You usually don’t pick up Connect Savannah for an in–depth analysis of macroeconomics. But an important number jumped out in the discussion of last week’s disappointing jobs report.
The so–called “labor participation rate,” i.e., the percentage of Americans in the work force, came in at a stark 63.6 percent — the lowest participation since 1981.
Combine that with the fact that U.S. worker productivity is at nearly an all–time high (America actually produces more goods and services now than before the start of the recession) and you can easily connect the dots:
Our current unemployment rate isn’t an anomaly that either presidential candidate can “solve,” but probably the new normal.
In other words, corporate America got what it wanted: More productive workers, and many fewer of them to pay.
(Sorry, new Armstrong/SSU grads and about–to–graduate SCAD seniors! At least the June 1 SCAD graduation concert featuring Grace Potter & the Nocturnals will help deaden the pain.)
For those of us of a certain age, that year 1981 pops out, and not only because that’s right around when we graduated high school. 1981 was the first year of the Reagan presidency, which introduced the modern American template of truly massive deficit spending combined with a push to cut taxes for the very wealthy.
Ronald Reagan is often called a “revolutionary” president, and for better or worse he was: His two terms still heavily influence the world today, whether in our own domestic debate over the One Percent vs. the 99 Percent, or the European Union’s current death–struggle of draconian austerity measures vs. the classic welfare state.
While the hagiography around Reagan portrays his deficit spending as a noble act of heroism — specifically, spending the Soviet Union into economic collapse — America’s deficit spending and the corresponding shift of wealth upward continued long after the collapse of the “Evil Empire.”
An even more revealing thirty–year statistic is that CEO compensation increased over 725 percent during that same period from the early ‘80s to today.
As the ‘80s dawned, CEOs took home about 26 times more than their average employee. Today, CEOs make about 206 times more than their average worker.
Meanwhile, worker pay rose an anemic 5.7 percent during those 30 years.
We see who really won the Cold War!
None of this is a coincidence — it’s a result of specific policy actions. And every action has an equal and opposite reaction, as we see in recent European elections.
After three decades of global policy favoring the few over the many, the proverbial chickens are coming home to roost. In many parts of Europe, voters have tired of the usual right vs. left false dichotomy sold by the same old charlatans, and are looking for more creative solutions.
People are waking up to see that the old labels don’t matter. Remember, it was the right–wing Reagan who introduced America to huge deficits. It was a Greek socialist government which pushed the pro–bank bailout measures which got them booted out of power this past weekend.
But the same people benefitted in both cases....
Voters in this country have serious choices to make very soon. Don’t pay attention to labels. Pay attention to actions. And act accordingly yourself!
As several astute readers pointed out, in last week’s Editor’s Note I was premature in referring to the great Emma Adler as “late.” While I suppose technically one could make the case that at some point each of us will indeed be “late” and I was actually ahead of the curve, obviously the truth is that it was a classic brain fart — sadly it was Emma’s husband Lee Adler who passed away recently.
I apologize for the error and reassure everyone that Emma Adler is alive and kicking.