BusinessWeek & the Labor Shortage Myth
Business Week has been curiously reality based about wages and immigration, considering who buys their advertising. They again debunk the notion that there is a labor shortage and we must open up the immigration spigots.
BusinessWeek: …A North American economist at Merrill Lynch…is one of a number of economists who say the concerns about too few workers are vastly overblown… Rosenberg argues the simplest way to gauge whether there’s a worker shortage is to look at the price of labor. According to the basic laws of economics, the tighter the supply of labor, the more it should cost. So if the economy were operating with full or near-full employment, we would be seeing an “explosion in labor compensation,” he says.
The price of labor, however, is hardly surging. In fact, key indicators of employee costs show they are tracking or trailing inflation. Average hourly earnings are running at 3.9% year over year, and the employment cost index is at 3.5% year over year.
Most Americans certainly aren’t finding their incomes exploding. The wages of 80% of the U.S. workforce—made up of nonsupervisory workers—have been stagnating since the late-1990s boom ended. On Aug. 20, the government released data that showed the average household income increased 4.1% in 2005, to $55,238. But that’s still below the average household income in 2000.
…Even as the unemployment rate has declined in recent years, millions of Americans have left the workforce and stopped looking for jobs. The government’s Bureau of Labor Statistics has a dedicated category for “discouraged” workers who believe no positions are available to them. If the percentage of Americans participating in the workforce were the same now as it was in 2000, the number officially counted as unemployed would be 9.1 million, rather than 7.1 million. The unemployment rate would be 5.8%, instead of 4.6%.
Lessons in basic economics for the Right Brain Dummies.
Mad Dog,
Your wish is my command:
“The wages of 80% of the U.S. workforce—made up of nonsupervisory workers—have been stagnating since the late-1990s boom ended.”
.
Are we still busting this myth? The data tell us that real wages are actually picking up steam, now 1.5% — in real, post-inflation, constant dollar terms – higher than in the first seven months of 2006, which is a faster pace than in each of the previous four years.
So, can we drive a stake through the “oh, my poor declining wages” nonsense? Either that, or get some more credible numbers to back up the claim.
.
From the Bureau of Labor Statistics (http://stats.bls.gov/ces/home.htm)
Private sector hourly wages, constant 1982 prices
- – - – - – - – - – Real – - – - Percent change
- – - – - – - – - – $ / hr – - – - to Jan-Jul ‘07
Jan-July 1995 = 7.65 _ _ + 8.7%
Jan-July 1996 = 7.56 _ _ +10.0
Jan-July 1997 = 7.65 _ _ + 8.7
Jan-July 1998 = 7.86 _ _ + 5.7
Jan-July 1999 = 8.00 _ _ + 3.9
Jan-July 2000 = 8.02 _ _ + 3.6
Jan-July 2001 = 8.09 _ _ + 2.8
Jan-July 2002 = 8.23 _ _ + 1.0
Jan-July 2003 = 8.28 _ _ + 0.4
Jan-July 2004 = 8.25 _ _ + 0.8
Jan-July 2005 = 8.22 _ _ + 1.2
Jan-July 2006 = 8.19 _ _ + 1.5
Jan-July 2007 =
.
Sorry.
Jan-July 2007 = 8.31 _ _ N/A
DOR: Are you quoting all wages or the “nonsupervisory workers” wages (i.e. lower 80%)?
Check the source: Private sector production workers is as fine as it gets for the data on their website.
I’d be happy to consider another source.
David,
Are you picking on me as being right brained?
Dang. Most people think I have no brain at all.
Thanks.
MD
I’m looking at the data.
Very interesting stuff.
However, I suspect that just looking at changes in hourly rates isn’t the best form of analysis.
Not that I’m saying something one way or the other.
But, hours worked should be factored in.
And, a peep at how we determine constant 1982 dollars.
Not picking on David or his choice of numbers.
He has a good source and it provides a lot more to the discussion.
MD
DOR: How do you reconcile the difference between the data you provided with the article’s reference to the “wages of 80% of the U.S. workforce—made up of nonsupervisory workers—have been stagnating since the late-1990s boom ended. On Aug. 20, the government released data that showed the average household income increased 4.1% in 2005, to $55,238. But that’s still below the average household income in 2000″?
Lefthook,
The issue is with the word, stagnating.
And household INCOME.
David data is hourly wage.
Hourly wage is different data than household income.
I don’t know how he can reconcile that to the article.
Even the article makes note of wages versus income in presenting two points of view.
One that we have enough workers based on household incomes falling since 2000 i.e. the late 1990s.
The other point of view is that unemployment is historically low.
I’d suggest looking at percent of population working instead of just the abstract unemployed and visiting government employment / unemployment centers.
The percent employed was far higher under Clinton than under Bush.
That abstract unemployed figure was between 3 and 4 percent. Far, far lower than ‘historical numbers.’
MD
MD: I’m concerned that DOR is taking into account income/wages paid to ALL Americans, including Bill Gates.
You know the old joke, 5 guys in a Seattle coffee shop make an average of $70,000 per year. Then Gates walks in and the average is now $30 million per year. Did anybody get a raise?
The lower 80% numbers cited in the article are more indicative of the average American’s experience. If DOR’s including Bill Gates, then he’s neglecting the polarization of wealth that’s leaving behind most working Americans.
LeftHook,
Apples and oranges, to put it in a nutshell. There are more ways to slice and dice income data than you can imagine. Start with the basics: income isn’t earnings but earnings are income. Disposable income isn’t private consumption, but it does get consumed, privately. Don’t even get me started on the relatively utility of a 1982 deflator vs. a 2000 one.
I just read the read the statements and if it doesn’t smell right, I try to prove it with the available data. If I can’t, you read about it in columns of dates and numbers separated by _ _ _ .
In the US, Gross National Product > [is greater than] Gross Domestic Product > Gross National Income > Net National Product > Net National Income > Final Consumption Expenditure > Private Consumption Expenditure > Household Consumption Expenditure > Personal Income > Compensation of Employees > Wages and Salary Disbursements > Hourly Earnings. That doesn’t even account for net transfers from the public sector, supplements to wages and salaries, personal income receipts on assets, personal interest income, personal dividend income or personal transfer receipts (which is bigger than income and dividends income put together).
Oh, and it all gets updated and revised over and over and over. Did you know we didn’t even have a recession in 2001? On the classic “two consecutive quarters of negative growth,” it never happened. Yeah, its confusing and that helps keep me employed.
So, when some lazy journalist or bias commentator decides to spout off about something that doesn’t make a lick of sense, it gets my dander up.
.
In nominal terms, the main measures of well-being – personal income, compensation of employees, wage and salary disbursements and private consumption expenditure have never declined for as far as the data record (Jan 1960—July 2007). In real terms, by which I mean subtracting the year-to-year change in the urban consumer price index, none of these indicators have declined in the past four years, and the most critical one – private consumption expenditure in real terms – last declined, year-on-year, in . . . wait for it . . . September 1991.
Fact.
The stuff that gets thrown around in this website tends to be focused on how much people are paid, rather than how much they can spend. Wrong measure, if you ask me, but to each his / her own.
If you thought the consumption side of national accounts was a bit confusing, don’t even try to figure out the Bureau of Labor Statistics data. All nonfarm employees, all private sector employees (would that include private farmhand?), production workers (not the same as goods producing employees and certainly not to be confused with manufacturing sector production workers.
Manufacturing sector production workers.
People who make things.
People who, if the economic conditions aren’t as favorable as somewhere outside America, might lose their jobs. The mighty working man, the union man, the little guy everyone wants to “protect” by jacking up the value of the Renminbi or slapping silly import duties on products made by American companies somewhere else.
Must be a pretty important bunch, these manufacturing sector production workers, to cause such a stir. Yet, out of 302.5 million consumers, these workers account for just 10.1 million, or 3.35% of the population. Out of 153.2 million people in the labor force, they’re just 6.6% and only 6.9% — less than seven percent of the 146.1 million employed people.
Call it the seven percent solution: make 7% happy, and screw the other 93%.
Not on my watch.
.
Oh, and Bill Gates isn’t included, unless you’re looking at a Fortune, Forbes or BusinessWeek article.
Did household incomes decline since 2000? The Census Department has data to 2005, which shows it did, by $1,273 or 2.7%.
It also shows an 8.9% rise in household incomes in Arkansas (up $2,994), +6.9% in Louisiana (+$2,415) and a whopping 10.9% rise, a full $6,230, in New Jersey.
Oh, and this is median household income, so, it tends to poke a few holes in the “rich get richer, poor get poorer” argument.
Bill Gates cannot sway a median.
.
Why did the median income go down? Well, aside from the utter incompetence of all Republican’t Administrations going back about 75 years, there’s also been an economic shift.
See, 2000 was a bubble year, the height of risk. Using 2000 as a base for American incomes is kind of like using 2004 as a base year for Boston Red Sox’s World Series results: the year was just a little bit unusual.
DOR: I appreciate the effort, but that seems like a lot of smoke and no fire.
Are you denying the conclusion about the non-supervisory workers? Is the BW-quoted economist (and the many others I’ve read elsewhere) that made the following statements a fool or a liar?
“The price of labor, however, is hardly surging. In fact, key indicators of employee costs show they are tracking or trailing inflation. Average hourly earnings are running at 3.9% year over year, and the employment cost index is at 3.5% year over year.
Most Americans certainly aren’t finding their incomes exploding. The wages of 80% of the U.S. workforce—made up of nonsupervisory workers—have been stagnating since the late-1990s boom ended. On Aug. 20, the government released data that showed the average household income increased 4.1% in 2005, to $55,238. But that’s still below the average household income in 2000.”
DOR: BTW, does the difference between how much people are paid, rather than how much they can spend include the money they pulled out of stock and housing bubbles?
If so, there’s good and obvious reasons not to rely on it.
LeftHook,
Wouldn’t be the first time a reporter got is economic data wrong, or drew the wrong conclusion.
3.9% rise in pay? Compare that to 2.6% rise in CPI, average July 2006 – June 2007, or 2.7% in June this year.
As for earnings vs. consumption, which one would you like to use? As I said, to each his / her own.
David,
Actually, Bill Gates has swayed or skewed the entire annual income for the United States.
MD
The $3 per share dividend given out as cash by MicroSoft in the 4th quarter skewed national data on income.
Mr. Gates had the lion’s share of the cash distribution, over $8 billion dollars.
I was in college at the time. Most indexes did not include Mr. Gates one time cash infusion under the logic that his personal income was an outlier.
There are quite a few newpaper articles from 2005 that covered the story.
Some indexes of the time, used footnotes.
I looked for footnotes this afternoon and so far found none.
Fourth quarter 2004. Sorry.
Not all daily newspaper keep stories online.
Not at permanent links.
Here’s one from the Washington Post.
link
Even though I love a good internet flame and rhetorical battle, I agree with David on the issue of ’stories.’
As I have said before, I do research. Some academic. Some political.
Some of my political research has be on Democratic and Republican CANDIDATES and some on issues.
For the political research, the ultimate goal seems to be, the verb is important SEEMS to BE, generating public awareness of corruption or exposing misinformation.
A nice way to say it, my research can wind up in a briefing given to reporters.
Now, those reporters might not use the briefing information. They might be “given” sample story copy to suggest how “we” see the public interest in presenting the story.
Now, to clarify all that to how it relates to David’s comment that reporters do get the story wrong.
IF I get it wrong, they WILL get it wrong.
I just helped produce a couple hundred pages on one dude. It took months of my time. Three people were working on it. I traveled to verify information and obtain certified copies of documents at court houses.
During the process, I bet we had three different times when I just KNEW I was researching clearly criminal activity that was under Federal jurisdiction.
Even though I still suspect a federal crime has occurred, I could not prove it. Nor, could I link the person of interest DIRECTLY to the events. I found no documents with his name or signature.
Oh, I had a file box full of documents. I had research going back to 1924. I had the “facts” down cold. No doubt in my mind. But, the boss said to drop it. We couldn’t link our guy to the crime. And, we didn’t have enough layers of confirmation.
Which I agree.
“We” don’t hand rumors to reporters. Reporters already have a bad reputation with the public. If “we” are the cause of false accusation, if we are nothing but a rumor mill, “we” will never work again.
Plus, the press remains almost the only vehicle for exposing corruption.
Don’t kill the goose if you want the golden eggs.
So, yes, reporters screw up stories. Yes, reporters get fed information. Yes, there are interviews. Yes, there are background documents. Yes, facts are checked and rechecked. Yes, recordings of meetings are made. And, still some stories are mangled.
But, over all, I’d say what is printed is okay. Not great for getting an education on a subject. Just enough to fill in current events.
MD
Also see http://www.bea.gov/newsreleases/regional/lapi/2006/mpi0406.htm
For a news release from the bea on the skewing of data by the one time dividend.
I am not sure the link is permanent.
Sorry. Didn’t even check.
What is not told is the increase cost of healthcare to the employer is in the wage number.
I do not think with the employee paying a higher contribution and co pay they would call that a raise.
FYI
The wage squeeze and higher health care costs
by Sylvia Allegretto and Jared Bernstein
Despite the fact that 2005 marked the fourth year of an economic expansion characterized by strong productivity growth, the inflation-adjusted wages of most workers’ fell last year. The median (or typical) worker’s wage fell by 1.3% (Figure A). The decline was even greater for those at the very bottom end of the wage scale, who saw their real wages fall by 1.9%. Only those at the very top of the wage scale had wage growth that outpaced inflation.
Some have stated that the reason for this unsettling result is that increasing health care costs are squeezing wage growth. Allan Hubbard, economic advisor to President Bush, stated in an interview with the Wall Street Journal that, “Employers are spending more money on health care, and that’s robbing people of wage increases” (January 12, 2006).
The logic of this claim is that dollars that would have gone into wage increases have instead gone to pay the increased cost of employer-provided health care. According to the view espoused by Hubbard and others, workers’ total compensation—wages plus benefits—continues to increase at a clip commensurate with the strength of the overall economy, even if their paychecks are admittedly not going as far.
READ MORE
MD: I appreciate your comments about reporters getting stories wrong, it’s certainly been my experience. But this is an established business periodical that has no incentive (given its multinational corporate advertisers) to understate American wages. Reporting on basic, fundamental economic data is right in their wheelhouse.
Contrast that with our friend DOR, a professional economist whose livelihood depends on Chinese business interests. They/he have a direct incentive to refute any narratives that suggest Americans are not better off with this massive trade debt with China.
LeftHook,
Maybe you don’t feel like I’ve got your back. I am a little whimpy on busting David straight in the chops unless I’m certain.
I doubt the story is wrong.
I think using year 2000 is the right starting point. I see 1998/1999 as peaks or the peak. With unemployment being strong by historical numbers, hellishly strong even in 2000.
We see rapidly changing policy being driven by election promises already published in December of 2000 by the transistion team.
Announcement means adjustment, not adjustments at implementation.
The negative self fullfilling call for recession started with Bush. If David wants to say that adjusted data shows NO 6 month decline ending in September, 2001. Fine.
I haven’t seen that anywhere else.
As much as I enjoy the ‘rational information’ David pukes up, that doesn’t mean he and I are having a love fest.
I am no fan of median or average as the defining statistic.
Nor GDP, nor unemployment, nor spending power, or caloric intake etc etc etc.
I know an phd that looks at crime statistics to determine economic health.
Crimes up! Economy’s down!
David most likely was hired for his pre-disposition to provide good information as well as a bias towards the future goals of his employers.
There’s a moral hazard. No pun intended.
A capitalist hiring only advocates of capitalism for investment strategy.
Signing on for any more comments.
MD
Mad Dog,
The median: if Bill Gates and a bum walked into a bar, the average net worth would go up, but the median wouldn’t.
- – - – -
US Federal Reserve Board chart showing quarterly (year-on-year) real economic growth, 1947-2007: http://tinyurl.com/3yl6d2
Note that the line doesn’t fall below zero at any time after 1992.
You may not like it, you may not disagree, but at least acknowledge the hard data.
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
Mr Konop,
What is not told is the increase cost of healthcare to the employer is in the wage number.
Wages and compensation are not the same. First column is cost to the employer; second is cash to the worker and third is benefits to the worker. All are in $/hr, average for all civilian employees.
_ _ _ _Cost of Compensation
_ _ _ _ _ _ _ _Wages & Salaries
_ _ _ _ _ _ _ _ _ _ _ _Total Benefits
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _
2004 _24.95 _ 17.71 _ _7.23
_ _ _ _24.96 _17.70 _7.26
_ _ _ _25.36 _17.96 _7.40
_ _ _ _25.57 _18.07 _7.50
2005 _25.87 _18.22 _7.65
_ _ _ _25.86 _18.21 _7.64
_ _ _ _26.05 _18.28 _7.77
_ _ _ _26.46 _18.59 _7.87
2006 _26.86 _18.82 _8.04
_ _ _ _26.86 _18.80 _8.06
_ _ _ _27.31 _19.12 _8.18
_ _ _ _27.54 _19.24 _8.30
2007 _27.82 _19.47 _8.35
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
LeftHook, Mad Dog
I don’t question your integrity, and I ask that you grant me the same respect. I don’t expect that from many of the others around here, but you two seem to be fairly rational.
David,
The increases in household income does not mean that “wages” have increased or decreased.
My household income has increased because I returned to work.
My daughter now works fulltime and lives at home.
My wife has increased her hours worked.
So just raw data does not tell us a story.
MD
David,
I can’t believe you would be so ingenius about the meaning of median.
If two bumbs walked in, it would change the median.
If anyone walks in alone, it does change the median.
That’s why the median does not tell us much.
Until now, David, I have never intended to put a hit on your integrity.
Perhaps, I’m just confused by your fondness for ‘median.’
On the other hand, the comments I’ve made about pre-disposition are not meant to be demeaning.
I cannot be a good employee for certain employers because of my unconscious and conscious leanings. That isn’t the employers fault nor mine.
Since my training in poliSci, I have become more an … economic Marxist in terms of how I would analyze money issues.
That doesn’t make me a communist. It just means I prefer the tools of Marx to the tools of … you pick the school within political economics.
David,
While visiting your link at tinyurl, I was directed here:
The NBER’s Recession Dating Procedure
As much as respect the Federal Reserve Economic Data (FRED), especially from St. Louis, I bow to NBER on recessions.
MD
and as I play around with the graph, I see that some parameters show a negative or below zero value at the date NBER gives for the recession.
Are you reaching?
From today’s NYT:
The nation’s median household income grew modestly in 2006, the Census Bureau reported yesterday, even as the percentage of people without health insurance hit a high.
Experts said the rise in income was mainly a reflection of an increase in the number of family members entering the workplace or working longer hours.
Average wages for men and women actually declined for the third consecutive year…
Some Republicans seized on the new data as evidence that Bush administration policies [including trade] had been good for people’s pocketbooks.
DOR: Please forgive me for appearing to impugn your integrity—I genuinely enjoy reading your comments. It’s really just me trying to guess at why you are so stubborn about acknowledging the negative effects of our current trade policies on American workers.
Why haven’t you joined the growing ranks of “free-trade” economists who at least confess that there is a “distribution problem”?
David
How does it factor higher co- pays, less coverage and higher monthly paymant for Healthcare?
Mad Dog,
So, there’s plenty of jobs for your daughter. Great.
Your wife is getting overtime, or moved from part-time to full-time. Terrific.
Sorry to break the news to you, buddy, but your household income just went up, and there’s nothing you can do about it.
- – - – - – - – - -
I’m missing the point you were trying to make about the median. I said “If Bill Gates and a bum walk into a bar,” but you said “two bumbs.”
What do you consider to be inaccurate or misleading about adding equal numbers of data points on either side of the median, and thus – by definition – causing no change? The whole point is to avoid special-case distortions.
“The median does not tell us much” ? Well, take it up with the Census Department. They’re the ones who brought the term into this discussion, not me. They defined the available data, not me.
# # #
Since my time in Asia, I have learned that Marx was incredibly naïve if he thought masses and masses of people would be motivated, every working day, by nonmaterial goods. The ways his followers put his ideas to work, on the other hand, was just evil.
# # #
Recessions. Didn’t I say “On the classic ‘two consecutive quarters of negative growth,’ it [the 2001 recession] never happened.” ? Yep.
Am I reaching? Of course I am! Why? Because I get so tired of otherwise knowledgeable people spouting off about things they haven’t even bothered to check. For anyone who wants to argue economic policy or politics on the internet, there is absolutely no excuse not to have a command of the data.
# # #
“The nation’s median household income grew modestly in 2006, . . . ”
Grew.
= = = = = = = = = = = = = = = = = = = = = = = = = =
LeftHook,
Thanks for your sentiment.
Why don’t I acknowledge the negative effects of American trade policy on American workers? Because it is irrelevant, that’s why.
Here me out.
The overwhelming majority of the impact of American trade policy isn’t on American workers. It is on people outside America. I’ll stick my neck out, and without evidence put the ratio at something like 80:20 – 80% of the impact, good or bad, is outside America.
So, just as I wouldn’t measure wine by the yard, neither would I judge American trade policy by its impact on American workers. Consumers, yes, as they are a significant number. But, workers? Doesn’t make sense.
# # #
Mr Konop,
I don’t know how to answer your question. The data I provided above shows the difference between what an employer pays out and the cash an employee receives.
Yes, David. My household income went up without an increase in wages.
The shoe store my daughter left is problably paying less to the new, replacement employee. Just as my daughter is now making the entry level wage at her new job.
That wasn’t an increase in wages. Just a shift in household income from one house to another.
Median doesn’t tell us anything without the full set of data.
You should know that a data set could contain two medians.
You should also know the classic example that LeftHook tried to use.
Borrowing it from an online source to save on typing.
“Suppose 19 paupers and 1 billionaire are in a room. Everyone removes all money from their pockets and puts it on a table. Each pauper puts £5 on the table; the billionaire puts £1 billion (i.e.£109) there. The total is then £1,000,000,095. If that money is divided equally among the 20 people, each gets £50,000,004.75. That amount is the mean amount of money that the 20 people brought into the room. But the median amount is £5, since one may divide the group into two groups of 10 people each, and say that everyone in the first group brought in no more than £5, and each person in the second group brought in no less than £5. In a sense, the median is the amount that the typical person brought in. By contrast, the mean is not at all typical, since nobody in the room brought in an amount approximating £50,000,004.75.”
Must have been a source in the UK, eh?
The other example from online:
“There may be more than one median: for example if there are an even number of cases, and the two middle values are different, then there is no unique middle value. Notice, however, that at least half the numbers in the list are less than or equal to either of the two middle values, and at least half are greater than or equal to either of the two values, and the same is true of any number between the two middle values. Thus either of the two middle values and all numbers between them are medians in that case.”
I really hate to do the John Konop cut and paste, David. I find it demeaning and common. Then, mad dogs are common and uncommon all at once, using dual meanings of common.
Common as in crude and common as in occurs often.
Median is just in the middle. It doesn’t tell us that Bill Gates is or isn’t in the room. Or, that the room is filled with bums, paupers, or bumbs. (Bad typo. I am not very well and I hope my medication is only hurting my typing skills. And, not my great ability to think and communicate.)
Using one of the earlier examples, the 19 paupers have their 5 pounds and the other dude gets a trillion dollars. The median remains 5 pounds, correct?
That is why the median household income tells us nothing about the rise or fall of wages.
Wages are the price of labor, which is the topic of the article. Not household income.
John is always ranting and raving about wages. God love him.
I’m not even sure there is a direct relationship to trade and wages. Or, an indirect relationship.
But, I’m pretty sure that I understand income distribution in the United States. My example fits in a football field.
Each yard line represents one percentile of the population.
Income would be represented by a string suspended an inch off the ground for every $10,000 of income.
At fifty yards, the string is … what? 25 inches off the ground?
At 95 yards, a 150 inches?
At the goal line, we have to use miles to measure how far off the ground to suspend the string. (In excess of 8333 feet).
I can’t be certain of the data, too many conflicting sources.
Average income in the States is around $51,000, if I calculated correctly from the IRS ’sample data estimates.’
Now if that were correct, and I’m pretty sure it’s only close at best, then, we have a skewed distribution.
Plus, that average is calculated on tax returns, including those with people 15 years old with income tax returns etc.
Not the best combination of method and data.
If we just take the 90 million returns with tax, the average rises… to over $70,000 average income for a per taxpayer look at income.
Now, with the variable nature of estimates made from samples, etc etc … not very good numbers.
Bottom line, income distribution in the United States looks more like the income distribution curve of a third world county in Africa than that of a post modern society.
So I doubt trade policy has anything to do with it, average wage in the US, that is.
And, I don’t see how using the data you provided suggested the US did not have two consequestive quarters of negative growth in mid 2001.
Was it a test?
“My household income has increased because I returned to work.”
As I said, my household income has increased, and I listed several reasons.
So thanks for trying to break the good news to me, but work on your timing, eh?
and I guess while I’m not sleeping …
I looked up the top 400 tax returns in AGI for the year 2000.
It’s a publication. SOURCE: IRS, Statistics of Income Bulletin,
Spring 2003, Publication 1136 (Revised 6-03).
MAYBE you can find it online.
The top 400 return in AGI got 1.33 percent of all AGI.
Not bad. Not bad at all.
But using medium hides that information.
Something like 60 billion dollars shared by 400 taxpaying units.
Tax rate was about 22 percent, about what I pay.
Not too sure but isn’t that the bottom income tax bracket these days?
Eh?
DOR: So your position is that whatever negative impacts there are to American workers are vastly outweighed by the positive impacts created abroad. That fine.
But why deny the negative impacts to American workers? Why not acknowledge them and then make your “greater good” argument?
Mad Dog,
OK, here it is, the full set of data:
$13,774.7 billion.
302.5 million.
There you have it: latest nominal GDP and population.
Not much use, is it?
If you need more detail, go here: http://tinyurl.com/3×2l2z
What you get is this (spreadsheet): http://tinyurl.com/2l4o6l
What you decide to do with it is where it all gets much more interesting.
Recession? No, that wasn’t a test, just a sample of how conventional wisdom (2 consecutive quarters of decline = recession) can be wrong.
. . . . .
You’re right, of course, about the median and the mean.
And, neither is going to tell you anything at all by itself, except “this is the mean/median.”
Run a string of them together, and value is added in the form of a time series.
. . . . .
The article made a fundamental error in the key statement, key indicators of employee costs show they are tracking or trailing inflation. Average hourly earnings are running at 3.9% year over year, and the employment cost index is at 3.5% year over year. . As I pointed out, inflation is running at 2.6% in June-June 2006-07, and 2.7 in July this year.
It then goes on to add average hourly earnings and wages of nonsupervisory workers and average household income, which gives a very strong impression that the author either doesn’t understand the differences, or is trying to pull a fast one.
. . . . .
I’m not sure how Bill Gates’ income got into all this, but when it did, I lost interest.
I’m also not sure why income distribution came in. If Farmer Fred has an income rising 10% a year (after inflation), and Worker Will, who makes $1 more per year than Farmer Fred, has an income rising 10.001% a year, the income gap is widening.
So what? Does it matter if it is widening even more? What if Fred’s getting 2% more and Will’s getting 20% more? Does it matter?
Yes and no. Yes, if Fred starts a riot because he perceives that he’s not doing as well as Will. No, because the problem is really in Fred’s mind: he is jealous.
.
“Bottom line, income distribution in the United States looks more like the income distribution curve of a third world county in Africa than that of a post modern society.”
Be careful here. Wiki-up a table of Gini coefficients and check out who’s No. 7 on the list: Bosnia & Herzegovina. The 19th “best” income distribution is Ethiopia.
Sure, there are a bunch of African countries at the bottom of the league table, but the US isn’t.
.
What is it about skewed distribution – i.e., a normal Gini coefficient – that bothers you? Is there some advantage in everyone getting exactly the same of everything, regardless of anything? We all eat out of the communal pot, is that the idea?
Sorry, I like capitalism better than communism, and I’ve seen both up close and personal.
(Turns out the communists like capitalism better, too.)
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
LeftHook,
If someone lights a match, and everyone screams “FIRE,” I’m not going to say “fire,” too.
I’m going to say, “Hang on, folks. That’s just a match!”
There is far too much attention on the negative impact of trade on US workers, none on the positive impact on US consumers and generally disinformation about the impact on non-US workers.
I just try to add a reality check now and then.
David
Is not China a communist country?
Why do you support them so much?