Wages can only go one way – Down!

In our new global environment we are seeing corporations become wealthier than countries and more powerful than governments. In this unhealthy situation profit dictates how companies spend their money as efficiently as possible.

Wages are the biggest item on any balance sheet and with the exception of a favoured few worker’s wages are kept to a minimum. This has become easier to achieve with globalisation, as corporations become more mobile with their production plants and administration, moving them to where the costs and wage rates are lowest.

It doesn’t take rocket science to work out that whilst this is beneficial for prices and profits it is effectively holding down wages across the Planet, in a best case scenario. In the worst case scenario wages are actually reducing as competition between countries escalates. And this worst case scenario gets a whole lot worse as analysis shows that the value of those wages has also been going down, when allowing for such factors as inflation.

In America, the supposed richest country in the world, many economists are concerned that median wages are stagnating. It’s actually more negative than that as Michael Greenstone and Adam Looney of the Hamilton Project have stated in this paper: http://www.hamiltonproject.org/papers/trends_reduced_earnings_for_men_in_america/

Far from stagnating, median earnings of prime-aged males has fallen by 28% over the past 40 years and this is further exacerbated by the fact that, compared with 1969, three times as many men of working age don’t work at all!

It is one thing to prepare and deal with new technology that is replacing human labour with machines, we have recognised this for some time now as a process of human evolution, but systematic suppression of earnings is not something that is sustainable in this 21st century, I would suggest.

If the nature of Homo sapiens is to reproduce then there has to be an infrastructure in place to support this most basic of human function. That means food and nourishment, together with protection from the elements in the shape of a family home. From these basic requirements flows the need for education and sustainable healthcare, all of which have to be supported by some form of financial infrastructure, which in turn is supported by a personal financial infrastructure in the shape of employment.

As our world gets smaller, globalisation has produced vast new market places fuelling the growth of mega corporations. History teaches that trade has been the primary driving force behind the exploration and discovery of other people and places on our Planet. However, democracy has also been the cornerstone by which we manage and meet, as far as possible, the divergent needs of Society.

When the needs of a minority direct and unbalance the shape of Society it is up to the majority to find new balance. In the current climate of wage strangulation, this has to take the shape of regaining control of the jobs market by forcing governments to legislate for higher wages, thereby empowering people to become more affluent consumers, and thus benefiting corporations and Society.

We are now in an era of ‘Zero Hours’ contracts which take away from people the dignity of work and the personal pride that comes with it. Done on the scale now being seen we are threatening the very foundations of our work force and the work ethic. If we add to this the growth in food banks, we have a Society that is managed by a political class that has totally lost the plot in understanding their responsibility for the proper management of Society.

There is no doubt people have the ultimate power and it is available to them in a twofold manner, as both voters and consumers. It is up to them to exercise that power now by voting with their feet as consumers and dictating the shape of political manifestos through the ballot box. It’s achievable . . . they just have to want to do it!

Until the next time