First the truism: the rich keep getting richer as the poor become poorer. A new study, via the New York Times, gives us the numbers. If you’ve discovered that your paycheck is not keeping pace with your needs, you are not alone. Across all income quintiles average hourly wages have declined, even among professionals like lawyers, corporate managers, teachers, and computer analysts. But for those at or near the bottom, your income has declined the most. Take a look at this chart from the Times.
Here’s another truism: employers feel no pressure to boost wages. There are plenty of people in the job market looking for work, and their burgeoning supply against modest demand for their labor squeezes paychecks. At the other end, highly skilled workers are in relatively short supply, pushing wage ceilings upwards.
The trend, while good for the individual employer, bodes ill for the economy as a whole. If we all make less money, we spend less (or go ever deeper into debt), retarding growth. (We would prefer that profits be reinvested in the economy, but why do so if the products or services cannot be bought?)
Elites offer a solution. Get an education. Though, it must be added, not just any old education. Securing a graduate degree from Harvard holds far better promise than a certificate from an information technology online training course. Whether or not you can gain entrance to an Ivy League school depends mostly on your choice of parents. That is, your chances of becoming wealthy are greatly improved if you are already rich. Yep. This game is rigged, and not in your favor.
For the Rest of Us, denied a slot at the better schools and therefore lacking the opportunity to climb the economic ladder, the answer may lie elsewhere. It was once suggested that workers of the world should unite. How’s that going?