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As the chasm between wages widen, most Americans become poorer and poorer



By Dian Vujovich

If you heard a big “Well, duh!” from seemingly out of nowhere the other day that was from me. After reading this headline in the Washington Post earlier this month, “With executive pay, rich pull away from rest of America”, I couldn’t help but react.

Here’s the reality: The inequality in wages between execs at our nation’s top companies and that of the average worker has put the US right in line with the wage discrepancies of, get this, developing nations. Meaning, that wage discrepancy leaves us behind Cameroon and Ivory Coast and a bit ahead of Uganda and Jamaica, according to that source.

Hard to believe, isn’t it? So if you’re worried that our nation’s accumulated debts are what’s going to bring America to its knees, think again. It’s more likely to be the huge gap in wages and salaries between our worker bees and management and executives.

When the vast majority of working American’s don’t have enough money to pay their monthly rent, power, gas or grocery bills, they also don’t have money for taxes. Or, pay for the stuff they’ve come so accustomed to consume like computers or electronic gadgets, new or used cars and insurance of any kind. Forget trying to build a savings and or retirement account.

No money means no money and no one knows that better than a family in which one or both of its breadwinners have either been unemployed or underemployed for an extended period of time. To this fact, Washington does not have a clue. Neither, apparently, do many in Congress or those with presidential aspirations.

It is, after all, the middle class that keeps our country humming and consuming. It is also the middle- and lower- classes that believe hard work still pays off. Today, the majority of hard-working, sincere, work-focused individuals are swimming up stream.

Capitalism is a wonderful thing but it appears as though too many many have forgotten its ugly underbelly. On the one hand capitalism provides everyone with an opportunity to make all the money they possibly can, while on the other, forgets to mention that there is nothing fair about this money game.

From the Washington Post story: “Inequality, economists have noted, is an essential part of capitalism. At least in theory, “the invisible hand,” or market system, sets compensation levels to lead workers into pursuits that are the most productive to society. This produces inequality but leads to a more efficient economy.”

Seems that “efficient economy” part isn’t exactly working now either. Ask me and I’d say that’s due in huge part to the now-proven-to-be-bunk economic “tickle down” theory of President Ronald Reagan. The only trickling that happened as a result of it was a trickle up of riches and wealth to the already wealthiest of Americans.

Ever since 1987, the majority of American’s (over 60 percent) polled by various surveys from the National Opinion Research Center either agreed or strongly agreed with the statement “differences in income in America are too large.”

As for the numbers, in 1970 the average executive pay was 28 times the average workers income at our country’s top companies. By 2005, it had jumped to 158 times, according to research from the University of California at Berkley. Today I’d bet its even greater.

“American society proclaims the worth of every human being,” economist Arthur M. Okun, former chairman of the Council of Economic Advisers, wrote in his 1975 book on the subject, “Equality and Efficiency.” But the economy awards “prizes that allow the big winners to feed their pets better than the losers can feed their children.”

For America to return to its top-ranking world position on any number of fronts -including reducing the current chasm of wages and salaries between those at the top and those in the middle and at the bottom— things have to change.

A good place to start would be with a change in the balance of wealth regarding wages. A balance that would allow working-class Americans enough income to earn a living wage as well as enough to prepare and plan for the long term. You know, like working folk who grew up in the 1950’s, ’60s and early ’70s were afforded.


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