With 70%+ of our domestic economy created by still lagging consumer spending, our economy remains in the toilet. But who’s willing to step up and do anything about it? Whose responsibility is it? Do we just hound financially strapped families and individuals until they spend more?
Actually, our underlying economy has been lagging since the 1970s. That’s how long real wages have been declining, leaving consumers less of their own money to spend. But for decades consumers were willing to spend OPM (other people’s money) to maintain their standard of living, masking the problem. Until the Great Recession forced most of us to reevaluate our risk tolerances for borrowing, which hit the economy as hard as so many of us losing our jobs and incomes.
Today we’re seeing slight improvement, but only slight. The bottom 90% economically has significantly less to spend than pre-recession. And the bottom 50%+ can only afford necessities, with a high percentage having to rely on declining government assistance. Should we solve the issue by increasing government assistance? In other words, government borrowing to replace reduced worker compensation?
While the recent surge in job openings has produced some slightly raised spending levels, most new jobs pay below living wage. Adding more low-income jobs won’t lift the economy out of this mess. Neither will government raising minimum wages nor can the Walmarts and Aetnas of the world voluntarily increase bottom tier wages. Lifting our economy out of the sinkhole will require reviving what used to be the middle class. But who’s going to tackle that?
Let’s see – who would greatly benefit from a healthier domestic economy with substantially increased demand for goods and services?