Thursday, July 29, 2004

It's the lack of wage growth, stupid

The profits of corporations are soaring, while federal income taxes on them and on wealthy individuals (whose income--capital gains from stock and realty ownership, dividends, interest--aren't largely derived from sources that are subject to the onerous payroll taxes) are declining.
Meanwhile, the wages of middle class Americans aren't growing at all, and are in fact declining in real terms, when measured against rising inflation.
This factor, it is to be noted, is further reflected in the components of the cost of production. As can be seen, the wage factor has remained flat, with all increases of employee costs being caused not by wage increases but by higher costs of benefits, which means, of course, increased payments to insurance companies and HMOs.
This is what the Democrats are calling the "wage squeeze," and it's not just political rhetoric. Borrowing, not just on second-mortgages but on credit cards, is at an all-time high.  For the vast majority of American wage-earners, the impossibility of meeting rising debt obligations with flat incomes, is a sad, stark reality.  It's this message I hope Kerry hammers on in his speech at the Democratic Convention in a few minutes. 

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