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The Economy Is Booming -- Just Not For You

The rich have too much money and too much power, and democracy is unresponsive to the rest of us.
The Economy Is Booming -- Just Not For You

Axios reports on some frank talk by our corporate overlords about how screwed the rest of us are:

... executives of big U.S. companies suggest that the days of most people getting a pay raise are over, and that they also plan to reduce their work forces further.

... This was rare, candid and bracing talk from executives atop corporate America, made at a conference Thursday at the Dallas Fed. The message is that Americans should stop waiting for across-the-board pay hikes coinciding with higher corporate profit; to cash in, workers will need to shift to higher-skilled jobs that command more income.

Troy Taylor, CEO of the Coke franchise for Florida, said he is currently adding employees with the idea of later reducing the staff over time "as we invest in automation." ...

The moderator asked the panel whether there would be broad-based wage gains again. "It's just not going to happen," Taylor said. The gains would go mostly to technically-skilled employees, he said. As for a general raise? "Absolutely not in my business," he said.

John Stephens, chief financial officer at AT&T, said 20% of the company's employees are call-center workers. He said he doesn't need that many. In addition, he added, "I don't need that many guys to install coaxial cables."

So much for Paul Ryan's claim that, as a result of "corporate tax reform" in the 2017 tax bill, "on average, American families will see a wage increase of at least $4,000 annually" -- although...

This comes as The New York Times reports on the massive wage gaps between CEOs and their average workers:

A Walmart employee earning the company’s median salary of $19,177 would have to work for more than a thousand years to earn the $22.2 million that Doug McMillon, the company’s chief executive, was awarded in 2017.

At Live Nation Entertainment, the concert and ticketing company, an employee earning the median pay of $24,406 would need to work for 2,893 years to earn the $70.6 million that its chief executive, Michael Rapino, made last year.

And at Time Warner, where the median compensation is a relatively handsome $75,217, an employee earning that much would still need to work for 651 years to earn the $49 million that Jeffrey Bewkes, the chief executive, earned in just 12 months....

“It’s grotesque how unequal this has become,” said Louis Hyman, a business historian at Cornell University. “For C.E.O.s, it’s like they are winning the lottery year after year. For a lot of Americans, they don’t have any savings. When they lose their job, they lose everything.”

In many cases, the gap is effectively worse, because companies outsource their labor to countries where the pay is low and the workers aren't actually employees, so they don't show up on payrolls.

I suppose the CEO-worker gaps will narrow when the replacement of lower-wage workers with robots really kicks into high gear -- mid-level employees may keep their jobs while other workers lose theirs, so the pay gap will narrow. (But unemployment will skyrocket.)

As this goes on, some commentators blame the surviving white-collar workers, as is done in a recent Atlantic cover story titled "The 9.9 Percent Is the New American Aristocracy." Sorry -- I blame the rich.Upper-middle-class people may have a disproportionate share of what's left after the really rich take what they want, but the upper middle class doesn't shape the economy. The superrich shape it. They're the ones who lobby for the laws and policies that decide how the world works.

I hope politics can mitigate this, but I fear it may be too late for a political solution -- the rich have too much money and too much power, and democracy is unresponsive to the rest of us. The non-rich are urged to fight among ourselves -- white vs. non-white, native-born vs. immigrant, union vs. non-union, Fox viewer vs. "cultural elitist" -- when we should recognize a common enemy and act accordingly. At this point I can't see a significant reordering of the way things are without violent social unrest, and I see no sign that that will happen anytime soon. For now, massive inequality is here to stay.

Originally published at No More Mr. Nice Blog

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