The rich no longer getting richer?

[TréGuevara]

.

[WhitemageofDOOM]

Depends on if American politics swing back towards the way they were during that period.

Which seems unlikely.

[bosgek]

Yes. Companies are getting larger and larger. Today, if your company is successful enough, some multinational will probably buy it. The big investors and top management are being paid more and more because of this growth.
Where does the money come from? For a part the capitalists whose company was taken over and for another part us, the consumers as we have less and less choice between producers that can drive prices up if they wish. This means less rich people, but a smaller ultra-rich group and we all have to pay for it in the end.

[KurtFF8]

Well saying "income tended to flatten" is a little much. But workers certainly took a greater share of bourgeois earnings as a percent of economic growth really from the late 19th century until the 1970s (with ups and downs of course).

(I get this from the Richard Wolff lecture "Capitalism hits the fan")

It isn't out of the realm of possibility that wages will cease to stay stagnant as a result of this crisis. Obviously as we have seen: stagnate wages are not an inherent part of capitalism, and capitalism can take the form of a more "egalitarian" income makeup.

[ComradeOm]

Its not much of a trend if its only been present for two years. As such it is almost entirely due to the current financial crisis. There is absolutely no basis for suggesting that incomes will continue to level out*, which the article accepts, when/if the capitalist economy recovers and returns to business as usual

*Which is disingenuous as that is not occurring at all today. What has happened is that the top earners have taken a blow to their wealth. We have seen no increase in the real wages of most of the workforce, something that is required for any real reduction in wage differentials

[New Tet]

Its not much of a trend if its only been present for two years. As such it is almost entirely due to the current financial crisis. There is absolutely no basis for suggesting that incomes will continue to level out*, which the article accepts, when/if the capitalist economy recovers and returns to business as usual.

Please define what you mean by "recover".


*Which is disingenuous as that is not occurring at all today. What has happened is that the top earners have taken a blow to their wealth. We have seen no increase in the real wages of most of the workforce, something that is required for any real reduction in wage differentials

What are "real wages"?

[GPDP]

This should be a helpful article:

http://www.zmag.org/znet/viewArticle/22478


By Rick Wolff

[/URL] Mid-August, 2009, was a peculiar time in the US economy. Wall Street, big banks, and the media were mostly celebrating "economic recovery." Meanwhile, average Americans were suffering record levels of unemployment, job insecurities, home foreclosures, personal debt anxieties, and the upsets, tensions, and angers that inevitably result. One economist referred to the US as [URL="http://www.huffingtonpost.com/max-fraad-wolff/one-nation-two-national-e_b_265372.html"]"one nation, two national economies." (https://www.zcommunications.org/zsustainers/signup) Two particular sets of August economic data reveal the deepening economic divide behind the "recovery" talk.

The first set of numbers came from the US Department of Labor's Bureau of Labor Statistics (http://www.bls.gov/news.release/prod2.nr0.htm). They showed some remarkable facts about (1) US workers' productivity -- the physical quantity of goods and services produced per employed worker, (2) the compensation paid to US workers, and (3) the hours they actually worked. These numbers showed how the economy had changed from the first quarter (January-March) to the second (April-June) of 2009. The average number of paid hours worked per employee fell by 7.6 per cent, but the total output fell only 1.7 per cent. That was because the workers who had not (yet) lost their jobs were fearful, so they worked harder and faster doing some of the jobs previously done by laid-off workers. With fewer employed workers doing more, the BLS reported a gain of 6.4 per cent in the productivity of US labor.

For their harder, faster, and thus 6.4 per cent more productive labor, those still employed saw their money wages rise by only 0.2 percent from the first to the second quarter of 2009. When the BLS took into account the rising prices workers had to pay, their real wages (the goods and services they could actually buy) fell by 1.1 per cent. Taken together, these numbers show that employers got a huge increase in output from each employee, while what they paid to their employees imposed on them a decrease in the goods and services they could afford.

No wonder the second quarter of 2009 was celebrated as a "recovery" by business and thus politicians and the media; the workers only watched and worried.

Yet the productivity numbers tell us more. They show a widening of the inequality between employers and employees in the US. Employers getting 6.4 per cent more output to sell per hour of paid worker's labor enjoyed about 6.4 per cent more sales revenues flowing to them per paid labor hour. However, their remaining employees, working harder and faster, got paid hourly wages that enabled them to afford fewer goods and services than before.

Employers' responses to the current economic crisis (lay-offs and speed-up) thus worsen the gap in incomes and standards of living between employers and employees. Keep that in mind the next time you hear business or political leaders speaking about how "we all need to tighten our belts" or "make equal sacrifices."

Rising inequality in the distribution of income between employers and employees usually widens political and cultural inequalities, too. Employers will now have relatively more resources to shape politics than workers will. Employers will have more to use to enhance their cultural amenities (their families will enjoy greater access to educational, artistic, recreational activities while workers will find such access increasingly difficult to afford). Growing economic, political, and cultural inequality since the 1970s helped to provoke the current crisis. Now the crisis is worsening that inequality. Recovery?

Rising inequality also threatens any "economic recovery" that might actually begin. This is because employers generally save more and spend less of their incomes than their employees do. The crisis-ridden US economy gets a beneficial "stimulus" from workers spending almost all of their earnings. That stimulus is reduced when income flows more to employers and less to workers. In an absurd twist of our contradictory economic system, just as the government spends more to "stimulate" our depressed economy, business practices leave workers with less to spend. This is a self-defeating combination that undermines the real recovery everyone needs.

The second set of numbers was collected and published by the US Federal Reserve; that set concerns "capacity utilization." (http://www.federalreserve.gov/releases/G17/Current/default.htm) Roughly, these numbers measure the proportion of the nation's capacity to produce that is actually being used for production. In July 2009, the US capacity utilization proportion in all manufacturing was 65.4, or roughly two thirds. Over one third of the tools, machines, equipment, factory and office space, etc. in manufacturing was idle. By comparison, the average rate of manufacturing capacity utilization from 1972 through 2009 was 79.6. The crisis is thus increasing our economic system's huge waste -- failure to make use -- of a very significant portion of our nation's productive resources. Idle capacity usually means deteriorating capacity. And this after a year of Bush and Obama "economic stimulus packages."

Consider the meaning of this waste. Side by side with today's 15 million unemployed people (not to speak of the underemployed), we have one third of our industrial capacity unemployed as well. Meanwhile massive social needs go unmet (rebuilding center cities, providing daycare, healthcare, and eldercare to millions, repairing decades of damage to the environment, and so on). The way this economic system works, we are supposed to wait until private enterprises see profits from rehiring the unemployed and utilizing the available capacity. Until then, we are supposed to watch and accept this system's inability to combine unemployed people with unemployed resources to meet obvious social needs.

The two sets of numbers released this August reveal the reality behind all the talk of "recovery." The vast majority of people live and work (or don't) in that "other" national economy not experiencing the "recovery" we are supposed to applaud.

[ComradeOm]

Please define what you mean by "recover"Emerge from its current crisis


What are "real wages"?Wage rates adjusted to account for inflation