The spin and reality of the economy

By JIM WRIGHT
FORT WORTH STAR-TELEGRAM.
The American workplace abounds with amazing contradictions. President Bush speaks glowingly of "recovery" and "economic growth," while most Americans are telling pollsters they are dissatisfied with the state of our economy.
Economic statistics reflect growth in the gross domestic product but continuing stubborn unemployment. Put simply, the economy is producing more goods but fewer jobs. In the past three years, the number of Americans without work has grown.
New housing starts, after rising in 2003, have plunged again this year. In the month that they rose most impressively, foreclosures hit a 17-year high.
Explain that.
Debt of all kinds -- corporate, credit card and mortgage -- continues to rise at a pace only slightly slower than our wildly escalating national debt, now seven times its size in 1980.
Could this help to explain the strange anomaly of spreading poverty in the midst of soaring profits? Not really. Debt may reflect the problem, but it doesn't explain it.
Charting the change
There is a pervasive change, more profoundly fundamental and alarming, than most realize. Here's a key measurement of what has been taking place in our society these past three years, and how astoundingly it differs from American tradition:
UThrough our four previous recoveries from economic recessions (a period that spans a half-century), 62 percent of the new wealth went into the wages of the American work force, while 14 percent went to increase corporate profits.
UBy sharp contrast, in this current period that is loosely labeled a recovery, only 39 percent of the economic gain has gone for wages, while 40 percent (three times as big a share as previously) feeds rising corporate profits.
So if this can be called a "recovery," the rational question arises: Recovery for whom?
Remuneration for company executives has taken quantum leaps, but wages for American workers as measured in real buying power actually are down.
More Americans are jobless; more are in debt; more (about 45 million now) are without any health coverage. More family breadwinners have had to settle for lower pay. (Look at what's happened to the American Airlines payroll.) And more of those who haven't lost jobs are having to work longer hours -- less time for family.
A subtle (but historically sudden) redistribution of America's wealth and earning capacity has taken place without much public notice.
Almost all the direct federal stimulus has been directed to those at the top of the economic heap, in the tragically misplaced faith that it all would somehow trickle or filter down to help everybody.
The ethos
In the process, however, a new and greedier ethos has come to permeate America's emerging corporate culture. Where corporate America once cultivated empathy and loyalty for its employees and its customers, the driving force in boardrooms today is to placate profit-hungry investors.
Among the mega-businesses that increasingly dominate America's key industries (banking, communications, transportation, retailing -- you name it), and within the Bush administration, a key word these days is productivity.
Productivity is the economic measurement of the total value of goods produced in a given period, divided by the number of people producing them. In other words, what value are we netting from our average worker? Or, what is our average worker worth to us?
In the mid-20th century, it was presumed that there was a direct social connection between productivity and wages. As productivity rose, so should the wages of those whose labors produced this bounty.
No more. The conscious drive now is to downplay any entitlement of the workers to a share in the profits of their productivity.
Corporate giants today are concentrating on squeezing that much more of the profit from their workers' productivity by downsizing, outsourcing, abandoning worker retirement programs and closing U.S. factories to open new ones in lowest-wage countries.
XJim Wright is a former speaker of the U.S. House of Representatives. Distributed by Knight Ridder/Tribune.