Frederick Allen examines how German auto companies compete (profitably, mind you) without driving down the price of labor:
There are “two overlapping sets of institutions” in Germany that guarantee high wages and good working conditions for autoworkers. The first is IG Metall, the country’s equivalent of the United Automobile Workers. Virtually all Germany’s car workers are members, and though they have the right to strike, they “hardly use it, because there is an elaborate system of conflict resolution that regularly is used to come to some sort of compromise that is acceptable to all parties,” according to Horst Mund, an IG Metall executive. The second institution is the German constitution, which allows for “works councils” in every factory, where management and employees work together on matters like shop floor conditions and work life. Mund says this guarantees cooperation, “where you don’t always wear your management pin or your union pin.”
Yet, as Allen explains, German transplant factories in America do not bring this business culture with them. Why is that?
The article’s author, Kevin C. Brown, asked Claude Barfield, a scholar with the American Enterprise Institute, why the German car companies behave so differently in the U.S. He answered, “Because they can get away with it so far.”
From the Center on Budget and Policy Priorities:
Tax policy should lean against the rising tide of income inequality, not exacerbate it. During the first three decades after World War II, economic growth was robust and widely shared: economy-wide productivity improvements were accompanied by significant increases in the living standards of most Americans. In recent decades, by contrast, the benefits of economic growth have not been widely shared. CBO data show that between 1979 and 2007, the average after-tax income of the top 1 percent of Americans grew by 281 percent, after adjusting for inflation, compared to just 25 percent for the middle 20 percent of Americans, and 16 percent for the poorest fifth of the population.
The tax cuts enacted in 2001 and 2003 provided the largest benefit to the highest-income households and widened these yawning income disparities. Under these tax cuts, households with incomes over $1 million stand to receive an average tax cut of $130,000 in 2012, according to the Tax Policy Center, equivalent to an increase of 6.3 percent in their after-tax income. Meanwhile, households in the middle of the income spectrum will receive tax cuts that equal 2.3 percent of their income. Households in the bottom quintile will receive an average increase in income of less than 1 percent.  (See Figure 3.)
Summary: after tax incomes from Bush’s tax cuts:
- Households > $1 million: increase of 6.3%
- Households in middle income: increase of 2.3%
- Households in bottom quintile: increase of < 1%
The GOP has been actively engaged in bottom-to-top income redistribution. And because of God, guns, and gays, the fundamentalist teabaggers will vote for it — despite their own precarious financial situation.
Want it to stop? Vote next time.
‘Member this the next time someone complains about the poor paying no income taxes: they have so little income to pay from that it only makes sense.
i’ve gotten a refund every year because i make so little and have school to pay for. this year should be interesting since i’ve made a little bit more and am out of school. but overall, throw me in the bottom.
The study focused on people who were middle-class teenagers in 1979 and who were between 39 and 44 years old in 2004 and 2006. It defines people as middle-class if they fall between the 30th and 70th percentiles in income distribution, which for a family of four is between $32,900 and $64,000 a year in 2010 dollars.
People were deemed downwardly mobile if they fell below the 30th percentile in income, if their income rank was 20 or more percentiles below their parents’ rank, or if they earn at least 20 percent less than their parents. The findings do not cover the difficult times that the nation has endured since 2007.
So, before the credit crunch, before the housing bubble broke, before the banks began to steal people’s houses with fraudulent paperwork and the government reneged on it’s guarantees to provide social services, 1/3 of Americans who grew up in middle class families are now impoverished.
What would our demographics look like today? How many citizens have been forced into poverty by the deliberate theft of wealth from the middle class?
This is interesting. Libertarian economist Phil Horwitz has a rhetorically powerful video in which he demonstrates that income mobility is extremely high in America for people who begin their lives in the bottom 20%. However, this study is a very strong counter-point to that video, suggesting that people are falling out of the Middle Class as quickly as they fall into it.