A Look At The American Dream

A BBC article looks at the American Dream

The end of the American dream?

Analysis
By Steve Schifferes
Economics reporter, BBC News website

The US economy has been generating strong economic growth over the past few years as it has come out of recession.

After growing at more than 3% a year in 2004 and 2005, the pace picked up to a blistering 5.6% annual rate in the first quarter of this year – although the pace has since then slipped back to 2.9%.

So far, though, little of that growth has translated into the hands of the average worker, according to new research from the Economic Policy Institute (EPI).

For real household incomes, the median point – the level at which half of households earn more and half less – has actually fallen over the past five years.

The unprecedented split between growth and living standards is the defining economic agenda …
Jared Bernstein, Economic Policy Institute

The full article can be read at:
http://news.bbc.co.uk/2/hi/business/5303590.stm

On the web page ” The End of An American Dream”,  is a link to a graph showing the relationship between wages and productivity between “1995 and 2006″. It is an interesting graph.

While viewing the “wages and productivity” graph, you should notice extreme pattern differences between the period 1995-2000 and the period 2000-2006. The pattern differences are striking but you are not viewing a comparison between two countries. To a large extent – you are viewing a pattern difference between two political parties.

Between the years 1995 and 2000, you will see wages tracking productivity almost like parallel lines. The American worker benefited  from improved productivity.

But that “tracking” changes dramatically during the years between 2000 and 2006. Instead of parallel lines, you have something that resembles a right triangle with productivity as the hypotenuse and wages as the base. In other words, productivity is increasing while wages stay flat.

What motivates a worker in the “RIGHT TRIANGLE” labor environment? It does not look like its to make a gain if wages don’t track productivity well. The other motivation option could be to avoid a loss – of job?. Perhaps flat wage “growth” is better than no wages at all? Perhaps the H-1B visas plays a role in flat wage “growth” for the American worker.

And now the American worker is being asked to “GIVE BACK”? As the American worker’s productivity increases, wages don’t. And the Bush team wants that worker to “GIVE BACK”?

That worker should not have to “GIVE BACK” because that worker gave at the office.