The gradual erosion of the paycheck has become a stealth force driving the American economic downturn. Most of the attention has focused on the loss of jobs and the risk of layoffs. But the less-noticeable shrinking of hours and pay for millions of workers around the country appears to be a bigger contributor to the decline, which has already spread from housing and finance to other important areas of the economy.While official unemployment has risen only modestly, to 5.1 percent, the reduction of wages and working hours for those still employed has become a primary cause of distress, pushing many more Americans into a downward spiral, economists say.[Workers Get Fewer Hours, Deepening the Downturn, by Peter S. Goodman, April 18, 2008]As I reported in The Jobs Crunch, there has been a serious erosion of many dimensions of job quality. Reduction of disposable income is one dimension of this erosion. We can see folks moving from low rent rural areas to high rent urban areas and have significantly less income left after taxes, housing, insurance and transportation costs. Another dimension is that people in a harsh economic climate may take jobs that are simply unpleasant or even morally offensive to them.
I tend to think that in many respects, jobs quality and living standards may have peaked in the US right before the Kennedy-inspired expansion of immigration. The result has been transfer of trillions of dollars of assets into the hands of the wealthy-and the gutting of the American economy.
Turning around over 40 years of gross mismanagement of a huge economy will be hard. What articles like this one in the New York Times are suggesting is that the economic decline of America is becoming so obvious, it cannot be ignored any longer.