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The Republican Low Wage Strategy
Not too long ago, we lived in a secure world with a steadily rising standard of living. You could buy a house, raise your family, and look forward to a comfortable retirement.
But in the 1980s, changes started and now the Republicans have sold the American public on the idea that the free enterprise system should be allowed to do whatever it wants. All we need to do is unleash “the magic of the marketplace” and everyone benefits.
The wealthy have big tax cuts to create jobs. Unfortunately, many of the jobs are in foreign countries where the free enterprise system makes higher profits. Most of the jobs are low wage with few benefits. Many are temporary or part-time with no benefits.
Wealthy investors use their tax cuts to speculate on Wall Street. Corporate raiders, investment bankers and lawyers make huge profits buying and selling companies. Wall Street dealmakers construct financial houses of cards and then vanish before they collapse.
The buying and selling of corporate America is done with borrowed money, usually in the form of high risk, high interest junk bonds. To pay the interest on these junk bonds and to increase profits, corporate America developed a low wage strategy. Now even healthy companies have a low wage strategy to increase profits.
This low wage strategy has many forms. American manufacturing plants are closed and new plants are in foreign countries where labor is cheap. Corporations threaten to move plants to foreign plants forcing American employees to accept lower wages and benefits.
To increase profits, employees are laid off and everyone left is forced to work harder. Also, full time employees are replaced with temporary and part-time workers and consultants who are paid less and aren’t eligible for benefits.
Millions of high paying jobs are lost forever. People with years of experience and earned high salaries have to take lower paying jobs or stand in the unemployment line.
While many Americans are losing their middle class standard of living, corporate profit margins continue to increase and compensation for top executives jumps constantly.
The low wage strategy is a big success for wealthy investors and top corporate executives but the middle class isn’t so lucky. People are working harder and harder for less and less money and benefits. The middle class piece of the pie is smaller and smaller every day.
As the middle class standard of living deteriorates, people do not have money to buy the things being produced. Eventually, this lack of purchasing power will destroy the American economy.
Unfortunately, wealthy investors don’t care what happens in the long term. They only care about making money now and it doesn’t matter to them how many people are hurt in the process.
Once the destruction of the American economy is complete, we will no longer be the largest economy in the world, nor will others compete for access to our American market.
Many people don’t know the Republicans are destroying the American economy. Please discuss this information with your friends, neighbors, and relatives.