The State of American Wages 2017
epi.org
epi.org
This report definitely isn't a whitewash. It starts by making it clear that the wealthy are continuing to skim about 1/3 of middle class productivity gains (through housing, healthcare) as compared to the post-WWII period of the rise of America as a middle-class country that free-marketeers claim to want to go back to.
The results are pretty similar to the CPI.
Do you have any specific complaints against the CPI? It's actually a pretty well thought out measure.
This is because buying a house is an investment, and CPI is meant to track consumption.
Also, calculating inflation can be very tricky. If every new iPhone costs the same, can you say that inflation = 0, or that there is deflation, since the same goods are now available at a lower price?
http://www.oecdbetterlifeindex.org
I really don't have a good feel for how robust the index and index data inputs are for that effort though.
Er, I think the number you're quoting is the median price of home sales, which went up 6.8% year-over-year. So it wasn't in a month alone.
So when HR departments use CPI as an input for planning of wage increases, that becomes a systemic squeeze. (Esp if they collectively think - we'll we had better keep raises at or below CPI...).
Edit: on more searching, college is included in the CPI. https://www.bls.gov/cpi/factsheets/college-tuition.htm
Hispanics are a huge and diverse group of people too. Yet they almost universally get lumped in together.
As do immigrant Nigerians, who are presumably included. All minorities aren't subject to the same levels of discrimination. This should be obvious given the historical context which drives much of the discrimination. I don't think it is a coincidence that the model minority stereotype was created at the height of the Civil Rights movement.
Really, immigrants and the direct children of immigrants tend to do well in the US as long as they are not part of a mass migration.
Also, it'd be instructive, I think, to compare Korean immigrants to the US (who generally have high educational achievement, income, etc.) with Zainichi Koreans in Japan (who show poor scores on these metrics). Surely something more is going on than just ethnicity.
Do you have any data on this?
Most of my second and even first generation Asian friends' parents came to the US with no education and worked low pay service jobs. While they were working 10-12 hours a day, my friends excelled in school and their career.
> Asians accounted for 46 percent of the total college-educated immigrant population, followed by whites (28 percent) and Latinos (17 percent). In contrast, an overwhelming majority of native college-educated individuals were white (85 percent), while minorities, particularly Asians and Latinos, were underrepresented (see Figure 2).
> In 2014, the top three countries of origin for college-educated immigrants were India (14 percent), China (including Hong Kong, about 8 percent), and the Philippines (8 percent, see Figure 3). The top ten countries of birth accounted for 52 percent of all college-educated immigrants.
Given the greater difficulty it makes intuitive sense.
Keep in mind asians were barred from immigrating to the US for much of the 20th century.
https://en.wikipedia.org/wiki/Immigration_Act_of_1924
The asian population in the US was effectively 0% ( less than 1% ) for most of the 20th century.
It wasn't until the 1970s that immigrants from asia started arriving.
Also, asians ( particularly asian women ) marry outside their race, so that stagnates the US asian population and hence limits the statistical analysis that can or will be done.
Maybe racism was a reason decades ago, but it isn't why asians aren't included in these stats. It's because there aren't that many asians in the US.
Edit: You will find asians in data where there are significant asian population - california/hawaii and college population. But generally, in overall US population stats, asians are left out because of their low population numbers.
21 million out of 350 million is a very insignificant number.
Also, that number is grouping chinese, japanese and koreans with indians, pakistanis and bangladeshis.
Do you think chinese and indians are the same race?
5% isn't a lot. And it's 5% only because indians, pakistanis, bengalis, etc are classified as asian along with chinese, japanese, koreans, etc. In other words, "asian" population is inflated. So it's a lot less than 5%.
> It's over 16 million people.
16 million out of nearly 350 million isn't much.
> I don't see how you can keep making this argument with a straight face.
Because it's a fact. And as I said, up until the 1970s, the asian population in the US was pretty much 0%. Asians were banned from immigrating to the US.
> We must have wildly differing opinions of what constitutes statistical significance.
We do. But you also have wildly differing opinions with every statistician.
As I said in the other comment, as the asian population in the US grows, statisticians will pay more attention to them. Although the "out"-marriage rates of asians ( particularly asian women ) might prevent increasing asian population. But who knows.
How can they claim this if they're not breaking out pay by job title? Comparing all women to all men then saying that women get paid 84 cents on the "male dollar" implies that women are paid less for doing the same job but that data is not included in the report.
Edit: If you disagree with this please tell me what I'm missing. I'd really like to understand what this is saying.
That's like saying "I earn $400k per year but I'm middle class because I can afford a home in Beverley Hills"
Many people well into their 30s and 40s live in NYC with roommates or a partner renting an apartment. Most of these decide to buy outside of the city but still work in it.
Though Beverly Hills is a different example since that's just an expensive neighborhood in a bigger city. I'm not talking about affording a luxury zip code. I'm talking about being able to live a "middle class lifestyle", which, at least in American culture, includes the option of home ownership in a safe neighborhood with pretty good schools.
Thing is, a lot of middle class white collar workers live here not expecting to ever have any of the above (owning a home, good schools) in the city. They know the city is expensive and home owners here have either been here for decades or are wealthy.
They're here until their mid 30s when they move to a suburb. What I am saying is, a lot of middle/upper middle class people don't care that they can't buy a house in NYC - they were never expecting to.
I would also argue that the middle class lifestyle you describe is not as popular as before.
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The areas in NYC that are affordable to own a home in are not much further away from jobs than areas where one can get a bigger house and not live in 100 year old, poorly maintained building. People will choose to commute an hour away from upstate, Long Island, or even Connecticut than still live in the city 40 mins from work in a smaller, older building.
Although sure, plenty of people in any line of work will take pride in what they do, you are shaming someone for showing consideration for the plight of workers well understood to be the front line victims of market precarity. Sounds like an ignorant stance without presenting some evidence.
EDIT: HN would not let me reply to my replies so I clarified my question here.
I take Uber a lot. I often ask the driver if they enjoy Ubering and I've yet to hear a negative response. In fact most love it. The main reason they site is being able to make their own hours and earn when they want.
I don't think most drivers are even aware that there's a group of upper/middle class people who think they're suffering and being degraded.
The regular economy? Are you suggesting people do these tasks for free, or that we should eliminate service roles from our society?
Knowing how supply/input of money has changed over the years is cool and all but you need to know demand/output to reason about the actual impact on quality of life.
This is encouraging, but a more useful baseline might be to compare similar state economies that did and did NOT adopt minimum wage increases.
And we've seen the rumblings of this in the US in the past few years, on both sides. Too bad racism is our thing over 'class warfare'. Think that goes back to the everyone thinking their a temporarily inconvenienced millionaire thing.
At what point do these sorts of situations go from "well, thats just the way things are now" to "burn this mother down" is playing the lotto, but I'd say the odds are moving towards "burn it down" on the daily.
It wasn't the existence of ultra-rich jerks. At least Jobs and Bezos could bring product to market. Those guys, I didn't have to worry about when I'm not buying from them. It's when the wealthies get involved in government and start changing the rules for their own benefit that makes me want to start weaving some head-catcher baskets.
I can stand just being relatively poor compared to some other person. I can't stand being oppressed and exploited, or having my personal agency removed, by people incapable of even feigning empathy. Their mistake was not in being rich, but in allowing themselves to believe that wealth correlates with superiority.
Right now, I'd put it at around a 2% chance of contagious civil unrest per calendar year in the US, and rising. Few want to start anything, but many are willing to join in. A lot of people are drooling over the special counsel investigations, and hoping to check a few trends with the midterm elections. The majority still wants peaceful resolution for their political issues, but a lot of people have given up on that. If it ever does flip to "burn it all down", that will go a lot faster than most people can react to it.
And yet, nobody votes. Everyone is apparently so willing to participate in violent revolution (which typically ends badly, if you read history), but nobody wants to head over to a church or school on a Tuesday in August. Nobody wants to go to city council meetings. Nobody wants to run for one of the many uncontested local elections in their area.
By the time you need your guns, you’ve already lost. It’s much easier, and much more likely, to change the system slowly and deliberately. That’s not to say you shouldn’t protest, or even strike, but there is so much unseized political power in America, and too much of it is simply because of apathy.
Voting is easy. Participation is difficult. In most cases, the local political system has evolved to perpetuate the interests of those who have been in power the longest. Creating change is 100x more difficult than maintaining the status quo. And that built-in resistance to change is corruptible.
Think about how blatantly unfair gerrymandering is, how unpopular it is, and how prevalent it remains in spite of that. It's almost as if the system is designed to capture the energy of passionate dissidents and dissipate it, such that it cannot be used to perform useful work. The wild goose chase and the snipe hunt are revered traditions for tiring people out and redirecting their energy into useless effort.
It's not entirely apathy. It's a rejection of the established political system as the most efficient means of producing the desired effects. You can vote your whole life, and never see a speck of change until after you join a general strike or boycott. The money follows the power that follows the money. Your side isn't going to win unless you can use your energy efficiently.
You're metaphorically taking on the role of the casino complaining that fewer people want to play the games that give you a 5% house advantage, instead of the ones that only give you a 0.5% house advantage. Nobody wants to play a game they can't win in the long run. They pick up the gun to say "this game is over, let's play another." If the game were actually fair, it could go on forever without permanent winners or losers.
Yes, that's called "human organizations" and it happens wherever there are three or more people trying to do a thing. :) Politicking is messy and difficult because humans are messy and difficult. To be honest, it's amazing we've made it this far.
> It's a rejection of the established political system as the most efficient means of producing the desired effects.
And my argument is that people who think that we'd be better off with a "full rewrite" (and I know several of them) are ignorant of history and the civic structures that exist around them that are absolutely available to anyone willing to participate. It's not hard to get on a school board, or become a county commissioner. Those things aren't necessarily easy like microwaving a burrito is easy, but they're not necessarily difficult like getting a PhD is difficult. That is to say, yes, politicking takes work, but that shouldn't be unexpected or surprising.
> You can vote your whole life, and never see a speck of change until after you join a general strike or boycott.
It all depends on what you're trying to do. Zoning changes are probably better handled by voting for better city council members and attending meetings, for example; a strike won't particularly help there. And yes, part of democracy means losing. Sometimes you lose a whole hell of a lot. I think what people (particularly the left, as of late) tend to forget is that sometimes when you lose it's because the people in your city, district, etc. actually have a different enough point of view that they can get their changes enacted. In other words, it IS possible to lose fair and square. That's obviously super abstract, and the real world is messy, but it's easy to interpret every failed election as a sign that the system is broken, when in reality, you just couldn't convince enough people that you're right.
I guess my overall point is: at this point in time, I don't think it's fair to say "the system doesn't work, so I'm not going to participate". I think that is an unfair characterization of the hundreds of thousands of available political offices in the United States, and other various ways of getting involved civically. I once door-knocked for a city clerk candidate and one of my neighbors said that he'd vote for the guy just because he heard his name from me and that he'd remember my quick spiel. It doesn't take much to make a difference, and it's better than just shooting him. That doesn't mean the system is perfect, because it certainly isn't, but I don't think it's nearly to the point where we should scrap the entire thing (if we could even survive) and start over.
Clearly, not every system is irredeemably corrupt--or even the majority of them--but some are. Some systems do not work, and it is eminently reasonable to not participate in them.
I also feel that the country is where you describe. The rich and powerful had better be careful. If this blows up, a fair number of them won't like how it goes.
Unfortunately, it only takes one of them being egregiously provocative in just the wrong way to light the fuse. I think your 2% chance per year may even be too low.
I recommend the podcast Economic Update:
https://player.fm/series/economic-update-with-richard-d-wolf...
It’s also available on iTunes and all the podcast apps.
For books, read Capitalist Realism by Mark Fisher. It’s a short read, too!
While there are many recent books of nuanced interested in what created these problems, books on how to fix them are fairly unnecessary. Just be open minded, honest and stop rewarding perspectives which by all accounts appear to have created the current problems.
You know, like what the US had in the 50s-70s. The kind that France and other european countries have had for a long time as well.
Large corporate taxes are useful too - it forces companies to reinvest (as reinvested profits are not taxed).
Sure the rates were higher, but the tax code closed a ton of "loopholes" since then.
Take a look at this Slate article which includes data:
http://www.slate.com/blogs/moneybox/2017/08/07/the_history_o...
"So the real tax rates rich Americans paid in the 1950s may not have been so stratospherically high as some progressives assume. But they also may have helped create a more egalitarian society. That seems worth considering."
Mainly by removing the massive incentive for increased wealth past a tax threshold. 1% households back then made much less than today.
This set of data shows the effective rate for the top 1% isn't that much lower than it was in the 1950's (baring the recession in 2008) and much higher than they were in the 1980's when Reagan gave his "tax cuts to the wealthy".
https://files.taxfoundation.org/20170804133536/Average-Effec...
Pop Culture Detective - Sociological Storytelling ( https://www.youtube.com/watch?v=Z1-vPQKwXbY )
Platform Capitalism by Nick Srnicek ( http://politybooks.com/bookdetail/?isbn=9781509504862 )
Reduce the complexity of society so a good baker can make a good living by starting a bakery. Business success these days seems to hinge much more on secret knowledge (taxes, real estate, employment law, patent process, certifications, etc.) than just great execution on a simple idea.
Complexity is a subsidy to the well-connected and masters of the arcane at the expense of everyone else.
Not sure where to find the data, but I'd love to see the churn rate by different income quintiles.
0: http://www.epi.org/publication/usa-lags-peer-countries-mobil...
1: https://www.economist.com/news/united-states/21595437-americ...
1) They do not include fringe benefits in their calculation of wages 2) They use one inflation measure to adjust for cost changes in productivity over time and a different inflation measure to adjust for cost changes in wages over time.
Doing a quick search over their methodology [1], to their credit, I believe EPI avoids mistake #1, but it appears they make mistake #2.
Studies which include the complete value of benefits in their calculation of wages and use the same method to deflate both wages and productivity show that there is no "wage decoupling" from productivity.
Of course, a lot of that has gone to health insurance which is not ideal.
Do you have an example?
http://www.nber.org/papers/w13953.pdf
http://cep.lse.ac.uk/pubs/download/dp1246.pdf
The last one they muddy the waters quite a big where they talk about a "net decoupling" and "gross decoupling". The first they use the same deflator and the second they use a different deflator. Using different deflators for wages and productivity means you're comparing apples to oranges.
Economists Donald Boudreaux and Liya Plagashvili discuss the topic in greater detail in this WSG op-ed https://www.wsj.com/articles/donald-boudreaux-and-liya-palag...