Comments on: The Great American Paycheck Squeeze
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- Just great. Women can now (thanks to the "women's liberation" movement) slave away for corporations and be separated from raising their kids! Hey, stupid Americans---you DESERVE it.
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- Since many of the comments on the show have been critical of my position and since I only got 20 seconds to present my views, let me take this opportunity to clarify what I stand for.
By way of background, I am a liberal democrat in favor of single-payer health insurance, a bigger social safety net, and higher taxes on the rich. I know Larry Mishel for over 20 years and wrote the first monograph that EPI produced on changes in the income structure. After finishing graduate school, I did community organizing in Baltimore for a number of years and then was an aid to Jim McDermott (when he was in the Washington State Senate).
If you want to see the best accessible presentation on the distribution of income in America, you should go to my Social Stratification in the United States, fifth edition poster book (published by the New Press). There is a striking 3 foot by 2 foot poster with 1000 icons showing the complete distribution of income by households identifying a variety of characteristics.
Where I differ with Larry and many of the comments made is that I don?t think the data show as negative a picture as many think. This is a difficult empirical question because there are multiple data sets, each with its own strengths and weaknesses. Ultimately, I see Larry trying to prove that 90% of Americans are struggling to get by, while I see 75% of Americans, even during this deep recession, as having a reasonable standard of living and optimism about their own situations and the opportunities for their children.
To prove this requires an extensive technical discussion of many issues, and I have done this in my upcoming book Rebound (due out in April). But let me make a few comments about the issues touched raised in the show.
First of all, for some of the critics, all data reported by professional economists, like Larry and myself are reported in inflation-adjusted 2007 dollars.
Second, the crux of Larry Mishel?s argument is that productivity in America grew by 75% over approximately the past three decades, whereas wages only grew by 4%. These data come from two separate series that are constructed differently.While Larry used the data as reported, Dean Baker (a former colleague of Larry?s and a leading left-wing economist) made adjustments to make the two series comparable and found that median compensation over this same period was up 20%, not 4%, while productivity was up 48% instead of 75%.
Third, Larry l says that only 15% of the income growth went to the bottom 90% from 1989 to 2007. In my view , the correct number is 35%. Explaining the discrepancy is complicated so let me just say a couple of things about the data that Larry uses. Instead of using the major Census survey that most income distribution studies use, he uses IRS data that are based on returns of tax filers that exclude pensions, social security, and other transfer payments. Further, in 2007 there were 30% more filers than the number of households. This difference is almost entirely due to young people filing separate returns in order to avoid paying the high marginal tax rates of their parents. Consequently, IRS data is excellent in showing what happened with the super rich and very bad in showing what happened to the bottom half of the income ladder. My own research shows the median household income from 1979 to 2006 grew by 32% versus an available growth of 48% per household. Maybe the median did not get its fair share but its absolute standard of living went up considerably.
In conclusion, we are a very rich society with a great deal of inequality. To say that 25% are struggling to get back is an indictment of the choices that we have made. It also means that there are a lot of people with heart-wrenching stories. But in my debates with Larry and others, I have said that it is an occupational hazard of those with a big heart to see problems and to want to fix them. But we do ourselves a disservice by skewing the data and pretending that things are worse off than the y really are. In America we have a minimum wage, which we all know is not a living wage, but ask your fellow Americans whether they are willing to see a ?maximum? wage and you will see quickly how unpopular such populist ideas are in our country.
Steve Rose - Reply to this comment
- by bobnjersey March 1, 2010 3:23 PM EST
[NOTHING you do is worth 270 times what I make working hard at a 40+ hour a week job. While I may not have a degree from Harvard, I am not uneducated. I know wrong from wrong. So understand why people like me want to vomit when those people 'earning' 270 times what an average American makes, actually think they deserve a bonus. ]
if my efforts make the company $1 billion in profit ... and it generates a thousand jobs ... what should my compensation be?
your efforts don't make the company any profit ... and you don't generate any jobs.
should it be tied to what others (like you) are doing/making ... or should it be based on what 'i' am doing?
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I have always wondered at the postulation that it takes a rocket scientist to run a corporation. There are far more talented people who make a corporation what it is than those who move these innovators and creators from a cubicle to a smaller cubicle in order to increase "profits." - Reply to this comment
- Increase taxes on everybody making 200,000. or more...they certainly won't go hungry paying more taxes...everybody benefits from that money since it pays firefighters, police, schools, libraries...etc...
What benefits one American, benefits the nation. Let's be a "nation" and not just a country. Canada, France, Norway and many other European countries have a "nation" because they take care of their citizens. They also have freedom of speech, press and elections...The U.S. thankfully has these freedoms, but we don't have a livable wage...the minimum should be no less than 10 dollars an hour. - Reply to this comment
- After reading this bit of humor I did have to laugh. Some guy that is making a 6 figure salary says that we middle class should just shut up because we are actually doing well. I wonder what country he is in. In 1970 I got out of college and secured a job for a very high wage, not salary. It has gone down from $105,000 to $39,000 so i wonder where I am doing so well. I am now making less than a first year union apprentice, mainly because I was retired, but my old buddy Bernie Madoff made sure that I had to look for another job.
One thing i would like to know is this. Rose showed the annual percentage of increase in earnings, 33% goes to the top, 15% to the bottom, why does the top one tenth of the workforce actuall need a raise. Seems klike the rich always have a reason for getting all of the money, like Kenneth Lays wife said when they got busted for Enron problems. She stated that they deserver the mo0ney because they have a higher lifestyle and that takes more money to have.
So, the moral of the story is this, Be poor so you do not have to deal with all of the problems of owning too much money.
Time for a revolution, we the people( all 300 million) are fed up with this way of thinking. I have a question, do you people think that they 300 million poor and hungry peasants of this country can rise up and crush the so-called American Royalty? I say yes, let's get busy. - Reply to this comment
- The banksters have gamed the system and now own and run the government to ensure their multi-billion dollar bonuses.
After 8 years of the Bushoccio Crime Family, this is probably now the the most corrupt nation on earth. It is one con after another perpetrated by the big corporations. Only now the government is guaranteeing the scam. - Reply to this comment
- I don't make a lot of money. I make $25,000 a year, give or take a little. I have an old truck and a small house, I live paycheck to paycheck, support only myself, and I do struggle to pay my heating bill in the winter. However, when I look at how people live in other parts of the world (ie no clean water running in their 'homes' aka tent aka pieced together shack with a dirt floor), I know that I live like a queen. Still, I think the fact that CEO's are making 270 times the average wage is disgusting. Unless you earn your living working with cancer stricken children all day, NOTHING you do is worth 270 times what I make working hard at a 40+ hour a week job. While I may not have a degree from Harvard, I am not uneducated. I know wrong from wrong. So understand why people like me want to vomit when those people 'earning' 270 times what an average American makes, actually think they deserve a bonus.
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- Republicrats have been bribed big bucks by the lobbyists-Perot wanted to stop this,but the lobbied media was sent to crusify him...
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- This might seem like a dumb question, but I wonder why banks aren't encouraging customers to start saving by offering high interest earnings on their money?
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- Thought I'd post the numbers again, so the ASPD-addled neos can try to argue with facts.
"...Rose uses a different set of numbers. He points out that the median income of American workers has been rising steadily, from about $49,000 dollars in 1970 to $62,000 in 2008..."
The reason that Rose is a lying S.o.S, is that in order to live the lifestyle that 49,000 bought in 1970, you need to be pulling in $286,098.79 today because the cumulative U.S. Price Inflation (CPI-U, Annual Average)
1970-2010 = 483.87%
U.S. Price Inflation (CPI-U, Annual Average) 1970-2010
1970 = 5.7%
1971 = 4.4%
1972 = 3.2%
1973 = 6.2%
1974 = 11.0%
1975 = 9.1%
1976 = 5.8%
1977 = 6.5%
1978 = 7.6%
1979 = 11.3%
1980 = 13.5%
1981 = 10.3%
1982 = 6.2%
1983 = 3.2%
1984 = 4.3%
1985 = 3.60%
1986 = 1.9%
1987 = 3.60%
1988 = 4.1%
1989 = 4.8%
1990 = 5.4%
1991 = 4.2%
1992 = 3.0%
1993 = 3.0%
1994 = 2.6%
1995 = 2.8%
1996 = 3.0%
1997 = 2.3%
1998 = 1.6%
1999 = 2.2%
2000 = 3.40%
2001 = 2.8%
2002 = 1.6%
2003 = 2.3%
2004 = 2.7%
2005 = 3.40%
2006 = 3.2%
2007 = 2.8%
2008 = 3.8%
2009 = -0.4%
[Year 2010 not included in calculations].
So it is clear that Rose is just another ASPD suffering neo-CON, who still believes in the failed "trickle down Reaganomics" and intentionally ignores important facts that show how skewed his data really is. - Reply to this comment
