KRWG

Is the Economy Helping Everyone?

Jun 9, 2019

Credit imagebase.net

Commentary: Trump and his Republican allies have been touting the low unemployment rate and increased incomes ever since he came into office—like he was the grand wizard that made this happen. These two data points began to improve shortly after the Great Recession in 2009, due to the bailout of financial institutions that caused this economic downturn in the first place. Unfortunately, the people who lost their homes due to shady mortgage loan practices received little support.

The bottom line is that low unemployment numbers do not tell the whole story. Compared to 1960, employment in the manufacturing sector went from 28% of the work force to a little over 8% in 2018. Most of the increase in employment has been in the service sectors like leisure, retail and support services—with less than ½ the pay of good manufacturing jobs.

Effective bargaining by unions no longer exists. The bottom line is that about 80% of the work force has not had an effective wage increase in 50 years. The income increases reported in the average statistics went to the top 20%, especially the top 1%--specifically the investor class and Professionals like Corporate Leaders, Financial Managers and Medical specialists.

Income and wealth inequality have gone through the roof, with CEO’s earning 400 times the average worker. Since 1980, the wealth of the top 1% has increased 3-fold, while those in the middle rose about 15%.

At the same time, the cost of living has gone up at a much higher rate for housing, medical care, prescription drugs, tuition and some food items like produce. The 2017 Corporate tax cut only made it worse. It’s time for new leadership at all levels of government.