Not instantaneously, I agree. But in a slow job market, like we have now, the worker who is able to settle for lower wages will gradually drive out those who cannot or will not.

My back of the envelope calculations tell me that the average worker today receives about a quarter of the usable income that he could in the 50s and 60s. That is, a single worker supporting a spouse and five children unaided, needs a much higher income than at that earlier time.

It doesn’t appear that bad because families compensated by raising 1/2 to 1/3 as many children, and sending a second worker (usually mom) out to work. And, they stopped saving.

In addition, if the salaries don’t appear too bad (though they are) you also have to take into account the likelihood that for every year of solid work, your average worker will today spend a couple of months out of work. This brings down effective income also, and adds in complex ways to the family’s cost of living, decreased level of health, likelihood of losing assets like savings, home equity, and so on.

Noni

It’s also the case, of course, that a larger share of total compensation is flowing to the front-office types—CEOs, senior vice presidents, etc. Here’s another, much simpler EPI brief on that: http://www.epi.org/publication/ceo-pay-231-times-greater-average-worker/

I’m not, however, persuaded that if we can live on less, we’ll necessarily get paid less. A revival of the private-sector labor movement would make a difference. So would a full employment economy. Here are some thoughts about these, based on what other experts have said: http://povertyandpolicy.wordpress.com/2012/08/28/we-need-more-than-just-more-jobs/

But that was almost 200 years ago. He was born in 1809. That was only 35 years after the Revolutionary War and the establishment of the US as a nation. Things have moved on a bit since then.

The story that if you work hard and educate yourself used to be true, and both those things are helpful, but no longer sufficient. You can study at the public library till you’re blue in the face, that still doesn’t get you a degree or a job. You can work 70 hour weeks and still have income insufficient to afford an apartment in any American state. http://tinyurl.com/an27omr

No, the predominant way to become wealthy now is to position yourself into a spot where you can harvest the productivity of the rest of the population. You don’t have to appear powerful or important, you can be practically invisible, so long as you can hold that spot.

For the average guy to work harder, save, and soberly manage his finances might increase his prosperity by 50% (not necessarily, though.) But for certain, that effort will increase the prosperity of the peak predators a dollar for every dime he gains for himself.

When someone tells you to live on less, just remember this: when you can live on less, they will pay you less.

Noni