July 31, 2013
More than five years after the great recession hit, the US economy is still sputtering. The government revised GDP growth figures down last month to a meager 1.8% for the first quarter of this year. It doesn’t take a PhD in economics to understand why: we have a demand problem. And we have a demand problem because the vast majority of consumers – aka workers – are not earning enough to pay for healthcare, education and retirement, let alone all the other stuff stores and service providers have to sell.
The reality is that we’re hollowing out the middle class by wiping out well-paid jobs with benefits and replacing them with low-wage ones that often lack them. That’s damaging not only to people who are living on smaller paychecks – or who are indeed unemployed – but also to the health and viability of the overall economy.
No matter what New York Times columnist Thomas Friedman and his followers say, we are not living in a “sharing economy”. We are living in a zero-sum economy – in which a handful of investors and owners win at everyone else’s expense.