The Rich Man's Dancing While the Poor Man Pays the Band
Today's Christian Science Monitor nails why-- despite all the talk about "economic recovery" -- most Americans still feel like they're struggling:
A boom in corporate profits has not yet created a job market that makes workers feel secure, economists say. Hiring hasn't skyrocketed. Worse, wages are stagnant.In other words, our already over-paid corporate class is pocketing the rewards of their employee's hard work -- and leaving working families to fight over the crumbs.
"Surveys show that even though the economy is growing reasonably strongly, a lot of households don't feel that," says Nariman Behravesh, chief economist at Global Insight in Lexington, Mass.
He points to two key reasons. First, since the last recession ended in November 2001, job growth has been weak until last year, when the Labor Department's employer survey showed a gain of 2.2 million jobs. Second, wage growth has been lackluster, despite strong gains in worker productivity.
Normally, as employees are able to produce more in each hour of work, the result is greater cash flow that can be divvied up between workers and owners or investors. In the long run, rising productivity means rising wages and living standards.
But in the short run, "most of the gains in the economy have gone into profits rather than wages," says Mr. Behravesh.
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