Does the middle class want too much, too fast? .
Computing the growth of average family income from lowest
to highest quintiles, from1968 through 2001, using the
CENSUS bureau’s reckoning of inflation (430%) discloses
serious under-performance on the low end: +17%, +23%,
+40%, +57%, +87%.  Recomputing family income using the
LABOR department’s inflation gauge (535%) reveals a
progress shut out for the bottom two quintiles, with minimal
betterment shifting to the next two above: -5%, -1%, +12%,
+26%, +50%. 

Over those 33 years, per capita income (all income divided
by all persons, working or not) rose 94% according to
Census inflation -- only 56% under Labor’s yardstick -- both
AVERAGE income gains edging out their respective highest
quintile’s growth.  It seems that a THIRD of all income is
hidden from the family survey behind a statistical device
called top coding (anything above a quarter million up until
1994 and above a million thereafter) -- trillions that could
have meant prosperity for all had economic progress been
proportionately divided. 

For whatever little it may be worth judging which standard
most matches real inflation: economic GROWTH, per
person, over the same period was 65%, which should
parallel income growth -- and every online calculator I have
come across clocks 535% inflation.
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It took 65 years for the federal minimum wage to jump from
$4/hour with no taxes, in 1939, to $4/hour after taxes, today.
It took 65 years from the Wright Brothers first flight, in 1903,
to the 747 jet airliner, in 1968.

Bus drivers earn 100 times more than rickshaw drivers --
even though they bring 10 times less to their work -- because
they are 100 times more productive.  Even workers who
perform the same old task in more productive economies
earn more -- generally according to how much they bring to
their job relative to what other workers bring to theirs’ -- why
cops are usually paid more than bus drivers; and why San
Diego cops earn 10 times more than Tijuana cops. 

Note well: if you educate a broader spectrum of people, you
make your society more productive as a whole, allowing
yourself to be paid more for doing the same old thing.  So
why do we have schools in the Bronx with no windows while
mayors of the “world’s capital city” talk up billions for new ball
playing emporiums?

Raising everyone’s well-being together has been the
successful lesson not only of the European left but also the
Asian right (China now qualifying as the largest capitalist
dictatorship -- at 75% private manufacturing).  And the
contrary lesson of South America and Russia -- and of
today’s almost labor union free United States of America?

20% of American workers now earn less than L.B.J.’s,
$8.50/hour minimum wage.  40% earn less than what the
1968 federal minimum wage might have kindly and gently
crept up to: $12/hour (at 75% pace with per capita output
growth -- would cause all of 4% increase in the cost of
today’s GDP output if instituted today, not counting other
wage pushups).  A lapsed middle class cannot be found in
anywhere in the modern industrial world except in the 90%
unorganized industries of the USA.

Most European labor organized gradually over decades -- in a heavy victimology frame of mind.  Germany labor organizedthe whole country at once, post 1945, according to a more systematic economic outlook: legally instituting sector wide labor agreements, wherein everybody doing the same job in the same geographical area must work under the same labor contract (preventing ownership even from playing off one unionized workplace against another) -- and 90% organized Germans are, today, the best paid workers in the world. Good model for us? -- why not?; WE made them do it. :-)

I am not pushing Europe’s business stifling welfare state.  I
support equal power, not over protection.  Super social
cellophane interests Europe’s left wing labor and America’s
liberal elite.  The ascendance of more moderate to
conservative workers of this side of the Atlantic would see
income maintenance fade faster -- as real need diminishes. 

For what it is worth those left wing European workers ship a
lot more VWs and BMWs over here than we ship Fords and
Chevies over there (VW has a commanding 42% lead in
China’s auto market, which market is growing 60% a year;
50 million cars a year possible some day! -- GM weighs in at
a meager 8%).  Airbus has been outselling Boeing of late,
also.  European workers must be more productive to justify
the price they exact -- or extract.

Mostly unorganized American labor may be in danger of
falling between two price stools: more expensive than the
third world and the cheaper than most of the first world:
losing low tech factories to the former while losing high-tech
orders to the latter. 

Mostly unorganized -- of self-reliant stock -- American wage
earners should be ripe, at long last, for some person or some
party to alert them to need to bargain collectively if they ever
expect to take home an even cut of the cake -- with tales of
how German style, MANDATED universal unions could kick
start their stalled standard of living -- emphasizing how
relatively quickly and easily the rebalancing of power
between business and labor could be legislated; relative to
the task of organizing a whole country the old fashioned way.

Or does the majority of today’s Americans -- to lift an ironic
question from a past era’s minority civil rights struggle --
want too much, too fast?
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THERE ARE EVEN MORE -- EASY ANSWERS:
Reverse bracket creep in social security collections can
be deducted at the intersection of three statistics:
     A) The FICA cap is about $86,000 -- indexed for inflation.
     B) 90 percentile income taxpayers reports in at about
81,000.
     C) For 30 years now, 90 to 95 percentile incomes have
grown in step with America’s economic output, but no more
-- while those above have scooped whatever proportion of
growth was missed out on by those below.

Thus: As economic output expands, 90 percentile tax payers
will soon join the lucky duckies who pay an ever shrinking
percentage of their ever expanding incomes into FICA --
then the 89 percentile, then the 88 percentile.  The other
percentage that will shrink steadily will be of earners paying
full FICA freight.

Indexing FICA for growth (as done in Germany) would lock in enough income to permanently end worries about social security retirement's funding -- taking advantage of the natural fact that per capita GDP output tends to quadruple as our populaton doubles (as Germany's population may shrink).
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Even should medical costs quadruple while economic output only doubles that would mean 15% of today's output would grow to 60% of today's -- which by then would have grown to 200%: leaving 140%, almost double today's 85% for everything else -- and, of course, medicine is not like real estate: four times the cost means four times the treatments.  So the future looks cheery, as it should, if we ever get "ORGANIZED" to take advantage of it.

Denis Drew
ddrew4u (at) aol.com