Figures recently released in the United States show that American workers’ wages are declining, even as corporate profits continue to soar.
The US Social Security Administration has just released wage statistics for 2013, and the numbers are startling. Last year, 50 percent of all American workers made less than US$28,031 (AUD$31,773) and 39 percent of all American workers made less than US$20,000.
The average yearly wage in America last year was just US$43,041 (AUD$48,786). In Australia, it is $75,603 – nearly twice the US figure.
Of course there are differences in the cost of living between the two countries. But the fact is that American workers have been going backwards, especially since the Global Financial Crisis. Average pay is now some $508 a year less in real terms than it was in 2007, the figures show.
Among other things, the numbers reflect the fact that the jobs that have been created since the crisis pay a lot less than those that were lost. In fact, it has been estimated that the jobs that have been created since the GFC pay an average of 23 percent less than the jobs that were lost.
As a result, total household incomes in the US have plummeted. The data shows that he yearly income of a typical (median) US household dropped by a massive 12 percent, or $6,400, in the six years between 2007 and 2013.
Meanwhile, several US-based multinational corporations have been announcing better-than-expected profits, particularly from their US operations.
Major manufacturers with third quarter profits beating Wall Street expectations included: General Electric (up 11 percent to $3.5 billion), Boeing (up 13 percent to $2.4 billion), General Motors (up 50 percent to $1.47 billion) and Caterpillar (up six percent to $1.02 billion).
Several US airlines also posted large third-quarter profits. United Airlines saw its most profitable quarter in history, earning $1.1 billion, or more than double the same period last year.
These results might suggest that a US “recovery” is well underway. In fact they are based on the now familiar formula of wage cutting and offshoring that is driving millions of Americans into poverty. Another recent report found that 1 in every 2 American children lived in families who were beneath or near the poverty line.
The US example stands as a warning to all working people of the threat to living standards that global capital and the “free market” policies that support it represent.