Forum Post: The Truth About the Productive Class

Is the Productive Class under assault? Yes, but the Productive Class is not who Fox News implies it is. American laborer productivity is at an all time high. American workers are working harder and harder, but are seeing no increased wages for their increased productivity.

With the loss of the high marginal tax (1950's 90% over $2 million, 1970's - 70%, 1980's 49%, 1990's 39%, 2000's - 36%) and the loss of unions (now only 6.9% of all private sector jobs are unionized), there is no disincentive for the few at the top to take all of the fruits of the workers' labor.

Since 1980, worker salaries have stagnated while executives' salaries have ballooned up over 275% since 1980. The average executive to worker salary ratio in 1965 was 24:1 -- the executives made $24 dollars to every worker $1. In 2005, it had ballooned to 262:1 -- executives made $262 for every worker $1.

How did this happen? 1) With the loss of the high marginal tax, there was no disincentive against paying out all of the corporate money to the few at the top; 2) unions have all but disappeared and therefore workers lost bargaining power to get their fair share of the fruits of their labor; and 3) corporations replaced worker wages with easy credit loans to buy products.

Americans did not realize that their middle class wealth was being redistributed into the hands of the few because credit was easy. The middle class is the economic engine of our economy. The middle class spent their wealth on corporate goods and services. Corporations made a profit from that middle class spending. Corporations redistributed the middle class wealth into the hands of the few at the top of the corporation. The middle class has worked harder and harder, but sees no return for that work. Instead, they were rewarded with easy credit and debt while the executives stole the monetary fruits of the workers' labor.

We have seen the largest redistribution of wealth in our nation's history. Moreover, in our broken modern Capitalism, the executives are rewarded handsomely for failure. The Home Depot CEO made $210 million when his business was not even doing well. What does that do to society when one person is rewarded with $210 million of the fruits of the workers' labor when the workers are struggling to get by on $10 an hour and no benefits. What good does that do for society to divert all of that wealth to one person -- what for? So, he can build a 10,000 room house? So, he can buy 500 cars? That is more money than most of us can spend in 10 lifetimes. He diverted that wealth to himself instead of paying the workers living wages and healthcare benefits.

This is what has been happening all across America. All of the middle class wealth that is spent has not come back to the middle class in wages and benefits, but is being diverted into the hands of the few. So, instead of wages, the middle class has to rely on credit to get by, but what happens when the easy credit starts to implode? The middle class spending engine starts to sputter -- you can only get the engine going through easy credit or wages and the few at the top are too greedy to give wages and the easy credit can only go so far -- people can only take on so much debt before they start to default.

So what do the executives do to keep extracting their outrageous salaries when the middle class spending engine is sputtering? They continue to squeeze the worker. They cut costs by laying off more workers and making the other workers pick up slack. They cut more and more benefits. They move more and more benefit costs onto the worker. The workers work harder and see no increase in wages from the fruits of their labor because the executives take it all for themselves. This is the spiral we are caught in without a high marginal tax and unions to bargain for better wages and better benefits -- for the workers to see any of the fruits of their labor. This is the productive class not the people stealing all of the fruits of the workers' labor.

And the real productive class has had enough! We want wages instead of easy credit! We want to see wage increases when we work harder and harder! We want good benefits! So, all you greedy executives stop redistributing all of the middle class wealth to yourselves. Just because you have been able to take the money, does not mean you deserve it!

http://www.businessinsider.com/15-charts-about-wealth-and-inequality-in-america-2010-4#the-gap-between-the-top-1-and-everyone-else-hasnt-been-this-bad-since-the-roaring-twenties-1

http://www.businessinsider.com/15-charts-about-wealth-and-inequality-in-america-2010-4#the-last-two-decades-were-greatif-you-were-a-ceo-or-owner-not-if-you-were-anyone-else-5