I have been giving economics presentations about inequality and the state of the economy. At a labor union meeting, I threw in a pop quiz. Here it is, with clarifications and answers later. Jot down your answers as you go.
- How much does the typical American worker earn per year? Clarification: This is median wages, tips and benefits, before tax.
- If wages had grown with productivity, how much should a worker actually be paid, if presently getting paid $50,000/year? Clarification: Joe Blow earns $50,000. How much would he be paid if Republican policies had not siphoned money away from workers and showered it on the wealthy?
- What is the typical (“median”) American person actually worth? Clarification: If you ask a real estate agent the average cost of a home, you will get the median. This is the middle-of-the-road figure. Half the data are above, half below. So how much is Joe worth? This includes home equity, possessions, savings, 401k, etc.
- Is the typical Canadian worth more or less than the typical American?
- What are the causes of America’s huge economic inequality?
- Who are more fiscally conservative, Democrats or Republicans? Clarification: Deficits each year are cumulative and add up to National Debt, the total of Uncle Sam’s IOUs. Who can manage taxes and debt better?
- Is there a good reason to pay people a living wage, or is it just charity?
- How many jobs were lost due to the North American Free Trade Agreement signed in 1994?
- How many jobs were lost due to free trade with China? Clarification: China was granted Permanent Normal Trade Relations by the World Trade Organization in 2001. What impact did it have?
- Do “job creators” really create jobs? Clarification: Super-rich CEOs are “job creators” in Republican mythology and have to be pampered with even more money and tax breaks because unemployment will rise unless we are nice to them. True or false?
- Are you a blue-collar worker? Have you done manual labor? Been in a union?
Here are the answers, in rounded numbers:
- $30,000, in 2015, per Federal Reserve and Social Security.
- $75,000 per year, per Economic Policy Institute, Wage Inequality Continued Its 35 Year Rise. Productivity per worker has grown steadily every year since 1948. Wages grew as well up to 1975, but have stagnated ever since due to Republican policies attacking trade unions and favoring employers. Workers have been systematically cheated.
- $45,000, per Credit Suisse 2016 Global Wealth Survey.
- Much more: $97,000 there v. $45,000 here, per Credit Suisse (Swiss bank). Canadians’ taxes are not squandered on failed neocolonial wars; they have single-payer healthcare covering everyone; they have affordable or free further education; median income is greater due to greater unionization.
- Inequality has been caused by (a) Reaganomics, particularly attacks on labor unions, and siphoning income to the wealthy via the tax code; (b) a “free trade” policy expressly favoring capital over labor; (c) an industrial policy expressly favoring employers over workers (unlike Germany, whose industrial success owes much to a well-educated and well-paid workforce).
- Democrats. When President Obama took office, 70 percent of all National Debt incurred in the entire nation’s historyhad been run up by Ronald Reagan and the two Bushes in 20 years.
- Not charity, per Henry Ford, John Keynes, Warren Buffett and the International Monetary Fund. Pope Francis agrees. Low wages shrink the economy due to the reduction of consumer spending. Poor people spend money very quickly (high “velocity of circulation”) whereas rich people hoard it.
- 850,000 jobs, per Economic Policy Institute, Fast Track to Lost Jobs and Lower Wages.
- 2.4 million jobs, per The Economist, 2016 Global Economy Special Report.
- No. YOU are a job creator when you spend money. If people do not spend, no jobs are created, as Donald Trump found out, many times. And see Capital In The Twenty-First Century, p. 510, Thomas Piketty: “In other words, the reduction of top marginal tax rates and the rise of top incomes do not seem to have stimulated productivity (contrary to the predictions of supply-side theory).” If you think Republican policies make you better off, you are sadly deluded. There is not the slightest evidence. Piketty spent years rooting through I.R.S. warehouses full of data and found the exact opposite.
- I am not. But my work history includes three lumber yards, five construction sites (one unionized), postal delivery, supermarket, barman and farmhand. Few Dems nowadays understand blue-collar workers.
Conclusion: Unless you are super-rich, voting Republican is like a turkey voting for Thanksgiving.