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.
so we can only accept what the BLS tells us, so long as they dare not be forward looking.
young people entering college now - need exactly this kind of forward looking information to make career decisions.
switch to a government job, its about the only safe path now to a decent retirement package. and young people are starting to realize that - I have never heard so many young people tell me that want to work for government. they see their parents getting beat up in the private sector - hours worked, benefits slowly trimmed away, always tied to a cell phone even during "off hours" - and alot of them are wondering whether its worth it.
college-bound senior enters Guidance Office at Doom H.S.
Examining Magistrate, dressed in black, briefly looks up and resumes reading a file [obscure Kafka reference]"It has come to my attention, K., that you wish to go to college."
"Yes, sir." [nervously]
"I'll have you know, K., that the BLS has determined that 6 of the 10 fastest growing occupations between 2004 and 2014 do not require a four-year degree, and four of these call for no academic degree at all. Of course I know nothing of any fast growing occupations that require a four-year degree. You are expected to take your life at once. Use this gun."
ping
If it's a prediction that supports your premise, it's a fact.
If it's a fact that doesn't support your premise, it's obviously DA MAN conspiring to keep you down.
At first, I thought this was a hedgetrimmer response. LOL!
they had best do some planning, before then incur $100K in debt for a degree that can't get them a decent job, and end up working in a job they could have had, without the degree and the debt.
I agree. That's why engineering is the best bet, not gender studies.
Did you understand what he posted? Average starting salaries for the class of 2006.
Are you claiming that say 100,000 engineers graduated but only 1,000 got jobs? So the salary numbers posted don't count? Because such a huge oversupply of graduates versus jobs wouldn't push the salaries for grads lower?
Is that really what you think?
you think so.
well, I can tell you that I know a guy I went to high school with. no college (perhaps some community college). got a job working in the hotel industry in manhattan. worked his way up, I am sure he had some "menial" jobs along the way - front desk, food service, bellhop, who knows. today, he's a conceirge at a top NYC hotel - makes about $90K a year. $90K to make dinner reservations and book theatre tickets - not a bad gig.
there are good jobs in the service industry to be sure, but as I tell young people - pick your spots. get a job providing service to wealthy people, you'll make better pay. want to work in the travel and leisure industry, don't think red roof inn, think ritz carlton. want to sell or service cars, think BMW and not Chevy.
the average salary number only has meaning in the context of the number of jobs available. that's why I used the NBA analogy - NBA average salaries are very high. who cares?
So only a tiny fraction of engineering grads got jobs? And starting salaries were still that high?
I wouldn't use the word "tiny". but first in line are people with experience, then the H1Bs, and finally the college newbies. and the other pheonmena I see at work - people who retire, are not replaced. they are oursourced/offshored instead. that's the most convenient time to do it, someone retires, no entry level person need be hired to replace them. its much less messy to not have to fire someone.
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