Class Warfare Blog

December 24, 2011

Send for a Repairman!

Filed under: Economics,Politics — Steve Ruis @ 1:47 pm
Tags: , , , ,

In a recent Slate magazine article, Matthew Yglesias commented on the following data …

2008 Average Number of Annual Work Hours
German 1,429
Greek 2,120
Spanish 1,647
Italian 1,802
Dutch 1,389

and here is the quote: “The truth is that countries aren’t rich because their people work hard. When people are poor, that’s when they work hard.”

So, Germany (1429) and The Netherlands (1,389) are rich countries in which people work less than average and Greece (2,120), Italy (1.802), and Spain (1,647) are poor countries (at least by European standards) in which workers are scrambling to make ends meet. The typical source of such data is the 2008 rankings by the Organization for Economic Co-operation and Development and consulting that list finds the U.S. at

 American 1,797 hours per year

putting us right in there with the poor countries. And considering what has happened between 2008 and now, I suspect that that number would be quite a bit higher now. So, why is the richest country in the world acting like one of the poorest? (I can’t help but hear the Church Lady responding “Satan?!”)

There has been an ongoing disconnect between workers and management in this country for over three decades now. The old paradigm was “a rising tide raises all boats” and that for pay increases American workers were expected to produce productivity gains. This was entirely reasonable as why would anyone want to pay more for the same labor (other than maybe to cover the effects of inflation). As I have mentioned before, American workers not only work hard for long hours, they are also the most productive workers in the world. But for the last 30-40 years this pact has been broken to the point of being nonexistent—productivity has gone way up, but salaries not so much if at all. Also, over the same span of years CEOs of corporations have seen their compensation go up from roughly 30X their worker’s average salary to almost 300X the amount their average worker makes. This expression of corporate officer greed also masks an estimate that actual total real wealth in the U.S. has declined over that same period of time.

Obviously the problem with our current system is there is “no one watching the watchers” to prevent them from make self-serving, but in the long term self-defeating, decisions. The Captains of Industry think they must be doing a good job because, gee, they are making so much money. Obviously such shallow thinking disqualifies such people from the argument that “they are worth the money for what they contribute.” How can such idiots contribute anything of worth?

We need a new paradigm in which profit is not the goal but what one can do with the profit is. Yes, yes, I agree with the conservatives that our current system got us where we are but clearly this system has stalled out. Did not our current system replace a past system that didn’t work as well, and shouldn’t we expect this system to run out of gas at some point, like, say, now? The prime example is Wall Street, an entity designed to allocate capital in our system but has been subverted to a role in which it thinks it is generating capital. This is an illusion, Wall Street is merely sucking capital away from people who actually produce something. The declining amount of wealth in the non-financial sector of the economy could account for a large part of our decline in total real wealth.

The system is broke. We gotta fix it.

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