Saturday, April 16, 2005


The neocon line is that everything is just hunky-dorey with Wallmart. Sure, we are losing our jobs, but the poor are benefiting by all those low prices. You should know right now, "there ain't no sech thang as a free lunch" and be very suspicious.

Cheap TVs, sound systems and appliances are a cover for increased expenses elsewhere. While UNNECESSARY consumer goods have truly gone down in price, certain NECESSITIES have shot up in cost. Couple this with stagnation of incomes among working people and a decline in incomes among the poor and the cheap consumer goods are no bargain.

Two essential aspects of living, housing and transportation have gone up in cost a much greater extent than either the rate of inflation or increase in income. In some Canadian cities, rents and house prices are ten to twelve times what they were 35-40 years ago. At the same time, the minimum wage and welfare have gone up only six or seven times. In the USA, housing costs, adjusted for inflation, rose 42% between 1970 and 1996. During the same period, worker income stagnated, and for families with parents under age 35, actually declined. Americans who made less than $20,000 US in 1997 spent 52% of their income on transportation and housing. (1)

Back in the 1960's a bus ticket cost 20 cents. Same ticket today is $2.50 or twelve and a half times. If the minimum wage had shot up to the same extent it would be $14 an hour! In the US the percent of family income devoted to transportation has doubled since the late 1930's. Looked at in dollar terms, a family making $40,000 US has to shell out $7600 for transportation. if the proportions were the same as in 1939, they would have $3800 extra to spend on other things. (2)

Back in the days when housing and transportation were relatively cheap, consumer durables, were, for the most part, relatively expensive. But no one went without. Everyone had a fridge, stove, and TV. If they couldn't afford new stuff, they bought them second hand. You could always pick up a fridge or TV for 25 bucks at the SallyAnn. NO ONE HAS EVER SUFFERED BY NOT HAVING THE LATEST TV OR FRIDGE. But, people who have to shell out 50 or 60% of their income for rent DO suffer.

Many consumer durables, adjusted for inflation, cost about half what they did in the 1960's. Had the same cost decline happened with housing and transportation, you would have no trouble buying a house in Vancouver for $70,000 or renting a two bedroom apartment for $400 a month. (3) A bus ticket would cost only 60 cents.

Wallmart’s "inexpensive" consumer goods are an example of capitalism's bad priorities. The important things, basic human necessities, are poorly met. In exchange, we get a lot of cheap, badly-made, job-killing imports. It's a lousy trade-off. (4)

1. Segal, Jerome, "Graceful Simplicity", p. 46
2. ibid, pps. 53, 54
3. Actual prices are approximately $400,000 and $1200
4. The situation is even worse than I portray here. Many government services that were once free now cost, taxes for working people doubled as the government off-loaded them on workers as a means of lowering corporate taxes, it costs twelve and a half times more to mail a letter than 1968.


Blogger Kevin Carson said...

"In the USA, housing costs, adjusted for inflation, rose 42% between 1970 and 1996."

This sounds like a job for Henry George.

Most of us radical lefties are familiar with the amount of productivity increases that have gone into increased corporate profits or management salaries, over the past 30 years, while wages remained flat.

But it's good to be reminded how much of society's increased productivity goes into increased land values that profit only the great land-owners at everyone else's expense.

6:37 PM  

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