Getting Screwed in the Bush Economy

The average worker has been getting screwed in the Bush economy since its inception, and now we have proof of this in action. As GDP has risen, the media wage (the wage in which half of the workforce is above it and half below) has remained flat or even shrunk. And workers aren't stupid, they recognize this:

A business coalition hired pollster David Winston to figure out why voters remained so dissatisfied with the economy. His focus groups of middle-income voters in Cincinnati and Pittsburgh found voters going deeper into debt to keep up with rising costs of health care and energy. Executive compensation "is getting to the point where it's obscene," said one focus-group participant.

The more politicians talked about how good the economy was, the worse these voters felt. "It's almost as if these folks are floating around in the ocean, watching the yachts and speedboats go by, thinking, 'Hey, I'm here, someone notice me,'" says Dirk Van Dongen, a co-chairman of the coalition and president of the National Association of Wholesaler-Distributors. Mr. Winston advised Republicans: "Our message should be that while the economy is getting back on track, we need to do more to help people with the cost of living."

There's an aspirational class that believes they will be on the yachts and speedboats someday soon. But there's also a far bigger middle class that has been fundamentally stepped on since 2001, and they cannot be mollified anymore. The Circuit City story is a perfect example of how workers have been disrespected in the current economy.

Circuit City Stores Inc. has a message for some of its best-paid employees: Work for less or work somewhere else.

The electronics retailer on Wednesday laid off 3,400 people who earned "well above" the local market rate for the sort of jobs they held at its stores.

In 11 weeks they'll be able to apply for their old positions — which will come with lower hourly wages.

The move put Richmond, Va.-based Circuit City, which has more than 40,000 employees in the United States, at the forefront of a new way of controlling labor costs in the service industry. Employers determine the prevailing market wages for particular jobs in various geographic regions and then find ways to make sure that their workers' salaries stay within that range.

That is a description of a race to the bottom, and it's actually anti-capitalist. You have a the biggest employers in the service sector (typically big-box stores) artificially setting wages based on one another and calling that "the market," when it's in the self-interest of all the respective management to lower those wages. One sign at a burger joint notwithstanding (yes, Mickey Kaus is that stupid that he believes one sign advertising jobs at In n Out for $9.50/hour, when they've always been a good employer anyway, means the economy is robust and strong), this is collusion. and it's going on across the service sector. Look at this looming Southern California grocery strike, where even with union backing, employees have had to endure anti-worker practices. Management across the board is dedicated to spending obscene amounts to ensure that the people they hire have no leverage, no bargaining power, that they do what their told and go home hungry if they must.

The Bush Administration thinks this is a PR problem, and so they make cosmetic trade policy shifts like putting tariffs on glossy paper coming out of China (how about a tariff on wheat gluten that kills pets?). It's too little and too late. They're making sops to a nonexistent manufacturing sector, while still vowing to veto the Employee Free Choice Act, which would give a fair shake to collective bargaining. They have a choice to make; continue to anger the largest group in the population, who sees through the "family values" mirage more and more as their families and their work are devalued, or do the right thing. I expect the former.