Faking the cost of living …The Clinton administration also granted a profit bonanza to the employing class by rejiggering the basis on which annual cost-of-living adjustments are calculated in wage payments and Social Security and other benefits to tens of millions of workers and working-class families in the United States. This is a decisive question for working people, as shown by the fact that real wages in this country in 2008 — even by government statistics — are some 10 percent lower than they were thirty-five years ago in 1973.
In 1997 the Clinton administration, acting on proposals by a Senate-appointed bipartisan commission, ordered that the government’s main yardstick of inflation — the Consumer Price Index (CPI) — henceforth be figured in a way that substantially reduced official price figures. This magic was produced by two tricks in particular.
First, the commission claimed to have unearthed an astounding oversight in the way inflation figures had been figured ever since such statistics had begun being kept decades earlier. In the past, if the price of steak went up, for example, that increase had been reflected in CPI figures. But it suddenly dawned on the commissioners that when steak gets too pricey, “people” simply start buying hamburger instead. So the cost of hamburger should replace the price of steak in the CPI. Shazam! No inflation in meat costs!
In reporting changes in the cost of living, the White House also introduced what it called “hedonics” (a word from the same root as “hedonism”). Lo these many decades, Clinton’s commissioners discovered, statisticians had been overlooking the fact that the “pleasure” working people and others derive from the goods we buy increases as new models are introduced. Cars may become more expensive, but now we can lock or unlock them as we walk across the parking lot. And as we’re sending off the next payment for that new computer, we should keep in mind that its speed and memory have expanded — so it’s actually getting more and more fun, and thus also “costs” less and less!
What’s the bottom line? Whereas the US government’s official annual inflation figure in late 2007 was deduced to be 3.2 percent, it would have been 7 percent — more than double — calculated by the methods used by every administration since the 1930s. And that means hundreds of billions of dollars in extra profits for the employing class — who are now paying much less in cost-of-living adjustments to workers in wage agreements, as well as Social Security, health, workers comp, and other benefits.
What does that mean in the everyday life of the working majority in the United States? In early 2008, less than half a year after the official inflation figure just cited, the US government announced that its so-called Consumer Price Index was now running a bit higher, at a 4 percent annual rate. But a closer look at that very same price data (even using the government’s own crooked methods) reveals that the costs of necessities such as groceries, gasoline, and health care had risen by an average of more than 9 percent over a year earlier.
Yet the Social Security administration announced that in 2008 the roughly 50 million people receiving retirement benefits will get a “cost of living” increase of 2.3 percent in their monthly checks — a measly $24 a month for the average recipient. And tens of millions of other working people will be lucky to get an inflation adjustment of any kind in their take-home pay.
…and faking jobless figures tooTo help mask the rising social toll of the profit system, the Clinton White House simply erased millions of jobless workers from the government’s monthly unemployment figures.
The Clintons learned this disappearing act from a previous Democratic Party role model of morality. During John F. Kennedy’s first year in office in 1961, he had worried about the political kickback from a sharp rise in joblessness that year. So he appointed a committee to look for a solution — not a solution to put people back to work, but to do better at keeping up appearances. A few years later the federal government slapped a label on workers who had been unable to find jobs for so long that they had stopped looking. Calling them “discouraged workers,” it no longer counted them as being unemployed. Voilà! The “unemployment rate” dropped overnight!
Clinton, who also confronted high joblessness at the opening of his first term, took things a step further. Although since the 1960s “discouraged workers” had no longer been counted as unemployed, they were nonetheless included as part of the overall labor force. Evidently that still revealed too much of the actual situation facing working people. So in 1994 the Clinton administration decided that only workers who had been looking for a job within the last year would be counted as part of the workforce. That’s how Clinton, with the wave of a statistical wand, disappeared millions more jobless workers!
Despite Washington’s deceptive “official” unemployment figures, the labor force participation rate has actually been going down from its post-World War II high point of a little over 67 percent in 2001. That’s the best measure available in government records of the percentage of workers actually holding down a job or looking for one, and who are thus counted in estimating the “official” unemployment rate. What’s more, even among those listed as unemployed in April 2008, almost 20 percent had been jobless for more than six months.
So while government jobless figures are a statistical fiction, the growing millions of workers who’ve been “disappeared” from the labor force since 2000 are not. They are real men and women who’ve been unable to get a steady job, often for years.
The US working class is getting smaller
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