Anyone know where Thom gets this stat from and how it squares with rising median family wages? If the median is rising while the middle share is falling, then lower class wages are rising, which doesn't exactly fit in with what Thom is saying.

The difference between the median and the mean for annual family income has been growing larger since 1970. Wages and income are different- the whole family rarely gets an hourly rate for some group activity.

Households with multiple workers are incresingly prevalent since 1970, with the growing cost of living requiring multiple breadwinners to make ends meet at 9.00-16.00 dollars an hour. If a hard-working breadwinner is making only somewhat more than his counterpart of forty years ago while the cost of living has risen more substantially, then the household income will have to find some way to rise to get close to making ends meet.
g kenyon

quote:

Originally posted by Dr. Econ:
Anyone know where Thom gets this stat from and how it squares with rising median family wages? If the median is rising while the middle share is falling, then lower class wages are rising, which doesn't exactly fit in with what Thom is saying.

Or it could mean upper class wages are rising and everyone else's is falling.

Retired Monk
"Ideology is a disease"

Correct polycarp.

Executive wages have risen to ?? 500 times the average wage earners income as opposed to 40 times 30 yrs ago. Mix in inflation and the minimum and lower, well for that ,atter the rest of us have had our buying power per dollar reduced. And that obscenity known as easy credit is crushing the most vulnerable.

Here is a link to a story Bernie wrote. Keep in mind that it was in 2000 that he wrote it. I have also included a more technical link.....

http://www.commondreams.org/views/021200-101.htm

The inflation-adjusted value of the minimum wage is 30% lower in 2006 than it was in 1979.

http://www.epinet.org/content.cfm/issueguides_minwage_minwagefacts

Polycarp wrote: "Or it could mean upper class wages are rising and everyone else's is falling."

Newguard wrote: "Correct..."

The term Dr. Econ used was median, a term for the value which divides the number of cases in a distribution in half. The mean is what we think of as the mathematical average and would be sensistive to rising income for a minority of cases at the top of the distribution. For the median to rise, at least half the cases would have to be making more at the second recorded data point.

Thank you G Kenyon.

Yes, my research has confirmed that median family and median incomes are rising.

However, my other limited research is showing that there might be evidence that median wages are not rising.

I have no evidence on median wages, despite several attempts at the Census and BLS. I suspect the only data that are available are average wages, which is what most people are quoting.

In any case, it seems there are a few agreed upon facts which are not altogether well known. The first is a slow rise in median and personal (and average) personal, per capita and family incomes. The second is that this rise appears to flatten a good deal at the end of the seventies, corresponding no doubt to an increase in trade.

The second is a reduction in males in the workforce and an increase in females. The male participation rates falls like stone from 1950 on and the female one rises especially in the seventies. Perhaps the competition from females helped reduce wages - I am certainly not going to make that arguement.

The third is the rise in trade, which I mentioned before. The rise in trade was the result of loosening capital control in the late seventies and the freeing of the dollar. Nafta and Cafta and whatever really just exaggerated a trend that was already under way.

The fourth is the stagnating wages which I have no evidence on.

Wages may have risen, but purchasing power has fallen.

When min. wage was $1.25 an hour, 1 hour's work bought 25 cups of coffee. I bought a house earning min. wage, furnishings for it and a nearly new sports car. What do you have to earn today to do that? How many times today's min. wage is required to have the same purchasing capacity of previous years?

I'd take $1.25 an hour with its purchasing power anyday over $20 an hour today.

Wages rising? Hardly. They've been dropping since the Reagan years.

Retired Monk
"Ideology is a disease"

So your saying coffee was 5 cents a cup when the minimum wage was 1.25?

But you have to admit it was lousy coffee.
.

What makes you say wages are dropping since the Reagan years? How could Reagan exert that much influence over wages in this country? Did he do it suddenly, as soon as he became president? How long did it take him to do this? 1 year or 2? When I look at my figures, I see slowing before 1980 as well as after.

quote:

So your saying coffee was 5 cents a cup when the minimum wage was 1.25?

I was born in 1960. I remember a bottle (a real, curvy bottle!!) of Coke cost 15 cents when I was a kid (with a nickel bottle deposit IIRC). I don't know what the min wage was in the 60's but when I got my first paying job at 14 the min wage was $2.00/hr.

Okay, let me lay this out and then ask a question:

Take the lowest earnings reported (that would have be above $0.00 because it's earnings, right?) and let that be represented by the variable 'X'.

Now get the highest earnings reported and let that be the variable 'Y'.

And finally let the median income for any given time be the variable 'Z'.

Mathematically then if Z - X (median minus lowest) is less than Y - Z (highest minus median), then the median would be closer to the bottom of earnings.

Likewise if Z - X is greater than Y - Z then the median is closer to the top of the earnings, and if Z - X equals Y - Z then the median is halfway between X and Y.

And now my question: where is today's median? In other words Y - Z = what? Where on that X to Y number line is Z?

I know a few very big numbers skew the hell out of that line so let's take the median and apply it to a truncated line where if Z is greater than $250,000 then Z equals $250,000.

quote:

Originally posted by Randomthots:

quote:

So your saying coffee was 5 cents a cup when the minimum wage was 1.25?

I was born in 1960. I remember a bottle (a real, curvy bottle!!) of Coke cost 15 cents when I was a kid (with a nickel bottle deposit IIRC). I don't know what the min wage was in the 60's but when I got my first paying job at 14 the min wage was $2.00/hr.

The year you were born, minimum wage was $1. an hour. Several years later, it was raised to $1.25.

Dr. Econ: The coffee wasn't as good as the coffee in France, but equal to most of today's...and re-fills were free.

I think a lot of the change can be placed at the foot of the military budget expansion. A large segment of the economy devoted to military goods rather than consumer goods.

Billions paid as wages without a corresponding increase in goods for consumption.

The 3rd Reich transfered resources of the nation into military production. It increased employment, but diverted resources from the consumer economy. In general, it increased employment but led to a decline in living standards to the point of rationing even before hostilities. The old "guns/butter" arguement.

"The Wages of Destruction" - An interesting read on the Nazi economic structure. The U.S. economy shows some similarities.

Retired Monk
Ideology is a disease"

quote:

Originally posted by polycarp:

The year you were born, minimum wage was $1.

I hate to point to the obvious and distract our attention from minimum wages, but aren't you just saying that the minimum wage was higher then, not that wages were higher?

I mean, if you take the minimum wage, divide by the CPI, you see in fact that the minimum wage in the 60's was like, I don't know, 10-15 dollars an hour - I forget precisely.

So I think all the facts that I have are right or close.

Let's say the purchasing power of one hour's labor was higher. This was so for all levels of income.

The per cent of the GDP given back as purchasing power for an hour's work has fallen dramatically for the average American.

Retired Monk
"Ideology is a disease:

Well, that's exactly what I am trying to prove or disprove.

Not all wages are falling. Some wages go up, others go down. Some profits go up, others go down. Some professional salaries go up, others go down. Some profits from investments and speculations go up, others go down.

Even if there is a trend of wages falling more than investment profits or professional salaries or other income categories, there is no reason to think this is bad for the economy.

There is no legitimate principle of economics that says that ALL wages, or even the GENERAL WAGE LEVEL must continually rise. There are good reasons why these wage levels might have to fall at certain periods.

What matters is this: Those whose incomes go down, no matter what the category of income, are those whose VALUE in the economy went down, and their lower income now reflects their lower value in the economy. Lower income = lower value of the income-earner. And that is how it should be.

So, if a lot of wage-earners are experiencing lower income, it is because they are currently offering lower value in the economy. If they are upset over this and want it to change, the only solution for them is to increase their value in the economy. I.e., they need to become worth more before they are entitled to be paid more.

But if they are fans of Lou Dobbs and Thom Hartmann, they are probably crybabies who think they are automatically entitled to retain their previous income, no matter how much their value decreases.

quote:

Originally posted by freetrader:
...Even if there is a trend of wages falling more than investment profits or professional salaries or other income categories, there is no reason to think this is bad for the economy.

...What matters is this: Those whose incomes go down, no matter what the category of income, are those whose VALUE in the economy went down, and their lower income now reflects their lower value in the economy. Lower income = lower value of the income-earner. And that is how it should be.

So, if a lot of wage-earners are experiencing lower income, it is because they are currently offering lower value in the economy. If they are upset over this and want it to change, the only solution for them is to increase their value in the economy. I.e., they need to become worth more before they are entitled to be paid more.

But if they are fans of Lou Dobbs and Thom Hartmann, they are probably crybabies who think they are automatically entitled to retain their previous income, no matter how much their value decreases.

Nice- the "Economy as Moloch" philosophy. Using the word "crybabies" seems to indicate there is some kind of pseudo-Nietzscheian value placed on the "economy". You seem to think we should serve it rather than it serve us. Oooga Booga!!
Of course, here the "economy" is being used as a metaphor for 'the profits of the ownership of capital', and one should never forget that every dirty trick in the book is used to devalue labor. For owners, people are overhead.
g kenyon

Freetrader, perhaps you can explain this difference to me: In Australia, miners are paid a good western wage to produce cobalt. In Central Africa, miners are paid several cents a day. Does this mean that miner's in Australia are only worth pennies a day?

If people were metalic machines, perhaps your theory would work in an economic sense. In a social sense, what you get is a lot of poverty, a lot of human suffering, and a tendency to revolt.

Perhaps Americans didn't chop of the English King's head like the French did theirs when we had our revolution...and such things do happen.

We either find a means to make an economy work for everyone, or we'll have one that works for no one.

Unfortunately, the theory you have presented comes into conflict with the basic laws of value as related to goods and services. Money is merely an intermediary of barter...and equal good for an equal good. When their isn't enough consumer purchasing power to keep this equal barter going, things tend to grind to a halt.

I suppose the booming Central African economy is an example of workers getting paid what they are "worth". I hope we don't catch up to them. Even McDonald's would go broke trying to sell to a pennies economy. They couldn't charge enough to pay for the paper wrapper around the hamburger. (Unless, of course, the penny's value reflected what it did several centuries ago...minus our inflation since that time).

Retired Monk
"Ideology is a disease"

quote:

Originally posted by freetrader:
So, if a lot of wage-earners are experiencing lower income, it is because they are currently offering lower value in the economy. If they are upset over this and want it to change, the only solution for them is to increase their value in the economy. I.e., they need to become worth more before they are entitled to be paid more.

I think that is a meaningless statement. What we are trying to find out is why wages stagnated - why people are not worth more.

You seem to come close to saying that people are lazy - but the fact is that people are working harder and longer for less (or near less) than before - in fact, you could argue that because it takes to make as much as one before, families are working twice as hard as they did before but getting less - or the same - depending on the price deflators and compensation measured.


You mentioned earlier that there is no legitimate economic theory that says wages 'should' rise. I think that is false in the sense that we should except modern economies to have rising wages. I mean this only in the statistical sense, that that is what we observe and have observed tremendous growth since the English began her industrial revolution, and that rising wages, output are the norm. If we see a country that does not have rising wages, there is immediate concern that something is wrong. This is the generally accepted practice among economists, I think.

Some economists blame the government, others immigration, trade, wars and our political system, whatever. But generally most economists - and I think most people who are educated think that stagnating wages - if they are indeed stagnating - are a problem.

I think you might be able to argue that people may be choosing leisure over work, and this in fact occurs. But the problem in the US is that we have rising GDP and stagnate wages, and the wages that stagnate have not been the upper incomes but the middle and lower wages - so it is unlikely that people are simply choosing more leisure.

This message has been edited. Last edited by: Dr. Econ,

Some people will support their basic economic theories even if it brings an economy and a nation tumbling down around their heads.

Nations that allow massive poverty to develop usually don't do very well. Tell the Haitians they aren't worth paying enough to purchase food, then watch them stuff people into tire towers and set fire to them.

I suppose this is called paying them their "utility value". People tend to go a lot more by biological necessities such as food, shelter, clothing, and water rather than economic theories that justify destitution.


Economic theories that justify an elite at the expense of human life deserve to be flushed down the toilet. Theories are attempts to maintain a status quo. Nothing more.

Theories that justified dumping oranges into the ocean when people were going hungery (Great Depression) make no sense. Economics, when operated out of basic trade values enhances the distribution of goods...doesn't needlesly destroy them when there is a demand for them.

Ideologues make just about as much sense as their flawed theories built upon the backs and lives of humankind.

Sociopaths make great businessmen. A basic pre-coneptual set is that others are seen only as how they may be put to use to gain their own ends. If their deaths or suffering are required, so what? The ends justify the means. Economic "theory" can prove it.

Retired Monk
"Ideology is a disease"

G Kenyon:

quote:

Nice- the "Economy as Moloch" philosophy. Using the word "crybabies" seems to indicate there is some kind of pseudo-Nietzscheian value placed on the "economy". You seem to think we should serve it rather than it serve us.

You are good at regurgitating the dogmatic slogans of your guru Hartmann. Do you have any original thoughts of your own, or do you rely on him to do all your thinking for you?

"The economy" is obviously all of us. Only a brainless idiot would think that "the economy" excludes 90% of the population.

The reality is that ALL OF US, rich and poor, benefit from the incentive system which rewards those who are more valuable or productive. We are all made better off by a system which rewards those who serve the market demand and which spurs on everyone to become more competitive. And this includes reducing the incomes of those who become less competitive or who are losing their value in the economy.

Those ones whose incomes go down, no matter what "class" they belong to, are the ones whose value is also going down. And that's the way it should be, because we all benefit when they are rewarded or penalized according to their performance.

Any other system, which would prop up their incomes despite their decreasing value or decreasing competitiveness, would make us all worse off.

quote:

Of course, here the "economy" is being used as a metaphor for 'the profits of the ownership of capital',

You need to try to do your own thinking instead of letting Left-wing dogmatists dictate to you how to think and how words must be defined. That is not what "economy" means.

quote:

every dirty trick in the book is used to devalue labor. For owners, people are overhead.

In general labor is over-valued and overpaid, especially in the U.S. and other developed countries. That is just an obvious economic fact. No one has to artificially devalue labor -- it is usually of low value because anyone can do it and the workers are so easily replaceable. The only reason we pander to the wage-earning class is that they are a majority of the population, and so it is popular and politically-correct to overvalue them and say they are getting a raw deal. It wins popularity polls to say such rubbish and pander to the rabble-masses.

The companies who pay the lowest wages are mom and pop stores. They "devalue" labor the most. Especially in 3rd World countries. The biggest owners, the big corporations, also pay the highest wages and benefits and place the highest value on workers. They never speak of the declining value of the workers being laid off or having their incomes reduced, because it would be bad PR and is politically-incorrect, and they know how to say the right things to bolster their public image.

This message has been edited. Last edited by: freetrader,

quote:

Originally posted by freetrader:
...We are all made better off by a system which rewards those who serve the market demand and which spurs on everyone to become more competitive. And this includes reducing the incomes of those who become less competitive or who are losing their value in the economy.

If you reduce someone's income, by every definition in the book, they are worse off. That just goes against every economic principle that all economists hold.

What economic theory does say is that when two people trade they are made better off than before the trade. Economic theory does not say that one trade must make both better off than another trade. In fact, you can easily say one person is worse off with one trade (or no trade) than with a particular trade.

Economic efficiently holds under the idea of market clearing prices (assumed by competition) but the actual process of competition that creates loosers who trade for awhile at wrong prices is nearly always ignored. But assuredly those people are worse off.

And that, really is the central point. Who cares if the market is efficient so that a some are better off, when others are worse off? What are the magnitudes of the costs and benefits of trade? How many people do you want to sacrifice to the gods of free trade? And to what end? So we can all have duo core computers and Ipods? Seems pretty pointless to me. take a look at Health care. I used to look at places like India and go, 'if they could only improve their economy they could all get health care'. Well, it turns out that most Indians have better access to health care than many Americans.

I don't think making wealthy people richer is the best criteria to use for a society. I think a society should care about the least among us, as well as the wealthiest among us.

quote:

Any other system, which would prop up their incomes despite their decreasing value or decreasing competitiveness, would make us all worse off.

I think any other system, for example, the system we have, makes us all a bit worse off but makes a lot of poor people a lot better off, and is in general quite worth it. Also, in my long run, it makes a more competitive society since people are able to be healthier, learn more, and be more productive in the end.

This message has been edited. Last edited by: Dr. Econ,

Paying wages for utility" value tends to lower that value to the lowest wage found globally.

The hiring of labor no longer has national borders.

Is the utility value of the American worker about 35 cents an hour as in China, or 12 cents as in Haiti?

At 12 cents, just who is going to be able to pay their mortgages, let alone their property taxes and insurance?

Utility value for most wage-earners in a global workplace averages about 25 cents an hour. Guess Americans ARE way overpaid.

Retired Monk
"Ideology is a disease"

quote:

Originally posted by Dr. Econ:
Thank you G Kenyon.

Yes, my research has confirmed that median family and median incomes are rising.

However, my other limited research is showing that there might be evidence that median wages are not rising.

I have no evidence on median wages, despite several attempts at the Census and BLS. I suspect the only data that are available are average wages, which is what most people are quoting.

In any case, it seems there are a few agreed upon facts which are not altogether well known. The first is a slow rise in median and personal (and average) personal, per capita and family incomes. The second is that this rise appears to flatten a good deal at the end of the seventies, corresponding no doubt to an increase in trade.

The second is a reduction in males in the workforce and an increase in females. The male participation rates falls like stone from 1950 on and the female one rises especially in the seventies. Perhaps the competition from females helped reduce wages - I am certainly not going to make that arguement.

The third is the rise in trade, which I mentioned before. The rise in trade was the result of loosening capital control in the late seventies and the freeing of the dollar. Nafta and Cafta and whatever really just exaggerated a trend that was already under way.

The fourth is the stagnating wages which I have no evidence on.

I don't believe you have linked or produced any of your "research". Dr. Maybe you can post some of it here or link to it. Why do you think you could not find any evidence of stagnating wages.

quote:

Originally posted by freetrader:
G Kenyon:

quote:

Nice- the "Economy as Moloch" philosophy. Using the word "crybabies" seems to indicate there is some kind of pseudo-Nietzscheian value placed on the "economy". You seem to think we should serve it rather than it serve us.

You are good at regurgitating the dogmatic slogans of your guru Hartmann. Do you have any original thoughts of your own, or do you rely on him to do all your thinking for you?

This is actually my own metaphor and my own reference. Hartmann may think like me, but he's hardly my guru. I notice you didn't actually address the content of the statement- are you scared like a little girl?

quote:

quote:

Of course, here the "economy" is being used as a metaphor for 'the profits of the ownership of capital',

...That is not what "economy" means.

Obviously that isn't, but you don't seem to be bothering to comprehend my writing. I am referring here only to your original post:

quote:

Freetrader wrote:

What matters is this: Those whose incomes go down, no matter what the category of income, are those whose VALUE in the economy went down, and their lower income now reflects their lower value in the economy. Lower income = lower value of the income-earner. And that is how it should be. ...they need to become worth more before they are entitled to be paid more

They can only be worth more to something or someone actual. Not your imagined collectivity. You need to get a grip on your level of abstraction relative to the concrete- only a wuss would be unable to do that.