Stagnant Wages? Made in USA

Thanks to Iowa Underground for digging up this article written by Robert Kuttner. It is a must read for all Common Iowans. Here are some excerpts...

As Congress grapples with immigration policy, most experts agree that wide-open immigration slightly depresses wages, especially among unskilled workers. But the main reason for static wages has more do with policies made in the United States.

Such as tax cuts for the wealthy, rising tuition costs for higher education, and health care costs that burdens businesses.

Census data show median household income fell 3.8 percent or $1,700, from 1999 to 2004, according to economist Jared Bernstein of the Economic Policy Institute (on whose board I serve.) And this drop occurred during a period when average productivity rose three percent per year.

Moreover, as economist Jeff Madrick has observed in his book ''Why Economies Grow," , the reality is worse because prices of commodities that make us middle class are rising much faster than inflation generally: housing, college education, health care, and also child care. These very rapid price increases are offset by falling costs of consumer electronics, basic food, and clothing, creating misleadingly low inflation measures.

It's great that shirts are cheaper than a decade ago, and that we all have cell phones. But that doesn't exactly substitute for a house, an affordable college education, or health care.

That is exactly the reason I don't shop at Wal Mart.

Don't blame it on immigrants. Blame it on the people running the government, who have made sure that the lion's share of the productivity gains go to the richest 1 percent of Americans. With different tax, labor, health, and housing policies, native-born workers and immigrants alike could get a fairer share of our productive economy -- and still have the nifty iPods.