jtuck004]

9. Along with the declining number of people who get any wages. n/t

[Alkene]

12. Well of course it is.

The elite long for the good old days,
and want to party like it's 999.

[Curmudgeoness]

13. How does that reasoning even make sense????

I don't consider Greenspan to be a dunce, but that line of thought is just pathetic. So since he is not stupid, I can only assume (to be kind) that he is an asshole.

We all know that the skilled "workers" are not the problem with wealth inequality. Most people would agree that people with skills should be making decent money and would be in a higher income bracket than those who do not have significant training and expertise. The problem in this country with inequality is the super wealthy who are taking all the gains in income at the expense of the workers. The less they pay to the workers, the more they have for themselves.

Seems to me that this is another policy idea that Greenspan will "regret" and have to backtrack on in the future---when it is too late and the damage has been done. Hasn't he learned anything from his "mistake" about the economy and markets. I guess that 2008 is too long ago for him to remember.

[Skittles]

28. it doesn't make sense and of course he knows it's not true

but he works in the interest of the 1%, not the American people

[YoungDemCA]

14. I agree that we should bring in more immigrants

But not for that reason. I would prefer it if the rich were taxed more (especially on unearned income) and that the safety net was expanded significantly.

[JDPriestly]

17. He is talking about H1-B short-term immigrants with computer skills, etc.

He is not talking about immigrants who become your neighbors.

He is talking about bringing in what Europeans call guest workers -- sort of slightly better paid migrant workers -- that you can exploit and not treat as equals.

Immigrants come and should be treated as equals as future Americans, not as temp laborers who are thrown out after their time is up.

[pampango]

35. Immigrants are subject to the same labor laws as you and me. More is better, as you say.

The use of temporary foreign labor is more problematic precisely because the same labor laws do not apply to them.

Canada's higher rate of immigration helps their already better income equality by giving a higher priority to more highly-skilled, higher-paid fields rather than less-skilled immigrants.

I would prefer it if the rich were taxed more (especially on unearned income) and that the safety net was expanded significantly.

When you run for office, you have my vote.

[JDPriestly]

16. Hey. If we nominate Bernie, we can put the theory to a vote.

Ask people: do you think your wages are too high?

If they say "yes," they should vote for a corporate candidate, anyone from Hillary in the center to Walker, Jeb or Trump on the right.

That's what this coming election cycle is about.

What do we want? Cheap imports, goods and labor and low wages here, or paying a little more for goods we make here and earning more. That seems to be our choice.

Meanwhile, the oligarchs take and take and take from the top, adding very little value compared to what they earn in any case.

[Warpy]

20. Economists in the 70s, well paid by their masters, said the inflation caused

by OPEC tripling the per barrel price of oil were caused by greedy unions pushing wages up too high. This drumbeat echoed throughout all mass media, louder even than the drums for all the various corporate wars.

This is the justification they've used for starving us for 40+ years, only by starving labor can you end the greater demon of inflation. But it didn't. We have starved labor and inflation still chugs on at 3-5% a year, built into our system of fiat currency. It's just how it works.

Everything went to hell in this country in the 70s: economic reasoning, the drug war, the expulsion of liberals from party power. It has all run its course and this is the end game.

Where we go from here is anyone's guess, either to an aristocratic oligarchy or even monarchy or back to a constitutional representative democracy. It is simply not going to go on as it is much longer.

[Octafish]

23. ''Wealth Management''

Where all the wealth flows up to management's owners.

One big way they do it is moving to Switzerland to work. Ask Phil Gramm, now vice chairman of Swiss bank UBS where he works in "Wealth Management" with Bill Clinton and George W Bush.

[Uncle Joe]

24. Yes but on the other hand, CEO entitlements stagnated as well as these graphs clearly demonstrate.

In 1973 CEO pay was 27 times their average workers' pay and it never topped over 350 times their workers pay, in 2005 it dropped all the way to only 262 times their average workers' pay, I don't know what the ratio is today, but I'm sure the CEOs are suffering, Phil Gramm even testified to that effect in Congress.



In 1991 CEO pay was roughly 10-20% over corporate profits, in 2000 corporate profits went up a whopping 25% while CEO pay stayed under a barely sustainable 410% in 2005 corporate profits rose to an astonishing level just under 110% while CEO pay decreased to a poverty level under 300% I believe some of them had to go on food stamps during that time.



Finally there is this misleading comparison to other nations' CEO to "average" worker pay, the U.S. of course is an exceptional nation, we don't have "average" workers, our employees prefer for the fruit of their labors to remain high at the top of the tree so that the glory can be seen all over the world.



Thanks for the thread, brentspeak.

[SusanCalvin]

40. Please make this an OP. nt

[salib]

25. Yep. We are suckers.

[haikugal]

26. K & R!

[kath]

27. man, oh man. It really is getting to be time to bring out the pitchforks.

or the guillotines.

[laundry_queen]

29. It's strange

I've heard rich business people on tv lament the lack of wage increases for the general population - they stated it hurts the overall economy, because when people feel like they aren't gaining or doing better, they stop spending and that hurts the economy. Yet, you have those in government trying to suppress wages. I'm thinking the Greenspans and Summers of the world don't really want the economy to be healthy so much as they personally want to cash in on low wages.

[Monk06]

30. 100% Correctamunco ! Also the reason for the drive for TPP. Capital fears wage costs above all

costs of doing business.

I never worked for an employer who didn't grumble about wages on payday or try to make you feel grateful for having a job.

Capital hates the cost of labour and always has. It's fears what it hates and flees from it at every opportunity.

In psychiatry this frame of mind is characterized by the Fight or Flight syndrome. The attitude of Capital towards labour shares some of the cognitive aspects of this syndrome.

https://en.wikipedia.org/wiki/Fight-or-flight_response#Cognitive_components

[TheFarseer]

32. Greenspan, you stupid fuck

I've never heard that having a larger supply of something drives up its cost - in this case labor. In fact it's pretty much the opposite. How are you an economist that's never heard of supply and demand?

[Enthusiast]

34. Kicked and recommended!

[Oneironaut]

36. The thinking in this country is moronically short-term.

The govt basically sees the world as corporations do - the only thing that matters is this month. Cutting wages and jobs might seem like a great idea now, because it causes more profits and can boost stock prices, but it's going to destroy us later. No one will be able to buy anything or innovate, and we'll become a third world country with only jobs that don't require innovation or an education.

We need to increase the minimum wage to at least keep up with inflation. Anyone not in the upper class is becoming less valuable every day, and the fuse to the economic time bomb is burning.

[TBF]

37. Trade Policy -

when jobs are sent overseas there are fewer in the US. As a leftist I am all for breaking down borders and sharing but that is not what is happening here. Other countries are not similarly opening their doors to us and reciprocating. Instead we are giving away the farm.

Ultimately workers worldwide will band together and fight against global capital. Anonymous is showing us new ways to do it.

It's the same as it ever was -

Let the ruling classes tremble at a communist revolution. The proletarians have nothing to lose but their chains. They have a world to win. Workingmen of all countries, unite! ~ Karl Marx

[strategery blunder]

41. Maybe we should import more CEOs to drive executive "labor" costs down

What's good for the goose is good for the gander and all that. Somehow I doubt that is what Greenspan is suggesting though.

[JayhawkSD]

42. Well, it's not compatible with a "consumer economy."

It's useful for bashing big business (and, no, I have no desire whatever to defend big business. I champion only sanity), but it at odds with an economy which is 70% driven by consumer spending. How do we have an increase in consumer spending when we are deliberately debasing the ability of the consumer to spend?

[Zorra]

43. Recommend. nt