The race to the bottom. But this time the supporters of the ideology that is leading the race to the bottom are not hiding behind slogans such as "small government", "government is the problem" or "trickle down economics". No, no, they are coming right out in the open. For example this New York Times article: here.
The authors of this article don't waste any time. Check out the first paragraph:
American workers are overpaid, relative to equally productive employees elsewhere doing the same work. If the global economy is to get into balance, that gap must close.
But it gets better:
The big trade deficit is another sign of excessive pay for Americans. One explanation for the attractive prices of imported goods is that American workers are paid too much relative to their foreign peers.
Get that - it's American workers fault for our huge trade deficit. These yahoos (that's putting kindly) continue:
Global wage convergence is great for the poor but tough on the overpaid. It’s possible to run the numbers to show that American manufacturing workers should take average real wage cuts of as much as 20 percent to get into global balance.
(emphasis added - of course)
Amazing. A 20% cut - wow. The authors are focusing on average real wage. So, let's look at average hourly REAL wage (meaning this wage accounts for inflation) and use the most recent hourly REAL wage (seasonally adjusted) for production and non supervisory workers. Average hourly REAL wage: $8.59 - or $284.48 weekly.
So, according to the authors of this article - U.S. workers should lower their hourly REAL wages to $6.87 or about $220 per week. Wow.
I know its difficult to think in terms of real wages. So, let's take a look at nominal (or actual) wages. The average hourly wage (seasonally adjusted) for production and non supervisory workers is $18.59 or $615.33 weekly or $31,997 annually.
It's best to put this $31,997 in perspective particularly in the form of family budgets from across the U.S. The article: Basic family budgets: Working families’ incomes often fail to meet living expenses around the US does a great job but keep in mind this is from 2005:
Amazing. Working class families are struggling now living on $31,997, and people who adhere to this ideology that is destroying working class families, want us to take a pay cut so that 'global balances' can be restored. This is no joke.
The theory or ideology that began under Reagan has been to put constant downward pressure on wages whether through the systematic weakening of unions or providing trade and tax policies that encourage multi-national corporations to ship U.S. jobs to developing countries. These ideologues thought that if they could flood the U.S. with cheap imports everything would be fine. They were terribly wrong - rise in cost of living is growing faster than the rise in wages. So, as a result of stagnate wage growth and struggling to maintain a certain standard of living we've incurred large amounts of debt. And that is where we are today. Stagnate wages, a huge amount of household debt and very little to show for it - particularly in terms of savings.
And these yahoos what us to take a pay cut. Actually what they want is that we lower our standard of living to the level of developing countries - but not everyone - just working class families. Amazing.