Why do you keep doing that? Are you assigning the effects of the high tech bubble bursting and 9-11 to trade with China?
Ravi Batra, author of The Myth of Free Trade, stated that the watershed year for the American standard of living was 1973. It was the year when real wages started its long decline, family poverty rates increased and rising inequality between rich and poor materialized. Batra clearly stated that "economists concede that GNP and per capita income are not ideal measures of national prosperity."2 The President's Economic Report for 1992, for instance, makes the statement that growth in real GNP or GDP cannot assure an increase in the level of living. This is especially true when applied to real wages. A truer measurement, Mr. Batra states, is the weekly earnings paradigm which is applicable to production and non-supervisory workers, who according to the United States Bureau of Labor Statistics, constitute 80% of all employees. Therefore the GDP and per capita figures fall flat or distort the real picture. These statistics exclude executives, managers and professionals such as lawyers, doctors, etc. According to Batra's calculations, real wages increased by 15% between 1950-55; 7% between 1955-60; and only 6% between 1970-73.
Since 1973, real wages have fallen steadily. More importantly, this decline has impacted at least 80% of the work force even before increases in Social Security and taxes are calculated into the equation. Thus take home pay is seriously impacted in an adverse way thus requiring families to have multiple wage earners. During the period between 1975-1995, the inflation rate rose 183%, while blue collar and white collar workers earnings across all private industry increased a mere 142%. Average salaries in 1995 were $20,559 dollars. This average earnings unfortunately will buy $3,500 less than could have been purchased in 1975. Real wages for most workers in America are falling rapidly.3 The change in lesser buying power is not bringing the Third World closer to our standard of living but in fact is reducing our standard of living in the direction of Second and Third World levels. Extensive competition among underdeveloped countries guarantees future cheap labor markets. Many of these Second and Third World nations disregard constructive environmental regulations and utilize child and prison labor, as well as paying wages which can be as low as $1.00 per day.
As the quality jobs continue to decline at such giants as Ford, General Motors, Chrysler and AT&T, new jobs are being created by the tens of thousands by mega-retail discount chains. However, when you do a comparative analysis on the employment picture (GM vs. Wal-Mart), the facts become obvious and startling. In a three week series in The Philadelphia Inquirer on "The American Dream," which ran in September 1996, a clear picture of the future of American jobs was presented. From 1978 to 1995, the big three (GM, Ford, Chrysler) had reductions from 667,000 to 398,000 hourly employees. Not to worry, as Washington and many economic pundits point out, new jobs are being created to replace the old ones. Employment by Wal-Mart alone accounted for a 2890% increase over the past 20 years. In 1978, Wal-Mart had 21,000 workers and revenues had reached the $100 million dollar plateau; by 1995, it had over 628,000 workers and revenues were approaching the $100 billion mark. According to the data, apparently, one out of every 200 American civilian jobs is being created at Wal-Mart. The Inquirer series explains a qualitative analysis is important. For example, 30% of Wal-Mart workers are part-time (full-time is 28 hrs., therefore, the 30% is exceedingly conservative figure by traditional standards). Positions at major corporations such as the big three are full-time, i.e. 35 - 40 hrs/week and overtime pay is not unusual. As for pay, a GM assembler earns a minimum $18.81/hour in wages; a tool and die maker $21.99/hour. Most Wal-Mart workers earn a dollar or two above the former minimum wage of $4.25 an hour. Then there's the matter of benefits. The auto workers have a guaranteed annual pension. The Wal-Mart employees do not. The auto workers receive fully paid health benefits. Wal-Mart part-timers receive no company paid benefits and "full timers" must pay for part of their health insurance. The Inquirer series also states that new jobs should have been created replacing the old by new technologies, such as in cellular phones; however, manufacturers in those high technology industries seem to prefer lower cost overseas production.4