The Ides of January!

The new year has begun. The Holidays are behind us. Winter plods along – with foul weather and thaw – forever reminding us that nature has power over us! But what will we do with this new year, this new opportunity to be better than we are at this moment?

Holly Skar, director of Business for a Fair Minimum Wage, reminds us:

“Remember that workers are also consumers, and the minimum-wage sets the floor under worker paychecks…We can’t build a strong economy with wages worth less than they were half a century ago.”

Seems logical. It is logical. Who would argue?

Seems plenty of people, but mostly those with inordinate power.  Bernie Sanders, Vermont Senator, reminds us:

“Today, virtually no piece of legislation can get passed unless it has the OK from corporate America.”

So the minimum wage battle goes on. It takes too much of our attention and accomplishes little. Fix the damn issue and move on to other items needing attention.

If we want all citizens to care for themselves, pay their own way and earn a living for the good of us all, why would we insist that they earn the minimum wage?  Seems to me the market should support higher rates of pay because they clearly are worth such. In turn those earnings are available to lubricate the wheels of the economy in all manner of rents, mortgages, utilities, food and other consumption as necessary. Without those earnings the economic engine is starved for lubricant!

Pope Francis reminds us:

“The promise was that when the glass was full, it would overflow, benefiting the poor.  But what happens instead, is that when the glass is full, it magically gets bigger – nothing ever comes out for the poor.”

If one segment of our society is hurting, we all hurt. If the foot develops an ache or soreness, the entire body hurts because of it. So too a body politic. So too an economy.

If one segment of the economy is in trouble, the balance of the engine is thrown off and inefficiency ensues.

Bernie Sanders, Independent Senator from Vermont has another quote worth sharing:

“At a time when long-term unemployment is near a record level, cutting benefits will hurt the rest of the economy and cause even more jobs to disappear.”

Of course this is true. It is logical. If the unemployment of millions of people is allowed to continue without help, the economic engine will continue to sputter.  Unemployment benefits are temporary. They are not permanent for the recipients. The benefits are there to help them transition from unemployment to re-employment. They are there to refuel families to be full fledged participants in the economy once again.

Some will argue the current unemployment situation has gone on far too long. It has. But that is not the fault of the unemployment benefit program. That is the fault of the economy itself. Something is not only out of kilter, it is seriously out of kilter of historic proportions.

I have written in an earlier blog of the re-calibration of the American economy. Our economy is not in a slump or cycle. It is in a major re-calibration of its inner workings. Witness:

            -Average household incomes declined several years in a row

            -Average wages and salaries declined several years in a row; they have been

 stagnant for several years

            -Entire industries have disappeared; new ones have emerged making the old

             ones obsolete; this is an historically recurring development, not alarming in

             itself unless you are a worker in a dying industry!

            -Housing has undergone a severe re-pricing. Instead of a continual appreciation

             of value, we have had historic drops in value; trillions of dollars of real estate

             value have been lost; they may be recovered in time but not in time for those

             who have already lost their homes or the ones who cannot afford to sell their

             home now and book a loss

            -Whole careers have disappeared while new ones are aborning; those in the

             transition don’t appreciate the distinction! But they must learn new ways of

             earning a living. The old job is not only gone but it will not reappear, too!

I need not continue in this vein. Suffice it to say we are not in a business cycle. This is not a boom and bust thing. Oh sure there is evidence of such, but I think the issues are too far reaching and too long lasting to be a simple up and down cycle. No; it is much more than that.

Twenty years from now we may wonder what the fuss was all about between 2000 and 2020. I think we will find it was epic. The trouble is, politics have been allowed to disguise this epic change to be something other than it is. Until we do recognize the difference, I fear we will not fix the right things.

And many will be lost because of it.  None of this needs to be so.

Shame on American democracy for allowing this to happen!

January 15, 2014