26 Jul 2011

JP Morgan Tells Investors Why Middle Class Americans Are Screwed

How many working class Republicans do you know? How many blindly vote against their own economic interest? It is not their fault, they have just been duped into believing the conservative mantra that the government is stealing their money, when in actuality it is the wealthy who are stealing their money.

Let’s take welfare for example, according to a report by USA Today, in 2010 4.4 million people were on welfare. In a country of 330 million people that equals to a little over 1% of the population. 
Many people do not know this statistic because the corporate media wants to sensationalize news and this statistic will not get the blood boiling. Now there are also 50 million people on Medicaid, this is also welfare, just not the “check” poor people use to buy clothing, gas and pay for their electric bills. The reason why there are so many people on Medicaid is simply because businesses are not providing health insurance to their employees or if they are, the cost to the employee is too much because their checks are so small.
So your Republican friends are not happy and they have been told that if we reduce taxes on the “job creators” those tax savings will trickle down to them in the form of better wages or benefits. Your republican friends are getting squeezed, financially all the while the wealthiest in America are having their taxes cut and earning more.
Each and every time the federal government reduces taxes on the wealthiest in this country, that translates to lower state aid from the federal government. The states increase sales tax then push the burden onto the local towns and cities by cutting local aid from the state capitols that help fund schools, build roads etc. This then translates to reduced police, firemen, teachers, parks and senior centers, and/or higher property taxes on the small business owners and middle class homeowners.
In a recent report in a JP Morgan memo to their investors from Michael Cembalest, the chief investment officer he says, “US labor compensation is now at a 50-year low relative to both company sales and US GDP.” Cembalest continues to explain why corporate profits are so strong while the rest of the working class are feeling the pinch, “reductions in wages and benefits explain the majority of the net improvement in margins.” 75% of the increase in profit margins directly correlate with the reduction in workers’ wages.
Why are your Republican friends aggravated? They aren’t getting paid their fair share of the national GDP and economic growth and they are paying an increased burden of the taxation in this country. Think about this, as you work harder for a company and productivity increases, you’re not seeing your share of the profits you helped the company earn.
If you remember the report earlier this year that 50% of American do not pay taxes?
Well that turns out to be first and foremost a cherry picked piece of data. That is directly from 2009, when more people were unemployed, President Obama’s tax cuts for working families etc. In any other year that number hovers around 35%.
So the next time you have a discussion with a working class Republican, ask them when is the last time they heard their candidate(s) ever mentioned American wages being on the decline.
Then you tell them that it is the GOP that fights against raising the minimum wage and organized labor and ultimately fights against your economic interests. The Republican tell us that raising the minimum wage will cause an increase in prices. Sure this could happen, unless you don’t believe in competition in the free market.
What happens if company (A) doesn’t pass on the extra wages onto the consumer, takes a smaller profit to keep prices low, while their competitors pass on the wage increase to keep profits high? The consumer will go to company (A) and actually increase his profits due to increase consumer demand.
All Republicans say is reduce taxes as if that has translated to increasing the economic status of working Americans, it hasn’t as JP Morgan has explained to us and their investors.
What middle class workers need more than anything is an increased share of the economic growth.
The best way to rectify our middle class situation is to increase unions in the private sector.
Unions in the past forced working class wages up for everyone, even for the non union workers. The reason is competition. Non union employers would increase their own wages to compete with union shops in order to keep their employees happy and ultimately keep the union out.
Today, there is no longer a reason to increase non union wages, simply because organized labor has lost its market share and there is no longer that threat of unions organizing around you, forcing wages to increase.
There is absolutely NO REASON why anyone who is a small business owner or a middle class worker to vote Republican. It is their policies that have squashed the middle class and protected the wealthy who have consistently hoarded all the increases in our economy.
It is these very wealthy people who have benefited from YOU working harder,longer hours, spending less and less time with friends and family only for them to receive all the gains.
If you want to be mad, BE MAD, you have every right to be, you’ve been screwed! But direct your anger in the right direction, don’t protest teachers and firefighters because they make a couple more dollars than you.
Working class Americans deserve a bigger piece of the pie, rather than having that pie being eaten by the few at the top while tossing you the crumbs from their chins.
Progressives just want fairness, we believe in shared prosperity, we believe that if you contribute to the success of a company, you deserve a healthy portion of the profits.
Stop pointing fingers at other working class people, because as Jay Gould a railroad businessman and financier said in the late 1800s, “I can hire one half of the working class to kill the other half.” Let’s not let this happen, because although we are not literally killing each other, we are killing each other’s economic interests. Fighting to lower a fireman’s salary because people have told you , that YOU haven’t received a raise is ridiculous. It’s time for those of you that complain about YOUR working class salary to buck up and demand more for your hard work. YOU EARNED IT!


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