Age of Crushing Anxiety: How the Bottom Fell Out in America

[xchrom]

http://www.alternet.org/economy/40-year-slump




The steady stream of Watergate revelations, President Richard Nixon’s twists and turns to fend off disclosures, the impeachment hearings, and finally an unprecedented resignation—all these riveted the nation’s attention in 1974. Hardly anyone paid attention to a story that seemed no more than a statistical oddity: That year, for the first time since the end of World War II, Americans’ wages declined.

Since 1947, Americans at all points on the economic spectrum had become a little better off with each passing year. The economy’s rising tide, as President John F. Kennedy had famously said, was lifting all boats. Productivity had risen by 97 percent in the preceding quarter-century, and median wages had risen by 95 percent. As economist John Kenneth Galbraith noted in The Affluent Society, this newly middle-class nation had become more egalitarian. The poorest fifth had seen their incomes increase by 42 percent since the end of the war, while the wealthiest fifth had seen their incomes rise by just 8 percent. Economists have dubbed the period the “Great Compression.”

This egalitarianism, of course, was severely circumscribed. African Americans had only recently won civil equality, and economic equality remained a distant dream. Women entered the workforce in record numbers during the early 1970s to find a profoundly discriminatory labor market. A new generation of workers rebelled at the regimentation of factory life, staging strikes across the Midwest to slow down and humanize the assembly line. But no one could deny that Americans in 1974 lived lives of greater comfort and security than they had a quarter-century earlier. During that time, median family income more than doubled.

Then, it all stopped. In 1974, wages fell by 2.1 percent and median household income shrunk by $1,500. To be sure, it was a year of mild recession, but the nation had experienced five previous downturns during its 25-year run of prosperity without seeing wages come down.

[liberal N proud]

1. The “Great Compression”?

Never heard that term before.

Sounds like the rich moaning about a rising middle class, one that would soon infringe on their way of life, they might have to deal with some of them at yacht clubs and resorts.

[rock]

2. Yes, that was about the time the MBAs gained dominance

The MBAs are disciplined in "management science" (not my sarcasm). They are the most horrible mangers that Education can produce. They are taught such things as cutting the budget on educating workers will increase the profits. They are taught that sending jobs overseas will increase the profits. And they are taught that profits need to increase every year by 10% to 20% (or more!). So for the last 40 years they have been doing everything they can to drive up profits while driving down quality, including quality of life. Your post is not news to me, but I enjoyed it very much. Thanks Xchrom!

[jwirr]

3. In the late 50s my brother attended a seminar in Utah for a animal food company. At this seminar

they told the audience that in the future the USA would not be making things but would be growing food for the world and would be the intellectual center of the world.

The seeds for our mess are that old. The business world and the banksters had a plan.