In the 1997 while testifying in congress, the chair of the Federal Reserve, Alan Greenspan explained why the economy was doing so well. A big part according to him was due to “greater workers insecurity”. The economy just fresly introduced concepts such as:
- NAFTA – The free trade agreement that allowed companies to easily move to China or Mexico if they thought the workers at home are too well paid
- Introduction of gig work – working part time, on temporary contracts or as “independent contractors” which severely weakens negotiating power
- Low union density – the vast majority of private workplaces had no unions. This was the result of a conscious and agressive war the US has been fighting against worker unionization for decades before that
All of that made the workers terribly isolated, desperate and worse off materially. The bottom 90% had to live in a situation where its harder to find a decent job since companies were moving elsewhere or offering precarious employment only. The economy was significantly and measurably worse for the vast majority of people. But the chair of the fed was celebrating it like it was a great achievement. That is because the indexes that are used to measure the economy are significantly skewed towards the top capital owners. Indexes such as:
- S&P 500 or Dow Jones – measure the profitability of top corporations and what is called investor confidence.
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