By Steve McCann
the past twenty years there has been a noticeable and growing gap
between the income and wealth accumulated by the rich versus that of the
middle class, a political asset habitually exploited by the Democrats
with class warfare rhetoric. However, the reality is that the very
government policies promulgated by the left and the Democrats, and
abetted by Republican indifference, are chiefly responsible for a
precipitous decline in upward income mobility in the United States. Yet
the current governing class refuses to recognize the cause and effect
of their policies and instead blames the failure on the most convenient
scapegoat the general public can easily focus upon, namely the wealthy
and free enterprise.
for many decades experienced the highest level of personal income
growth of any nation in the history of mankind. This occurred not
because of government central planning or the worship of the false gods
of extreme environmentalism or income redistribution, but because
Americans were free to create, invent, and begin their own businesses,
or freely work with those who did, without the heavy hand of government
or a predetermined class system to impede their ambitions.
the process many were hired to produce the goods and provide various
services to these businesses. As the economy and these industries grew,
wages and benefits increased, as the demand for workers was constantly
on the rise. A dominant middle class came into existence and the
standard of living for all Americans improved dramatically.
The main generator
of wealth for any nation is the research, development, and production
of goods for domestic consumption and international export. This is
also the historical path taken by those nations throughout history that
dominated the world economy in their era; this course is in the process
of being repeated by China today.
United States, thanks to the anti-capitalist mindset of those in power,
has chosen instead to abandon what has made this country dominant in
the post-World War II period. The governing class, over the past twenty
years and today more than ever, is determined to impose a) industry-
and energy production-killing carbon mandates based on a specious
"climate change" theory; b) a health care plan and a myriad of other
mandates that fall most heavily on businesses large and small in an
effort to "redistribute" wealth by fiat; c) tens of thousands of pages
of new regulations to be administered by bureaucrats with no knowledge
of business in order to establish a centrally planned economy; and d)
increasingly higher taxes on all businesses and the upper income-earners
while spending the country into bankruptcy. China has eagerly exploited the opportunity by keeping the renminbi undervalued and stealing as much technology as possible.
end result of these actions is the precipitous decline of the
goods-producing sector of the American economy, the virtual end of
large-scale upward income mobility, and a stagnant and potentially
diminishing economy, as it becomes dependent solely on consumption,
which in turn relies on upward income mobility. This is a death spiral
that can end only in national collapse.
decline in the percentage of the employed labor force involved in the
goods-producing sector of the economy is as follows (all statistics are
from the Bureau of Labor Statistics (BLS) unless otherwise noted):
terms of actual jobs lost, since June of 2000, 7,694,000 jobs have been
eliminated in the goods-producing sector (2,239,000 since Obama became
president). Of the jobs lost in this category, 3,840,000 are in the
production of durable goods. Per the latest BLS report the average
weekly earnings for those in the production of durable goods is
$1,023.53 per week. The overall average for the entire goods-producing
sector is $973.96 per week.
June of 2000 there were 131.2 million Americans working in the nonfarm
employment arena. In June of 2011 there were 131.0 working in the same
sector. Factoring the loss of 7.7 million jobs in the goods-producing
sector and 0.2 million jobs overall, there was a net increase of 7.5
million jobs. In what area were these gains?
The private service segment accounted for 5.9 million, and government hiring 1.3 million.
The following chart shows the area of gain or loss and the current average weekly earnings for that job sector:
the difference of $467.96 in average weekly earnings between the
goods-producing sector and the two service segments (weighted: $506.00
per week); the loss in individual annual income is $24,334.00 per job
and an aggregate wage loss of $187 billion per year to the economy, as
well as the non-realization of the purchase of materials, supplies, and
the sale and marketing of the products no longer produced in the United
Obama assumed office, the trend has worsened, as the higher-paying
segments of the service arena are declining in employment as well. The
country is presently creating mostly low-wage and part-time jobs.
It should be noted that federal government employment (less the Post Office) has increased by 164,000.
United States has embarked on a ruinous trend of eliminating
high-paying jobs which produce a value-added product or a higher-worth
service. This process has been ongoing for some time; however, it is
now being dramatically accelerated by the federal government with such
actions as the recent carbon mandates by the EPA, which will cause the
shutdown not only of power plants and much of the petroleum based
industry, but of manufacturing facilities as well. The new financial
regulations courtesy of the Dodd-Frank Bill make capital formation much
more difficult, and the reporting requirements of Sarbanes-Oxley Bill
leave all businesses more susceptible to the whims of regulators and
frivolous lawsuits in the legal free-for-all that is the American
mandates within ObamaCare along with a veritable tsunami of other
regulations from every rule-making agency, but particularly the National
Labor Relations Board and the Federal Trade Commission in Washington
D.C. as well as many state capitals, are not only dramatically reducing
competitiveness for American industry, but also significantly increasing
costs on all businesses large and small. Lastly, the insatiable
appetite for government spending will eventuate in much higher taxes and
fees for businesses and individuals at all levels.
net result: more goods-producing activity will move offshore; the
income gap between the rich and the ever-shrinking middle class will
widen, as there will be relatively little upward income mobility; the
standard of living will degenerate; and joblessness will be epidemic, as
the country cannot continue to produce low wage jobs in the service
sector. A net of nearly 1.6 million people enter the workforce each
year; few jobs await them.
short, it has now become more difficult, and in some cases nearly
impossible, to do business long-term in the United States, and no
domestic or foreign company will risk the investment to open new
facilities in this country unless there is a seismic shift in national
policy and the country returns to becoming the foremost haven for
business and investment in the world. There is still a window of
opportunity, but it will close if the results of November 2012 elections
do not eventuate in evicting the current governing class and their
devastating policies from Washington D.C.
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