View Full Version : Productivity up, Wages down.

Gayle in MD
08-26-2008, 01:13 PM

Here's the last part of it...
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Going back to the 1940s, we've never completed an economic expansion where the middle-class family income failed to regain its prior peak (note the subtle switch from 'household' to 'family' income -- the Census family series goes back to the mid-1940s; the household series only goes back to the mid-60s; the main difference is that families exclude one-person units). I can think of no more damning indictment of the current economy -- no better example of how it is broken.

That's why next Tuesday's release is such an important one. True, it's last year's news, but if I'm anywhere close regarding these forecasts, the results will shine a red-hot spotlight on the biggest challenge we face: the disconnect between growth and living standards.

Look for the candidates to release statements based on the findings. Both will distance themselves from the Bush policies that have surely played a role in the disconnect. The problem for McCain is that his economic agenda seems to have been formed by looking approvingly at results like these and deciding the best path forward was to double-down on Bushonomics. He extends the Bush cuts for the wealthy, and throws in a big corporate tax cut for a cherry on top. His health care plan will be much less effective in covering the uninsured.

Obama (for whom I'm an informal advisor) starts with tax relief targeted at the middle and lower income families. After-tax income grows most for the poor under Obama, and most for the rich under McCain (see figure 1 here). Obama offsets the disconnect; McCain exacerbates it.

But tax policy can only offset the disconnect; it can't repair it. For that you need robust job creation, restraints on capital excesses, deep infrastructure investment, single-payer health care, and long-term energy policy with job-creating investments in green tech and alternative energy sources.

So, I hope to join all of you on the Census Bureau website next Tuesday, August 26th. I recognize that my forecasting prowess is on the line, but somehow, I think the stakes are a little higher than that. The release and the analysis surrounding it should provide a close and critical look about where we've been and we're we need to go.

Pretty good article about the Census, with a link to the Census report.

08-26-2008, 01:34 PM
Good article. I would only say that the off set here is the fundamental difference in the economy now is the international competition that, more than domestic policy, determines the real wage rate. Obama and McCain can promise to change this but really can't.

If either will be more responsible fiscally we can recover but, never, in my opinion, reach growth in wages unless we make more productivity gains, develop product that is unique and not immediately copyable or rob a large bank. /forums/images/%%GRAEMLIN_URL%%/smile.gif

Thanks for this info.

08-26-2008, 01:57 PM
Productivity up, wages down = profits up.

Let me pull up my Etrade Pro and see if I can't jack up the price of something.

08-26-2008, 03:29 PM
The rise in productivity is the main reason for the loss of manufacturing jobs. Despite the lamentations of the folks crying over this, it's not all bad. I mean, do you really want your kids to grow up to be hod carriers or sew t-shirts?

As far as the middle class lifestyle you can massage statistics from here until Chridtmas but the fact is the standard of living in this country is way above what our parents (and particularly our grandparents) enjoyed.

08-27-2008, 07:09 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Wally_in_Cincy</div><div class="ubbcode-body"> do you really want your kids to grow up to be hod carriers or sew t-shirts?


<span style="color: #FF0000"> No, those jobs are for the 14 year old Chinese Gymnastics team. /forums/images/%%GRAEMLIN_URL%%/smile.gif </span>

08-27-2008, 07:12 AM
that should be amended deeman. Those jobs are for 14 year old Chinese gymnasts that didn't medal /forums/images/%%GRAEMLIN_URL%%/smile.gif