For some Americans, the Great Recession is actually the Great Depression 2. In a recession, wages and prices generally stop increasing temporarily. In a depression, wages and prices actually decrease. For most Americans, the price/value of their homes has decreased and prices of some items are falling. For most of us, wages are increasing very slowly, if at all. For some, such as new hires in many industries like the auto industry, starting wages are only 50% of what they once were.
GM is now back as number one in the world and earning mucho dinero, much money. The question I have is, can the new GM employees afford to purchase the cars they are building? If they follow the generally accepted rule of thumb to spend a maximum of 6 months salary on a car, the answer is no they cannot. Then who is buying all the cars that GM is building and selling? Is it the Chinese in China? Who?
Please see Job creators
- We Are in a Jobs Depression (pilogic.net)
- GM makes some record earnings, but under the hood it shows it has ways to go (traderjb.com)
- Industry Insiders And Reporters Slam Romney’s Auto Rescue Editorial As ‘Reckless,’ ‘Dishonest,’ And ‘Pure Fantasy’ (thinkprogress.org)
- GM leads the US auto industry on road to success | Michelle Krebs (guardian.co.uk)