Wednesday, November 20, 2013

More proof of a two-tier society

Time to give you some more Charlie Pierce from this week. Here's an excellent rundown of how screwed up this country's economy is right now, with the accurately titled "WTF is Going on in America?" Pierce brings up that the S&P broke 1,800 and the Dow 16,000 this week, but most people aren't feeling the boom.
For single mother Laurinda Darosa of Dorchester, it has been difficult adjusting to unemployment after a heart operation. Before the cut, she, her 21-year-old daughter, and 11-year-old son relied on $66 in assistance to help them buy food. Now, nearly cut in half, Darosa's monthly stipend is $37, causing her to budget "day by day" for food in a neighborhood where a gallon of milk at Shaw's costs $2.99. "I don't know how I'm going to do it," she said. "Everything is so expensive."

Should have expanded the old investment portfolio when you had the chance.

And, finally, there's an update from the modern heirs to the legacy of commodity traders Scrooge & Marley.

Wal-Mart has been criticized for paying low wages to its 2.2 million employees. Last week, 50 people were arrested after protesting the retailer's pay at a store in Los Angeles. Wal-Mart turned a profit of $15.7 billion last year.
We also found out this week that Wal-Mart is holding a holiday food drive...for their own employees! Of course, this is typical of the Wal-Mart strategy, which involves paying their employees low wages and next to no benefits, which reduces the labor costs as low as possible (and makes the profits as high as possible, which Wall Street likes). In fact, the Wisconsin Department of Human Services says Wal-Mart had more than 3,000 of its employees on BadgerCare between July and September, 2013, more than double any other state employer. If Wal-Mart paid a living wage (or was forced to due to a higher minimum wage), not only might you have some of these gross inequities reduced, it would probably save taxpayer dollars due to fewer workers on Badgercare, along with those workers being more likely to owe income tax.

This low-wage environment helps to explain why inflation is non-existent these days, with the year-over-year rate at 1.01%, and real wages only increasing by 1.3% for the last 12 months (in fact, real wages have DROPPED in 4 of the last 6 months). At the same time, the S&P 500 is up 28% since this time last year (so much for higher capital gains in 2013 being a deterrent).

It doesn't take a genius to figure out that the low wage increases and booming stock market are connected. Heck, Wal-Mart spends $7.6 billion a year to buy back its own stock in order to pump up its share price. Needless to say, these practices are a big reason why I don't shop at Wal-Mart, and you shouldn't either.

It is well past time for workers to start taking back a small piece of the gains they have allowed idle investors to get. If we do not stop this cycle of stagnation and cuts for the 99% while the oligarchs thrive, things will get much worse, and much more turbulent. As usual, Pierce sums it up well.
This is not sustainable in viable self-government. It simply is not. Either we change or our democracy does.

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