Tuesday, September 3, 2019

The Lies And Propaganda About How Working Americans Have It So "Great" Have Never Been More Pronounced


The mind boggling stat from The Sunday Denver Post (p. 11A) that the U.S. is the only nation in the OECD that mandates no paid vacation days was hard to swallow.   Even more difficult,  when employers (91 percent) do offer such time off, only 70 % of workers take advantage.

Recall here that according to surplus value theory proposed by Karl Marx in his work, Kapital, if the labor value sold as a product or service is L, and V is the labor value embodied in the production of the item or service then the surplus value S is:

S = L - V

If an employee then earns $36,000 a year for generating a service or whatever other labor, and yields 6.2 days of his vacation time to the Boss Man, this translates to roughly $150 per working day assuming 20 such days per month. Then 6.2 days given up per year on average amounts to $930.

Then, by this reckoning V is the yearly paid labor or $36,000 and S is the unpaid labor or $930 per year. . The amount of labor expropriated per year is therefore equal to $930. Now, add in possible employee extra costs of $1,000 - say for health care or unpaid sick days - and you have $1,930 of labor exploited. 

Meanwhile, the rate of surplus value per year, or the rate of yearly exploitation is:

S/V = ($1,930)/ ($36,000) = 0.053

In other words, the company or Boss Man is extracting 5.3% more work per year out of his forlorn employee than that employee is being remunerated.  It was computations similar to these that led a statistics outfit called 
Hotwire to conclude American workers were leaving nearly $126 billion total "on the table" - and that was 7 years ago. 

Those who do take their paid vacation days too often remain willing hostages to their email or cell phones - effectively working even on vacation.  But this is small potatoes compared to the other indignities paid labor is having to withstand in the country - even when the economy is "doing great' according to Donnie Dotard.  Alas, too many American workers aren't aware of the bill of fake goods they've been handed because, well, most do not read the financial press.  (Which may be just as well given the gigabytes of pure propaganda and hog swill peddled therein, which we'll get to.)

But a bit of perspective first. Probably no truer a statement ever appeared than barely 21 years ago, in an issue of Psychology Today no less (July-August 1998, p. 10. Includes graph):

"Starting in the mid-1970s, the nation's quality of life parted company with its wealth, and the gap between social health, and GDP is now bigger than it's ever been."

A graph of 'quality life indices' vs. GDP (ibid.) shows the measured divergence. More recent data also suggests that we are currently a much sicker society than at that (PT publication)  time and beyond what anyone imagined. The marginalization of the workforce is surely one major barometer of that: the inability of so many millions to secure enough remuneration from one job to afford rent in most U.S. cities. The GINI coefficient is also trending worse (i.e. greater inequality), and there's more recent research disclosing how it portends social and economic upheaval..

Have things really changed for the better since the 2008 financial crisis? Well, the recession finally gave way to a tight labor market with many jobs, but alas too many of these jobs don't pay the freight.  By that I mean that one such job will not earn you enough to pay for rent in a decent place, say here in Colorado Springs.  That rent now approaching $1,100 a ,month,  whereas the average worker's wage here is just above $20/ hour.  Do the math and it does not favor the lower wage renter!  (Rent or mortgage should be no more than 30 % of total monthly expenses.)

According to a recent TIME article  ('Living on Tips'',  Sept. 2-9, p. 40)  food service (wait) jobs now number 12.2 million and continue to proliferate across the country even as manufacturing  jobs  (currently at 12. 8 million ) continue to suffer attrition.  Mainly owing to Trump's ongoing, relentless trade war with China, which will see further high end wage losses to the service-gig sector.

  Perhaps as many as twice that number of  12.2 m cited in the TIME article  are either stuck in Amazon- controlled warehouse jobs or gig jobs like Task Rabbit, Task Easy, Uber, Grub hub etc..   Worse, those workers who've lost manufacturing or coal mining jobs are often tossed headlong into the expanding gig  or service sector which pays 40-50% less than their original jobs - which also had benefits. We also learn (p. 42) that those who lose jobs in a recession usually move down the income scale and seldom move back up.  They are stuck in positions like "personal care aide ($24,020 median wage)",  "food prep worker ($21,250 median wage" and "wait staff ($21, 780 median wage)" - none of which is adequate to pay for rent in most areas of the nation now.

And yet we are informed by the likes of WSJ op-ed columnists Phil Gramm and John Early ('Americans Are Richer Than They Think', Aug. 22, p. 15A)  that if the pointy- headed gov't statisticians and economists just stopped "overstating inflation" all would be well given such "overstatement leads to understatement of America's well being".  In other words, hell, you'd then actually be richer than you've been led to believe!  And indeed this would be dramatically reinforced if "consumers always bought the same amount of goods and services."

Which make one wonder what planet (in what alternate cosmos)  these two nattering nabobs inhabit, because it sure isn't the US of A on this planet Earth.  I mean,  if I purchased pork chops one week and they were priced (at Safeway or King Soopers) at $.1.50 /lb. then came back the next week and found them at $2.75 a pound, there is no way I am purchasing the same amount. I may then elect to decrease my purchase from 3 lbs. of chops to 2 pounds.  The same, obviously applies to other goods  such as shoes, jackets, shirts or shorts, and services - including haircuts.  Speaking of the latter, those were once $10 per haircut for a senior here in the Springs and I usually went once per month. They are now $13 per cut, and so I go every two months.  My point:  only an independently wealthy person like Gramm would always buy the same volume of goods and services irrespective of costs.

The claptrap of the two WSJ writers was also corrected in a followup letter ('The BLS Strives To Track Inflation Accurately',  Aug. 30, p. 12A) written by one William W. Beach Ph.D., Commissioner of the U.S. Bureau of Labor Statistics.  In the reply he writes:

"In constructing the (price) indexes, the Bureau of Labor Statistics follows the guidance of the International Labour Organization's  consumer price index manual, an internationally recognized authority on price index theory and practice. In fact, the U.S.  CPI not only meets the best practices recommended in the manual, it exceeds many of them.  Thus we take issue with the authors' notion that the BLS produces ;bad measures of inflation'"

But, of course, that is Gramm's and Early's intention. To muddy the water on inflation indexes to try to snooker American workers that they really have it much better than they believe. Hell, don't go buy those high-priced pork chops or chicken thighs! Don't believe your lying eyes or pocket book! Just believe our codswallop!  You'll be richer for it!

Another letter writer (Jim Smedra) actually pulls up the two propagandists directly, writing:

"Messrs. Gramm and Early state that inflation readings (about 2 %) are overstated. I disagree. The Journal has published several articles describing how Americans are struggling with higher costs for homes, rent, health care, college and vehicles.".

A third WSJ letter writer clobbers the pair from a different direction, that rising debt is the real culprit, not overstated inflation, i.e.

"The measure of inflation today isn't rising prices but rising debt - the opposite side of the ledger. Debt is nothing more than collapse of purchasing power, or 'what your money buys'."

Which, of course, is why so many young Americans can't afford rent or even a first mortgage in Denver, or Colorado Springs.  Their purchasing power simply isn't enough to buy in.  Plus, most are already saddled with enormous student loan debt. So they either have to rent  chintzy rooms at $550 a month, or share an apartment with 3 or 4 others. Those are the choices granted.

But let's remind ourselves Messrs. Gramm and Early tried a similar stunt back in May when they churned out 'The Myth Of Wage Stagnation', (WSJ, May 18-19, p. A15) trying to argue that if we just added employer benefits to the wages actually earned everyone would be seen to be paid much better.   But that increment, or any other tack-ons the pair propose, is still not going to get those Denver workers a new home or apt.   As we learned (Denver Post, May 15, p 2A):

"A middle of the road home in metro Denver now costs more than five times the median household income, a record. "

Again, a lack of purchasing power, which then leads the buyer to have to take out more debt than he or she can afford - if they can afford a down payment at all.  But looking all through the median household worker economy this is what we see: exploding debt because the wage standards have collapsed to the point they can't support current purchases, whether of homes, special services, or even medical care.  The Fed's recent stat showing that nearly half of most middle income earners can't even afford a $400 emergency expense was one of the biggest shockers in the past 4 months.  Then there was JP Morgan's prediction that U.S. households will pay an extra $1,000 this year thanks to Trump's trade war.  Yet Gramm and Early don't mention any of this.   They also would be taken more seriously if they'd referenced the WSJ piece of August 1: 'U.S. Workers' Wage Growth Levels Off' (p. A2) which noted that even the pitiful little increment increase in compensation gains of American workers had "leveled off"

Wage stagnation a myth? Propaganda!  Americans are really richer than they think? Even more propaganda designed as a kind of  'opiate' for the masses to imbibe.

Another reality needle puncturing the fantasy balloons of Gramm and Early appeared August 30, on page A3, e.g.

Historic Asset Boom Passes by Half of Families - WSJ


https://www.wsj.com/articles/historic-asset-boom-passes-by-half-of-families-11567157400

Wherein we learn the decades long economic boom has effectively passed by nearly half of American families who "still have 32 percent less wealth than they had in 2003 adjusted for inflation".  Americans ricer? Only the top 1 percent who saw the value of their assets soar with the over heated, cheap money infused Stock market.

Lastly, bear in mind when the glowing jobs numbers and low unemployment stats are trotted out, they don't tell the full story. That is,  "The BLS official unemployment rate only counts as unemployed those who are available to work and actively searching over the past 4 weeks" to find a job.  Not counted are the 2.3 million -plus between the ages of 25 to 54 who have basically dropped out since 2000.

What becomes of these, what has become of hem? Most likely they live mainly in debt - as one of the WSJ letter writers pointed out - but this isn't being wealthy or rich.   Then there is the underemployment rate for those who are working. Especially forlorn are those with a B.A. or B.Sc. degree and working in an Amazon   Those who may have aspired to get a decent job with benefits that makes use of their degree- but to no avail.

Well these workers definitely need to read the book The Winner Take All Society -to explain  why the U.S. has a narrow 'pyramid' of jobs with quality conditions.   At the very narrow peak or top (Google engineers, software testers, etc.) are the few winners in terms of salary and benefits.  

Thus the observed asymmetry in the U.S. job market(Ch. 6, 'Too Many Contestants?', p. 102):

"Market incentives typically lure too many contestants into winner take all markets, and too few into other careers. One reason involves a well documented human frailty: the tendency to overestimate our chances of prevailing over our competitors."

Adding:

"The decision to compete in a winner take all market is akin to buying a lottery ticket. If you win you win many times more than if you were in a less risky career. If you lose, you earn much less."

The takeaway in terms of newly minted Ph.D.s  for example,  is don't obsess over getting into a university teaching job for status - because that is a winner take all market - too many competing. So you are as likely as not to lose the lotto and end u an adjunct on food stamps, e.g.

http://chronicle.com/article/From-Graduate-School-to/131795/


Better by fare to snatch a good paying job at a private or STEM high school, where the students' caliber often compares favorably with 1st, 2nd year university students. 

As for one way workers can correct the imbalance between capital and labor, well take all your paid vacation days! Don't leave any on the table which amounts to a de facto pay cut for you.  Also don't take cell phones or activate emails on holidays.  To do so merely keeps playing into the exploiters' paws.

See also:


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