Welcome friends to another edition of
economic update a weekly program devoted
to the economic dimensions of our lives
jobs debts incomes the growth of some
parts of the world economy their
shrinkage of other parts and how it
impacts all of us
I'm your host Richard Wolff I've been a
professor of economics all my adult life
and in a way I hope that that has
prepared me to provide these comments on
what's going on in the economy today I
want to begin by presenting to you some
of the findings of the World Wealth
Report this very important periodic
document took time out this year to take
a look at the last 40 years the period
since 1980 of looking at what has
happened in the world economy and what
it tells us so important are these
results that the Harvard Business Review
for the month of March 2018 devotes a
long detailed article to this wealth
report and what I'm presenting to you is
a mixture of what the report contains
and what the Harvard Business Review
also has to say about it
let's start at the top and then look at
it with some detail inequality in the
world has sharpened Lee worsened over
the last 40 years
let me explain there is actually been a
shrinkage of inequality less inequality
when you compare countries to countries
mostly that has to do with extraordinary
improvement in the economic performance
of China and then also India and Brazil
they have gotten relatively richer fast
and the rest of the world particularly
the older wealthy parts Western Europe
North America and Japan have grown much
much more slowly if at all and so
there's been a little less inequality
country to country but the price of that
has been a staggering in
in inequality inside countries literally
all countries growing inequality in
China in India as I will come back to as
well as in the United States Western
Europe and Japan and so on that's what I
want to talk to you about over the last
40 years the share of income of the top
1% of people in the world the top the
richest 1% in 1980 they together got 16%
of the world's income they were only 1%
of the world's people
they got 16% of the world's income by
2016 that share of the top 1% had risen
from 16 which is what it was in 1980 to
20% Wow
that means the rich got much richer the
rich got a bigger share not only did
their income go up but it went up faster
than everybody else so that everybody
else had to do make do with a smaller
share let me look at this in some detail
so you can see the most remarkable of it
from 1980 to the present the income of
the top richest 0.001 percent that's
really the richest of the rich in
America went up by 600 percent you heard
me right from 1980 to 2016 the income of
the richest point or 1% went up 600
percent the bottom half of the American
people that's a hundred and sixty odd
million people the bottom half saw no
income increase at all over the last 40
years that is if you were just the money
they earned for the prices they had to
pay they went nowhere
I want to let that sink in the richest
people got an increase over 40 years of
six
hundred percent and the bottom half of
the population saw no increase at all in
Europe just to give you another kind of
comparison that top point or one percent
that income grew but it grew five times
more slowly than in the United States
the Europeans didn't experience the
level of growth of the top at the
expense of everybody else the way they
did in the United States so that the
bottom half in Europe over 40 years grew
by 26 percent over 40 years that's not
much but it is better than zero
which is what their American equivalent
the lower half in America was able to do
compare China and India China grew much
faster than India but unlike India it
didn't have a growing inequality like
the Indians did yes inequality in China
grew but it grew much more slowly than
the inequality of India and that tells
you as much about what is happening to
divide Asia as any other statistic I can
think of in the United States then the
bottom 50% income share decreased from
20% of total income to 10 percent let me
drive that home the bottom half of the
American people lost half of the share
of total income produced in America
compared to 1980 it has been a disaster
for the bottom half which is the biggest
clue I can give all of you about how to
understand American politics right up
through mr. Trump but where the Harvard
Business Review article falls down is to
explain why did this happen what causes
this staggering growth but even before I
do that I want to use these data to make
a powerful point
we have been told for the last century
that capitalism is going to enrich the
rich yes indeed but we're all gonna
benefit because it's all gonna trickle
down the rich being better off will make
us all participate in their good fortune
these statistics show for the last 40
years that is cold stone wrong that
doesn't happen it doesn't trickle down
here in the United States even more
dramatically than anywhere else in the
world the rich got much much much richer
and the poor went absolutely nowhere
nothing trickled my friends if you want
to help the people the majority the
bottom two-thirds of this country you're
gonna have to help them you're gonna
have to deal with them the notion that
you can make the rich richer and feel
good that it'll all trickle down is
revealed by the last 40 years to be the
phony oneis story it always was as to
some of the reasons in 1980 the United
States had the highest minimum wage in
the world but since then the minimum
wage again adjusted for prices how much
the minimum wage actually pays you
versus the prices you have to pay the
minimum wage has fallen by 30 percent
let me compare that to France where the
minimum wage has gone from 1980 to the
present up by 300% it's tripled let me
drive it home again in the United States
the real minimum wage fell by 30 percent
in France it rose by 300% we're not
talking small differences here there's a
reason why the bottom half in Europe
didn't fare as badly as the United
States because they're treated better
they have a National Health Service and
a national health insurance program that
helps them higher education is becoming
more and more costly in America
requiring families to take out
in more and more European countries
higher education is becoming free no
charge at all let me give you a little
example that struck me when Bavarian
policymakers Bavaria's the southern part
of Germany tried to introduce small
university fees in recent years a
referendum was called in which the
Bavarian people fundamentally and
overwhelmingly rejected the imposition
of fees the tooth parts of the world
Europe and North America are different
and nowhere does it show in the less
serious inequality growth in Europe than
in the United States but fundamentally
capitalism has shown itself in the last
40 years to be an engine of in equal
economic development unequal development
it is not the alternative the only
reason capitalism temporarily after the
1930s made less inequality was the
massive uprising of people across the
world demanding a better treatment than
what capitalism was giving them and they
got it for a while the New Deal in
America social democracy in Europe but
as soon as capitalism could recover and
resumed its normal moment momentum its
normal way of development inequality was
the gift it is no trickle-down
inequality is the cost of the capitalist
system for the majority I want to move
next to an institution that isn't part
of the normal capitalist arrangement
here in the United States I want to talk
to you briefly about the YMCA this is a
charitable institution been around in
the United States for a long time
usually providing all kinds of services
to working people poor people athletic
facilities social benefit programs of
various kinds but I want to talk to you
about the problem of the YMCA but
it illustrates a larger point the YMCA
in particular I'm gonna talk to you
about is the YMCA in Chicago one of
America's biggest cities the head the
CEO they call him which is already a
hint the head of the YMCA a social
service organization is given the same
title as the head of a capitalist
corporation chief economic officer CEO
the CEO of the Chicago YMCA is dick
Malone in 2016
his total income salary and bonus came
to five hundred and eighty thousand
dollars for the year that's over half a
million dollars the workers at the
Chicago YMCA the people who clean the
ymca buildings who make sure that the
water in the YMCA swimming pool is safe
for children to go into etc Center earn
in the range of get ready now eleven
dollars an hour to fifteen dollars and
fifty cents an hour let's do that again
the workers get eleven to fifteen bucks
an hour the CEO gets half a million
dollars a year this grotesquerie led to
finally after years to the workers those
earning eleven to fifteen to call a
strike on March first of 2018 a one-day
strike to protest this grotesque
inequality they were organized by the
SEIU the Service Employees International
Union and that negotiations between the
two sides are continuing why did I bring
this particular little strike to your
attention because the inequality of
capitalism spreads beyond the
corporation it is replicated sadly in
institutions that are not profit-making
corporate driven institutions the YMCA
is a social service organization no one
expects it to run
profit no one demands that it compete
against other social service
organizations to earn a profit yet the
the infection if you like the disease of
capitalism spreads and makes a YMCA
replicate what goes on in corporations
wilde overpayment of the people at the
top gross under payment of those who do
all the work until it's unbearable they
contribute to the inequality because
they allow the model of capitalism to be
reproduced in their own ranks the next
economic update I want to bring to you
was stunning and I'm sure caught many of
your attentions as well this has to do
with an event in Quebec Canada 700
physicians residents and medical
students rejected a pay raise that had
been negotiated by the Federation's that
represent them my goodness an
organization of these doctors called mid
sacoby qua pool of a team in French
because it's Quebec of course said quote
we Quebec doctors who believe in a
strong public health system opposed the
recent salary increases negotiated by
our medical Federation's my goodness in
February
québec's legislate legislature gave
another increase to the 1000 assumed me
to the provinces 10,000 medical
specialists the average salary for a
specialist in Quebec is already high
ready four hundred thousand dollars
annually and so these doctors these
seven hundred out of those ten thousand
said wait a minute there's something
wrong we are already very well paid and
this system is giving us an in
while there aren't enough supplies there
aren't enough nurses there aren't enough
other workers in the health system to
provide a decent health system we don't
want our increases we'd rather see the
money go to make a better health system
now I want to explain to all of you what
this means it's very important it's not
just about the generosity of these
specialists it's not just about the
wonderful model of workers who care more
about the service they're part of than
grabbing a little more money for
themselves granted they're already very
well paid but I want to talk to you
about again the capitalist model you pay
the people at the top a great deal and
part of that money is to keep down
everybody else because you know
something it's been learned by
capitalists that if you pay the top a
lot you can avoid having to pay the mass
of your workers what they really ought
to be paid it's cheaper to pay those at
the top a lot more than it is to give
everybody a fair shake and so your top
heavy with overpaid folks at the top and
you know something this happens
everywhere outside of the corporation
and in it corporate executives at the
top are paid enormous lee and part of
their job is to manipulate and control
everybody else because the people who
run the system understand
in the end it's cheaper to pay the top a
lot more if it avoids having to pay the
mass of people a decent salary you see
it in the university with top heavy
folks at the top at the administrators
you see it at the YMCA you see it in the
medical profession you see it everywhere
messing up the average worker by
overpaying those at the top and telling
them we'll pay you extra you keep the
lid on all of those fellow workers
well 700 courageous doctors and medical
professionals
in Quebec understand this game and said
no as if to illustrate it here's the
next update the you UK which is a
organization of lecturers and other
staffs in universities across the United
Kingdom started a two-week strike period
on March 1st
why because again the conditions of
their teaching and the quality of the
education they can bring to the people
of Britain is being attacked and they
won't have it another example
Oklahoma Oklahoma in the is a state here
in the United States which has the
following statistic it has to be ashamed
of it has the lowest paid public school
teachers in the 50 states of the United
States they were so moved by the strike
of public school teachers in West
Virginia that they are now planning to
do it themselves they're going to have a
strike and their union unlike the one in
West Virginia the affiliate of the
National Education Association is saying
they will be part of this they saw the
writing on the wall in West Virginia
once again teachers are saying you
cannot treat us as if we don't matter
because it's an insult not only to us as
professional teachers but to the people
of this state into whose care you have
entrusted their children what kind of a
commitment to the future to children is
shown by paying your teachers less than
any other state in the Union at this
point I want to make a usual break and
remind you that we maintain two websites
that we urge you to make use of the
first is rdwolff with two Fs dot com and
the second one is democracyatwork.info.
Both of them allow you to follow us
on Facebook Twitter Instagram both of
them allow you to communicate what you
like about this program how you would
like us to
change the program and so on and both of
them provide you with extra material
they are available to you 24/7 no charge
whatsoever ever for those of you that
are listening and would like to see this
program instead as a video as a
television program we urge you please go
to patreon.com/economicupdate and
to view this program as a television
program I also want to remind you as we
did last week to take a look at these
two programs that we provide podcasts
that you can find as well on our website
the first is left out a monthly podcast
that does all kinds of interesting
interviews I think you will find
extraordinarily interesting and also
another one called Puerto Rico forward
that offers really extraordinary
insights into the history and struggles
of the Puerto Rican people at this time
I encourage you to give them a listen
we're very proud of adding them to what
we do on our web sites and you can also
find left-out and Puerto Rico forward on
iTunes Google Play as well as our
website I think you will find them as
valuable and useful as I do my next
update goes to Africa with the American
Secretary of State Rex Tillerson he gave
a lecture recently in Africa warning
African countries to be wary of making
commercial deals loans building projects
with China because he said the Chinese
may take advantage of you if you make
those financial deals I blew my socks
off here is the American Secretary of
State telling Africans who starting with
the slave trade have understood that
dealings with the West Europe America in
any ikan
amiquay is a long-term project of
destroying Africa in many ways giving
advice that they should be wary of
somebody else who might do that to them
there's something horrifically absurd in
the very spectacle and his inability to
recognize the absurdity of what he was
doing tells you a lot about the Trump
administration if you didn't figure it
out already and just as mr. Tillerson
was giving us that little story what was
going on right nearby in the Democratic
Republic of the Congo guess what Apple
computers and other companies were
negotiating with the government a new
set of deals what were the deals about
cobalt turns out that the Democratic
Republic of Congo is a place where
cobalt is importantly located and can be
mined and if you want to do anything
with modern batteries you need cobalt so
the companies are calling the deals with
Congo exactly endangering the future of
Congo the way mr. Tillerson was advising
African countries not to do that's
because what Apple does is what these
companies have always done and what mr.
Tillerson does is the BS veneer as if he
didn't know and understand as the former
head of Exxon heaven help us exactly
what the realities here are the final
economic update we have time for allows
me to introduce you all to the J CCU
what does that mean
that's Japan's cooperative consumer
Union or to be more accurate
Japan's consumer cooperative Union it is
one of the largest co-op associations in
the world it's been going in Japan since
1951 it now includes 334 coops that are
members of that build it is servicing
Kenny ready for this it's a powerhouse
37% of Japanese
households are members of the JCC you
they are a big powerful co-op
organization they prove that in that
capitalist economy coops can become a
very important part of the economy they
have a specialty in grocery stores in
delivering grocery and other items
across Japan they are much bigger in
delivery than Amazon has been able to be
they are bigger than Amazon and do not
fear the competition with Amazon 90% of
their members of females who do the
ordering for households in Japan here's
the interesting thing with millions and
millions of members with a very powerful
role in the economy of Japan they really
are ready to take the next step because
a consumer co-op and this is so
important to understand is a way for
people to cooperate in the act of
consumption in buying things that they
need food clothing shelter and so on but
it is not yet about being cooperative in
the production side in cooperatively
producing as well as cooperatively
consuming what could be done by consumer
coops is to say what we consume
collectively and cooperatively we also
want to see produced in that way we want
to see a production side of the economy
the enterprises where goods and services
are produced factories offices stores we
want them to work cooperatively in the
same spirit that we have consumed
cooperatively the millions and millions
of Japanese that are fiercely loyal
members of their consumer cooperatives
want to get the same benefits of lower
prices and better conditions for
consumption
they want to see that also done for the
workplace better conditions better
solidarity a better life
what they're not willing to say yet but
I'll say it for them they want to go
beyond the capitalist workplace the
top-down hierarchical inequality
producing economic system that we suffer
under and they want to move to something
else they've already figured it out by
cooperatively buying now they want to
take the next step which they are
uniquely powerfully position to do in
Japan because they've done such a fine
job of the consumer cooperation now we
can move on to cooperate izing the
workplace or as we like to say here
democratize the workplace make it be a
place that serves people not requiring
people to serve it listen up CEOs from
corporations on over to the YMCA time
for change we've come to the end of the
first half of this economic update thank
you very much for being with me we're
going to take a short break and then
we'll be back with an interview I think
you'll find remarkably exciting and
important
