As our nation celebrates Labor Day with backyard cookouts, fun at the beach, or simply kicking back in a La-Z-Boy and doing several rounds of 12-ounce elbow bends – we can all take comfort in the happy news that our economy is whizzing! Economists tell us that job creation is surging, wages are rising, and consumers are racking up record levels of purchases. What’s not to like about all that?
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Two things. First, the economists’ claim about wage growth is a sham, covering up the shame that top corporate executives and major shareholders are grabbing nearly all of the economic gains produced by America’s entire workforce. The so-called “nominal wage” (ie, the sum that workers see on their paychecks) has risen only 2.7 percent in the past year, a very mediocre result for the 82 percent of the labor force who are non-managerial worker bees.
Second, that nominal wage is not the worker’s real wage, for it doesn’t take into account the very real fact that consumer price increases eat up the buying power of people’s paychecks. Indeed, while nominal wages are up 2.7 percent in recent months, the price of everything from gasoline to groceries is up by 2.9 percent, effectively slapping working families with a wage cut. Sure the economy is whizzing – whizzing on the working class.
So all the rejoicing on this Labor Day is coming from the gated zip codes of the rich. For example, in the same year that workers took a pay cut, the CEOs of America’s 350 largest corporations had an 18 percent jump in their pay, hauling in an average of $18.9 million each. In a lifetime of labor, the typical American worker would not be paid as much as those honchos took in one year. Those few are getting rich enough to air-condition hell – and I think they’d better be pooling their money for that project.