Related Stories
The US should break up monopolies – not punish working Americans for rising prices
Key Excerpts from Article on Website of The Guardian (One of the UK's Leading Newspapers)
Posted: January 22nd, 2023
https://www.theguardian.com/commentisfree/2023/jan/08/us-mon...
Job growth and wages are slowing. This is music to the ears of Federal Reserve chair Jerome Powell, because the Fed blames inflation on rising wages. The Fed has been increasing interest rates to slow the economy and thereby reduce the bargaining power of workers to get wage gains. But aren’t higher wages a good thing? The typical American worker’s wage has been stuck in the mud for four decades. Most of the gains from a more productive economy have been going to the top – to executives and investors. The richest 10% of Americans now own more than 90% of the value of shares of stock owned by Americans. Powell’s solution to inflation is to clobber workers even further. But if the demand for workers exceeds the supply, isn’t the answer to pay workers more? Not according to Powell and the Fed. Their answer is to continue to raise interest rates to slow the economy and put more people out of work, so workers can’t get higher wages. The Fed projects that as it continues to increase interest rates, unemployment will rise to 4.6% by the end of 2023 – resulting in more than 1m job losses. The problem isn’t that wages are rising. The real problem is that corporations have the power to pass those wage increases – along with record profit margins – on to consumers in the form of higher prices. If corporations had to compete vigorously for consumers, they wouldn’t be able to do this. Competitors would charge lower prices and grab those consumers away.
Note: The above was written by former US Secretary of Labor Robert Reich. For more along these lines, see concise summaries of deeply revealing news articles on government corruption and income inequality from reliable major media sources.
Related Stories
Latest News
Key News Articles from Years Past
