Hey Baggers, your work ethic IS being redistributed

As infuriating and stupid as I think Tea Partiers are, one thing that riles me up in particular is a Bagger bumper sticker that says "Redistribute my work ethic." The implication is along the lines of "I work hard, so why is the government giving funds to others that don't (allegedly) work as hard as I do? My taxes should be lower as a result" And I can see where that frustration comes from, because people are working harder than ever and getting less back from it. But I got a tip for these guys, because they're on the right track, but it ain't the government that's taking money out of your pocket and sending it to others.

A good example of this is the one major economic stat that seems to be getting kept out of what I've been calling the Obama Recovery, and that's wage and income growth. This week illustrated this troubling trend, as the BLS reported that real (inflation-adjusted) hourly earnings dropped by 0.1% in March and weekly earnings went down 0.4%. In addition, real hourly earnings are now down 0.6% compared to this time last year, and the only reason weekly earnings are flat is that the average work week has gone up a bit (granted, that's a good thing, as it shows more people are being hired full-time).

And those numbers continue the trend we've seen in the last 3 years, where real earnings were stagnant or declined.

Real hourly earnings, all non-farm workers 2009-2011
2008 vs. 2009- -1.0%
2009 vs. 2010- +0.3%
2010 vs. 2011- -0.9%

And if you're on the lower end of the wage and education, this is no real surprise to you, because if you don't have a college degree, you really don't make any more money than you would have a generation ago. (as usual, click the page to see a larger picture)

Real wages and education, 1979-2009

And it's not like people have been stagnant when it comes to getting the job done, as you may recall this graph showing where productivity is way up in that time, while incomes for both the private and public sector have barely creeped up.
Productivity vs. wages, 1989-2010


So you're working smarter and faster, but chances are that you haven't been paid much for it. Unless you're a 1%-er. In that case, you've gotten big returns since 1979, well above those in the top 20%, let alone those who aren't lucky enough to be upper-middle class or above. And remember that this graph hasn't been updated to show the negative real incomes for those of us on Main Street since the start of the Great Recession at the end of 2007.



Oh, and the top marginal income tax rate in 1979? 70 percent. Since then, it's been:

1981-82- 50 percent (Reagan)
1987- 38 percent
1988- 28/33 percent (Reagan-Bush I)
1991- 31.9 percent
1993- 40.8 percent- (Clinton, minus Medicare tax)
2001-2003- 40.3 percent- 36.1 percent (Bush II, minus Medicare tax)

Not coincidentally, the capital gains tax rates (which are paid on legalized gambling like the stock market and real estate) have also gone down

1978- 39%
1979- 28%
1981- 23.7% (Reagan)
1982- 20%
1987- 28%
1988- 28/33 percent (Reagan-Bush I)
1991- 31.9 percent
1993- 29.2 percent (Clinton)
1997- 21.2 percent
2003- 16.1 percent (Bush II, divdends too)

(you can check the history of top and bottom tax rates here, it's good stuff).

Anyone else sense a coincidence here? As you drop the highest income tax rates and capital gains taxes, these funds are confiscated by rich and corporate interests for themselves, as the "penalty" for hoarding incomes and profits is less, and there is less incentive for them to hire and pay workers (or work themselves) when they can just throw the money in some risky investment and get taxed less if their gamble pays off. And this trend has been going on for over 30 years.

So it's no surprise that working and middle-class people would be upset that they feel they're seeing no benefit to the hard work they put in, as there is a group that is stealing money that the workers helped make - the idle rich and the corporates who take all the benefits, without putting in all the work that we do. And those culprits keep the cycle going by paying off the politicians to keep the tax code and government policies in their favor, and they buy and pay off the media to keep them from bringing this reality to the attention of the average everyday worker.

See, if our media and our politicians did their job of being responsive and informational to the public, we might have a real Tea Party, where people would be rightfully protesting the redistribution of their work ethic. But if they did, this time they'd be recognizing the reality that the redistribution is going to the rich, corporate and well-connected, and they wouldn't need the Koch Brothers and talk-show hosts to sponsor the fake outrage, because it would be the real thing.