America Wealthy, Even If You Aren’t
Conservatives say that “America is broke.” They say that Social Security, Medicare, public employee wages and benefits, and social spending are the cause of our debt.
America is not broke. The value of all goods and services produced in the U.S. is almost $16 trillion. We produce and sell almost double that of China, two and one-half times that of Japan, eight times that of India, and about equal to all European countries combined. In fact the U.S. produces about 25 percent of all the world’s wealth.
In 2012, corporate after-tax profits totaled $1.7 trillion. After dipping during the great recession, corporate profits have sailed past their pre-recession levels. Despite massive profits, corporations are adding more jobs overseas than they are in the United States and paying one of the lowest effective tax rates in the developed world. Corporate profits have never been higher. So America is not broke; national gross domestic product (GDP) and private corporate profits are at record levels.
Gross domestic product and corporate profits are at record levels because American workers are the most productive in the world. American workers work longer hours than their counterparts in Europe and most other rich nations, and we produce more per person over the year. We also get more done than everyone except the Norwegians, according to a United Nations report, which said the United States “leads the world in labor productivity.” U.S. productivity grew twice as fast in 2009 as it had in 2008, and twice as fast again in 2010. With the workforce down and output up, no wonder corporate profits are up 22 percent since 2007.
If GDP is double that of China and even higher when compared to the rest of the world, and American corporations are making more profit than at any time in history, where is all of the money going?
We know it’s not going to working families. Since 2000 productivity has grown 22.8 percent, but real compensation has been stagnant. Average hourly earnings when adjusted for inflation haven’t increased in three decades. So basically, you haven’t had a raise in 30 years! Wages and benefits have been stagnant because the economy, as structured by the rules in place, no longer ensures that workers’ pay increases in tandem with productivity.
CEO overcompensation hurts average Americans. It transfers wealth upward from employees and shareholders to already rich top executives. The CEO of an S&P 500 index company made, on average, 380 times the average wages of U.S. workers in 2011. In comparison, Japanese and German CEOs made 12 times the average worker, in the United Kingdom it was 22 times average workers’ wages, and Canadian CEOs made 20 times average workers’ wages.
We have no culture of shame about excess in America. In fact people adore the lives of the rich and famous. Unfortunately this disparity takes billions of dollars out of the economy. We have seen two economies in America since the mid 1970s. CEOs and people with lots of money invested in the stock market have done very well. Meanwhile, working class Americans have to contend with stagnant wages, rising job insecurity, and burdensome debt.
America is not broke! The country is loaded with wealth and cash. It’s just not in your hands. For 155 years (1820-1975) for every decade productivity increased; as productivity increased, so did workers’ income. That was the “social contract.” If you worked hard, you shared in the increase of productivity and our nation’s increasing wealth. Today, productivity continues to increase, but workers’ wages flat lined.
If we as Americans want to live the American Dream, then we must organize and unite together. Labor unions are the answer. Unionism is so much more than just collective bargaining for members, it is a social movement based on justice, equality, respect and fairness. It is a movement whose goal is increasing the quality of life for all people.
Joining or organizing a union isn’t easy, but as great civil rights leader Frederick Douglass said, “If there is no struggle there is no progress. Those who profess to favor freedom, and yet depreciate agitation, want crops without plowing the ground. They want rain without thunder and lightning. They want the ocean without the awful roar of its many waters. This struggle may be a moral one; or it may be a physical one; or it may be both moral and physical; but it must be a struggle. Power concedes nothing without a demand. It never did and never will.”