Thursday, June 27, 2013

American people accept a lower standard of living. Globalization in Action by Shannon Hill

Shannon Hill
27 June 2013
You may have heard references to us making the transition into the new economy. If you haven't then you need to be paying closer attention because this may be the single most defining point in all of human history, especially economically speaking. In the global economy wealthy corporations are able to pit the labor force of one nation against the labor forces of all other nations. This has been developing more and more over the past 20 years and by now is well entrenched globally. The ramifications of this poses problems for labor that have never been encountered before. In this new economy, labor will no longer have any leverage to negotiate for better pay, benefits, or working conditions. In addition to stifling efforts of labor the effects of a global economy will have profound effects on social welfare as well. These effect are a part of an even larger design intended to lower the standard of living of the American working class.

The movement toward it has been going on for a long time and our fate was sealed when 26 years ago President Reagan famously stated, or infamously stated, depending on how you look at it, "Mr. Gorbachev, tear down this wall!" The end of the cold war marked the beginning of the unbridled capitalist movement to be able to spread around the world. Our government sent a message to labor when President Reagan fired more than 11,000 air traffic controllers in 1981, effectively saying to labor that your demands will no longer be tolerated in this country. Since then, Union membership has fallen to about 7% of the workforce, down from 35% at the peak of membership.

As we have already seen participation in the global economy does not bold well for the labor forces of wealthy countries like the US. Jobs are outsourced, Unions are made impotent, unemployment grows and thus wages are pushed down while poorer countries see wages inch up ever so slightly. The ultimate goal is to equalize wages of labor worldwide. With this and advances in technology, labor will be forevermore on the wrong side of the supply and demand equation and thus wages will remain low. The stark reality is that US labor will simply have no chance of negotiating for better pay or benefits in a global economy.

Another way being utilized to lower the standard of living for the American working class is by reducing the amount of social aid available to our society. While we have seen a rise in the amount of social spending in the US, especially since the economic crash of 2008-09, real dollar amounts, adjusted for inflation, of government benefits for those in poverty have been in decline since the late 70's. When the AFDC was replaced with TANF in 1996 it paved the way for even more reductions setting lifetime available benefit limits and 5 year time limits of participating in the program.

To be effective, social benefit programs have to be able to expand in poor economic times and then contract as the economy strengthens. TANF eliminated the ability of this kind of federal aid to adjust according to need. What we have seen as a result is benefits continually shrinking even in the worst economic times.

Instead of recognizing this problem there are factions that push for even more severe cuts to our safety net in these times of desperate need. Their excuse, and indeed the same reasoning that fueled the change from AFDC to TANF to begin with, is that supplying aid takes away the incentive of the poor to get out and work to earn their keep.

They fail to acknowledge that 69% of those receiving aid are either elderly, disabled, or children who cannot work no matter how much you cut their benefits. They disregard the fact that 13% of those receiving benefits are already working but make so little income they qualify for benefits. They do this while not only opposing the raising of the minimum wage but actually vote to eliminate the minimum wage. Finally, they fail to realize that only 18% of those that receive benefits are unemployed, many of whom would happily go to work given the opportunity.

Given these facts it begs the question why are these factions REALLY pushing our society in this direction? Why are not more of our representatives from the left standing up and screaming against this? After all, we must remember that it was Bill Clinton who negotiated TANF with a republican controlled congress to begin with. Just last week, house republicans purposed $20 Billion in cuts to SNAP but the Democratically controlled Senate passed cuts themselves of $4 Billion to SNAP. Democrats have even supported cuts to Social Security in the form of reduction of chained CPI. Why?

Well, part of the answer is that even those on the left see and understand the reality and inevitability of our new global economy. Not only did Clinton sign TANF into law he also signed in the first major step to make the global economy a reality, NAFTA. The reasons there is now this attack on welfare spending is really twofold. First, it is to the corporations advantage to drive wages down in the wealthy countries faster than wages can rise in the poor nations. Eliminating the safety net is done as a way of lowering overall wages and thus conditioning people for lower standards of living. The first ones to see their benefits eliminated will be the working poor. Their incomes that are now subsidized by government benefits will be lowered by doing away with that social spending. Secondly, with other's incomes also falling it will mean less tax revenue to finance social programs especially when more and more of the middle class fall into poverty as is inevitable because of the lowering of wages.

What we have to realize is that the global economy mandates that the American people accept a lower standard of living. The housing crisis was contrived by banking deregulation and promotion of home ownership by our government. The end result was to send a message through record foreclosures that the American people can no longer afford the American dream. 8 million people lost jobs, many of them the kind of living wage jobs that paid for the American dream have now been replaced by low wage jobs that no longer have the kind of benefits, insurance and retirement, that living wage jobs once had. This was necessary to force us to lower our expectations of living standards. Cutting social benefits now at such a crucial time is an announcement by our government that we have to accept and find other ways to adjust to these new standards of living.

Our government understands the effects of the global economy and are working to adjust to it to give multinational corporations every advantage that it can give them. All the while they keep the people in the dark because they believe the consequences for the American worker are inevitable. If we truly had a government for the people it would be working towards solutions to shield the American worker from the effects of the global economy but this is not our governments objective. The people are being sold out and if Americans had any idea of what is coming they would be rioting in the streets.

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