A Discussion on Crisis of Capitalism
"The best way I know to get into this is to talk a moment about the history the United States. We are a remarkable country in that for most of our history up until the nineteen seventies we were a society that raised the wages of its workers on a regular basis decade after decade across the 19th century and most of the 20th century. It brought the waves of immigrants at make up the American people. It has brought us a nation that assumed that if you work hard and you do well things tend to get better as time goes along and your children will do better than you. There was a reason for it and that's what's kinda missing in most the history books. The reason is what economists call a labor shortage. There would never be enough people in the United States, partly because what was done to the native people who were here when the Europeans came. There was always a shortage of labor. Capitalism was successful, businesses thrived but they were always running up against the problem of not having enough workers and you can't run a capitalist business without workers. The solution found by capitalists always under these conditions is to raise wages. It would induce people to come to the United States particularly from Europe over most history although American capitalists discovered that notion when a worker comes here from Italy or Poland or Ireland they would then say "If I don't get a rising wage I'm gonna go take land in the West because the West was cleared so you had to pay workers not only to come here but to stay on the east coast or to stay where the industries were. So you had this rising wage until the nineteen seventies.
Not to make it too complicated, the labor shortage ended and there were simple reasons for this:
(1) the computer revolution. We replaced millions of workers with machines instead of having fifty people keeping track of the inventory in a supermarket you have one guy sitting in an office somewhere in Boise, Idaho, watching a ticker telling you how many rolls of toilet paper or boxes of cereal were sold and you know when to replenish.
(2) American corporations, because the wages have risen for 150 years, began to see that they could make much more profits by hiring workers in places in the world where the wages have not risen for 150 years. So they can leaving the United States in bigger and bigger waves and suddenly between the computer getting rid of jobs and that departure for other parts of the world, American corporations' demand for workers fell apart.
(3)American women popular women's liberation movement starting in the seventies. They began moving in to look for paid work.
(4) We had a new wave of immigrants, this time from Latin America.
If you put all that together, computer and export jobs meaning there's less demand and women and immigrants coming in bringing more labor supply, corporations everywhere in America discovered they don't need to raise wages any more.The first thing you learn in business school is if you are an employer and you don't have to raise the wages for workers you don't do it. That's how you make a better business at a profit.
Starting in the seventies, real wages stop rising. American workers get the same wages for the last 35 years. The average American worker gets the same bundle of goods and services for an hour's worth of work today that he or she got in 1978.
That changed American economics.