Friday, June 8, 2012

Keeping A Roof Over Your Head At Minimum Wage

The above chart is based on a report by the National Low Income Housing Coalition, which report can be downloaded from their web site. Note that is says, "In no state can a minimum wage worker afford a two-bedroom unit at Fair Market Rent working a standard 40 hour week."

Meanwhile, Business Week happily reports that average household wealth, or net worth, increased 4.7 percent last quarter.

How so?

"Most of the gain came from a 12 percent jump in the Standard & Poor's 500 index in the January-March quarter," Business Week says. In other words, the rich are getting richer. The trend in which record profits go to the rich, while wages and living standards for the 99 percent are in decline, continues.

I have been reporting that the gap between the 1 percent and the rest of us is back where it was in the 1920s, during the so-called "Gilded Age." That was when, as now, a few at the top controlled the economy and government. That was before unions gained a foothold in the United States, a foothold they have lost thanks to thirty years of Reaganomics.

I've also reported that Reaganomics, or supply side economics, has been adopted by Democrats as well as Republicans, and by the European and Asian economies, and by the International Monetary Fund and the World Bank. If you doubt that, read what's going on in places like Greece or Spain, or anyplace else, where any money the IMF or World Bank loans a country is now conditioned on its government adopting harsh "austerity" measures -- cuts to social programs, wages and pensions -- and tax cuts for the rich, and then see this attack yesterday by World Bank chief Robert Zellnick on Venezuelan President Hugo Chavez.

Chavez' crime, and the reason he is vilified, is that he has brought health care, housing and education to millions of poor Venezuelans, and uses Venezuela's oil wealth to assist other countries, like Cuba, Bolivia, and many others, that are trying to do the same. Since first being elected in 1998, Chavez has been repeatedly re-elected by wide margins in elections that all independent observers including the Carter Center have called free and fair, but Zellnick, like the mainstream media and the US government, paints him as a dictator.

Chavez' crime, and why he can never be forgiven by Capitalism and its news outlets, is that he has led efforts by Socialists in Venezuela to transform that country's historically oligarchic economy into one that is more fair and where those whose labor creates wealth get more of it.

Meanwhile, the ongoing transformation in the opposite direction, in Europe and Asia and in the US, under Democrats and Republicans alike, continues. If you vote for somebody who hasn't explicitly pointed all this out, who hasn't been alerting people and mobilizing them to fight against it, who hasn't been doing something concrete to stop it, you're helping the process along yourself. You're hastening the return to a time in American history you probably don't even know about. You're ensuring that more Americans fall into the category of those whose plight is highlighted by the chart above. You're helping realize the original goal of Reaganomics, which was to see we all end up where a worker was in the 1920s, who often worked so many hours he had to sleep next to his machine at the factory and still didn't make enough to feed his family, and forget about providing them with a decent place to live.



  1. Hi Frank. Good post but I have to add my two cents here. President Chavez has brought a large number of his citizens out of poverty, I believe I read once that it was in the tens of millions. All of this is admirable except that it was done at the cost of the entire future Venezuelan economy - short term gain with the horizon in tatters. The cost of his social programs exceed the considerable oil wealth of the country. Most of the current social initiatives are funded by debt which has pushed the nation's inflation rate above 20% on an annual basis. Runaway inflation destroys personal savings and destroys private enterprise. In the time it takes businesses to receive ordered goods and sell them to customers their profit margins have vanished. Demand for these goods will also fall as prices rise. Unless oil prices rocket to $200 /barrel the economy will collapse in the next ten years and a greater number of Venezuelans will be in poverty than before.

  2. I should add that this is not to imply that western alternatives are anything to crow about. There are obviously massive imbalances in wealth, income, and access to education. But they also don't have all their economic eggs in one basket (oil), or are increasingly isolated from global financial activity (Venezuela's largest ally Iran is on the ropes).

    1. Thanks for your comments, Kev. I'd say this, that we in the Capitalist world, when there is inflation in a Socialist economy, we tend to blame Socialism, or its leaders (I'm guilty of this, too. I was born here.) We don't do the same when there's inflation in a Capitalist economy. We look for what is causing it.

      Inflation is actually low in Venezuela, historically. If you go here:

      and adjust the date selection tabs, you see that it's pretty low compared to what it has been. You can go back to 1973 in this chart. Chavez took office in 98, and there was one spike after that. Also if you here:

      there are some articles that provide some context from a more favorable viewpoint.