Carriage Towne News
---- — Corporations Need to Step Up
Recently, the American people have been debating front-line economic issues such as the minimum wage, unemployment, job creation, CEO compensation, and income inequality. A then-and-now comparison sheds some light on these issues and leads to harsh conclusions.
The World Bank tracks the minimum wage in countries around the globe. Here’s a snippet from its 2013 report; Canada - $9.95, United States - $7.25, China - $1.19, Mexico and Philippines – 61 cents, India – 28 cents and Bangladesh – 9 cents.
According to CNN.com, in 1980, a CEO of a large corporation made 42 times more than the typical worker. In 2013, that CEO earned 354 times more than the average worker. According to the Bureau of Labor Statistics, the average worker’s yearly salary was $34,053 for all occupations last year. CNN Money says the average CEO compensation in large corporations is now over $12 million a year.
In 1980, with a minimum wage of $3.10 and an average wage of $6.82 for production workers, the cost of a men’s shirt was $15.00. Today, with a minimum wage of $7.25 and an average wage of $20.12 ($6.82 factored for inflation would now be $19.43) that shirt actually costs $39.74. Factored for inflation the shirts would cost $42.50, if they were made in the US, but they are not. The above narrative reveals that in 1980 the labor cost of a shirt, in wages only, was 46% of a shirt’s price, today – 50%. Now, as opposed to 1980, there are hardly any defined-benefit retirement or fully-paid health insurance plans offered by employers so the overall cost of manufacturing in the United States has actually dropped, despite inflationary pressures.
Historically, increased productivity has resulted in increased wages. From 1950 to 1980, the productivity of American workers increased 92% and hourly wages rose 87%; however, since 1980, productivity has doubled while hourly wages have risen only 40%. In the former time period the socioeconomic stratification structure of the US resembled a diamond shape with a large middle class, while in the latter, it would resemble a truncated triangle that continues to flatten.
It is obvious that the standard of living in the US is falling. The cause is massive outsourcing of jobs to foreign lands over the last several decades.
History will decide whether or not Edward Snowden is a traitor. The real traitors are the US multinational corporations that outsource jobs that strengthen autocracies like China, where the tainted products originate from. This nation saved those corporations from communism and have repaid it with desertion. They feel no compunction about aiding and abetting a potential, global adversary while selling out the native workforce that made their overwhelming success possible. They weaken their own homeland politically, economically and militarily by their unmitigated greed.
Absent their treasonous practices, the United States would have retained its position as the world’s leading producer of goods. First they moved out of the inner cities, creating ghettos. Over the last three decades, they have abandoned America and its citizens. They claim that they must go to foreign lands because the US lacks qualified employees. Their real intent is to pay the lowest common denominator relative to wages. Large corporations import workers by paying visa fees for the same reason, lack of technical expertise. That’s just another smokescreen to bring in workers who will work for less, while our own highly-qualified college graduates leave college buried in debt and have no prospects for landing a career that pays a salary equal to their abilities. They too end up in the low-paying sectors of employment, clamoring for a higher minimum wage. If we had more production jobs in this country, competition for employees, not government fiat, would drive up the minimum wage; however, that isn’t going to happen anytime soon so it is imperative that the minimum wage be raised because it is the middle class who are paying the entitlements that provide subsistence for low-paid, minimum wage employees.
If these multinationals, many of whom pay no federal taxes, feast on the (middle class) public trough via subsidies and tax credits, while off-shoring money to avoid paying taxes do not return to America, they should be charged a “participation fee” to sell their ill-gotten, cheaply-made, high-priced goods in this country. Perhaps 5% of sales would defray the cost of providing sustenance to the American workers they have displaced. Perhaps corporations would forgo some of these injurious tactics if the putative, federal tax rate was not 35% but equal to the industrial world’s average of 15%.
When did it become the federal government’s role to create jobs? That’s the civic function of industry by way of expansion to increase shareholder value. The companies that cannot succeed in this endeavor are bought out or fail. Government’s role is to set America’s course and the corporate role is to reach national goals such as rebuilding the infrastructure and transportation systems. Such programs require a coalition of business, labor, and government.
The American people are hungry for work, hungry for opportunity, upward mobility, the “American Dream” and also hungry for food and lodging. Thirty-six million of them are hungry, literally. People will follow their stomachs; we continue on this path at our own peril.