Friday, May 13, 2005

The decline of the American middle class

...will inevitably lead to the decline of America as a whole.

Krugman today:

In 1968, when General Motors was a widely emulated icon of American business, many of its workers were lifetime employees. On average, they earned about $29,000 a year in today's dollars, a solidly middle-class income at the time. They also had generous health and retirement benefits.

Since then, America has grown much richer, but American workers have become far less secure.

Today, Wal-Mart is America's largest corporation. Like G.M. in its prime, it has become a widely emulated business icon. But there the resemblance ends.

The average full-time Wal-Mart employee is paid only about $17,000 a year. The company's health care plan covers fewer than half of its workers.

True, not everyone is badly paid. In 1968, the head of General Motors received about $4 million in today's dollars - and that was considered extravagant. But last year Scott Lee Jr., Wal-Mart's chief executive, was paid $17.5 million. That is, every two weeks Mr. Lee was paid about as much as his average employee will earn in a lifetime.

Kevin Phillips has been noting these same trends and drawing some conclusions about the larger implications for years. You would think that the greedy, the rapacious, the powerful would want to reverse some of these trends - not out of some sense of noblesse oblige, mind you, but for fear that they will be dragged down in the very same maelstrom, eventually.

Henry Ford, who was an authoritarian f--k and admirer of Hitler, at least recognized the fact that Ford Motors wasn't going to go anywhere as a corporation unless employees made enough to be able to afford their own car. Apparently, WalMart doesn't care whether employees can afford to shop there or not.


Blogger jerseycityjoan said...

Krugman's 100% right, of course.

When are people going to wake up?

The only rational explanation for our collective inertia is that we all think we're going to win the lottery.

12:48 PM, June 17, 2005  
Blogger Tlazolteotl said...

Yeah, that's a problem - with all the "reality" shows and mega-millions, everyone thinks they can get rich!

9:04 AM, June 23, 2005  

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