Robert Reich: The Economic Reality That No One Wants to Talk About

Robert Reich offers us some analysis that to which we need attend.

…Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.

This means many Americans won’t be rehired unless they’re willing to settle for much lower wages and benefits. Today’s official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay as a condition for keeping them. Or they’ve lost higher-paying jobs and are now in a new ones that pays less.

Yet reducing unemployment by cutting wages merely exchanges one problem for another. We’ll get jobs back but have more people working for pay they consider inadequate, more working families at or near poverty, and widening inequality. The nation will also have a harder time restarting the economy because so many more Americans lack the money they need to buy all the goods and services the economy can produce.

So let’s be clear: The goal isn’t just more jobs. It’s more jobs with good wages. Which means the fix isn’t just temporary measures to accelerate a jobs recovery, but permanent new investments in the productivity of Americans.

What sort of investments? Big ones that span many years: early childhood education for every young child, excellent K-12, fully-funded public higher education, more generous aid for kids from middle-class and poor families to attend college, good health care, more basic R&D that’s done here in the U.S., better and more efficient public transit like light rail, a power grid that’s up to the task, and so on.

Without these sorts of productivity-enhancing investments, a steadily increasing number of Americans will be priced out of competition in world economy. More and more Americans will face a Hobson’s choice of no job or a job with lousy wages. It’s already happening. [emphasis added]

Inserted from <Huffington Post>

Short term job creation may be politically expedient, but unless we deal with the underlying causes of the problem, the benefit will be fleeting at best.  That hard working Americans  used the equity in their homes, often lured by predatory  lenders, to try to maintain their standard of living in the face of Reagan/Bush/Bush/GOP policies that shifted wealth from lower classes to the very rich was one of the main causes of the home mortgage crisis that lead to our ongoing economic woes.  This GOP redistribution of wealth has been so extreme that the  bottom 40% of Americans own only 0.2% of the wealth.  Government caused this through GOP policies restricting free enterprise to the poor at the same time that the rich enjoyed all the benefits of socialism.  Government must restore the balance of wealth., by making those who have benefited from the inequity pay for it.