What these fools in corporate America don't understand is that a poorly paid workforce cannot buy the products that make profits possible. That is why the minimum wage should be increased. Additionally, most high paying manufacturing jobs have been outsourced. You didn't hear these ideas during the State of the Union:
Over the last three months of last year, income growth stagnated and people across the country dug deeper into their savings than they have in years, according to data released Friday by the Bureau of Economic Analysis. That's despite a pickup in the overall growth of the economy.Full article
[...]On the whole, wages for workers aren't keeping up with the inflation rate, causing them to fork out more just to afford the basics. Median weekly wages rose just 1.6 percent in the fourth quarter over that quarter in 2010. In contrast, prices rose 3.3 percent, according to the Bureau of Labor Statistics. As a result, consumers dipped more into their savings: The annual personal saving rate plunged 29 percent in the fourth quarter (compared with that stretch of 2010), to 3.7 percent. This is the lowest saving rate since 2007's fourth quarter, according to the Bureau of Economic Analysis.
Spending failed to keep up with the production of goods at the end of 2011 because most newly created jobs paid close to the minimum wage, Vitner said. Seventy-seven percent of the jobs created since the end of the recession are in the low-paying sectors of retail, leisure and hospitality, home health care and temporary staffing, according to Vitner. With credit still tight and wages falling (once adjusted for inflation), Americans aren't boosting their spending, he said.
The millions of unemployed job seekers have put further downward pressure on low-paying wages.