Posted by: coastcontact | November 18, 2014

The Gap Between the Wealthy and the Middle Class

The political parties have missed the primary message of the November 4 election. There was a poor turnout because neither party addressed the issue that most Americans care about. My opinion: A growing economy ought to be the primary target for both parties.   The graph below developed by the Economic Policy Institute shows increased productivity without increased remuneration but the EPI discussion does not offer any evaluation as to cause. They leave the evaluation to others. Those others are the commentators and economists who just might have a political agenda.

Real Hourly Growth

My take: Higher productivity is not the outcome of employees working harder or smarter. It is the result of new technologies. Those technologies are the consequence of new tools and new software. Those technologies lower the needed manpower. A good example is the elimination of ticket takers/payment clerks as you leave a parking structure. They are now being replaced with automated systems. Those same systems will eliminate order takers at McDonald’s, etc. Those technologies enable machine shops to complete projects faster with less scrap and higher quality.

What will we do with all the people who no longer have jobs? That is the question that politicians can’t answer. Those illegal aliens? Their jobs are on the line too. Capitalism in a free enterprise society translates to hiring the least expensive labor. Of course politicians don’t want to talk to the electorate about this issue.

Is the solution more subsidies and aid for the “middle class”? That appears to be the only solution today. Neither political party wants to admit we have a problem with no apparent solution.

Do not expect anyone running for president in 2016 to say anything about this issue. You will hear discussion on illegal immigration, Russian threats to Eastern Europe, the challenges in Middle Eastern Islamic nations (no boots on the ground), and of course Obama Care. No one will be talking about the gap between the wealthy and the middle class. I hope I am wrong.

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