How the Bottom Fell Out in America

[Tom Joad]

This article is outstanding IMO.

It really hits home to me.

I was born in 1947 and got out of the Air Force in 1974 and this describes exactly how I have seen history unfold in my lifetime.

Age of Crushing Anxiety: How the Bottom Fell Out in America | Alternet


The following article first appeared in the American Prospect.

The steady stream of Watergate revelations, President Richard Nixon’s twists and turns to fend off disclosures, the impeachment hearings, and finally an unprecedented resignation—all these riveted the nation’s attention in 1974. Hardly anyone paid attention to a story that seemed no more than a statistical oddity: That year, for the first time since the end of World War II, Americans’ wages declined.

Since 1947, Americans at all points on the economic spectrum had become a little better off with each passing year. The economy’s rising tide, as President John F. Kennedy had famously said, was lifting all boats. Productivity had risen by 97 percent in the preceding quarter-century, and median wages had risen by 95 percent. As economist John Kenneth Galbraith noted in The Affluent Society, this newly middle-class nation had become more egalitarian. The poorest fifth had seen their incomes increase by 42 percent since the end of the war, while the wealthiest fifth had seen their incomes rise by just 8 percent. Economists have dubbed the period the “Great Compression.”

This egalitarianism, of course, was severely circumscribed. African Americans had only recently won civil equality, and economic equality remained a distant dream. Women entered the workforce in record numbers during the early 1970s to find a profoundly discriminatory labor market. A new generation of workers rebelled at the regimentation of factory life, staging strikes across the Midwest to slow down and humanize the assembly line. But no one could deny that Americans in 1974 lived lives of greater comfort and security than they had a quarter-century earlier. During that time, median family income more than doubled.

Then, it all stopped. In 1974, wages fell by 2.1 percent and median household income shrunk by $1,500. To be sure, it was a year of mild recession, but the nation had experienced five previous downturns during its 25-year run of prosperity without seeing wages come down.

What no one grasped at the time was that this wasn’t a one-year anomaly, that 1974 would mark a fundamental breakpoint in American economic history. In the years since, the tide has continued to rise, but a growing number of boats have been chained to the bottom. Productivity has increased by 80 percent, but median compensation (that’s wages plus benefits) has risen by just 11 percent during that time. The middle-income jobs of the nation’s postwar boom years have disproportionately vanished. Low-wage jobs have disproportionately burgeoned. Employment has become less secure. Benefits have been cut. The dictionary definition of “layoff” has changed, from denoting a temporary severance from one’s job to denoting a permanent severance.

As their incomes flat-lined, Americans struggled to maintain their standard of living. In most families, both adults entered the workforce. They worked longer hours. When paychecks stopped increasing, they tried to keep up by incurring an enormous amount of debt. The combination of skyrocketing debt and stagnating income proved predictably calamitous (though few predicted it). Since the crash of 2008, that debt has been called in.

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[Charles]

Good article. Evenly balanced and well worth the time to read.

Chas

[Tom Joad]

Originally Posted by Charles

Good article. Evenly balanced and well worth the time to read.

Chas

Thanks, I thought so too.

IMO It's one of the best articles on this subject I have read.

[Dondilion]

Nixon went to China in 1972.

http://en.wikipedia.org/wiki/1972_Nixon_visit_to_China

[Charles]

Originally Posted by Tom Joad

Thanks, I thought so too.

IMO It's one of the best articles on this subject I have read.

I think that what makes it good is that it is a brief overview of the economic realities we have faced since WWII, explained in a calm and non partisan manner.

Most of what we read now on our current economic situation are nothing more than thinly disguised political talking points.

At least that's the way I see things.

Chas

[Tom Joad]

Originally Posted by Charles

I think that what makes it good is that it is a brief overview of the economic realities we have faced since WWII, explained in a calm and non partisan manner.

Most of what we read now on our current economic situation are nothing more than thinly disguised political talking points.

At least that's the way I see things.

Chas

It is non partisan.

However, everything in it is true, and the truth has a liberal bias IMO.

[CarlV]

Excellent article!


Carl

[merrylander]

We can thank Milton Friedman for much of what has happened since the 1970s.

[Dondilion]

Originally Posted by merrylander

We can thank Milton Friedman for much of what has happened since the 1970s.

Can you kindly expand.

[merrylander]

Try this

http://www.nybooks.com/articles/arch...gination=false