An Economy That Works
June 13, 2012
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(I’m still working on this, so I’ll be updating it several times in next week or so)
It is increasingly common for folks to bemoan the fact that our economy “isn’t working.” Some say it’s not working for young people (the unemployment rate for people under age 25 is twice the national average, according to the Economic Policy Institute); others for workers (income inequality is growing faster under Obama than it did under the Bush administration). Things are bad for those who drop out of high school, but also for those with doctoral degrees (growing numbers of whom, the Chronicle of Higher Education reports, are now on food stamps). But at least they have the comfort of knowing that U.S. student loan debt now exceeds credit card debt, and it can’t be discharged in bankruptcy.
Nearly a third of high school graduates are jobless (and of course, US unemployment statistics count those working even an hour a week as employed, while those who have given up looking are not counted as part of the labor market and so don’t show up in the statistics at all). It is of course much worse for the millions who did not finish high school. Many of the college graduates holding jobs have taken jobs that previously would have gone to high school graduates, and for which they probably would have been overqualified – helping to depress wages (down an inflation-adjusted 11.1 percent for high school grads from 2000, and down 5.4 percent for college grads).
But the problem is not that the economy is broken — it’s working exactly as it was designed to do: taking wealth from those who do the work that keeps us all alive, and transferring it to a small group of parasites who seek to dominate our planet and our lives. So when the Federal Reserve reports that median household wealth fell by roughly $50,000 from 2007 to 2010 (adjusted for inflation; annual income also fell by nearly $4,000 in the same period — The Washington Post has a link to the original report), that’s the invisible hand of the capitalist marketplace, working as it was designed to do. Working people are basically back to where we were in the early 1970s, except that we’re working longer and harder. Median income is up a bit, but that conceals heavy losses at the bottom and a gradual decline for lots of other folks.