How is productivity measured? GDP / (Hours Worked * Salary) = Productivity?
Share of Income Gains by Quintile - Great Depression til Now
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Re: Share of Income Gains by Quintile - Great Depression til Now
#22This analysis also ignores actual purchasing power (non-core inflation). Wages may have stagnated, but purchasing power for non-core goods has soared. Free trade is a powerful cause of both wage stagnation and purchasing power. Sure, eliminate free trade and the working class will see wages go up; but they'll spend those wages on $4000 plasma TVs and $50,000 economy cars.
Do the limits in the chart (both parents working and household debt maxed) and your observation mean that increases in consumer demand in the near-to-medium term can only come from increases in purchasing power?
Re: Share of Income Gains by Quintile - Great Depression til Now
#23What happened in the late 70s?
With the caveat that this facile explanation is almost certainly insufficient to explain large scale changes in the largest national economy:
I believe during the boom years of industrializaton, THE scarce resource was manpower. Factories were full of machines, and machines were operated by humans. In 1943 U.S. Steel employed 340,000 workers.
The high demand for manpower allowed workers to capture a greater proportion of the economic surplus their activities generated through negotiation.
At some point other ingredients of business became crucial and thus the balance of power shifted.
Re: Share of Income Gains by Quintile - Great Depression til Now
#24My guess as to what happened in the late 70s... the microprocessor, and computers becoming part of the workforce.
Re: Share of Income Gains by Quintile - Great Depression til Now
#25Earlier quoted context omitted.
These are household income quantiles, not personal income quantiles. It's not stated on the chart, but that lines up better with: http://en.wikipedia.org/wiki/Household_income_in_the_United_...
Yes -- many families have shifted from single to dual-earner in order to maintain the same standard of living, so the household income charts really understate the decline in individual wages over this period.
That is not true. They vastly overstate the decline in wages, due to the rise of more single person households. See: http://www.google.com/publicdata/explore?ds=a7jenngfc4um7_&#...
Individual wages have risen steadily since 1910, with no gaps. The household income chart is a misleading chart.
Re: Share of Income Gains by Quintile - Great Depression til Now
#26I haven't seen it featured in a lot of US news agencies, but the economical situation is Israel might be insightful in comparison with the US.
For the last couple of months Israelis are protesting about the economical situation around the country. The focus of those protests is the neo liberalist and capitalist direction the country took. You can search for #j14 on twitter. The protest demands among other things social justice, free education from the age of 3 months and free housing.
Last week 400,000 protested around the country. That's about 7% of the population.
Oh, and today S&P just upgraded Israel credit status to A+.
Re: Share of Income Gains by Quintile - Great Depression til Now
#27What happened in the late 70s?
The rise of the corporate raider mentality. Instead of making money by making and selling things, American corporations shifted towards financial games instead, seeing a prosperous factory as an unmined resource to be cut up and sold to the highest bidder.
We've been eating our seed corn ever since.
Re: Share of Income Gains by Quintile - Great Depression til Now
#28The primary problem with this type of comparison is that it completely ignores economic mobility. Someone simply isn't born into a given income bracket and stays there for life. Most people's earning potential goes up over time. Speaking for myself, I think I've been in all five quintiles.
You are introducing an additional variable that doesn't make any sense to include. Even if mobility is greater now than it was (something of which I am skeptical), the fact remains that the top quintile is still only ever 20% of the population. If one new person moves into the top quintile, that means someone else has moved out. "Most people's earning potential goes up over time." This is generally true, but it goes…
Right, but that's why it makes sense that the top quintile should have runaway gains like those shown. I would expect that.
Re: Share of Income Gains by Quintile - Great Depression til Now
#29Earlier quoted context omitted.
Reagan (1981-1989).
To be fair, Carter's reign wasn't exactly an economic wonder-time, and I don't think Reagan was influencing the economy that much as governor. I do think there's a political dimension to the change, but laying the blame at Reagan's feet exclusively seems like simple political point-scoring. Edit: it's funny seeing this comment getting down-modded. I think I'm significantly more liberal than most people here, but it l…
The article gives two ranges: 1947-1979, 1980-Present. Reagan's presidency (1981-1989), and the political changes it brought, coincided with the beginning of the second range.
Re: Share of Income Gains by Quintile - Great Depression til Now
#30This analysis also ignores actual purchasing power (non-core inflation). Wages may have stagnated, but purchasing power for non-core goods has soared. Free trade is a powerful cause of both wage stagnation and purchasing power. Sure, eliminate free trade and the working class will see wages go up; but they'll spend those wages on $4000 plasma TVs and $50,000 economy cars.
People making your argument always mention TVs, they never mention rent, land, food, education, childcare, or healthcare.
1. Rent
2. Land
3. Food
4. Education
5. Childcare
6. Healthcare
You know, the stuff that actually matters.
I'll give up my $400 LCD TV to be able to afford having my spouse stay home. No problem.
I'll give up my Hyundai to be able to get a degree on the cheap like they did back in the 60s.
I'll give up 100% of my silicon-based technology if in exchange I can afford to own some land. Easy choice.
If I have to become a silicone-smashing luddite to return to 1960s level wealth, fine. I don't love computers THAT much.