this post was submitted on 11 Feb 2024
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What happened 1979? Reagan?
1979 was Jimmy Carter, a Democrat. Reagan did not start until 1980, and while he is famous for breaking the backs of unions, thus crippling their ability to fight back against this trend, he did not actually start it.
Before Carter was Ford and Nixon, both Republicans. Ford pardoned Nixon's crimes, supposedly to help "heal the nation".
According to Robert Reich's "Inequality for All" (free link) - he was the Secretary of Labor under Clinton and previously served under both the Carter and Ford administration so he was very much attuned to what was going on - this trend started due to the rise of corporations, which have super-rights that humans do not have. e.g., taxes on stock dividends were capped at like 13% while payroll taxes can go up to >35%, and while if a human commits a crime they would go to jail, but not so with a corporation. It's a great racket scheme for the rich to cover themselves in a legal fiction so as to avoid pretty much any responsibility for their actions. Hence why we see so many corporations acting so very boldly to destroy the planet - after all, why not? What's the worst that could happen to them in return?
I was surprised to learn that Carter deregulated trucking, which devastated wages for truckers, and they never recovered.
Oh, I never knew that - he was before my time, thanks for sharing that :-).
Carter has become something of a sacred cow among progressives. His post-presidency had shown him to be a wonderful human being, but there's lots to criticize about his time in office.
Can you clarify what you mean by rise of corporations?
I'm asking since I recently learned they'd existed for hundreds of years by then, at least. My understanding is the British East India Co was the first legit corpo
Robert Reich can definitely explain it better than I:-). Basically any law that further enhances their protection moves them forward - e.g. Citizens United - while other things may pull them back, e.g. Obama raised the marginal top tax rate on dividends.
But corporations can do many things, like corporation A takes out a huge loan, builds a building, then hands it to B, then defaults on the loan, even while the board members of B are the same humans as were on A. Sounds like stealing right? Humans need to eat, breathe, sleep, and pay their debts, but corporations do not, plus have special protections besides. In the USA, a "President" of a legal entity can be held liable for actions taken by either himself or by the company, whereas a Chief Executive Officer (CEO) of a Limited Liability Corporation (LLC) not as much.
Corporations helped do things not otherwise possible, e.g. didn't they build the Panama Canal? At the time that was such a huge endeavor that a single normal company could not have done it.
But there's a balance, and all told that balance has as of late tipped towards enhancing protections for corporations while offering less rights to the humans, i.e. the former has risen and by implication, at the expense of the latter.
That makes perfect sense! I 100% agree with you and Mr Reich (love his YouTube channel as well) on the need for striking some kind of balance.
We need a set of checks and balances just for corporations!
Even if we were to assume for the sake of argument that corporations were the best thing since sliced bread - which in some ways they legit are, e.g. see how powerful computers have gotten in the hands of American LLCs, and there seems little doubt that such a pace of innovation would have occurred elsewhere in the world? but even so, setting that aside - the many special exemptions that have continued to be granted to them seems to have lost the balance that they may once have enjoyed.
Like, when will their wealth eventually trickle down to the rest of us mere humans? Even their own human CEOs are as nothing compared to those giant monolithic entities, able to engage with the world underneath the umbrella of special protections granted to them by governments, which their human board members could not accomplish either on their own or collectively without those special exemptions - that's just the whole point of forming a LLC to begin with.
And the American taxpayer continues to subsidize them, so yes we get even more powerful computing devices (in our pockets, on our wrists, on our faces, inside our very brains!?:-P), but on the other hand, most millennials and younger who do not already have a home have lost hope of ever owning one?
So yeah, as the OP graphic illustrated, "productivity" went up but "wages" (unlike stock dividends) did not, depicting the rise of corporations that use stock rather than Oxygen as the air that they breathe, and correspondingly that occurred at the expense of the mere human, who must rely on "dolla dolla bills ya'all" to be able to purchase goods & services. And there the ultra-wealthy have the most advantages (by design) as they can sacrifice the tiniest percentage of their stock portfolio to be able to purchase a car (or private jet, helicopter, humongous boat, whatever), whereas the mere human must scrimp and save for literally DECADES just to live somewhere where rain does not fall onto their heads as they sleep. It's not fair - which is fine, nobody who thinks about it for even a moment wants it to be even (why should someone who never works get paid, whereas someone who expends great sacrifices and efforts get similar reimbursement in return - that would be the true unfairness, from a ROI perspective) - but more to the point, it's nowhere near as balanced today as it once was, say, back in the 50s, 60s, and early to mid 70s. We used to exist side-by-side with corporations, whereas today a tipping point has been crossed and now we are becoming their slaves.
Reagan was a couple of years later.
Coincidentally though, Thatcher happened in 1979, and Reagan is just Thatcher with a penis.
But the real answer is likely that after the financial troubles in the 70s and sky high inflation, there was a number of changes in government to try to have and maintain low inflation - things like higher levels of unemployment being tolerated, employer protection laws not evolving to combat companies' growing anti-union sentiment, fewer and smaller rises in minimum wages.
At the same time, lowering of tax rates on wealthy/high income people meant those people at the top wanted to take more of the pie than ever before, knowing that far less of it would end up being lost as taxes anyway, and that meant less for the workers.
I’m really surprised no one here has mentioned this yet, but a huge factor would have to be globalization and the offshoring of American manufacturing.
It started in the 70’s, with companies like GE and the car manufacturers moving factories to Mexico and later Asia, and with growing supply of imported cheap goods like steel. This really took off in the 80’s and 90’s with deliberate market liberalization and promotion of globalization during the Reagan/Bush and Clinton administrations.
In other words, American workers’ wages were pressured by the extremely low wages of overseas labour.