Economic growth and perspectives…links
What does economic growth mean for Americans by Uwe E. Reihnhart
Suppose we placed a carefully selected sample of men on a hot stove and another sample of men on dry ice. Could we reasonably conclude that, on average, they were comfortable?
As a nation we worship a deity called economic growth…
The rich get richer through the recovery by Anne Lowry
Why labors share of income is falling by Jared Bernstein
In a recent post about fast-food workers striking for a higher wage, I noted the juxtaposition of the strikers and the banks, which just reported another quarter of record profits. In fact, as many inequality watchers have noticed, profits as a share of income are at or near record highs while the compensation share is around a 50-year low.
Labors falling share everywhere by Conversable Economist
A Decade of Flat Wages, Economic Policy Institute by Lawrence Mishel and Heidi Shierholz
A new paper from the Economic Policy Institute provides both diagnosis and prescription of what is arguably the fundamental problem of the United States economy in recent years: wage stagnation.
Economic growth should be measured in terms of wages, not profits.
We worship a diety called aggregation, and that requires we worship aggregate gdp growth. Find the fools who love to aggregate in DC and you have the culprit. Who could that be? Hmm…
Bernstein’s analysis is almost as vapid as his solution: “policy makers must plot a course toward full employment.” And we take this for insight
Taylor’s analysis ends in murk. No help there. Try this: U.S. outsources almost everything: CEO’s win; Labour loses. China has no labour protection, nor does it offer any meaningful bargain rights: CEO’s win; Labour loses.
Put German and Japan with the U.S. Next time at Walmart, check where things are made. Do the same with every piece of computer you have.
Who pays these guys to be stupid?
The piece from the conversable economist, suggests that the issue of the labor share of the gdp is falling everywhere is a world wide problem, not due to US politics. However it does bring up the issue of the distribution of the labor share. I do think more work should be done on examining the problem suggested in the piece as it raises requires more analysis as to why. Note the comment that in Europe the same thing is happening as in the US suggesting that the strength of unions is not the issue.
Let me propose a wild guess theory, It is the rapid increase in population that the world has had until recently that is the cause as labor in general has become less dear than it was in the past. This should start reversing if the demand for labor stays steady, however if we replace humans with machines the decline in population should still result in labor becoming more expensive over time, just not back to the equilibrium level. It is interesting that the change started when the world wide baby boom came of working age.
Haven’t had time to read Tony Lange’s Having the top 10% collect 50% of household income is not the natural order. That skew can be fixed — too tired from moving — but:
If the top 54% (who take 90% of overall income) could squeeze just 3% of overall income out of the top 1% (no need for numbers I hope) and pass it down to the 45% of of the workforce who currently get 10% (who earn $15 an hour or less), that would represent a $15/hr minimum wage. 63 million X average $8,000 yearly increase = $504 billion = 3.2% of our $15,800 billion economy.
Not proportional to pick on the top 90 to 987-98-99% (if he did — haven’t read it yet; but I just can’t shut up) who have just about kept pace with average income growth (productivity, whatever) since 1968 — while below fell behind growth and above ahead.
The ultimate overall solution is re-unionization, of course — legally mandated sector-wide labor agreements style.
Whenever hear someone saying that the economy has recovered, I think of the three thermometer problem. If you have three thermometers reading 48, 52 and 100, you don’t go around saying the temperature is around 100 degrees or around 67 degrees. That’s not how it works.
Tukey developed some interesting approaches to median based statistics which work even when there are lots of outliers. His median based robust line fitting algorithm leaves the usual least squares fits in the shade. (Of course, when the mean approximates the median, the lines are almost the same.)
Then again, Tukey was a genius.
stormy
don’t think they are stupid. they are making money. they can’t see why it’s a problem that some people are not. by definition the unemployed are not making anything the rich need. as for the low wage workers… again, who needs ’em? “if we needed ’em we’d pay them more.
you are proposing that low wage workers be given money out of the “earnings” of the high end (not wage) workers. won’t happen unless you find a way for the ordinary worker to determine political outcomes.
something like that happened in 1932.
looking towards the extreme poor in the USA rather than the upper few percent [some no. of which never report total annual income] and we start to get a clearer picture……of some colonias in the sw and most [or all] major us cities.
fixing this requires direct redistribution from those who have gained so much since ’81, or better, a social revolution.
‘By Debra Watson
19 August 2013
A report this summer from the National Poverty Center (NPC) reveals that the number of people in the US living on less than $2 a day per person, termed “extreme poverty,” increased by 160 percent from 1996 to mid-2011, rising from 636,000 households to some 1.65 million households. The findings throw light on the terrible plight of children in America. Concentrating on non-elderly households with children, the report found that 4.3 percent of these households were in extreme poverty, with 3.55 million children living in them.
The number of households in extreme poverty in the US began to climb irreversibly after the Clinton administration ended cash welfare for vulnerable families in 1996. Over a dozen years, between 1996 and late 2008, the number and extent of extreme poverty roughly doubled, rising by more than 600,000 households. The increase continued after the recession of 2008, but the pace was now accelerated. Over roughly three years following the financial meltdown, 450,000 more families joined the ranks of the utterly destitute, with a sharp increase in numbers in the first six months of 2011.
The report, published in Social Service Review, was authored by H. Luke Shaefer, University of Michigan, School of Social Work, and Kathryn Edin, Harvard University, Kennedy School of Government. Measuring extreme poverty uncovers a further income stratification among those below the official poverty level. The sharply rising income inequality in the US has created in its wake a new phenomenon: massive numbers of US families that live in daily conditions once relegated the poorest of the poor in the economically underdeveloped world.
…
http://www.wsws.org/en/articles/2013/08/19/extr-a19.html
Again —
” the number of people in the US living on less than $2 a day per person, termed “extreme poverty,” increased by 160 percent from 1996 to mid-2011, rising from 636,000 households to some 1.65 million households..”
————- less than $2 a day per person in the U.S.————————-
Cumulative change in total economy productivity and real hourly compensation of production/nonsupervisory workers, 1948–2012
http://stateofworkingamerica.org/chart/swa-wages-figure-4u-change-total-economy/
The goverment should come up with other ways of measuring economic growth as through each individual’s wages. Low wage workers can’t be given money out of high earned workers. And I think the government should consider charging equal tax to all workers. There is an increase in income equality mostly in underdeveloped countries which decreases the economic growth. So the government should find ways to deal with those measures