CEO Salaries, Poverty, & Wages

[unlawflcombatnt]

CEO SALARIES, POVERTY, & INVENTORIES INCREASE.

WAGES DECREASE.

Today's economic reports show increasing disparities between the income of the rich and poor, as well as between production and demand.

Evidence continues to come in that U.S. production is exceeding demand. Factory orders declined 1.9% in July. Factory inventories increased 0.5%. Durable goods orders declined 1.9% in July. June's durable goods order increase was revised downward to 0.9% from its original 1.4%. The link for this information from Briefing.com is at:
http://www.briefing.com/Silver/Calendars/EconomicReleases/facord.htm

The ratio of CEO salary to average wages increased from 301-1 in 2003 to 431-1 in 2004. The current ratio is much higher than it was in 1990, when it was 107 times more than the average workers pay. It is much higher than in 1982, when the average CEO made only 42 times more than the average worker. The link for this can be found at:
http://money.cnn.com/2005/08/26/news/economy/ceo_pay/index.htm

While CEO salaries have skyrocketed, more people have dipped below the poverty level. 1.1 million more people dropped below the poverty level in 2004. The number of people below the poverty level increased to 37.0 million in 2004, up from 35.9 million in 2003. The percent of the U.S. population below the poverty level was 12.7% in 2004 at the end of 2004. The link for this can be found at:
http://money.cnn.com/2005/08/30/news/economy/poverty_rate.reut/index.htm

Over the last year, the average inflation-adjusted earnings of Americans declined 0.5%. In July, inflation-adjusted ("real") hourly earnings declined 0.1%. Real hourly wages have declined in 13 of the last 15 months. July's average hourly wage was $16.13/hour in 2005 dollars, which is less November 2001's $16.15/hour (in 2005 dollars.) Meanwhile, worker productivity has increased 12% since November 2001. Productivity has increased dramatically, while wages have actually declined. American workers are clearly VERY productive, but they are not receiving *any* increase in pay for their increased productivity. The link to this information can be found at: http://www.epi.org/content.cfm/webfeatures_snapshots_20050817

The only postive "growth" in our economy is in CEO salaries, Corporate Profits, incomes of the most affluent, and worker productivity. There has also been "growth" in the number of Americans in poverty, as well as "growth" of the national debt. Meanwhile, family incomes are flat, and hourly wages have declined.

Yes indeed, as Bush has repeatedly stated, our economy certainly is "strong, and getting stronger." It just doesn't look that way to most of us. We just need to have faith. After all, this is a "faith-based" economy, not a fact-based economy. So we shouldn't allow the facts to confuse us.

unlawflcombatnt

[wli]

1. headed straight to Great Depression v2.0 n/t

[unlawflcombatnt]

2. Strong Possibilty

I think that's a strong possibility. The housing bubble, through increasing home equity loans, has furnished the money to sustain consumer spending. It has made up for the decline in real wages. When the housing bubble deflates, that monetary source for consumer spending is going to dry up. And that source amounts to about $200 billion per year, or about 1.7% of our GDP. Jobs in the housing industry will also be lost, causing a further decline in spendable consumer income, GDP, and our economy as a whole.

[Catchawave]

3. Raise the Minimum Wage !

Here's a great resource about getting this initiative on state ballots for 2006 to draw more progressives to the polls. I think it's a great plan, and one we really need.

More info here:

http://www.oneamericacommittee.com/minimumwage/

[unlawflcombatnt]

4. Great Idea

I certainly agree that we should raise the minimum wage. In addition, a ballot initiative to raise the minimum wage is a great way to get progressives to the polls.

In addition, it's a great way to get the less affluent to the polls. This may work out to be a real brainstorm. It might draw people to the polls like the anti-gay marriage amendments did. (Hopefully it will bring a different group of voters.)

Many people view a minimum wage increase in terms of "fairness" or "economic justice." But it is far more than that. It is an economic growth issue. It puts more money in the pockets of consumers. It causes increased consumer spending, increased production demand, and increased demand for workers to provide the production. Unlike the regressive Bush tax cuts, increasing the minimum wage would actually increase economic growth.

Wage declines have been largely obscured by increased consumer borrowing, and reduced savings. This increased "consumer deficit spending" cannot maintain current production demand indefinitely. The ability of consumers to borrow money to maintain consumer spending is nearing its limit.

Home equity borrowing cannot continue providing $200-300 billion per year in consumer spending, which is 1.7-2.5% of our $12 trillion GDP. Wages need to increase, or our economy is going to sink.

Worker productivity has increased over 10% under Bush, while wages have increased NONE. In the past economists have maintained that increased productivity is what is responsible for improved living conditions and quality of life. But this is only true if wages increase along with productivity. They have not. And quality of life has declined as a result.

Amen to increasing the minimum wage. Increasing the minimumc wage makes EVERYONE more prosperous. Consumers have more money to spend. That spending increases consumer demand for production, which increases demand for workers to provide that production. Increased demand for workers not only increases hiring, but the wages of those already working as well.

Increased consumer spending also increases corporate profits. The short-term increase in labor costs will be more than compensated for by the long-term increase in sales.

[Mel]

7. yes indeed raise minimum wage

to what should be a living wage. Oh, and btw today is it's 8 year old birthday of being raised to $5.15.

[unlawflcombatnt]

8. Minimum Wage

If it's been $5.15/hour for 8 years, that means it would be $6.27/hour if it were adjusted for inflation. However, if it had been inflation-adjusted from its level of $1.65/hour in 1971, it would be $7.96/hour today. The minimum wage has definitely not kept up with inflation. Below is the link to the Bureau of Labor Statistics inflation calculator.

http://data.bls.gov/cgi-bin/cpicalc.pl

Here's the link to the actual numbers used for the Consumer Price Index:
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=CUUR0000SA0

[Serial Mom]

5. I was amazed at the figures around here ..

City of Milwaukee WI

26% of entire city living in poverty and of that 62,000 are CHILDREN

That means a family of 4 living with wages of $19,000 or LESS

How can a person provide shelter, food and clothes for that?

SHAMEFUL - the repukes should be ashamed of themselves for allowing this it happen in this country!

[unlawflcombatnt]

6. Poverty

I agree. It certainly is shameful. What the Republicans don't understand is that this is also bad for the economy. Impoverished Americans are unable to contribute much to consumer spending. It is in the economic best interests of capitalism and Corporate America that the poor become less poor. This is not only an issue of economic "justice." It's an issue of economic "growth" as well.

[unlawflcombatnt]

9. Employment:Population Ratio Graph

I found the following graph today at another site. This graph gives a more accurate picture of our employment situation. It eliminates the "labor force participation rate" from the employment calculation. It refutes the idea that true unemployment is decreasing.

Normally calculation of the unemployment rate is reduced when there is reduction in the labor force participation rate. In other words, the unemployment rate can be reduced without any change in the number of people unemployed. The result is a reduction in the published unemployment rate, with no actual reduction in the number of workers unemployed. It's pure statistical chicanery. And it is typical of the Bush corporatocracy.

This graph shows the other end of the picture. It shows the fraction of the total population that actually is employed. It shows the employment:population ratio. This removes the labor force participation rate from the calculation. It's obvious from the graph that the percent of Americans actually employed has dropped sharply under the Bush administration. As a result, it also means the % of unemployed Americans has increased, despite the falsely lowered unemployment rate.