If the real federal minimum wage had kept up with productivity growth since the late 1960s, it would be….

If the real federal minimum wage had kept up with productivity growth since the late 1960s, it would be….

Here’s something from the Economic Policy Institute:

“Last week, Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-CA) introduced the Fair Minimum Wage Act of 2013, which would raise the federal minimum wage in three incremental increases to $10.10 per hour by 2015 and then index it to inflation. This would bring the minimum wage, after adjusting for inflation, roughly back in line with its historical high value from the late 1960s.

Yet even after this increase, the minimum wage would still be lower than it could be given the economy’s growth over the past 45 years. Had the minimum wage increased at the same rate as the average American production worker’s wages, it would be about $10.50 today. If it had been raised at the growth rate of productivity—i.e., the economy’s overall capacity to generate income per hour worked—it would be nearly $19 per hour. See our full analysis of the impact of raising the minimum wage in Raising the federal minimum wage to $10.10 would give working families, and the overall economy, a much-needed boost.”

Senator Harkin’s idea about raising the minimum wage to $10.10 per hour from the $7.50 is kind of stupid when you think about it because it’s not very much, although about 25 percent of the people earning the current minimum wage are adults with children and they would benefit from the raise.

However, the redistribution of income from the 99 to the 1 percent over the last thirty-two years is what ails the economy. It’s why the economy doesn’t create jobs at the same rate as it used to, two or three decades ago.

Currently, 1 percent take home over 30 percent of the all the income created in the United States compared to 7-8 percent thirty-two years ago. The 1 percent don’t do anything to create jobs in the USA. As I’ve shown over and over again in my book and on this blog, for the most part, the rich destroy jobs, as do tax cuts for the rich. For proof, just look at current income and wealth distribution and then at how weak the economy is. You’ll discover a correlation there.

The 99 percent have experienced the inverse of that redistribution. We take home about 68 percent of the national income compared to 92-93 percent thirty-two years ago. That means we don’t have the ability to buy stuff like we did decades ago, and the result is a weak economy since the demand for goods and services is much lower per capita. Furthermore, the 1 percent are taking more and more of the total national income. By 2015, they’ll probably steal close to 40 percent of it all since they’re stolen 88 percent of all national income growth from 2009-2011. It was probably even more in 2012, or at least as bad. This trend is the thing that is rotting the economy, corrupting our government, destroying the future of the nation, and turning the USA into a banana republic. That’s what Democrats like Wall Street Senator Ron Wyden and Wall Street Congressmen John Boehner and Earl Blumenauer have done for America.

Federal legislation has been and is being used to redistribute the nation’s income, such as free trade treaties. So federal legislation can be used to put some of the money back in the pockets of the 99 percent. You can begin by raising the federal minimum wage to $10.10 an hour in increments like Senator Harkin desires, but instead of tying it to the growth of inflation, which is massively understated by the government for the purpose of redistributing income from the 99 to the 1 percent, it would be better to tie increases to productivity growth.(See Record Corporate Profits? How’d they Do That? The Inflation Income Redistribution Scam for how inflation is deliberately understated by the US government.)

If the Economic Policy Institute (EPI) is correct, the minimum wage should be over $18 an hour if it had been linked to productivity growth. It’s inflationary impacts would have been minimal since it would have been incrementally increased over 45 years, and since the government massively understates inflation any way, and especially since it would not have been more than productivity gains.

In today’s economy, increasing the minimum wage to $10.10 and then tying it to productivity growth would generate greater demand for goods and services. Some critics might argue that small businesses would suffer under such a policy, and that might be a reasonable point-of-view, but there’s a way around that.

Initiate a two-tiered federal minimum wage. Increase the minimum for everybody to $10.10 an hour by 2015. Tie increases in the minimum wage to the national growth of productivity for any business with jobs and assets outside the nation, such as money stowed away in the Caymen Islands to avoid paying US taxes, or for any publicly traded, limited liability corporations. Those are the companies that are making record profits, and so they can share a little more with their lower level employees here in the USA without any hardship. These companies might even think twice about moving more and more jobs overseas, although most of them have moved tons of them, and whatever jobs they can ship away, they’ve already done it. Some of them have even shifted production to European nations that have higher minimum wages than the USA anyway.

This would spur the demand for goods and services and to a little tiny degree, it would slow or even reverse US economic decline, by redistributing income from the 1 back to the 99 percent.

As for the second tier, let local businesses pay $10.10 an hour by 2015 and tie the growth of the minimum wage to the understated inflation rate. Recent studies show increases in the minimum wage on state levels have raised the demand for goods and services and created jobs in the process. This minimum wage might have some minor inflationary impact, but if it does, the government will understate it anyway.

If wage increases keep up with productivity growth, economic theory tells us that there should be no inflation. Any increase in the minimum wage tied to the understated inflation rate will almost assuredly be less than the growth in productivity, and therefore such a yearly rate increase can not be inflationary.

Think about what the US might be like nowadays if increases based on productivity growth had happened over the last forty-five years. This would have offset a little of the income redistribution that has taken place over the last thirty-two years, and which is destroying the US economy and the middle class. The demand for goods and services would have been greater than it is today, meaning the economy would be stronger. The rich would not be so rich. Instead of stealing 32 percent of the nation’s income, it would probably only be about 27-29 percent. So they would’ve had less money to purchase the political favors of politicians from both major parties.

Since our economy can afford to let a tiny percentage of parasitic rich people suck away 32 percent of the nation’s total income, essentially allowing a “kept unproductive, but parasitic welfare class” to get something for nothing, the economy should be able to divert a tiny bit of their ill gotten money toward a higher minimum wage tied to productivity gains. That’s what shared prosperity is all about. Isn’t that what an economy with a representative government is supposed to be for? To represent all the people and not just those who can most afford to purchase politicians like they would well trained sheep dogs, such as Wyden and Boehner?

Besides, if the economy can afford to let rich people steal hundreds of billions of dollars per year from the 99 percent via federal legislation, and can give them trillions of dollars a year whenever the market threatens to depress their earnings and the values of their assets, such as stocks and bonds (which means the 1 percent are shielded from market forces except when it is to their advantage), and since it is obvious that letting them steal so much money only weakens the economy, then lifting working people out of their poverty with an increase in the minimum wage tied to productivity gains can only strengthen the economy. It would also help to slow or maybe even reverse the slide of the United States to banana republic status, which it is hurtling toward in less than fifteen years.

In other words, it’s time to raise the minimum wage and tie a great deal of it to productivity gains. We can afford a two-tiered system. We cannot afford to let it not happen.

The Economy Can Support a Higher Minimum Wage than $10.10 an Hour

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Historical Data: Earnings of the top 1.0 percent rebound strongly in the recovery

The graph below shows how income distribution has changed quite a bit since 1979. Notice that the most massive income redistribution from the 99 to the 1 percent occurred after President Bill “Wall Street” Clinton signed NAFTA into law. Clinton wasn’t dumb. He knew the treaty was an income redistribution scam.

Right now negotiators from 11 nations, along with 600 corporate lobbyists, are negotiating the Trans Pacific Partnership in secrecy. This is the largest free trade pact of all time. The implications are massive; the utter destruction of the American middle class, since the 1 percent will have more power via the treaty to suck the middle class dryer. That is Obama’s agenda. But we’re really talking about the top 0.1 percent, the high millionaires and the billionaires that have destroyed democracy in the United States and replaced it with a plutocracy.

Think about this. After Obama signs the still being negotiated Trans Pacific Partnership into law, the line in the graph that shows how much of the national income the 1 percent receive will shoot up way higher, while the 90 percent go down, down, down. And the 91-99 percent will follow. It’s beginning to look like banana republic time for the US middle class. It doesn’t need to be that way. Fight back. Labor unions are. Don’t let corporate drones like Wall Street Congressman Earl Blumenauer vote for the treaty.

By the way, some ridiculous discussion over the last year or so is that the growth of income inequality in favor of “the 1 percent had been reversed in the recent downturn and, therefore, policymakers need not focus on the overall increase in income inequality since the late 1970s.” A new report from the Economic Policy Institute (EPI) shows that income of the top 1 percent have rebounded strongly since 2010. However, I show in The Rigged Game that this argument is stupid because it has never been the case. It’s true that the wealth of the 1 percent declines during recessions, and with it the income that derives from those assets, but the decline reflects temporary dips in the values of corporate stocks and bonds and other assets due to recessions. These dips are always temporary, if they occur. By the way, income is money coming in, wealth are assets such as stocks, bonds, gold, house, cars, etc…..

Regardless, below are some of EPI’s findings for the current downturn.

1. Those at the top are seeing their wages rebound quite strongly in the recovery. Following a 15.6 percent decline from 2007 to 2009, real annual wages of the top 1.0 percent of earners grew 8.2 percent from 2009 to 2011.

2. The real annual wages of the bottom 90 percent have continued to decline in the recovery, eroding by 1.2 percent between 2009 and 2011.

3. Wage inequality grew substantially over 1979–2007, lessened in the 2007–2009 downturn, and began expanding again in the 2009–2011 recovery. Trends over the next few years will determine whether wage inequality returns to or exceeds the heights reached in 2007 or 2000—or simply remains far higher than at any time in the 1980s and 1990s.

4. Given the strong stock market recovery and wage growth at the top, the top 1.0 percent’s overall incomes (which include wages, capital gains, and other returns on financial assets) probably grew strongly in 2011, thereby increasing income inequality.

In other words, Obama’s policies have not reversed the redistribution of income from the 99 to the 1 percent. In fact, Obama’s policies continue to accelerate the redistribution process. That’s why the 90 percent have seen wages drop 1.2 percent from 2009-2011. That money has been redistributed to the 1 percent, more or less, by such simple methods as shifting more jobs overseas, reducing employee compensation, and privatizing more government jobs. The difference between the old wages and the new, lower, wages is redistributed to the 1 percent via higher corporate earnings, dividends and share prices.

Click the link below for the complete study.

The Report From the Economic Policy Institute

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Jackie Chan Was Right-The US Government is Corrupt and Rotten to the Core: Represent.Us: The Campaign to pass the American Anti-Corruption Act

Jackie Chan was recently quoted as saying, “What I can see is our country (China) is continuously making progress and learning. If you talk about corruption, the entire world, America, has no corruption?”

When the show’s host asked Chan about his statement, Chan said, “Where does the Great [Depression] come from? It’s precisely from the world, the United States, that it started.”

That’s a remarkably true statement and much of the US corporate media has railed against it in an attempt to brainwash the American people.

Wall Street bought off 99 percent of the Republican Party and 80 percent of the Democratic Party three decades ago. Wall Street has senators like Ron Wyden doing its bidding in its never ending war against the middle class, always pushing legislation that redistributes income from the 99 to the 1 percent, such as free trade treaties and Wyden’s plan to privatize Medicare. John Boehner and Earl Blumenauer are also Wall Street toadies.

The Great Recession occurred because Wall Street had purchased sufficient government officials to ensure the government wouldn’t interfere with Wall Street’s crimes. That corruption is also why not a single Wall Street official has been prosecuted for their crimes. Chan knows what he is talking about.

There’s corruption in China and all over the world, but the US government has been rotten to the core by cash for three decades. That’s precisely why there a push to pass the American Anti-Corruption Act. Check out the video below.

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The Betrayal of the American Middle Class Was Not An Accident

As I pointed out in The Rigged Game, the massive redistribution of income and wealth from the 99 to the 1 percent was not an accident. It was planned by our ruling elite and brought to fruition by their corrupt drones in political office, such as Wall Street Senator Ron Wyden and Wall Street Congressman Earl Blumenauer.

Click the link below for more on the story.

The Betrayal of American Middle Class Was Not An Accident–Truthout.org

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Eight Key Charts About the Growing Income Inequality in the United States

Number one is real simple. I predicted it in my book, The Rigged Game: Corporate America and a People Betrayed, that income inequality is growing in the United States. President Obama, Wall Street Senator Ron Wyden, the Democratic party leadership, Mitt Romney and the Republican party leadership, know this. They all have the same plan regardless of who wins the upcoming presidential election. They plan to make sure income inequality continues to grow by redistributing income and wealth from the 99 to the 1 percent.

Currently, the 1 percent receive about 30 percent of all income in the US, up from about 7-8 percent in 1980. That means the 99 percent have less money to purchase stuff with, which is why the economy is mired in this Great Recession, jobs are scarce, and the economy is tilting on the edge of an economic abyss that will make our current situation look like the good old days.

There is one key difference between the two; Republicans want to redistribute income to the 1 percent faster than the Democrats. Big Deal. The end result is the same; the economic disenfranchisement of the 99 percent. It will soon be banana republic time in the United States. Political disenfranchisement has already occurred.

The rich have created a much larger income gap because they have stolen the money from the 99 percent via US legislation, such as free trade treaties, deregulation and privatization scams. All of these redistribute income from the 99 to the 1 percent.

Liberal Wall Street Senator Ron Wyden, a nasty son-of-a-Wall Street-Bitch, is a driving force behind these scams. Free trade treaties open the door for US businesses to ship (or create) jobs overseas. The difference between the lost higher wage US jobs and the new lower overseas jobs goes into the pockets of the rich via higher corporate profits, surging dividends and rising share prices. The senator of Wall Street knows this but continues to vote for Wall Street and hedge funds over the interests of the 99 percent. Worse yet, the jobs shipped away or created overseas were once the tax base that supported government services, such as schools, roads, bridges, fire fighters and polices.

“The middle class is shrinking. According to Prof. Alan Krueger, Chairman of President Obama’s Council of Economic Advisers, ‘the shift in income inequality over the last three decades is the equivalent of moving $1.1 trillion of income from the 99 percent to the top 1 percent every single year.’” There’s a reason for this. That’s because $1.1 trillion of income has been redistributed every year on average from the 99 to the 1 percent via free trade treaties, deregulation and privatization scams.

The middle class is still shrinking under Obama. He knows this and continues to sign legislation to do exactly this. Last autumn he signed free trade treaties with Panama, South Korea and Colombia. The result, according to numerous estimates, will be a net loss of nearly a million jobs. So the difference between the old higher wages and the new lower wages goes into the pockets of the wealthy. Now Obama has his people negotiating the Trans Pacific Free Trade Agreement (TPP), which the Guardian newspaper of the UK calls “Nafta on steroids.” The TPP will accelerate the decline of the middle class by redistributing more income and political power from the 99 to the 1 percent. Obama knows this, but continues the policy anyway.

So what? Profits are up? Where are the jobs? Obviously, trickle down didn’t work. Worldwide, US corporations are sitting on over $5 trillion. But they can’t invest it because demand is so slack due to the massive redistribution of income from the 99 to the 1 percent.

Wall Street Mitt the Twit Romney claims tax cuts for the rich will stimulate the economy, but 30 years of failed trickle down economics is ultimately the primary reason the current economy sucks big time, like total New Great Depression. The Twit’s trickle down economic policies will only make things worse for the 99 percent. That’s because the 1 percent will have more income with the cuts with which to purchase more legislation from Mitt Romney (if elected), Obama (if re-elected), Ron Wyden, John Boehner, Rand Paul, Earl Blumenauer and lots of others in congress and the senate. So does Obama and Wyden. Too bad for the 99 percent. Apparently, Mitt the Twit thinks the US economy should be used to redistribute income from the 99 to the 1 percent. Make the rich richer at the expense of the rest of us? I don’t think that’s what an economy is for.

Bank profits are enormous because the Federal Reserve continues to help these folks out. Fed Chairman Ben Bernanke last week announced a plan to stimulate the economy. It was a lie. The fed has decided to purchase $40 billion of worthless mortgage backed bonds from wealthy investors and institutions such as investment banks like Goldman Sachs and Morgan Stanley. The Fed will purchase the worthless or nearly worthless bonds on a face value basis. If the investors or banks paid $10 million for the bonds, which are now valueless, the Fed will still pay the stupid bank or investor $10 million for the worthless bonds. The Fed has been very helpful with increasing the profits of banks for several years now using such scams.

CEO pay has risen because the government and the Federal Reserve continue to bail out the rich and help to increase corporate profits by enacting income redistribution legislation, like the South Korea free trade treaty. See the chart above.

There is a reason 1 in 5 US workers earn so little. Wall Street Senator Ron Wyden and others continue to redistribute income from the 99 to the 1 percent via free trade treaties that ship or create jobs overseas. This puts downward pressure on wages in the US, which redistributes income from the 99 to the 1 percent. The same process occurs when too many immigrants come to the US, creating a surplus of labor, which also puts downward pressure on wages. Republicans love this, but so do Wall Street democrats, like Ron Wyden.

Related story

Breakdown of the $26 trillion the Federal Reserve Handed Out to Save Stupid, but Rich, Investors and Banks

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Are We In the USA Better Off Than Four Years Ago?

Everybody with half a brain knows we in the US are better off than four years ago. The US was on the verge of an economic collapse four years ago, thanks to Republican policies. The policies of President Obama and the Federal Reserve saved the day. Under the Republican plan, which Wall Street Mitt the Twit Romney and his running mate Paul “Complete Idiot” Ryan plan to resurrect, the US economy was on the verge of a complete collapse, like during the Great Depression.

On the other hand, the US remains on the verge of collapse and Obama and Federal Reserve Chairman Ben Bernanke have no intention of doing anything about it. And it’s worse than I make it out to be. With over 93 percent of all US income growth going to the 1 percent, it’s only a matter of time before the economy continues to collapse.

Only the federal deficit, the Great Society programs like food stamps, and the New Deal (Social Security, unemployment insurance, etc…) have kept demand at a high enough level to stop the coming Great Collapse.

Click the link below for why the Democrats should celebrate Obama’s successes, but not his failure.

Is the USA Better Off Now Than Four Years Ago? The Guardian UK

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Key Facts About the US Economic Policies of the Last Thirty-Two Years

The Great Recession of 2007 had its origins with the Reagan tax cuts. You’ll notice from the graphs and charts below that income redistribution has been going on since then, and this has been brought about by legislative acts of the federal government. It’s been a rigged income redistribution game against the middle class ever since Reagan. Wall Street Senator Ron Wyden has been a consistent voted for these thinly disguised redistribution legislation, like free trade treaties and deregulation. The same is true for Wall Street Congressman Earl Blumenauer.

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Mitt the Twit and VP Pick Paul Ryan; The Koch Brothers Candidates

Wall Street Mitt the Twit Romney and his Vice Presidential pick Paul Ryan are hawking the same failed trickle down policies that brought on our Great Recession, as well as the Great Depression 83 years ago. These bozos want to cut taxes for the rich, which destroy the economy by redistributing income from working people to the 1 percent. Click here for how tax cuts for the rich are destroying the American middle class.

The Koch brothers Twin Bozos intend to reduce social programs for the 99 percent. In other words, the Koch brothers bozo twins want to use the federal government to redistribute income from the 99 percent (reduced programs) to pay for the 1 percent (tax cuts). That’s a recipe for an even greater disaster than we have now. Click video below.

One other point needs to be made. Liberal Democratic Senator Ron Wyden of Wall Street supports many of Ryan’s positions, as do a whole bunch of congressional corporate Democrats. Wyden’s been waging war against the middle class for years as a thinly disguised liberal when he’s really a hardened class warrior/Fetchboy of the 1 percent of Wall Street.

Related stories

Labors share of US income at lowest level in 60 years

Wall Street Senator Ron Wyden and Congressman Earl Blumenauer continue to wage war against the middle class

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Here’s the Reason the Economy is Weak

The St. Louis branch of the US Federal Reserve Bank reported this morning that labor’s share of total US income is at its lowest level since records have been kept. That’s sixty years of records. That means the demand for goods and services is only as strong as labors income and ability to generate credit. In other words, demand is weak, which is why jobs growth is weak. Getting credit to purchase food and pay energy bills is not in anybody’s interest. The economy is weak and isn’t creating jobs because labor continues to experience defeat to the 1 percent in the legislative markets, where the income of 99 percent is redistributed to the 1 percent.

The worst part is that Barack Obama, president of Wall Street, continues to lead the legislative charge of the 1 percent as they roll over the limited number of champions of the 99 percent in the senate and Wall Street’s US House of Representatives. Wall Street has such liberals as Senator Ron Wyden and Congressman Earl Blumenauer on their ideological and perhaps financial payroll, at least in some way. Why else would Wall Street’s Fetch Boy Ron Wyden and Wall Street’s Fetch Boy Earl lead the charge against the middle class on behalf of the 1 percent? No doubt both will vote for the Trans Pacific Income Redistribution Trade Treaty, which will redistribute income and democracy from the 99 to the 1 percent. Both Fetch Boy Wyden and Fetch Boy Earl know this.

Click below for more on this issue.

Labor's Share of National Income at Lowest Level in Sixty Years

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Is the US Economic Recovery a Mirage?

In Europe, there is a rising view that the US economic recovery, from the most recent recession that was exacerbated by the disastrous housing bubble, income redistributing Clinton and Bush free trade treaties and the Bush tax cuts, is a mirage. That may well be true. And it may not be true. From my point of view, however, the US economy is in a slow motion collapse.

The only thing slowing the arrival of a new Great Depression is FDR’s New Deal programs, like Social Security, Unemployment Insurance and the Minimum Wage, and LBJ’s Great Society Programs, like the food stamp program. Those legislative feats are keeping the demand for goods and services higher than would be normal without the programs. They’ve also lifted GNP.

The US economy is already dangerously teetering on the cliff of another Great Depression. It’s not like Democratic and Republican Party politicians care, because they don’t. Their job is to use legislation to redistribute income from the 99 to the 1 percent. That’s what the 1 percent pay their good lap dogs for, plutocrats like Senator Ron Wyden and Congressman Earl Blumenauer, for example.

Unfortunately, that legislative redistribution of income and wealth continues. President Obama, for example, is pushing for the Trans Pacific Free Trade Treaty, which the Nation magazine calls “Nafta on steroids.”

For more on how some Europeans view the US economy as a “mirage,” click the link below.

The Guardian–UK "US Economic Recovery is a Dangerous Mirage

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