Marx Got It Backward: Wages Fall, Workers Turn Right

R W JohnsonThe failure of the American Dream, as we are told repeatedly, has produced a populist revolt of volcanic proportions. At the heart of the problem is the stagnation of real wages and the lack of upward social mobility as higher education costs escalate out of sight. The data is persuasive. Between 1948 and 1973, productivity rose by 96.7 percent and real wages by 91.3 percent, almost exactly in step. Those were the days of plentiful hard-hat jobs in steel and the auto industry when workers could afford to send their children to college and see them rise into the middle class. But from 1973 to 2015 — the era of globalization, when many of those jobs vanished abroad — productivity rose 73.4 percent while wages rose by only 11.1 percent. Trump argued that this was caused by unrestricted illegal immigration and the off-shoring of jobs, though these were only partial causes: the erosion of trade unions probably accounts for 25 to 30 percent of the net loss in earning power. The 11 million unauthorized immigrants in the US form only part of the vast mass of non-unionized labor competing for jobs.

In any mass democracy, this would spell trouble, but it was masked for some time by more women going out to work, creating two-income households, and later by many workers taking two or three jobs. Sooner or later the stress of such a downward spiral had to be felt and the results are more and more visible. Drive across America and you will notice who operates the pumps at the gas stations. Over and over again it is white men and women in their seventies, pensioners eking out a few more dollars. What does it mean for someone on social security to walk past shops with watches or shoes or dresses marked in the thousands of dollars? Each price ticket says: “You’re just nothing, you’re a loser.”

There is no sign of any halt in the trend towards greater inequality (and a Trump victory, bringing tax cuts for the rich, will only increase it). Since 2000 the wages paid to college graduates have fallen. For men wages have risen slightly but for women they have plunged, producing an overall fall. The situation at the bottom is more serious still: the worst paid 10 percent saw the biggest drop in wages between 1979 and 2013. At the same time, employers have slashed health benefits. In 2011, only 50 percent of high school graduates — the peculiar America-speak for those who didn’t have a higher education or enter the middle class — got them (down from 67 percent in 2000) and only 76 percent of college graduates, down from 84 percent.

Another telling figure. On average in 1965 an American CEO earned 20 times what a worker did. By 2013, on average, the number was 296 times. Marx foresaw ever greater concentrations of capital accompanied by the pauperization of the working class. But the result has been the opposite of what Marx predicted: the rise of right-wing demagoguery.

–R W Johnson
Trump: Some Numbers