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Today's Commentary: 09.04.06
A Labor Day Lament
How the Economy has Disappointed the American Workforce
Each year, Labor Day comes with the same sort of soapbox proclamations. The economy is good. Growth is positive.
Politicos may stump in the coming months that it was the "policies" that got us here. Businesses would agree. But really, would everyone agree, not just the small group that has benefited from the administrationıs benevolence, that we are better off than we were two, four or six years ago? As one economist recently was quoted, we may be doing well, but that is the view "from 40,000 feet".
On this Labor Day, let's take a look at three things that have garnered kudos from capitalists near and far. These events have forever changed the landscape for the American worker, no matter the color of their collar.
Consider first the misnamed Pension Protection Act. Although the nine hundred plus page document signed into law recently does offer one or two nuggets (to those who can afford to save for college for their children or pass on inherited retirement plans), it could have easily been more aptly named the Pension Rejection Plan.
Jettison those pension plans the Act suggests! Offer them self-directed defined contribution instead of defined benefit! Promises that were designed to create loyalty be damned! Workers, you are on your own!
The stock market, the Plan seems to suggest is the great and good god of eventual prosperity. It awaits those who have failed to invest, donıt have access to good plans or simply chose the default plan at work. Now legislation will force you to save, even if it is still is far less than your retirement requires. There is nothing in the Plan that requires employers to match those contributions.
Add to the fact that Wall Street will charge these hapless, underinvested fools for the guidance they lack. How benevolent! To let them navigate the waters of the future sans paddle would be wrong. But far too many workers are without pensions or access to 401(k) plans and the bill does little to address this. After all, legislation that costs businesses is not pro-business.
The Pension Rejection Plan is yet another bald faced nod to profits. I'm okay with that. I think governments should help their businesses succeed on the worldıs stage. But at what cost? This Act has too high a price tag for the average worker cum investor.
I must admit, for the sake of all of those naysayers who side with corporate profits over pensions, that without capitalism there would be no jobs. We can all agree as well that without shareholders there would be no business. Yet, without consumers, there would be no reason for business.
Most American workers do not begrudge capitalism the ever-widening income gap. We complain as the news reports how much more CEOs earn compared to the worker on the factory floor. But we get over it. We have more pressing issues at hand.
The wage disparity is wrongly built on the notion that all boats will rise as the economy rewards those at the top. Recent wage numbers have not proven that to be the case. So where, will this self-directed investment coming from anyway?
Which brings me to the second thing that has made headlines this Labor Day: employment. We have jobs. We, in fact, have many jobs. Even if those jobs are not necessarily the best ones, at least we're working. A lot.
I often wonder if the average American worker pays close attention to the chatter about job growth on the business channels and in newspapers. I suspect not. They may be too busy to notice the backslapping that occurs when a paltry number like 128, 000 new jobs are created in August is reported.
The average worker is probably too busy to realize that good employment numbers create at least a 150,000 new jobs each month, the number of new entrants that enter the force every month looking for gainful employment. If they did, they might realize that 22,000 of us failed to find work. But to hear anyone with a podium tell it, the economy is doing just fine and job creation is where it should be.
Could the average worker care about each reported nuance and up-tick in the inflation rate? Once again, I think not. Remember, the core rate doesn't count the aggressive nature of that particular beast. That reality plays itself out for many of us daily at the grocery store and the gas pumps.
To get ahead, which means getting better higher paying jobs, we need to be educated. Although America is doing a poor job with those still in school especially when compared to other industrialized nations, education remains the key to better jobs and, with any luck, better paychecks.
While healthier paychecks would make us more prosperous, to prosper, we need to invest and there just isnıt enough leftover these days. So we mostly work on the holiday at the gas stations and hotels you visit, staffing the grocery stores you shop, or patrolling the streets you drive. We are gripped by fear. We take fewer vacations and when we do, we worry about whether our jobs will be there when we return.
And lastly, with our paychecks dwindling and our retirement in jeopardy, please don't tell us the economy is good. From where most of us stand, it isn't that great.
To frame the opposing argument for this lament, economists one and all will step forward to say that more than half of us own homes. This is true. But more telling than that, more than half of us can't afford them.
The economy they tell us is good because more than half of us are invested in some way, shape or form in the stock markets. Although those investments are largely under funded with fewer than 10% of the lower 90% of the population able to put the maximum away in their 401(k).
Those economic optimists will also point out that more than half of us have health insurance. Yet more than half of us are forced to make the decision. Just how ill are we? Does a $5,000 deductible on top of a monthly fee make insurance worthwhile?
In a good economy, the health of the nation, the education of its children, and the paycheck of its citizens are all part of the same equation. They are not stand-alone issues.
Business does not benefit when any of these factors are askew. And in this economy, they all seem to be.
Surviving this economy has become a battle on numerous fronts for far too many Americans.
It is a sad era when capitalism doesn't reward the machinery of their profits, their employees. The one day when labor should be celebrated, perhaps capitalism could lay down weapons of economic assault and say thanks.
Pro-business, even if it receives encouragement from the folks on Capitol Hill, doesn't have to be anti-employee.
The Blue Money Report
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