Our Representative, Tom Price, is wrong about why you’re struggling to make a good living.  It is not High Taxes, as he thinks.  You’re struggling because Automation and International Competition have driven down real wages.

Here is what Tom Price says in his latest email blast.

“Millions of Americans are still struggling in an economy that is underperforming by historical standards because the president’s economic policies of higher taxes and burdensome regulations build barriers to growth, diminish opportunity and impede increases in wages.”

He thinks high taxes and burdensome regulations are stopping companies from paying you more money.   Sorry, Tom, but, with all due respect, you’re wrong.  The reason the middle class is struggling is because employers can get away with suppressing your wages.  “Higher Taxes” and “Burdensome Regulations” and not impeding increases in your wages, free market economies 101 is impeding your wages.

Because of Super Container Ships, it is now cheaper to ship stuff from Vietnam or China or Indonesia to the US than to ship stuff within the US.   Because of these reduced transportation costs, to be competitive, companies have to pay American workers the same as foreign workers.  Your wages are being suppressed, not because of high taxes and burdensome regulations as Tom Prices says, but because of simple free market economics.

From a statistical perspective it is called “Regression Toward the Mean.”  When it is cheaper to ship a toy from Vietnam on giant container ships than to ship it within the US, than there is no reason to pay a US worker much more than a Vietnam worker.  Hence, there is huge pressure to “impede increases in wages” from the marketplace.

Adding to the suppression of wages is massive automation of manufacturing.  With automation, an unskilled worker in Vietnam can make equally good stuff with workers in the US.

It is not high taxes or burdensome regulations stomping all over your wages, it is global free markets and manufacturing automation.

Bottom line is that companies are trying to pay their workers the least the worker will accept, rather than pay them the most the company can afford.  Companies are driven by their investment class to maximize profits.  And to maximize profits in an global marketplace you simply find the cheapest workers and get them to make your stuff.

Of course the problem is that with suppressed wages, you don’t have to the money to buy the stuff that these international corporate giants are making, but that is ok, because, just as your wages are suppressed, the foreign workers wages are going up, so they will buy the stuff they make.

Now, I could be wrong, and I would love to discuss this more.  Please join our 6th District Learning Community so we can work together to figure out what is impeding your wages and what we can do about it.