During a recent shopping trip to Macy’s I made a simple, but possibly profound, discovery: shit costs too much, way too much. I’m serious. I keep reading about big discounts offered by retailers due to the recession so I went shopping looking for a good buy in keeping with my $10 shirt and pants policy — I don’t spent more than 10 bucks for either. Seriously. However, I’m not seeing any big change in prices as compared to, say, six months or a year ago. What’s going on?
I mean it’s true that the cost of gas has gone down by one-half and in some places close to two-thirds, though there has been a recent spike allegedly due to Israel’s razing of Gaza. However, other than that, I’m not seeing any big difference.
And I’m thinking if the cost of gas can be cut in half or even by two-thirds, then why not everything else? Let’s start off with rent. Why not a two-thirds cut? Home prices have edged down after the popping of the housing bubble; shouldn’t rent do likewise? And then basic foods: milk, eggs, a loaf of bread? And how about cars? Big auto and the Republican Party are demanding the UAW take steep benefit and wage cuts, but do you think the cost of buying a new car will take a commensurate plunge downward?
What about medical costs? Any chance those $125-a-second office visits, $750 MRIs or $1,200 emergency room visits might be lowered a tad?
Fat chance. Economists claim that today, because of the recession, one of the big dangers is deflation: a general decline of prices when inflation is below zero, along with supposedly a bigger danger of a deflationary spiral. Supposedly what might happen in a deflationary spiral is that if consumers hold back on spending looking for lower prices, this could lead to a general drop in demand, causing a drop in production, a lowering of investment and, heaven forbid, an increase in the value of money. Now, I haven’t heard any big qualms recently when prices went up, for example in the housing market. So why all the noise now?
I know one thing: wages haven’t increased at all over the last quarter century, especially over the last decade. On the other hand, productivity has increased dramatically. In fact, according to a graph I saw recently put out by Change to Win, if wages had kept pace with productivity, today the minimum wage would be $19 an hour. In addition, real wages peaked in 1972 at $8.99 an hour, and by 2006 dropped to $8.24 an hour. Consumer prices increased 4.3 percent for the same year.
Clearly there’s a very simple solution to the growing recession: restore workers’ purchasing power. Start with raising the minimum wage to $19 an hour. Cut prices by two-thirds. It’s only fair. And if that capitalist system enters into a deflationary spiral and crashes because of it, well, well maybe it’s time to reorganize things in a more rational way — ’cause right now from a worker’s point of view, it ain’t making no sense at all.