current trend in the economy
The content of the reading materials given for the assignment gave a grim depiction of a current trend in the economy that has come at the average person’s expense. The articles highlighted how the super-elite brand of individuals looks for their interests. These interests come at the cost of the workers and the governmental structures. The first consideration that was pertinent to the conversation is shown concerning companies’ move to move their manufacturing faculties overseas. While unemployment rates continue to soar due to change in the socio-economic structure from the Industrial era to the post-industrial period, there is cause for concern. A new trend has emerged where companies move base operations to overseas countries (University of Minnesota Libraries Publishing, 2010). First, it cost-effective for a company to move its manufacturing facilities to countries like India and China, where labor laws are somewhat suspect. Hence, exploitation becomes a factor to consider as these companies continue to rake in profits from scrupulous business models.
Secondly, the move to transfer companies results in a gaping hole that is left in the American economy as people who used to work in these facilities are left without an income source. It is estimated that 5.5 million jobs have been lost from American companies moving their company to overseas markets. Even with the core focus of the American economy becoming IT and service-related occupations, outsourcing continues to be done at the average person’s expense. Despite the frequent calls for closures and firing of workers at the base level, it is highly suspect that the average CEO’s remuneration package continues to increase by 167%. The disparity is made even higher when an average worker’s wages have only risen from 17.46 per hour in 1979 to 18.63 per hour over a 30-year period (University of Minnesota Libraries Publishing, 2010). Most corporate CEOs have differing objectives to that of the workers.
The second aspect that compounds the economic issue that faces America is the psychological elements that govern the elite’s actions. In the current social structure, the super-rich does not see themselves as privileged people who need to show an empathetic understanding of the average worker’s plight. The elite believes that they are deserving of the wealth they have been accustomed to, which fuels the feeling of disdain towards people who are not in a similar higher position (Freeland, 2011). The term plutocracy has become the description of the social order that is adopted by the elite. The current demography of the elite class comprises highly educated and hardworking people whose apparent success continues to fuel their narcissistic outlook of themselves compared to the average person. Also, plutocrats only recognize their peers’ validated existence or people in the same class, forming their group of people in this group. The plutocrat class only has concerns that are relatable to them than those who occupy the lower echelons of life.
The third aspect of the current socio-economic situation is the advent of private equity firms that illustrate a capitalist approach that acts to the detriment of a society’s economic structure. The sequential process of private equity firms is to get investors to invest their own money for the purchase of profitable ventures for the sole purpose of squeezing out profits that they can use to pay back investors (Reich, 2012). Once the investors have been paid back with interest, the private equity firms sell the company has incurred a severe amount of debt from profits being channeled to endeavors that are focused on self-enrichment instead of re-investment in the company. Private equities pocket 20% from the company’s sale. At the same time, workers lose jobs, and the average population incurs more financial burden from unemployment benefits and a lack of revenue from a foreclosed company. The effects of Private Equities are shown in the example of Toys-R-us, a giant that was closed in 2018 (AJ+, 2018). The company failed to pay its laid-off workers the severance package promised and left most of its workers in impoverished conditions.
References
AJ+. (2018, July 15). Why Did Toys R Us Go Bankrupt? | AJ+. Retrieved from YouTube: https://www.youtube.com/watch?v=DgXLS_XBcbg
Freeland, C. (2011). The Rise of the Global Elite. The Atlantic, 430-439.
Reich, R. (2012, April 11). How Did Mitt Romney Get So Obscenely Rich? Robert Reich Explains. Retrieved from YouTube: https://www.youtube.com/watch?v=rodifJlis2c
University of Minnesota Libraries Publishing. (, 2010). Problems in Work and the Economy. In the U. o. Publishing, Social Problems: Continuity and Change. Minneapolis: University of Minnesota Libraries Publishing.