Posted on 09/26/2006 5:20:47 AM PDT by .cnI redruM
Lately, there has been a big debate going on among Democrats about why workers aren't outraged by their economic condition, and therefore more hostile to Republican economic policies and more sympathetic to Democratic policies.
On the surface, it would appear that workers should be in open revolt. According to the Bureau of Labor Statistics, the average worker is no better off today than he was seven years ago in real terms. In August 2006, his average weekly earnings were $275.49. In August 1999, they were $275.61 (both in constant 1982 dollars).
Census Bureau data confirm this trend. According to recently released information, median annual earnings for men fell to $41,386 in 2005 from $43,158 in 2003 (in 2005 dollars), despite steady economic growth. Male earnings in 2005 were lower than in every year since 1997. Female earnings also fell in 2005 to $31,858 from $32,285 a year earlier and were lower than in any year since 2000.
Looking at the broadest measure of economic well-being, median household income, we also see flatness. In 2005, the median income -- the point at which half of households are above and half are below -- was $46,326. This was up from the levels in 2002, 2003 and 2004, but below those registered from 1998 to 2001. Median household income peaked in 1999 at $47,671 (in 2005 dollars) and fell every year thereafter until 2005's small uptick.
There is no simple explanation for worker passivity in the face of income stagnation. One argument is that labor union membership has fallen sharply over the last generation and, consequently, workers have no organizational mechanism through which to bargain for higher wages or protest wage stagnation politically. In 2005, labor union membership was down to just 7.8 percent of private sector workers, from 24.2 percent in 1973.
Another possibility is that workers have been so beaten down by layoffs and give-backs in recent years that they are just grateful to have jobs at all, even if their pay stinks. And because of declining health coverage by employers, those lucky enough to have health insurance may feel compelled to hold onto such jobs. If they switch to another job, they may get higher pay but lose their health benefits in the process.
Indeed, the rising cost of health benefits is a key reason for the flatness of wages. From the point of view of employers, their total labor costs have risen sharply. But all of the increase has gone into benefits, with nothing left over to raise wages. Workers may not like this fact, but accept its reality.
According to the BLS, wages and salaries have fallen from 72.6 percent of total compensation in 2000 to 70 percent in June of this year. At the same time, health benefits have risen from 5.9 percent of compensation to 7.7 percent.
Still another explanation is that the changing demographics of the population have eased the transition to an economy with slower wage growth. Many baby boomers have just seen the last of their children finish college and leave home. Suddenly, they have had a huge increase in their discretionary income, as the enormous costs of tuition and child care that they have borne for decades have now disappeared. They may not be any better off in terms of their family income, but they feel a lot better off financially.
Finally, despite wage and income stagnation at the macro level, people continue to move up out of the working class into the middle and upper classes. According to the Census Bureau, the percentage of all households with an income below $25,000 per year (in 2005 dollars) fell to 27.1 percent last year, from 27.6 percent in 2004. In 1995, 28.9 percent fell into this income class. In 1985, the percentage was 30.5 percent. In 1975m it was 33.1 percent.
At the same time, the percentage of households that are considered well-to-do -- those with an income above $75,000 (in 2005 dollars) -- rose to 28.3 percent last year, from 27.9 percent in 2004. In 1995, only 24.4 percent of households had that much income, up from 20.2 percent in 1985 and 14 percent in 1975.
In short, despite all the talk about the rich getting richer at the expense of the poor, the fact is that the percentage of households with low incomes has fallen and the percentage of those with high incomes has risen. This is perhaps the main reason why Democrats have had trouble getting traction on the income issue -- there are fewer people in the income class to which they historically have directed their message.
The more people there are in the $75,000-plus income category, the more people there are who are receptive to the Republican message of low taxes.
Oh, that's right, you again. You're the guy who thinks we have no semiconductor industry in the the U.S. anymore. As for your bullsh++ NBA example, the last time you excreted it, I asked you to consider all the (American) basketball players playing in Europe and elsewhere overseas, as well as semi-professional ball here in the U.S. You fled.
so are you telling me I should start taking lessons in dribbling?
According to you, only if you can play at the NBA level. Don't think of getting an engineering degree unless you're guaranteed a research slot at Dupont.
those dotcom fantasy jobs were blown out of the system by the end of 2001. the steady offshoring by large cap US tech companies has continued unabated since then.
Real wages are most definitely cyclical, with the trend-line pointing upward. Generally speaking, discussions about the real wage don't occur unless a Republican president is in office.
When you have people with engineering degrees who can't make it to DuPont, that's one thing. But when they go to work at Lowes, something is very wrong. In fact, US tech is gradually becoming just like the NBA - its becoming a boutique profession, the "average" jobs are going offshore or are being staffed by H1Bs, so if you can't be a "star player", my advice is not to choose another field. Which is exactly what young people are doing. And as the CSM article points out, its not just tech, the imbalances between jobs being created and education levels, is a real phenomena.
should say "choose another field".
Wrong. Again, your CSM opinion-piece points out that our colleges are generating kids with degrees with no economic benefit. It says nothing of kids with degrees in marketable fields. In essence, you are pointing to some dolt with a gender studies degree and lamenting the sad state of engineering study. It won't wash here.
I think you misread my post. No where did I equate manufacturing with adding value.
Bingo. I've always been a fan of Bartlett but I don't know what Bush did to turn him so rabidly against him.
The title of his new book and some of the reviews I've read, leads me to believe that his bias against Bush is motivated by vindictiveness and is affecting his balance and objectivity.
no, it points out a BLS labor stat that shows that the types of jobs being created (in many categories, not all of course, there are no absolutes here) - requiring little or no college. and which direction is the trend taking us? with offshoring, the answer to that question is very easy. so long as knowledge jobs can be offshored, our economy will increasingly generate service and government jobs, health care and education, etc. there is no stopping that trend.
its easy to blow off these young people as "dolts" - in many cases, they are people who can't find jobs in their field of training, and are thus working in unskilled positions, with a mountain of college debt behind them.
its not they they should have otherwise gotten degrees in "marketable" fields, the jobs don't exist in those field to accomodate everyone, so increasingly, college makes little sense for more and more young people.
so much for the knowledge economy.
BUY GOLD
Illegals making lower wages (which drags down these averages) doesn't seem to bother Dems... but they can't resist any chance to try to rile up their base.
My point was that the article's author was cherry picking the numbers by selecting 1999 as his wage reference. 2001 would've been fair -- after the dot-com implosion.
Outsourcing was going full-bore through the 90s, however the dotcom 'fantasy jobs' (I'll use your phrase - its accurate), covered up this fact. And when the 'fantasy jobs' were gone, people looked up and many of those past jobs that were once available in manufacturing or Hi-Tech, were overseas.
The dot-com crash brought down the entire stock market (harming good companies in the wake); the normal economic down cycle; WTC; all of this combined to extend the downturn, and depress wages/jobs for a several year period. So it isn't puzzling to me why people aren't upset that their wages haven't grown significantly since the peak of the dot-com era (unless they suffer from amnesia).
Can't disagree with one word of your post.
Are you and I reading the same piece? Have you read it?
. . . the Bureau of Labor Statistics's 10 fastest growing occupations between 2004 and 2014, and you'll find that six of the 10 professions do not require a four-year degree, and four of these call for no academic degree at all. [emphasis added]Since when does a prediction count as fact?
Long Island is one of the few places on the planet where you'll find two dozen illegal immigrants living in a $600,000 home. The economic forces at work here are probably the same.
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