About That $70,000

Has Cheesehead logic taken over America?

Among the many half-truths being tossed out by Governor Cheesehead, sorry, Scott Walker of Wisconsin is the claim that state workers are overpaid. Lord knows if the number is accurate or not, but the figure of $70,000 is being bandied about as the average state worker’s salary. Because this figure is higher than the average pay in the private sector, Walker and his minions have seized upon it to “prove” that state workers are overpaid. To the average Joe and Jane this sounds right; after all, they’re not making that kind of money.

But Joe and Jane are pointing their fingers in the wrong direction. The problem isn’t that public sector salaries are too high, it’s that those in the private sector are too low, way too low. $70,000 per year translates to 1,334 pretax dollars per week. According to the Bureau of Labor Statistics, the median wage in the United States is just under $21 per hour, or $840 per week. So state workers are bathing in gravy, right?

Not so fast. The problem is that we’ve become accustomed to the funny math of the Ford-Carter-Reagan-Bush hyperinflation years. Who would want a weekly paycheck of just $297, which is what the average worker made back in 1970? Answer: most of us, if it came with 1970 prices. If we adjust that $297 to 2010 dollars, it comes out to $1,623 per week, or $84,396 per year. All of a sudden our gravy-boating public sector workers are falling behind, not living in the lap of luxury. As for those in the private sector, the only thing between them and Skid Row has been a combination of adding household members to the payroll and deficit spending. Women have flooded the workplace since the late 1960s. If we were to remove them and adjust the average male wage for inflation, American family income sinks to a 1932 level, the cruelest year of the Great Depression. It might even be worse since the average family carries nearly $118,000 of debt and 43% of families actually have a negative yearly income, courtesy of more than $8,000 worth of credit card spending.

How did it get so dire? Smashing labor unions is among the reasons. Union strength in the private sector is now under 12%; it used to be triple that. With no countervailing force, organized capital has looted and plundered the common treasury. Consider: In 1978 there were 450,000 millionaires in the United States; ten years later there were 1.5 million. It gets worse. There are now 7.8 million. America as a land of opportunity? Well… yes, for a very small percentage of a nation of 300 million. If trickle-down boosters were correct in their assertion that a rising tide raises all ships, the average wage in the United States should be more than $17,000 per year for those allegedly overpaid Wisconsin state workers, and more than $40,000 more for Joe and Jane.

I can’t blame the latter for feeling strapped, but they are truly the Cheesehead yokels of state legend if they think public sector unions are their enemy. Want to fix America’s budget woes, folks? How about making the pirates share their booty for a change? Raise taxes on the wealthy, close tax loopholes, end runaway capital subsidies, slap on some protective tariffs, create some real jobs, organize private sector unions, and cut your piece of the American Dream pie from the hogs with the big slices, not those whose sliver is wider than your own.