While many CEO’s as well as investors continue to profit from the rebounding stock market the majority of Americans continue to experience quite the opposite in the form of longer working hours, added demands placed on their job by upper management and an overall declining dollar value due to inflation.
It has been instilled in the American people that trickle-down economics socially applies when the wealthiest of Americans who control the majority of America’s wealth reinvest into new business ventures to create new jobs. This supposition of constant future development assumed there would be a constant flow of available cash in society which would help offset inflation and allowed for employees paychecks to be fairly adjusted annually with the growth of business domestically as well as abroad.
In principle it would seem to make sense, investors investing into new future business ventures which translated into a greater turnover of the American dollar. In part trickle-down economics relied on top wage earners to spend their disposable income at a higher rate generating new jobs and additional government revenue. However, in recent years due to the recession the top 5% wage earners have chosen to reinvest their earning into the stock market to recover from their recent losses and stock piles their disposable income for another rainy day. The results have been a reduction of available capital in the market place, reduced government revenues, increased inflation and stagnation of wages for the average working American. This is not to say present incomes are derived solely from the top five percent of the population; there are many factors to take into consideration that determines one’s personal pay scale. Nevertheless the recession, new bank regulations and protective investor spending habits have had a direct impact on “ Trickle-down Economics” that affects all wage earners. Trickle down Economics has become overtime what some would refer to as the lion gets his share while others got what was left as it trickle-down the lion’s leg that nobody wanted. Needless to say the fine line between social economics that drove the United States towards prosperity economically as well as politically is being redefined and in turn has created one of the greatest distrusts between the middle class and that of politicians that can be quietly persuaded by lobbyists who represent big business interest.
To put it in perspective, it’s rather like if everyone collected pennies and stored them away, eventually pennies would become in short supply impacting the way we spend our money. In a manner of speaking the top five percent earners in America have done the same thing but on a much grander scale over a longer period of time. The results on society to some may seem subtle yet to the naked eye it can be seen in every city and town across America, low and middle class wage earners now struggle to maintain what they have as the circulation of the dollar diminish wages remain stagnant.
At present cost of goods have continued to rise while the hourly workers wages that represent nearly 72% OF THE WORKING POPULATION at an annual income of approx. $50,000 have either declined or remained stagnant. For the minim wage earner that comprises less than 5% of the working population nearly one quarter of their overall wages now goes towards the cost of going to or from their assigned place of employment. Yet it is the minimum wage earner that does most of the jobs many would prefer not to do, but more importantly they are the ones who would prefer to spend what they have earned at a mall, movie or a restaurant. The same industries that historically counts on minimum wage earners to staff their stores stands to profit the most by an increase in the minimum wage. Given that fact and using one small clothing store as an example it could potentially realize additional earning profits in sales far offsetting the cost of their own employees added wage increases. Increased sales in turn would require more goods to be produced, packaged and shipped which in turn would generate additional taxable revenue. Henry Ford who founded Ford motors corporation realized by building a production car cheaply more Americans could afford to buy one which in turn would generate more jobs and by providing the American worker a fair wage you also insured yourself a future car sale.
How much has the average Americans workers wage declined in value in recent years according to Bureau of Labor Statics? An individual earning $50,000 in 2000 today would need to earn $66,642.92, in comparison an individual earning $100,000. in 2000 would now need to earn $1333,329.85 and if a minimum wage earned $7.25 per hour in 2000 they would need to see an adjusted wage increase of $9.66 per hour allowing for inflation. However it is important note that in the year of 2000 the minimum wage was $5.15 per hour. Yet even with the minimum wages being adjusted upward over recent years today's present minimum wage does need to be increased to offset inflation.
Something in America is going wrong, overall personal incomes are not keeping pace with the cost of living and the spread of wealth has steadily moved away from the middle class to a certain few. The reason in part as explain in preceding paragraphs is due to a slowing effect of the circulation of the dollar combined with the recent economy and for the low wage earners they are now working closer to an exploitative wage that harkens back to serfdom. Freedom in part is the right to work for a fair wage not an exploitative wage that offers no hope towards one’s own advancement. However, here in part comes the rub for some in determining what minimum wage should be. In a free and open society such as ours wages as well as goods should be determined by supply and demand, however as you are probably aware that does not always apply and current unjustifiable fluctuations in gas prices at the pump are a fair example of that.
Surprisingly or maybe not some Senators such as Sen. Joe Hardy of Nevada are now recommending to lower the minimum wage not increase it. Their hope is to offset the added cost employers of 50 or more employees will incur under the Affordable Care Act instituted under the Obama administration. As it stand now employers not offering health care insurance which employ 50 or more employees will be charged a fine of $2,000 by the Federal government per employee, after the first 30 employees. This proposal has huge ramifications to all wage earners across the board and opens the door for all employers to reduce the average wage earners wage by citing the added costs of the Affordable Care Act by passing the direct cost back onto the employee.
To protect the minimum wage earner government has introduced what has come to be known as the Fair Labor Standards Act in 1938. This standard although designed to stop abusive labor trends has a much greater reaching affect than one would expect, it reaches out beyond the minimum wage earner and has the potential to indirectly increase overtime the average wage earners pay check. By raising the bar for one group additional revenue is pumped back into the economy directly and as more money flows through the system wages on a whole have the potential to increase. The name of the game is to get the flow of cash back into public and private sector and there is no better way to do it then put cash in the hands of those who need it the most and will pay their bills.
Edmund M. Dunn, reporting
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