The American Economy

The dominant economic paradigm in American thought has always placed a strong emphasis on efficiency, and concomitant concepts such as individualism and autonomy. A corollary to this thinking is that the individual is dynamic and efficient whereas the government is an ossifying bureaucracy, resistant to change and anathema to efficiency. The individual is the creator of wealth; the government is the parasitic redistributionary usurper that feeds upon this wealth. This aversion to government assistance and oversight of the economy has had dramatic and substantive effects on our nation’s social structure and welfare system. By maintaining a “laissez-faire” approach to the market, workers have been subject to the many vagaries an unregulated market unleashes; such as unemployment and slow wage growth. Inflation, slower wage growth, and deregulation have led to economic chasms separating the richest from the poorest, but instead of the federal government trying to vigorously assist the less fortunate, it has actually grown stingier and more averse to helping. The politicians routinely speak of the positive effects of finding a job; as if America’s poverty would dissipate if the poor would simply find an entry-level position. But the government’s failure in ameliorating the harm caused by slow wage growth prevents catechisms such as “find a job” from being the panacea politician’s promise.

Observing several indicators of the American labor market creates an unusual and frustrating picture of wage growth and its impact on American workers. Four seemingly disparate graphs and statistics, when viewed concurrently, paints a revealing picture. Firstly, according to a comparative study of welfare systems, “…when people of prime working age who had been depending primarily on public transfer income shift into paid labor, they get fully 43 percent more money on average in the US” (Goodin 139-140). One gets the initial impression that “work” is the necessary corrective for poverty. However, another finding in the same study claims that “…median equivalent income increased by between 15 and 16 per cent in Germany and the Netherlands, respectively, it increase only just 1 per cent in the U.S……the U.S…also does far worse at promoting economic well being for average citizens” (Goodin 130). These two statistics, when viewed together, are troubling. Real income growth was only one percent for the average family; less than the average growth of inflation. However, despite this abysmal growth, moving from welfare to work still leads to a 43 percent jump in earned income: these statistics show that our redistributed income is paltry, not that wages are getting stronger.