Posted on 11/10/2007 10:03:26 AM PST by 1rudeboy
Daniel Griswold directs the Cato Institute's Center for Trade Policy Studies and authored the new study, "Trading Up: How Expanding Trade Has Delivered Better Jobs and Higher Living Standards for American Workers," available at freetrade.org.
President Bush urged Congress yesterday to pass four pending trade agreements, telling a White House audience that open markets boost economic growth, raise standards of living by creating higher-paying jobs and deliver more choice and better prices for consumers. Despite claims to the contrary by populist opponents of trade expansion, the president has the facts and decades of experience on his side.
Critics of trade counter that real wages have stagnated while the middle class has been squeezed by a loss of jobs to low-wage competitors such as China and Mexico. Democrats in Congress point to those anxieties to justify their opposition to any meaningful trade-expanding legislation — including pending free trade accords with South Korea and Colombia and renewal of presidential trade-promotion authority.
Like so many assumptions about trade, the belief that more global competition has somehow lowered the living standards of the average American worker and family is just a myth.
The critics have it all wrong: The middle class isn't disappearing — it's moving up.
The Census reports that the share of U.S. households earning $35,000 to $75,000 a year (in '06 dollars) — roughly, the middle class — has indeed shrunk slightly over the last decade, from 34 percent to 33 percent. But so, too, has the share earning less than $35,000 — from 40 percent to 37 percent.
It's the share of households earning more than $75,000 that's jumped — from 26 percent to 30 percent.
Trade has helped America transform itself into a middle-class service economy. Yes, the country's lost a net 3.3 million manufacturing jobs . . .
(Excerpt) Read more at freetrade.org ...
What a terrible turn of events. Where can the nation find a woman to lead us out of this mess?
The only good job is a manufacturing job. It doesn’t matter how much less it pays.
Food and beverage manufacturing doesn’t count, though. It must be something important . . . like pink flamingos.
Of course it's moving up, and also disappearing. Eventually we will have workers making wages comparable to the rest of the world and there will only be two classes, the poor and the elite.
Yes, and the statistics show that if you wish to be a member of the underclass, fail to get a high school diploma (or illegally cross the border).
Tell that to the roofers and landscapers.
Why? Are they more likely to be afraid of the truth?
Just saying that since you stated that everyone not making a decent wage has not graduated or is illegal, go ask someone who is legal and has a diploma.
But you knew that. Looks like you’re the one who’s afraid of the truth.
Don’t you know that stopping people from improving their lives will help the undereducated and the lower skilled?
Any other points you wish to make, Captain Obvious?
Well dear, there are statistics and there are real people. Talk to some. And thanks, I’ll be the captain.
bump
Real people? As in Ph.D. candidates working in landscaping using teaspoons as tools?
“Demagoguery beats data in making public policy.”
--Dick Armey
Oh, you alluded? Sorry, I thought you meant what you said:
the statistics show that if you wish to be a member of the underclass, fail to get a high school diploma
Pwah!
Even (if) so-called free trade were to be resulting in our once-mighty economy actually added jobs — a rather absurd claim on its face — those jobs are now being paid. In a rapidly shrinking currency.
A direct result, of a mind boggling foreign trade deficit.
Fact is *all* Americans are paid less, every day now.
Gee. This so-called free trade is just great.
Thanks Wal*mart.
Where are we hiding all those unemployed? In camps somewhere?
From now on I’ll read something that’s not there into everything you post. There now, settle down.
Well, we can all be assured you’ll have a job...
(spamming FR with so-called “free trade” propaganda)
:)
/sort of
It’s my pleasure. Someone needs to keep the Dem sleepers and third party malcontents on their toes.
The U.S. Bureau of Labor Statistics reports that the average real hourly compensation earned by Americans has actually grown by 22 percent during the past decade — even as trade and other measures of globalization have grown rapidly.
The falling dollar correlates more toward the uncertainty
of our congressional leadership.
Yes, a sharply devalued dollar could bolster inflation. However our economy
grew at 3.9% annually last quarter so I don’t believe there’s too much to worry about.
I’m more worried about the “green” stranglehold over our congress. No oil, no prosperity.
Oh, you want me to read some more of statistics that you keep changing the meaning of? Ha.
Of course not. You failed to consider them the first time. Why should the second time be any different?
Tax the greedy elite, for the poor!
The Census reports that the share of U.S. households earning $35,000 to $75,000 a year (in '06 dollars) — roughly, the middle class — has indeed shrunk slightly over the last decade, from 34 percent to 33 percent. But so, too, has the share earning less than $35,000 — from 40 percent to 37 percent.
Darn it, there are fewer poor. I blame free trade.
You really need to take a closer look at my comment #6, and your reaction to it in your comment #7. The fact of the matter is, I am discussing data and you are demagoguing . . . that’s why you made the bee-line for the tall grass by telling me to “talk to real people.” As if I don’t. Har.
More accurately, it’s “proof” that incomes are not rising for anyone.
The U.S. Bureau of Labor Statistics reports that the average real hourly compensation earned by Americans has actually grown by 22 percent during the past decade — even as trade and other measures of globalization have grown rapidly.
I wish these guys would cite their sources -- maybe I wouldn't have to ask. BLS is pretty big.
Employment, Hours, and Earnings from the Current Employment Statistics survey (National) Yes, wages are up including adjusting for inflation no doubt.
Total Private Average Hourly Earnings of Production Workers - Seasonally Adjusted, January
1997 12.29
2007 17.10
It appears that production workers include these sectors Goods-producing; Natural Resources and Mining; Construction; Manufacturing; Private Service-providing; Trade, Transportation and Utilities; Wholesale Trade; Retail Trade; Transportation and Warehousing; Information; Financial Activities; Professional and Business Services; Education and Health Services; Leisure and Hospitality; and Other Services.
For example,
Private Service-providing Average Hourly Earnings of Production Workers - Seasonally Adjusted, January
1997 11.84
2007 16.77
Manufacturing Average Hourly Earnings of Production Workers - Seasonally Adjusted, January
1997 12.99
2007 16.98
However..
Total Private Average Hourly Earnings, 1982 Dollars - Seasonally Adjusted, January
1982 7.89
1997 7.61
2007 8.36
Total Private Average Hourly Earnings, 1982 Dollars - Not Seasonally Adjusted, January
1982 7.94
1997 7.66
2007 8.42
With a base year as an index the increases are not in the twenty-two percent neighborhood. (Sill an increase of course.) Isn't this index a better indicator of how well off the average wage earner is?
Notice the drop between 1982 and 1997 and now the increase, does this suggest we're adjusting to our "new" economy? IOW, can't both sides be more or less right? It hurt for awhile but we're making the adjustments.
You are just so sophisticated! You got any idea when the down turn on Wall Street will change direction?
The roofer will not care about a hourly wage if wall street keeps heading south
I happen to be in the IT industry.. My attitude is this, keep on learning if you don’t you have no job..
LM_AO!
The author does reference the 1982-based data; it's a little more telling than I presented because I did not look at wages prior to 1982; to wit, ". . . official statistics show that the average real hourly wage paid to American workers is lower today than in the 1970s. From a peak of $8.99 an hour in 1972, the average real wage (in 1982 dollars) declined steadily to a low of $7.52 in 1993 before rising again to $8.32 during the first half of 2007.14 The statistic that the average real wage remains below its peak of more than 30 years ago has become a rhetorical battering ram against trade liberalization, but it fails to capture the reality of the progress Americans have made in a more globalized era."
Then he goes on to try to explain it away with charts and several pages. I'll need to rest up before tackling that.
My guess is when "they" see that the little people are starting to buy, then buy and buy and run up the price as "they" sell to the little people. Then ka-boom! Repeat. :)
I've seen lots and lots of recessions, inflation, stagnation, and stagflation (once) since the 1940s. We all survived.
Still no directions to the alleged source but he does walk thru the process. First, to get to the 22 percent you must consider real hourly compensation not hourly wage, says the CATO employee.
Actually, it's all an oft-repeated claim that appears here in these threads regularly. To wit, it ain't the salary alone that counts it's the salary, benefits, and lower consumer prices that make the 22 percent increase.
In that case here's my reply summary: So that 22% increase in hourly "compensation" is partly ipods and cell phones replacing 8-tracks and pay phones. I see.
I just knew that hedonism would make an appearance A.k.a., technology inflation, a.k.a. Hedonic Price Indexing.
[End of summary]
After citing authors who say wages have fallen he dismisses them as not understanding and states, "Contrary to the common tale, expanding levels of trade in recent decades have been accompanied by rising real hourly compensation for American workers and a higher median income for households."
(Note: recent decades have brought higher median incomes for households. Yes, recent decades have introduced the two-income family.)
Free trade promotes greater employment in higher-paying sectors "[t]hus expanding trade tends to raise overall wage and income levels. Even for the majority who work in nontrade sectors, global competition delivers lower prices for everyday consumer goods, allowing workers to stretch their paychecks further."
"First, the real wage does not include benefits. Second, it relies on cost-of-living estimates that have tended to systematically overstate inflation in recent decades and thus understate gains in real earnings. Third, real wage numbers are often compared to previous peak years, a practice that tends to minimize longer-term upward trends."
Honest, I knew that hedonism would make an appearance. To wit, "Consumer Price Index tends to overstate the cost of living compared with past years because it often fails to accurately capture the increased quality of new and improved products." A.k.a., technology inflation, a.k.a. Hedonic Price Indexing.
So part of that 22% increase in hourly "compensation" is gained by ipods and cell phones replacing 8-tracks and pay phones.* I see.
Then the author goes on to complain about a "peak year" being used as a base year -- 1982 was a recession year, as the author earlier noted. Instead he complains about 2000 (a peak year) being compared to following years. Yet, there's no complaint about 1982 (a recession year) being used as a base that exceeds following years and was exceeded by earlier years.
* "In that light, the real hourly compensation and even the flawed real wage data look much more benign: In the decade since 1997, as the U.S. economy has become more globalized, real compensation per hour for American workers has risen by 22 percent."
The author talks about "the facts and decades of experience on his side" and denounces the myths of those who oppose. IMO the author's posted article is flat dishonest though he does say "real hourly compensation;" and the article mentions benefits, lower prices, and increased household incomes. I'd like to see real hourly wages and 1982 data mentioned rather than the cheap shots at opponents.
I am reminded of CATO's Reynolds who wrote and "proved" that no significant number of manufacturing jobs had been transferred offshore. Limbaugh and Tom Sullivan used that to bash those who knew otherwise. Reynolds' proof? Manufacturing was still the same percentage of GDP as the past several decades. He "forgot" to mention that the way manufacturing is measured changed in the late 1990s.
Exactly! Back when 80% of Americans lived on farms, Dad was the only one who worked. That's why school vacations coincided with harvest time. When Americans moved to the city and lived in tenements, Mom and the kids never worked in miserable factories and sweatshops. That's why we never needed child labor laws.
We need more plentiful cheaper energy. We need more production. We need more machines and more fuel to run those machines. And we need machines that require less maintenance and less manpower to operate them.
This is how we improve standard of living. This is how we maintain our position of dominance in the world.
Dad was the only one who worked
~~~~~~~~~~~~~~~~~
I understand what you are saying, but I would prefer you didn’t word it like this. My grandmothers worked harder than most females today ever did or ever will. But they didn’t work for income. Before modern convienences, homemaking was more work than it is today...especially on a farm. And with 10 plus kids running around in hand washed diapers and homemade clothes out of old flour sacks, the work was unceasing. Gardening, quilting, cooking, canning, helping with the animals...sure, women never used to work. And neither did the kids. Heck, those hayseed kids just ran around all day playing in the dirt and fishing and swimming in the pond, rigth? THat’s why they were so uneducated, right?
Not quite. They all worked themselves to death. THey just didn’t get a paycheck on friday.
Are you trying to say that we have a higher standard of living now?
Gardening, quilting, cooking, canning, helping with the animals...sure, women never used to work.
Are you saying that people who claim women never worked until the 1970s are wrong?
That’s why they were so uneducated, right?
Who said anything about education?
They all worked themselves to death.
In case you haven't figured it out yet, I agree with you.
Are you trying to say that we have a higher standard of living now?
~~~~~~~~~~~~~~~
I would say that we do have a higher standard of living now. But I would also say that our standard of living is slipping some.
How so?
We slipped some in the jimmy carter days and we’ve never got back to where we were. Part of it is taxes, part of it is irresponsible consumers, part of it is soaring health care, part of it is soaring education costs, part of it is college degree escalation. What I mean by college degree escalation is that too many jobs require too much schooling. I’d say 75 % of the jobs requiring a college degree could be done by someone without a college degree.
Too many people are wasting 4 years(or more) of their lives getting a worthless degree for the privilege of being interviewed for an average or below average job.
How common? 80% of the families? 50%? 20%?
What I mean by college degree escalation is that too many jobs require too much schooling.
True.
I’d say 75 % of the jobs requiring a college degree could be done by someone without a college degree.
A high school diploma used to mean you learned something. Now it means you warmed a seat for 4 years.
Too many people are wasting 4 years(or more) of their lives getting a worthless degree
A bachelors degree today is the only way an employer can be assured they're hiring someone who can read and write. Usually.
I agree with you on this. A degree implies a modicum of effort.
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