Legend for Graph (at AB readers request of this lazy Bear): blue line = total worker compensation relative to national income with red line representing wages and salaries and green line representing fringe benefits.
I’m certainly no Lou Dobbs Democrat so I tend to enjoy it when someone takes down his anti-trade, anti-immigration garbage. But why does it have to be the Stupidest Man Alive taking on some rather obvious myths from Mr. Dobbs? The one part of this stupid debate that struck me was:
The claim about salaries and wages is so deceptive as to very nearly be a lie. Dobbs ignored the fact that for many of the years following 1929, companies paid only salaries and wages, and no fringe benefits such as pensions or health care. In the modern economy, fringe benefits are a significant portion of total compensation. Today, the income share of total worker compensation – wages and salaries plus benefits – is higher than in any year prior to 1967, and lands in about the middle of the narrow range in which it has since fluctuated.
We have graphed total worker compensation relative to national income as well as its components (salaries&wages and fringe benefits). While Luskin is correct that fringe benefits are a larger component of compensation today than they were in 1929 – notice something. The share of worker compensation has declined from 66.2% in 2001 to 64% in 2006. To disguise this fact, he has to reach back 40 years to find a period when the share of worker compensation was lower. Donald Luskin has found a foe that may be even dumber than he is – but his attempt to defend free trade was still really stupid.