People are slowly but surely recognizing that there is no economic light at the end of the tunnel. In fact, it appears that we may be looking into a cave not a tunnel.
The U.S. economy has undergone a major transformation. Globalization, financialization, privatization, deregulation, and liberalization, to mention just a few of the developments that define this transformation, have created an economic system that rewards only a very few people.
The chart below shows these are good times for those at the top–economic profits are up and the stock market is soaring over this expansion period. But what about for the great majority? Growth is slow and even more importantly median household (HH) income has actually fallen by 3 percent.
The following two charts highlight some of the pressures facing working people. The first shows that the average earner, the one at the 50th percentile, has suffered a 2.7 percent real decline in hourly wages since 2007. The decline has actually been much greater since 2009, when the recession allegedly ended and the good times began. Even those at the 95 percentile have suffered real hourly declines since 2009.
The second shows that family income has fallen for almost all income groups over the period 2007 to 2012. We can get some idea of the transition period by comparing income trends in the three periods shown. Suppressing wages is one way to boost profits and stock prices in a period of slow growth.
As I said above, people are beginning to recognize that current trends are no aberration. A recent Rutgers University poll asked Americans how they viewed the Great Recession and its aftermath. The figure below present the results.
Here is what the Rugers researchers had to say:
The survey finds 71 percent saying the recession left us with “a permanent change in what are normal economic conditions in the country.” Moreover, the belief that the economic downturn created irreversible shifts in the economy grew from 49 perent in November 2009 to 56 percent in September 2010, and to 60 percent in Janary 2013. Now, 71 percent of Americans think the economy has changed permanently, which represents a broad consensus.
At least some people are drawing the appropriate conclusion—they are taking direct action to improve their working and living conditions. As the Guardian reports:
America’s fast food workers are planning their biggest strike to date this Thursday (September 4th), with a nationwide walkout in protest at low wages and poor healthcare.
The strike is the latest in a series of increasingly heated confrontations between fast food firms and their workers. Pressure is also mounting on McDonald’s, the largest fast food company, over its relations with its workers and franchisees. . . .
Workers from McDonald’s, Burger King, Pizza Hut and other large chains will strike on Thursday and are planning protests outside stores nationwide, in states including California, Missouri, Wisconsin and New York.
The day of disruption is being coordinated by local coalitions and Fast Food Forward and Fight for 15, union-backed pressure groups which have called for the raising of the minimum wage to $15 an hour for the nation’s four million fast-food workers.
Thursday’s strike will be the seventh since fast food workers in New York walked out on their jobs in November 2012. Each walkout has been bigger than the last and have been credited with spurring President Barack Obama to focus on an increase in the minimum wage.