Why Wages Aren’t Growing
Wages aren&#x27;t growing because people aren&#x27;t worth more. Most job growth is in low-skill jobs.<p>For wages to grow, <i>people have to be paid more than they&#x27;re worth</i> as an economic unit. That&#x27;s what unions are about. &quot;More&quot;, as Samuel Gompers would answer when asked what he wanted.<p>This was a well understood concept in the 1950s, and was accepted by both management and labor in the major US manufacturing industries. The UAW - auto company contracts of that era explicitly tied wages to increased manufacturing productivity. It still is somewhat accepted in Germany, but is dead in the US.<p>Part of what killed wage growth was the demise of Communism.  Communism was once a serious ideological threat to capitalism. From the 1920s to the early 1980s, there was real fear in the business community that communism might work. It might deliver a better life to workers.  There was competition in ideology, and capitalism had to provide an increasing standard of living or risk countries going communist. Communism never did deliver a better standard of living, but the presence of a competing system which more or less worked kept capitalism honest.<p>With the demise of the USSR, and China moving away from its strict communist roots, the competition disappeared. Capitalism became a monopoly. Then it started acting like one. There was no longer any need to deliver a better life to workers.<p>That&#x27;s how we got here.