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Tilting at Windmills

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January 18, 2006
By: Kevin Drum

BUSHONOMICS....Bloomberg News writes the following about the state of the economy:

After 16 consecutive quarters of economic growth, pay is rising at a slower rate than in any similar expansion since the end of World War II. Companies are paying less of their cash gains in the form of wages and salaries than at any time since the Great Depression, according to government figures.

...."There is no doubt that something is happening" to reduce labor's share of income, says Robert Solow, a Nobel Prize- winning economist and professor emeritus at Massachusetts Institute of Technology in Cambridge. An economy that doesn't distribute its gains widely is "poorly performing," he says.

From the final quarter of 2001 through last year's third quarter, total compensation paid to employees by corporations, including health benefits, rose at a 4.3 percent average annual rate, according to government figures. That's the slowest growth for any similar period in post-war expansions lasting at least four years.

Translation: supply side economics works. It just doesn't work for you or me.

Kevin Drum 12:23 PM Permalink | Trackbacks | Comments (92)

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Comments

On a related note about the "results" of the tax cuts:

http://www.faireconomy.org/press/2006/No_Thanks_Report_01.06.pdf

Posted by: bubba on January 18, 2006 at 12:25 PM | PERMALINK

Well, at least the article is smart enough to understand that the relevant statistic is TOTAL COMPENSATION, instead of the "wages" that Kevin (misleadingly) usually posts about.

Posted by: Al on January 18, 2006 at 12:28 PM | PERMALINK

As Al would say, since more and more families and kids are falling into poverty (as opposed to under Clinton, when the poverty and abortion rates went down), it is good that the lazy in America are learning they have to work hard! And stay away from hurricanes.

But at least W protects us from gay terrorists.

Posted by: Gore/Obama '08 on January 18, 2006 at 12:29 PM | PERMALINK

Well, at least the article is smart enough to understand that the relevant statistic is TOTAL COMPENSATION, instead of the "wages" that Kevin (misleadingly) usually posts about.

Yeah, because things like health care coverage are so much better now than they were four or five years ago! </snark>

Posted by: Doctor Gonzo on January 18, 2006 at 12:30 PM | PERMALINK

Doctor Gonzo, you have to look at this through the mind of Al (I know, contradiction in terms; but bear with me).

The "free market" determines prices. Prices determine value. Therefore, if the price of your health care benefits went up, then obviously their value went up too.

Posted by: MJ Memphis on January 18, 2006 at 12:33 PM | PERMALINK

What members of the elite forget is that unlike the truly poor, members of the educated middle class expect wealth will be shared with them. If it isn't and the income disparity between the elites and the middle class becomes too great revolution will soon follow. That is what happened in Russia in 1918 and in the Soviet Union when the wall came down. It happened in Germany when the NAZIs came to power. It almost happened in the US during the great depression. FDR instituted some pretty radical but wise polices to head off the revolution.

The forgoing comment isn't intended to threaten, it is intended to remind all of us that there is a good reason for members of the elite to believe in and support progressive polices often derided by conservatives--self preservation.

Posted by: Ron Byers on January 18, 2006 at 12:35 PM | PERMALINK

The article actually did have an intersting point to make at the very bottom: perhaps pay isn't rising as much because PEOPLE NO LONGER VALUE HIGHER WAGES AS MUCH:

"``We are not finding compensation being the issue at all,'' says Terry Laudal, senior vice president of human resources at SAP America in Newtown Square, Pennsylvania, a unit of Walldorf, Germany-based SAP AG, the world's largest maker of business- management software. ``The issue is really the culture. Are you winning, are you investing in personal growth?''

Pay is typically a fourth- or fifth-rank issue for SAP job applicants, says Mark Steinke, the firm's vice president of staffing for North America."


Well, gee, is it possible that if people don't care about higher pay so much, then pay won't increase so much any more?

Not that Kevin would ever acknowledge that there might be other factors involved here other than the evil, incompetent George Bush.

Posted by: Al on January 18, 2006 at 12:36 PM | PERMALINK

says Robert Solow, a Nobel Prize- winning economist and professor emeritus at Massachusetts Institute of Technology in Cambridge. An economy that doesn't distribute its gains widely is "poorly performing," he says.

Robert Solow is wrong of course. One of the things he doesn't recognize is that in America we are currently living in the ownership society. Instead of making money by wages employees own stock shares so they can share in ownership of companies. As a recent statistic has shown, a majority of American families own stocks. People are making more money but investment earnings are not counted as their wage. So workers are making more money but in their investments and ownership of the company.

Posted by: Al on January 18, 2006 at 12:36 PM | PERMALINK

Why all the surprise? This was BC'00/BC'04 campaign bedrock.

If anyone made their own assumptions that theirs and Bush's' interpretation of "economic growth" was the same - then shame on them.

Posted by: wishIwuz2 on January 18, 2006 at 12:38 PM | PERMALINK

Compensation to employees rose at 4.3% and you're complaining?!?

Compensation to employees cannot on a sustainable basis possibly rise faster than the growth in productivity, so I fail to understand what your complaint is.

Posted by: DBL on January 18, 2006 at 12:38 PM | PERMALINK

DBL -- what is the delta between the mean and median on that 4.3% compensation increase. If compensation is improving across the board you might be right, but if it is increasing not at all for the lower income groups while increasing dramatically for the elites the increasing disparity in income will, at some point, become unsustainable.

Posted by: Ron Byers on January 18, 2006 at 12:41 PM | PERMALINK

Translation: supply side economics works. It just doesn't work for you or me.

Translation: American democracy doesn't work until the little guy gets his face seriously stepped on.

Posted by: koreyel on January 18, 2006 at 12:41 PM | PERMALINK

The assault on the middle class by the REPUKELISCUM and their corporate masters continues apace. Every SINGLE INITIATIVE they have initiated is intended to transfer money and power from the middle class to the monied class

1) the tax cuts

2) the increases in immigration to continue to destroy the ability to gain a living wage

3) the destruction of the unions

4) the assault on public universities

5) the assault on public education

6) the continued push to off-shore jobs and support by KING TURRDBOY and Emperor Dick of the creation of jobs in India at the expense of US jobs

7) refusal of the GOP scumbags to fix the AMT

8) destruction of the pension system by under-regulation.

I live in concern for the future

Posted by: POed Liberal on January 18, 2006 at 12:43 PM | PERMALINK

"Compensation to employees rose at 4.3% and you're complaining?!?"

Typical liberal goal post moving. First it was 3 million jobs lost, now it's: "we're growing too slow!"

Same with Iraq. After the first week it was quagmire, now it's: "why doesn't downtown Baghdad resemble Beverley Hills yet?!"

Posted by: Freedom Fighter on January 18, 2006 at 12:45 PM | PERMALINK

Robert Solow is wrong of course. One of the things he doesn't recognize is that in America we are currently living in the ownership society.

Oh, yeah - the Ownership Society. In the Ownership Society, we are all slaves to the REPUKELISCUM party.

We fought a civil war to end the Ownership Society. Looks like we are gonna need a second one.

Posted by: POed Liberal on January 18, 2006 at 12:45 PM | PERMALINK

Well, I guess I was wrong about this administration being completely incompetent. At their core value - distributing wealth upwards - they appear to be pretty good.

The 2008 slogan: "We Really Are Banana Republicans!"

Posted by: craigie on January 18, 2006 at 12:47 PM | PERMALINK

The increase in MEAN wages is YET ANOTHER REPUKELISCUM STATISTICAL LIE.

When I am in a room with Bill Gates, our collective average worth is 45 billion dollars. When we add Warren Buffet, our mean worth is 65 billion dollars.

Should I be happy about that increase in mean net worth?

Posted by: POed Liberal on January 18, 2006 at 12:47 PM | PERMALINK

"We fought a civil war to end the Ownership Society. Looks like we are gonna need a second one."

If history is any indication, the Republicans will whip the Dems in round 2 as well.

Posted by: Freedom Fighter on January 18, 2006 at 12:48 PM | PERMALINK

"That's the slowest growth for any similar period in post-war expansions lasting at least four years."

Not to quibble, but just how many "similar periods" in "post-war expansions" lasting "at least four years" have we had? The sample size can't be all that large. Also, the 4.3% number may conceal distribution problems and it may not, but it certainly sounds like a pretty healthy number from which to start the inquiry (well above inflation). As noted previously, it also doesn't take into acount the incredible amount of wealth generation that has taken place in the equities and real estate markets.

Posted by: Mose on January 18, 2006 at 12:48 PM | PERMALINK

Robert Reich in American Prospect Online:

But theres another story about the American economy thats equally remarkable although more sobering. Although the data arent all in, it seems almost certain that in 2005 median incomes continued to drop.

Its been that way for four years now, since the end of the last recession. The economy keeps growing but median incomes keep declining. Take inflation into account and you find that half of all American workers are earning less now than they did in 2001. Rarely before in history has there been such a long period of growth in the gross domestic product without most Americans sharing in that growth.

Bush is the antithesis of Robin Hood - he takes from the poor to give to the rich.


Posted by: JimBobRay on January 18, 2006 at 12:49 PM | PERMALINK

*Same with Iraq. After the first week it was quagmire, now it's: "why doesn't downtown Baghdad resemble Beverley Hills yet?!"*

(heh)

Break's over. Back on your medicine.

Posted by: wishIwuz2 on January 18, 2006 at 12:50 PM | PERMALINK

The more I read about phenomena like this, the more I think that the mysterious powers of the invisible hand are just a crock of shit.

Here's my theory. Employees aren't getting paid better because, in the current Zeitgeist, it's regarded as OK that they are not, while it's simulataneously regarded as OK to pay up the gazoo for executive talent.

Think about it. If you're deciding for one job or another in a given environment, does a 5% raise seem like a small deal, while a 7% raise seems like a big deal? If, across the board a 5% raise is, in fact, on the generous side, don't you simply adjust your expectations to the reality of the market? The point is, the perceptions drive the market, not the other way around. There is no miraculous external all-wise force that adjusts people's wages to some "correct" point; there is nothing but perception underpinning everything. The "invisible hand" may affect how people are rewarded ordinally, so that better workers within a market are better rewarded, but the sense of what "better" is, is entirely based on subjective, culturally dependent perceptions.

This, I think, accounts for why, say, Japanese executives might receive only one tenth of the compensation of their American counterparts, even while their companies beat the pants off American companies. It also accounts for why the fAmerican executives of the 50s and 60s were perfectly content to get far less than a tenth of their only less successful counterparts of today.

The market is, in short, massively manipulable to the favor of certain types of workers over others -- and, of course, it is executives who decide who gets paid what. And that, more than anything else, is the likely the explanation of the poor payoffs employees are seeing in today's market.

Posted by: frankly0 on January 18, 2006 at 12:52 PM | PERMALINK

Compensation rose at 4.3% including health benefits. Wonder how much of that is health benefits. Probably quite a bit, DBL.

Posted by: bg on January 18, 2006 at 12:53 PM | PERMALINK

Typical liberal goal post moving. First it was 3 million jobs lost, now it's: "we're growing too slow!"

Um, you really don't understand why people would be upset when 3 million jobs are lost and the economy is slow to replace those jobs with new ones? Really?

Here's a hint: when your job goes away and is not replaced by a new one, that means you don't have a job.

Posted by: Mnemosyne on January 18, 2006 at 12:54 PM | PERMALINK

As if further evidence of "Freedom Fighter"'s raging ignorance was needed:

If history is any indication, the Republicans will whip the Dems in round 2 as well.

He/she/it would do well to consider which party is the natural and welcome home to the neo-Confederate school of thought. Hint: the Republican Party isn't the party of Lincoln any more.

Posted by: Gregory on January 18, 2006 at 12:55 PM | PERMALINK

Just to make my point a different way.

Mostly, within a given type of worker, it's relatively easy to discriminate better from worse, and to make ordinal distinctions in terms of pay. But ACROSS types of workers, the measurements are mostly incommmensurate.

How much does management contribute to the bottom line? How much does the worker force? It's almost impossible to do head to head comparisons, so that subjectivity rules entirely in how well those different types are rewarded.

Posted by: frankly0 on January 18, 2006 at 12:56 PM | PERMALINK

BTW - 4.3% is before inflation, which rose faster in 2005 than in 5 years. So net increase was about 0%.

On the "investment society" mirage. Yes, most Americans own some stocks. But only a small percentage own a lot of stocks. So increase in stock prices benefits a small percentage of people.

Posted by: Samuel Knight on January 18, 2006 at 12:57 PM | PERMALINK

Modern economies do not have any difficulty providing goods and services. Modern economies have a difficulty consuming all of the goods and services they are able to produce. Everybody knows it, including rich capitalists, yet our political economy does not address that one particular problem because of the demeaning qualities wealth has on our political process. Wealth trumps utility for the commonweal.

Posted by: Powerpuff on January 18, 2006 at 1:03 PM | PERMALINK

Also, the 4.3% number may conceal distribution problems and it may not, but it certainly sounds like a pretty healthy number from which to start the inquiry (well above inflation).

Another point to make is that, even MORE important that total compensation increase is REAL total compensation increase - how much OVER INFLATION compensation has increased.

Now, the article CONVENIENTLY IGNORES INFLATION.

So while 4.3% might be "the slowest growth for any similar period in post-war expansions lasting at least four years", we have no idea how it ranks WHEN INFLATION IS FACTORED IN.

I'm curious which scenarion Kevin thinks is better for workers: (a) 4.3% average compensation growth with 2.0% inflation, or (b) 5.3% compensation growth with average 4.0% inflation.

So why does the article IGNORE INFLATION? Is it, perhaps, because if you include the effect of inflation, this expansion is VERY GOOD FOR WORKERS?

Posted by: Al on January 18, 2006 at 1:03 PM | PERMALINK

Al:

So workers are making more money but in their investments and ownership of the company.

So I guess I can look forward to credit at the company store rather than a payraise. Who needs money, when I can get "ownership"?

Posted by: Jon Karak on January 18, 2006 at 1:07 PM | PERMALINK

Also, take a look at what period they used:

From the final quarter of 2001 through last year's third quarter, total compensation paid to employees by corporations, including health benefits, rose at a 4.3 percent average annual rate, according to government figures

This period INCLUDES PART OF THE RECESSION! It is not just the period after the recession, but a part of the recession too!

Really, the closer you look at this article, the more ludicrous is really is. I mean who wrote it, Paul Krugman and Brad DeLong?

Posted by: Al on January 18, 2006 at 1:08 PM | PERMALINK

Not to quibble, but just how many "similar periods" in "post-war expansions" lasting "at least four years" have we had?

You noticed that, huh? The qualifiers on these "the economy sucks!" news stories keep getting longer and more elaborate.

Another item in the article that slid by where some statistical fiddling may have been done:

Stripping away benefits, corporate wages and salaries rose at a 3.4 percent annual rate in the 16-quarter period, the slowest of any post-war expansion lasting that long.

Just out of curiosity, what percent of employees in the U.S. work for corporations? What's the overall number?

Note that most of the article is about how people "feel" about the economy, not about the statistics. But a constant barrage of "the economy sucks!" articles from an ever-more-desperate media probably has nothing to do with any negatives.

Posted by: tbrosz on January 18, 2006 at 1:11 PM | PERMALINK

Note that most of the article is about how people "feel" about the economy, not about the statistics. But a constant barrage of "the economy sucks!" articles from an ever-more-desperate media probably has nothing to do with any negatives.

Shame on you, tbrosz.

Posted by: Gregory on January 18, 2006 at 1:16 PM | PERMALINK

On the "investment society" mirage. Yes, most Americans own some stocks. But only a small percentage own a lot of stocks. So increase in stock prices benefits a small percentage of people. Posted by: Samuel Knight on January 18, 2006 at 12:57 PM

The numbers of companies that pay dividends has also fallen. The number of companies paying

"...dividends peaked at 66.5% in 1978 and fell to a bare 20.8% by 1999, according to Eugene Fama of the University of Chicago and Kenneth French of the Massachusetts Institute of Technology's Sloan School."
(here)

So the revenue from stock ownership can hardly be a significant factor for the majority of Americans, let alone replace the income they receive from their job(s).

The "ownership society" line is just a lie. But that should come as no surprise to anyone who's paying attention.

Posted by: Dr. Morpheus on January 18, 2006 at 1:20 PM | PERMALINK

An economy that doesn't distribute its gains widely is "poorly performing," he says.

Must be a socialist.
.

Posted by: Grand Moff Texan on January 18, 2006 at 1:20 PM | PERMALINK

Powerpuff is on to something.

"The human race has had long experience and a fine tradition in surviving adversity. But we now face a task for which we have little experience, the task of surviving prosperity."
Alan Gregg

Posted by: craigie on January 18, 2006 at 1:21 PM | PERMALINK

Freedome Fighter: If history is any indication, the Republicans will whip the Dems in round 2 as well.

If history is any indication the Repubs will steal the next election, as they did in 2000 and 2004.

Posted by: DCNative on January 18, 2006 at 1:33 PM | PERMALINK

"One of the things he doesn't recognize is that in America we are currently living in the ownership society. Instead of making money by wages employees own stock shares so they can share in ownership of companies. As a recent statistic has shown, a majority of American families own stocks. People are making more money but investment earnings are not counted as their wage. So workers are making more money but in their investments and ownership of the company."

Dow, Jan 3, 2001: 10,945.75
Dow, 2 minutes ago: 10,828.04

Yeah, that ownershp society thing has been working out really well over the last 5 years, hasn't it?

Posted by: chaboard on January 18, 2006 at 1:33 PM | PERMALINK

It's not particularly surprising. Pay is still staying ahead of inflation which is historically low, too.

The spending that would have come as pay increases in other times are going into hiring (or avoiding layoffs) instead. There were a lot of "future" jobs and salary increase that got sucked into the dot.com bubble. It takes time to work them off and get stable and growing again after that displacement.

Posted by: Strick on January 18, 2006 at 1:37 PM | PERMALINK

"I'm curious which scenarion Kevin thinks is better for workers: (a) 4.3% average compensation growth with 2.0% inflation, or.."

In other news, CPI rose at 3.4% in 2005 - a far cry from fake Al's 2.0% strawman figure:
http://biz.yahoo.com/ap/060118/economy.html?.v=22

Posted by: chaboard on January 18, 2006 at 1:38 PM | PERMALINK

Lessee. My employer froze my DB pension plan a few weeks ago. I am 52 and would have maxed out my old plan around 60. I figure I lost about 200K in the freeze, after figuring in enhancments to the 401K plan to make the medicine a little less bitter. So to make up the shortfall, I can sock away an additional 20K or so a year. Is there some reason I shouldn't regard this as a massive reduction in compensation?

Posted by: demisod on January 18, 2006 at 1:44 PM | PERMALINK

Kevin is wrong. "Trickle-down" economics is an utter and complete failure. Until the Dems regain control over the executive branch (or after the revolution, whichever comes first) and can do some forensic reconstruction over at the Bureau of Labor Statistics, we will never truly know how hosed the American economy really is. Keep in mind that early in Bush's first term, the BLS changed the way they tracked unemployment numbers and wage trends. This happy face they are trying to paint on the economy is pure theater.

Remember - One of the first acts of any fascist regime is to manipulate the reporting of government statistics....

Posted by: Stephen Kriz on January 18, 2006 at 1:46 PM | PERMALINK

Trickle down economics does work. The only people that complain are the lazy, inferior people who are jealous of the smarter, more dedicated successful investors.

America is the land of opportunity, everyone knows that, it's in the Constitution for jeeper's sake.

Poor just equates to stupid, and the constitution doesn't protect stupid people.

Go USA, beat Evil!

Posted by: Spectator Consumer on January 18, 2006 at 1:58 PM | PERMALINK

Stephen Kriz: early in Bush's first term, the BLS changed the way they tracked unemployment numbers and wage trends.

Cite?

Look, Bush & Co. have done all sorts of nasty stuff. But if you don't have a cite for this particular claim, I'm calling you a liar.

Posted by: RT on January 18, 2006 at 1:59 PM | PERMALINK

This thread was entirely worth it just to see Al compare himself favorably to Paul Krugman and Brad DeLong.

Wow.

That's awesome.

Posted by: S Ra on January 18, 2006 at 2:06 PM | PERMALINK

Just to be clear: You could put either of those two gentlemen in a vegetative coma and they would still be smarter than Al.

Posted by: S Ra on January 18, 2006 at 2:07 PM | PERMALINK

Ron Byers has it right. I'm led to think of a line in an old Billy Bragg song, "You poor take courage. You rich take care..."

Posted by: theorajones on January 18, 2006 at 2:08 PM | PERMALINK

It was reported here (Wash. Monthly) just a couple of weeks ago that median income has fallen for all of Bush's time in office. Things haven't changed in that time. That's a crap economy.

Posted by: Jeffrey Davis on January 18, 2006 at 2:17 PM | PERMALINK

For all of you folks barfing all over Freedom Fighter all I can say is:

I for one am glad he's over there in Iraq doing the dirty work so you liberals can safely type at home.

God bless Freedom Fighter.
And God bless America.

Posted by: Christian Charlie's Ghost on January 18, 2006 at 2:22 PM | PERMALINK

What's that economic "growth" going to look like when we finally factor in the next 30% drop in the dollar?

Maybe we're just cutting each other's hair and wiping each other's bottoms for pay, while China is amassing the productive capacity AND the financial capacity to buy any real goods economy right out from underneath us.

Posted by: sandtoe on January 18, 2006 at 2:24 PM | PERMALINK

Well, gee, is it possible that if people don't care about higher pay so much, then pay won't increase so much any more?

That has to be about the stupidest fucking comment I've ever seen posted in a blog comment section.

Only an unhinged Bush apologist could make the claim that people are abandoning their need for money and replacing it with interest in personal growth and corporate culture.

shorter zombie Al: If the economy isn't great, just claim that it's because we've all coincidentally embraced socialism at the same time.

Posted by: trex on January 18, 2006 at 2:45 PM | PERMALINK

...."There is no doubt that something is happening" to reduce labor's share of income, says Robert Solow, a Nobel Prize- winning economist and professor emeritus at Massachusetts Institute of Technology in Cambridge. An economy that doesn't distribute its gains widely is "poorly performing," he says.

Well, there's your problem right there. I mean, sure, if you go to some ivory-tower egghead for "expertise," you're going to get this kind of Blame-America-first garbage. They should have asked an expert at the Heritage Foundation. Then we'd see what kind of economy America really has.

Posted by: Alek Hidell on January 18, 2006 at 2:51 PM | PERMALINK

'Al' posted:

"As a recent statistic has shown, a majority of American families own stocks."

You must have missed the other half of that statistic, which revealed that the VALUE of those stocks owned by the majority of Americans was LESS than the value of their vehicle.

.

"People are making more money..."

Only the wealthy.

.

"...but investment earnings are not counted as their wage."

Most people don't have much in "investment earnings" to begin with, but under the last five years of the illegally installed Boy Emperor Clown Criminal, the stock market has gone BACKWARDS by about 15% in inflation-adjusted dollars.

.

"So workers are making more money but in their investments and ownership of the company."

Wrong again.

Are you living in that undisclosed cave with Uncle Dick ?
.

Posted by: VJ on January 18, 2006 at 2:53 PM | PERMALINK

Jeff Davis: It was reported here (Wash. Monthly) just a couple of weeks ago that median income has fallen for all of Bush's time in office.

That's what the Census Bureau stats (warning: big-ass PDF) say: click the link and go to page 31.

Posted by: RT on January 18, 2006 at 2:58 PM | PERMALINK

trex:

Only an unhinged Bush apologist could make the claim that people are abandoning their need for money and replacing it with interest in personal growth and corporate culture.

Maybe you missed the threads here a while back where we were told that the crappy economic statistics like high unemployment in countries like France weren't nearly as important as the fact that they had a lot of leisure time and were more concerned about their quality of life.

Posted by: tbrosz on January 18, 2006 at 2:58 PM | PERMALINK

tbrosz:

Leisure time and quality of life are very, very different things from "personal [work-related] growth".

Posted by: S Ra on January 18, 2006 at 3:09 PM | PERMALINK

tbrosz:

Maybe you missed the couple hundred thousand comments that we're nothing like the French and never will be.

Amercans don't have the leisure time that many Europeans do. We work more hours, have shorter lunches, and less vacation. We also have less discretionary spending dollars on average than some European countries.

With health care and energy costs SKYROCKETING Americans care a LOT about their wages.

cue rdw and his prayer rugs schtick.

Posted by: trex on January 18, 2006 at 3:10 PM | PERMALINK

Prayer rugs, huh?
Must be a growth industry.

Let's not forget that many of us unfortunate norteamericanos are working more hours for the same pay we got a couple years ago.

Yay job security! (don't ever walk into a dark alley when I can see you going ...)

Posted by: bangagong on January 18, 2006 at 3:18 PM | PERMALINK

to be clear - I was pretending job security is a person that has wronged me

Posted by: bangagong on January 18, 2006 at 3:20 PM | PERMALINK

alls i gotta say is anyone who says that Americans don't care about their wages has to be smoking some high potency hash.

the main reason i'm looking for another job is to try to get a pay increase, cuz i'm sure as shit not gettin' one where i work now. there are these things, they come in the mail in enevelopes with other envelopes inside, and an accounting of charges. if i don't return the included envelope with a check then things i like (i.e. electricity, phone service, my car) go away. i cannot take care of these transactions with my stock portfolio (i.e. the balance on my 403B)

Posted by: e1 on January 18, 2006 at 3:28 PM | PERMALINK

In other news, CPI rose at 3.4% in 2005 - a far cry from fake Al's 2.0% strawman figure:
http://biz.yahoo.com/ap/060118/economy.html?.v=22

Um, those figures were from a hypothetical. But EVEN IF I were trying to use the proper numbers, the 4.3% figure for income increases is an average over FOUR years. You can't compare it to a SINGLE YEAR's figure for inflation.

Sheesh. Smarter trolls, please!

Posted by: Al on January 18, 2006 at 3:32 PM | PERMALINK

That has to be about the stupidest fucking comment I've ever seen posted in a blog comment section.

Only an unhinged Bush apologist could make the claim that people are abandoning their need for money and replacing it with interest in personal growth and corporate culture.

And yet my comment quoted an expert in the field of employment who did an actual survey that said that higher earnings only ranked "fourth or fifth" among things people look for in a job.

Now, your evidence to the contrary consists entirely of ad hominem attacks.

Well, I guess that's the "reality-based community" for you - completely ignoring actual evidence and instead relying on spewing insults.

Posted by: Al on January 18, 2006 at 3:41 PM | PERMALINK

Jeff Davis: It was reported here (Wash. Monthly) just a couple of weeks ago that median income has fallen for all of Bush's time in office.

That's what the Census Bureau stats (warning: big-ass PDF) say: click the link and go to page 31.

On page ONE it says the following: "Real median household income showed no change between 2003 and 2004."

Posted by: Al on January 18, 2006 at 3:45 PM | PERMALINK

Um, those figures were from a hypothetical. But EVEN IF I were trying to use the proper numbers, the 4.3% figure for income increases is an average over FOUR years. You can't compare it to a SINGLE YEAR's figure for inflation.

Doesn't matter. The 4.3% figure is for total compensation. As median salary figures show, that's not going to the average guy since the average guy is LOSING ground. And owing to Bush's insane economic, policies investments haven't stirred off the zero point since he took office.

We just discussed the hell out of this. Not two weeks ago. We're not making money and we're adding debt at a record pace. Government debt and current accounts both. Money is FLEEING the country. With China dumping dollar denominated investments this year is going to be grim.

Chickens, roost.
Roost, chickens.

Get to know each other.

Posted by: Jeffrey Davis on January 18, 2006 at 3:47 PM | PERMALINK

And yet my comment quoted an expert in the field of employment who did an actual survey that said that higher earnings only ranked "fourth or fifth" among things people look for in a job.

If memory serves me right, the "expert in the field of employment" worked in a job placement firm. From my experience in job placement from the first time I was downsized, it's conventional wisdom that you should not list salary as your most important consideration. The potential employer might not want to negotiate a higher salary or might assume you'd leave for a higher paying job.

In short, an employment consultant reporting that applicants are regurgitating the happy talk employment consultants advise them to say is hardly convincing.

Posted by: Gregory on January 18, 2006 at 3:49 PM | PERMALINK

On page ONE it says the following: "Real median household income showed no change between 2003 and 2004."

Then it took a dive for 2005, didn't it?

Quote mining is a mug's game, son. Get over it.

Posted by: Jeffrey Davis on January 18, 2006 at 3:49 PM | PERMALINK

And yet my comment quoted an expert in the field of employment who did an actual survey that said that higher earnings only ranked "fourth or fifth" among things people look for in a job.

An "expert in the field of employment"? True only if by that you mean "someone who employs people" and not "a disinterested academic expert who studies the field." And nowhere in the quote is "an actual survey" mentioned -- that's simply a lie. The cite, remember, was

"``We are not finding compensation being the issue at all,'' says Terry Laudal, senior vice president of human resources at SAP America in Newtown Square, Pennsylvania, a unit of Walldorf, Germany-based SAP AG, the world's largest maker of business- management software. ``The issue is really the culture. Are you winning, are you investing in personal growth?'' Pay is typically a fourth- or fifth-rank issue for SAP job applicants, says Mark Steinke, the firm's vice president of staffing for North America."

These are not disinterested experts talking, these are employers, who have every financial reason in the world for talking down the importance of employee pay. The less they pay employees, the more money they themselves keep.

Another point to remember is that in a tight job market job seekers will often themselves de-emphasize the importance of pay because their first and foremost goal is to get a job, any job. They simply don't have the leverage to demand higher pay when they know that someone else will do the job for less (or worse, that the job will be outsourced). Employers take advantage of this and then cite this reluctance as further proof that workers aren't "demanding" higher pay.

Posted by: Stefan on January 18, 2006 at 4:08 PM | PERMALINK

Then it took a dive for 2005, didn't it?

And your evidence to support this is...?

Posted by: Al on January 18, 2006 at 4:17 PM | PERMALINK

Did the study adjust for the fact the recessions have become increasingly shallow in the post-war era? If the trough is not as deep, then the rate of increase out of the trough is likely going to be decreased as well.

Posted by: Will Allen on January 18, 2006 at 4:19 PM | PERMALINK

These are not disinterested experts talking

Didn't say they were. But much as you can criticize the experts I quoted, they are still actual evidence, as opposed to the pure ad hominem attacks of "trex".

Posted by: Al on January 18, 2006 at 4:20 PM | PERMALINK

Who exactly goes into a job interview for a highly skilled job like those this guy at SAP has experience with and says "what is most important to me is money"? Nobody they hire. Not even at the height of the dot com bubble did people do that.

You spout baloney like "I want to make great products" or "satisfy customers" or "work with a great team on a great product". Everyone knows it is mostly baloney, except aparrantly "Terry Laudal, senior vice president of human resources at SAP America" who is the kind of feeble minded manager that makes it necessary to spout such nonsense in the first place.

Posted by: jefff on January 18, 2006 at 4:25 PM | PERMALINK

I stand corrected: The people quoted were in HR, not job placement. My point, and Stefan's, and jefff's, still stand.

And no, Al, I don't think you get to count such a lame citation as "actual evidence," even if you're a half-bright high school debater. But if you insist, then consider your "actual evidence" duly refuted.

Posted by: Gregory on January 18, 2006 at 4:38 PM | PERMALINK

Didn't say they were...they are still actual evidence....

Yeah, he said they "did an actual survey" when there was no mention of a survey whatsoever in the cite. That's not evidence -- that's making things up or, in simpler terms, lying.

Posted by: Stefan on January 18, 2006 at 4:40 PM | PERMALINK

4.9% unemployment is outstanding. But rabid Bush-haters can't admit it!

Posted by: GOPGregory on January 18, 2006 at 4:43 PM | PERMALINK

Didn't say they were.

I look forward to future instances when this poster cites a Mafiosi as "an expert in the criminal justice system" or Rush Limbaugh as "an expert in pharmaceutical addiction".....

Posted by: Stefan on January 18, 2006 at 4:52 PM | PERMALINK

"Real median household income showed no change between 2003 and 2004."

Then read this:

The heads of America's 500 biggest companies received an aggregate 54% pay raise last year. As a group, their total compensation amounted to $5.1 billion, versus $3.3 billion in fiscal 2003.

http://www.forbes.com/2005/04/20/05ceoland.html

Do you think the value of their comapnies increased by an aggregate of 54% ? Are these CEO's working 54% harder ? Do you know anyone who gets a 54% raise in a year for doing the same job ?

Kevin's right, supply side economics works for some people.

Posted by: Stephen on January 18, 2006 at 5:15 PM | PERMALINK

Then it took a dive for 2005, didn't it?

And your evidence to support this is...?

I don't know. I suspect I read 2004 and interpreted it as 2005. The text you quote in the report is contradicted by the table. There is a decline of $93 from 2003 to 2004.

Posted by: Jeffrey Davis on January 18, 2006 at 5:27 PM | PERMALINK

Amazing. It is so obvious that the rich are getting richer and the poor poorer, but you can't get a Bushbot to just come out and admit it. I think they really believe the stuff they spout here.

I keep thinking of those studies that come out every so often where sizeable percentages of Americans who aren't rich at all tell pollsters they are, indeed, rich.

It is self-delusion on a grand scale that keeps Americans from facing the fact that the rich are getting richer, the poor poorer, and the middle class shrinking rapidly.

Yes, traditionally a precursor to revolution -- hence the Patriot Act, NSA spying, police state advocacy, etc.

Posted by: Jim J on January 18, 2006 at 5:54 PM | PERMALINK

I don't know. I suspect I read 2004 and interpreted it as 2005. The text you quote in the report is contradicted by the table. There is a decline of $93 from 2003 to 2004.

No, the text I quote is NOT contradicted by the table. You cannot look solely at the column entitled "Value"; you also must consider the column entitled "Standard Error".

Posted by: Al on January 18, 2006 at 6:11 PM | PERMALINK

To quote Mark Twain "There are lies, damn lies, and statistics." Down here in the trenches the wages are not rising at a 4.3% annual rate. To get a clear picture we need to look at the annual increase for the executive crowd (rising much faster than inflation), then look at the annual increase for the middle and lower tiers (not keeping pace with inflation). The ownership society is a farce. Most Americans do not rely on their stock investments to supplement their incomes because they don't own very much...maybe a little in the 401k, but that won't buy groceries or gas up the ol jalopy. The middle class is getting screwed royally, but it was the middle class that elected the current regeime so if they have no bread, let em eat cake.

Posted by: sparky on January 18, 2006 at 6:20 PM | PERMALINK
here is a good reason for members of the elite to believe in and support progressive polices often derided by conservatives--self preservation. Posted by: Ron Byers o
Here's a little list of the history of Republican smears. Scroll down a bit to the time of FDR 1933

In 1933 Major General Smedley Darlington Butler reported to Congress a coup d'etat plot against President Franklin Roosevelt, sponsored by corporate interests. Alarmed by Roosevelt's Democratic "New Deal" which would redistribute wealth from the rich to the poor, Irenee Du Pont, Grayson Murphy, William Doyle, John Davis and other representatives of J.P. Morgan banks, Du Pont, Goodyear and Bethlehem Steel sought to overthrow the U.S. government with a military coup and replace it with a fascist state, based on the recent success of Mussolini and Hitler in Italy and Germany.
Some of your elite were not so enlightened.

"why doesn't downtown Baghdad resemble Beverley Hills yet?!" Posted by: Freedom Fighter

Gee, I don't know. Maybe you should ask Dick Cheney.
a constant barrage of "the economy sucks!" articles from an ever-more-desperate media probably has nothing to do with any negatives. Posted by: tbrosz o

Yup, all Bush as got to do is go around the country singing Over the Rainbow and Happy Days Are Here Again!
4.9% unemployment is outstanding. But rabid Bush-haters can't admit it! Posted by: GOPGregory

Workforce participation rate down! Rabbit Bush suckers can't admit it!

Ratio of labor's share of national income graphic.

Posted by: Mike on January 18, 2006 at 6:54 PM | PERMALINK

'GOPGregory' posted:

"4.9% unemployment..."

With the same National Labor Participation Rate that we had in 2000, the Unemployment Rate is 6.6%, and that still doesn't count the large number of those part-time workers who want full-time jobs but cannot find them.

.

"...is outstanding. But rabid Bush-haters can't admit it!"

I'll admit it. It's an outstanding FAILURE.
.

Posted by: VJ on January 18, 2006 at 7:07 PM | PERMALINK

"Fuck You, I've Got Mine" works great up until the logical progression of "Fuck You, I've Got Nothing So I'll Take Yours" is reached. Social democracy believes that by taking care of the former, the latter can be averted.

But the Bushbots would rather risk being the first against the wall. The line between "It Can't Happen Here" and "How Did It Happen Here" is thin, yes, but if they clap hard enough, the bloated dessicated corpse of Tinkerbell really will rise from the grave!

Posted by: Dustbin Of History on January 18, 2006 at 7:27 PM | PERMALINK

Didn't say they were. But much as you can criticize the experts I quoted, they are still actual evidence, as opposed to the pure ad hominem attacks of "trex".

First of all it wasn't ad hominem. In assessing the comment you made (and it could have been made by anyone) I determined that on its own it really was the stupidest fucking blog comment I've ever seen.

Secondly, you didn't quote any experts except that you read further down the article Keven linked to and cited one person's view. Spend a lot of time researching that, did you? While we're at it, have a lot of experience with companies involved in Business Management? If you had any you'd have given that remark a perfunctory mouth-vomit, ignored it, and moved on.

Thirdly, you took Laudal's comment out of context. The reason wages weren't first on the list of what employees value was because they were losing their fucking jobs so often they decided it was better to have a lower-paying job that was secure and a culture that wasn't going to throw them away to cut costs then no job at all. If you look at the statistics concerning hours worked, working overtime at home, workplace stress, and the lack of time to meet family obligations it's clear that wages don't come first simply because people are so overworked and stressed they're willing to sacrifice wages for a few breaks.

Not because of some ridiculous notion that people own stocks so they don't need to make money.

Everything being equal, however, wages would surely come first, which is a fundamental premise of a free market economy.

As an aside, I have made ad hominem attacks for the whole Al impersonation thing, and I stand by them.

Posted by: trex on January 18, 2006 at 7:27 PM | PERMALINK

Bloody hell, it's early. OK, let me caffienate myself, then I'll try being witty again.

Posted by: Dustbin Of History on January 18, 2006 at 7:29 PM | PERMALINK

To Kevin Drum,

I'm surprised you didn't ban Al from this site months ago. What are his credentials that he believes he can lecture Solow on economics? Who is he, a Don Luskin sock puppet?

Robert Solow is wrong of course. One of the things he doesn't recognize is that in America we are currently living in the ownership society.

Posted by: Oskar Shapley on January 18, 2006 at 7:54 PM | PERMALINK

"Compensation to employees cannot on a sustainable basis possibly rise faster than the growth in productivity,"

Posted by: DBL on January 18, 2006 at 12:38 PM | PERMALINK


But, somehow compensation to CEOs can?

Posted by: MarkH on January 18, 2006 at 9:34 PM | PERMALINK

"Compensation rose at 4.3% including health benefits. Wonder how much of that is health benefits."

Posted by: bg on January 18, 2006 at 12:53 PM | PERMALINK


If health care costs (to the nation) are increasing at a 15%-20% rate each year, then how useful is a 4.3% pay increase?

Posted by: MarkH on January 18, 2006 at 9:41 PM | PERMALINK

"Maybe we're just cutting each other's hair and wiping each other's bottoms for pay, while China is amassing the productive capacity AND the financial capacity to buy any real goods economy right out from underneath us.
Posted by: sandtoe"

Well this from Warren Buffet (in Forbes) "Now it's $200 billion. If we don't change the course, the rest of the world could own $15 trillion of us. That's pretty substantial. That's equal to the value of all American stock," he added.

Of course the benefits of our paper thin (confines almost exclusively to the top 5%)'expansion' are being hoarded at the top of the income scale. That's a function of marginal analysis and the destruction of progressivity in tax rates.

If your next incremental dollar is, post-tax, worth only 15 cents to you but is worth 85 cents to your workers, there's less of an incentive to skim off every single dollar of profit for yourself simply because you're in a position to do so. It simply costs you less in real terms to cut your employees in on the gains from productivity.

Posted by: CFShep on January 19, 2006 at 7:27 AM | PERMALINK

These threads ought to come with a counter of the number of times AI or Tbrosz have posted on it. Because the more times they post the obviously correct Kevin was in his original comments.

By the by the best source for the skinny on economic news tends to be Paul Craig Roberts whose column get reposted on Thesmirkingchimp.com He's very good at explaining in easy to understand language what's going on with these employment numbers.

Posted by: beb on January 19, 2006 at 9:07 AM | PERMALINK

"Prices rose faster than wages in 2005 for the third straight year, according to the Commerce Department."

http://finance.yahoo.com/columnist/article/business/2289

Voodoo economics at work.

Posted by: Stephen on January 19, 2006 at 11:23 AM | PERMALINK

Hey are you guys still accepting commments here?

Posted by: Riverbelle on January 20, 2006 at 11:28 AM | PERMALINK




 

 

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