Reich’s radical proposal — decent wages

The decline of unions, outsourcing, off-shoring, politicians who are bought and paid for by corporate kingpins — all of these factors and more have resulted in levels of employee pay that would have sickened our parents and grandparents:

For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling. That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.

Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day – three times what the typical factory employee earned at the time. The Wall Street Journal termed his action “an economic crime.”

But Ford knew it was a cunning business move. The higher wage turned Ford’s auto workers into customers who could afford to buy Model T’s. In two years Ford’s profits more than doubled.

That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago. The basic bargain is over – not only at Ford but all over the American economy.

New data from the Commerce Department shows employee pay is now down to the smallest share of the economy since the government began collecting wage and salary data in 1929. Meanwhile, corporate profits now constitute the largest share of the economy since 1929.

1929, by the way, was the year of the Great Crash that ushered in the Great Depression.

More here.

2 thoughts on “Reich’s radical proposal — decent wages

  1. Ebenezer Scrooge has spoken. Yesterday the Republicans said that they would support an extension of the payroll tax holiday. But only if it was paid for by freezing the wages of all federal employess and firing 200,000 of them. The Republicans refuse to raise the taxes on the 1% to pay for anything including the illegal wars they started in Afghanistan and Iraq. They will however giver tax cuts to the 99% if their wages are frozen and 200,000 of them are forced into the ranks of the unemployed. Good times Bob Cratchit, now hit the bricks you’re fired.

  2. Thanks, Imhotep, for mentioning this.

    I found this by David Dayen at FDL on the Repub POS-

    Here’s the Politicker article:

    Democrats reacted warily to the GOP plan but did not reject it outright. One senior Democratic aide told CNN said there is “skepticism” among Democrats because Republicans want to “cherry pick” items discussed in the context of a broader deficit-reduction agreement by the so-called super committee. The aide said Democrats might be flexible on how the costs are offset if Republicans show similar flexibility in expanding the tax break.

    When Dems have no principles to stand on, they seem to be pretty wobbly….

Comments are closed.