Several years ago Rush Limbaugh had a mantra he liked to use as proof that the U.S. economy was doing very well. His argument was that the economy was doing great because prices were so cheap. Even though, I was and still am a listener of Limbaugh, his assertion never sat well with me. I believe that in truth, those cheap prices were indicators of forces at work that were leading to the decline of our economy. As a worker at the lower end of the wage scale, at that time, I saw a lot of problems related to those cheap prices.

One of the reasons for the cheap prices was the strength of the U.S. dollar. Obviously a strong dollar is an indicator of a strong economy. Except even back then the value of the U.S. dollar was artificially inflated by economic competitors such as Japan, and China. These competitors would buy dollars in order to push it's value as high as possible. A high dollar made it easier to undercut U.S. manufacturing prices, take over market share, and cause harm to the U.S. manufacturing base.

Another damaging dynamic that was occurring was the rise of the big box stores. I remember as a kid, going to the Mall when the department stores ruled. Macy's, Sears, J.C. Penneys, Montgomery Wards where truly a fun place to visit. They put a lot of money into their displays, you could buy clothes, tools, sporting goods, furniture, jewelry, appliances, stereos, and televisions. Every department was staffed with several sales people who knew the products in their department. Most of them worked on a commission. Of course some departments were more profitable and offered higher commissions. There was competition among the work force to get into these better departments. Now you were not going to get rich working there but a person in one of the better departments could support a family. Oh and one more thing. They were retail stores whose merchandise was sold at full retail prices, a term that is almost meaningless today.

Surrounding the malls were the smaller more specialized stores. Many of them owned by a small business owner. The small business owner could make a decent living and provide a few jobs as well. Some could pay as much or more than the department stores, some could not. But there was a range of jobs from entry level to more skilled and a person could work their way into a comfortable living without college. And then there were the manufacturing jobs that typically paid more than the retail stores. Workers had choices and employers had to compete for good labor which meant they had to offer a decent wage for experienced workers or build their business around younger entry level workers.

But even as our economy was growing, the attack on the worker began. Some of that you could blame on corporations and politicians but much of it is our own fault. The bottom line to this decline was the desire for cheaper prices. And everyone from rich to poor wanted to pay less for their goods and services. That is the way it is in a free market. The businesses try to make as much money as they can and the customer tries to get the cheapest price that they can and the market is supposed to settle into a happy medium. But the manufacturing jobs were disappearing and along with that disappeared one of the career choices for the high school graduate. The problem was that we were now competing with countries with an entirely different price structure than our own. We could not compete with countries that had a much lower cost of living. And we could not compete against countries whose currency was much cheaper than our own. This put downward pressure on the lower wage earners. At first is was the raises that grew smaller and smaller. And finally the average starting wage began to drop.

Consumers making lower wages could no longer afford the same quality and amount of goods that they once could. Businesses responded by coming up with cheaper business models to keep their sales up. Retail stores cut staff. Now when you walk into a department store you have to hunt down a sales clerk before you can make a purchase, instead of being greeted by a sales person. Commissioned based retail sales position disappeared and more and more positions were replaced by minimum wage workers to keep cost down. When the big box stores arrived, they operated on a margin of pennies. Many small boutique businesses folded because the box store could sell goods for less than a small business owner could buy them. There was no way to compete.

So the higher paying manufacturing jobs started to disappear, the commission based retail jobs started to disappear, the mom and pop stores started to disappear, and the big box, high volume, low overhead businesses flourish. Is it any wonder that real wages in America are dropping? The demand for cheap goods has been a large contributer to the decline in quality jobs. Now that the genie is out of the bottle, can it ever be put back in? Would the American consumer be willing to pay higher prices for their goods if it meant better pay for retail workers? Would the American consumer be willing to pay higher prices so that small businesses could better compete with the large powerful big box stores? Would the American consumer be willing to pay more for foreign goods in order to protect American manufacturing?

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