Wringing Out The Excesses
by digby
Because they’re so good at their jobs compared to everyone else:
Households across the country are still feeling the effects of the Great Recession, with unemployment falling very slowly, while foreclosures are still increasing, along with poverty rates and oil prices. However, one group of Americans is doing very well — corporate CEOs, whose pay is returning to pre-recession levels:
At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010 as the executives’ compensation started working its way back to prerecession levels, a USA TODAY analysis of data from GovernanceMetrics International found. Workers in private industry, meanwhile, saw their compensation grow just 2.1% in the 12 months ended December 2010, says the Bureau of Labor Statistics.
Median CEO pay is 9 million dollars a year.
And you have to admit that they really are good at their jobs if their job is strictly defined as a rising stock price. They’ve all done very well at that. But one can’t help but wonder on what rational basis these stocks are rising if the only people in the country with any money to spend are in the top 1%. (In fact, when stocks rise precipitously without any fundamental basis, we usually call that a bubble.)
It’s very hard to see how this is sustained if the rest of the country isn’t sharing in the wealth. On the other hand, the unemployment rate dropped again this month to a mere 8.8% (which reminds me of the Japanese earthquake — they are regularly having 6.9 aftershocks right now, which normally would be considered huge, but because they are compared to the Big One, seem like nothing.) Still 8.8 is better, although the underlying numbers are full of warnings and disappointments. Following the Reagan blueprint as they admit they are, the government and business are simply wringing the excesses out of the economy by squeezing the hell out of the middle and working classes and rewarding the wealthy. I guess that’s just how it’s done these days.
Meanwhile, as we’re all clapping louder and louder for the confidence fairy, let’s take a look at the toll this sort of thing takes on average people for just a second:
A separate report being released Friday tries to go beyond traditional measurements like the poverty line and minimum wage to show what people need to earn to achieve a basic standard of living. The study, commissioned by Wider Opportunities for Women, a nonprofit group, builds on an analysis the group and some state and local partners have been conducting since 1995 on how much income it takes to meet basic needs without relying on public subsidies. The new study aims to set thresholds for economic stability rather than mere survival, and takes into account saving for retirement and emergencies. “We wanted to recognize that there was a cumulative impact that would affect one’s lifelong economic security,” said Joan A. Kuriansky, executive director of Wider Opportunities, whose report is called “The Basic Economic Security Tables for the United States.” “And we’ve all seen how often we have emergencies that we are unprepared for,” she said, especially during the recession. Layoffs or other health crises “can definitely begin to draw us into poverty.” According to the report, a single worker needs an income of $30,012 a year — or just above $14 an hour — to cover basic expenses and save for retirement and emergencies. That is close to three times the 2010 national poverty level of $10,830 for a single person, and nearly twice the federal minimum wage of $7.25 an hour. A single worker with two young children needs an annual income of $57,756, or just over $27 an hour, to attain economic stability, and a family with two working parents and two young children needs to earn $67,920 a year, or about $16 an hour per worker. That compares with the national poverty level of $22,050 for a family of four. The most recent data from the Census Bureau found that 14.3 percent of Americans were living below the poverty line in 2009. Wider Opportunities and its consulting partners saw a need for an index that would indicate how much families need to earn if, for example, they want to save for their children’s college education or for a down payment on a home. “It’s an index that asks how can a family have a little grasp at the middle class,” said Michael Sherraden, director of the Center for Social Development at Washington University in St. Louis, who consulted on the project and helped develop projections for how much income families need to devote to savings. “If we’re interested in families being able to be stable and not have their lives disrupted and have a little protection and backup and be able to educate their children, then this is the way we have to think.”
The numbers will not come as a surprise to working families who are struggling. Tara, a medical biller who declined to give her last name, said that she earns $15 an hour, while her husband, who works in building maintenance, makes $11.50 an hour. The couple, who live in Jamaica, Queens, have three sons, aged 9, 8 and 6. “We tried to cut back on a lot of things,” she said. But the couple has been unable to make ends meet on their wages, and visit the River Fund food pantry in Richmond Hill every Saturday. With no money for savings, “I’m hoping that I will hit the lotto soon,” she said.
And it isn’t temporary. For every year that someone is unable to go to college or save for retirement or take care of their health, the cost down the road increase. “Wringing out the excess” really means keeping many people poorer for life.
That’s why I get livid to the point of violence when I hear these fat cats complaining about public employees living high on the hog on their 40k a year salaries. It’s quite clear they have absolutely no idea what it takes to live a decent life with a tiny bit of financial security in this country. Or, if they do, they think of us a peasants who don’t deserve any better.
Tara the medical biller and her family are doing everything you’re supposed to do. And they are having to go to food banks because there just isn’t enough money even though they both work full time jobs. There’s something wrong with that.
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