The American Middle Class Hasn't Gotten a Raise in 15 Years
fivethirtyeight.com
fivethirtyeight.com
http://thecurrentmoment.files.wordpress.com/2011/08/producti...
Among other things, I think this exonerates Silicon Valley. Information tech did not cause this. I've smelled an agenda to frame SV and its larger economic and cultural orbit for middle class woes for several years, mostly emanating from curmudgeonly journalistic and literary circles. I think it's total baloney... the dates just don't match up. This murder occurred while the suspect was in diapers.
Interesting in light of all the recent discussion around Peter Thiel's new book which argues that fundamental (as opposed to just incremental) technological innovation has slowed in most areas since roughly the same date. I would add the above graph to the very long list of things that went off the rails in the 70s.
I'm very heartened by all this talk, especially given that it's coming from multiple points on the political landscape. I'm hearing liberals, conservatives, and libertarians all talking about how something really broke around that time-- something I've personally believed very strongly for many years. For years I've said that on or around 1970 "the future was cancelled." As for why-- I don't know. I scribbled down my own hypothesis here: http://adamierymenko.com/c/
Specifically the part where it talks about how the current establishment is squeezing the value-creating workers (teachers, police, factory workers, artists, mechanics, etc) while ballooning the "bullshit jobs" (school and hospital administration, lobbyists, PR researchers, consultants, etc)
We call those "filfak" in Sweden. The "philosophical" faculty. Basically non-value creating personell that leeches on those who add value.
Humans are strong worthy opponents and battling them all day is tiring, either directly or indirectly as what amounts to being a toolsmith. TPS reports and such.
A "real job" is much more asymmetric warfare. You, with high technology, cheap energy, financial capitalization tools, an advanced mechanized transport system, and health care support, vs a poor defenseless forest of trees. I wonder who will win?
Even retail vs customer is fundamentally asymmetric warfare, not person to person warfare.
Nationally, as per the article, we probably do spend only 10 or so hours per week working on average. But we also spend maybe 30 hours per week national average fighting other people, either directly or more likely as support troops.
The purpose of this new procedure or report or process is solely for exec A to screw over exec B. Don't worry about the customers we have .gov on our side to eliminate competition.
I don't feel bad about working these jobs. Some high level crook paid off the government to collect a huge amount of money in an unfair market. If I don't collect my share for basically doing nothing, the crook will get it. The system is designed so its completely outside my control other than accepting my cut for doing not much. Well OK then. My carefully designed TPS reports or new procedure or whatever will report my feudal overlord is better than the other feudal overlord. Whatever.
We are a country of price takers, not price setters. Most people are taking whatever price they are offered with no push back. No raises this year? Well maybe next year. Maybe a tiny bonus. Etc.
Unions had their own set of problems and at some point might be unsustainable, but when people stop negotiating deals, they get taken advantage of.
I've changed jobs more than some people I know because it would get me a better deal, and it has. But before that, I experienced myself and watched my parents stick to the same job without getting appropriate raises and bonuses for the work they did.
In our current economy the best way to get a raise seems to be to switch companies because companies don't like giving raises and people don't like asking for them. Eventually what used to be a early raise negotiation will be a yearly job negotiation. It's starting to happen with younger workers and the more that is normal, the less efficient all these businesses will become.
All because people stopped negotiating.
The all-pervading "glue" of society is crumbling down.
Real trust is great, but you can negotiate without it.
I agree that ideally people should always be pushing back, but if it's potentially between a raise or you're fired(at least in the minds of people requesting the raise), then people will be more cautious.
Also, young(cheap) workers are in large supply so people may actually be fired for asking for a raise; they can just fire the guy and hire a new younger worker(probably working for less too).
Many of these tech companies out here in the Bay probably pull hundreds of millions of dollars in "free" labor using an army of temporary interns(because it's cheap).
The limit is shown in the recent fast food strikes: when the existing jobs are so damn bad that people can't get by from working, people start fighting back again.
"There are three million good jobs that no one seems to want."
If employers can't be bothered to pay well, why work for them?
The only people I personally know with paid-off houses in California are tradespeople and startup lottery winners.
This country has a deeply embedded, cultural and in my opinion entirely unhealthy bent toward deference to the wealthy and connected that borders on obsquious.
> The other half of that thought, "at the price I'm willing to pay" is almost never mentioned.
Think on that for a second. Let's say CompanyX is willing to pay huge gobs of money for engineers. Now CompanyX employs all the good engineers and everyone else whines that they can't find any. So CompanyY comes along and offers a bit more. Some engineers bail and move over, but most are happy where they are/don't want the life change/etc. And on it goes. It's like the search for a mate: the older you get, the more likely it is you've found a situation you want to keep. In the engineering case, "skilled engineers" are for the most part older, may have other responsibilities (mortgage, kids, spouse), have had the opportunity to "sow their wild oats" by trying a few different companies/startups/whatever, and have found a situation they want to keep.
It's an untruthful trope that's damaging, because some people actually believe it.
> young(cheap) workers are in large supply so people may actually be fired for asking for a raise
which is what I'm specifically asking about. Is there any case where this causal relationship has been demonstrated?
> I'm just describing, hypothetically, what a person's logic might be
Then we need to preach loud and long how totally mistaken that logic is. "Well Johnson, you're a model employee and get great reviews every year, but you asked for a raise so I'm afraid we're going to have to let you go." - never happens.
An obvious one is that the Great Recession has shifted power toward companies and away from workers. You won't negotiate if it does no good.
Americans now spend nearly $18 of every $100 produced in the US on health care.
For every $100 made in the United States, $1.50 is spent just on hospital administration.
Wages are being eaten up by corporate health care expenditures.
"The United States has been running consistent trade deficits since 1980 due to high imports of oil and consumer products. In recent years, the biggest trade deficits were recorded with China, Japan, Germany, Mexico and Saudi Arabia. United States records trade surpluses with Hong Kong, Australia, Netherlands and Belgium."
http://www.tradingeconomics.com/united-states/balance-of-tra...
http://economyincrisis.org/content/failed-trade-policies-hav...
It's not clear that this is an apples-to-apples comparison, but this AEI chart suggests this statistic might not be as disheartening as it sounds:
http://www.aei-ideas.org/2013/07/yes-the-middle-class-has-be...
In other words, America’s “middle class” did start largely disappearing in the 1970s, but it was because they were moving up to a higher-income category, not down into a lower-income category. And that movement was so significant that between 1967 and 2009, the share of American families earning incomes above $75,000 more than doubled, from 16.3% to 39.1%.
Is this for real? Are you actually serious?
Go talk to some ordinary people, or maybe tour some of the country outside whatever rich coastal enclave you inhabit.
Edit: to clarify: I don't trust the source. Doesn't it make you suspicious that AEI and their orbit are the only ones saying this while everyone else says otherwise? All I'm saying above is that my anecdotal experience clearly supports what "everyone else" is saying, not what AEI is saying. When I read stuff like that I'm like "uhh... what parallel universe is this from?" Pravda always had graphs that made the Communist Party look good too. (Side note: during the Bush years it really struck me how oddly "Soviet" the American right is in its thinking and character. I guess, like Nietzsche said, when you fight against something you become what you fight against.)
The article is a classic example of lying by omission. It would be like saying household incomes dropped precipitously in the late 1800s after government started regulating factories, without mentioning that the regulation was banning child labor, thus removing the income brought in by your 12 year old son working at the mill.
This article instead casts the last several decades of neo-liberal trade and economic policies as having greatly increased household incomes, without ever mentioning the fact that now twice as many people in the household have had to start working in order to keep pace with the economy. On an individual level, the one that matters, the middle class has been boned for several decades now.
Edit: Trade policies are neo-liberal as pointed out by eli_gottlieb. Thanks for the head's up!
http://www.slate.com/blogs/moneybox/2013/09/18/median_family...
He's arguing that life has gotten better for the median family, not about how "fat" the distribution is around that family, but based on your other comments, I assume you think "everyone" agrees that things are getting worse.
Its kind of odd that the only people I ever see positively citing "progressive" Yglesias are doing so in the context of using Yglesias's support for an economic position to bolster the idea that its not a particularly conservative viewpoint.
Otherwise there should be a new middle class composed of the formerly working class's children instead of a void.
Either way polarisation is still happening.
No idea if that's what's actually happening, but just watching the dot of the median and not the whole distribution is not likely to be enlightening unless events conspire to keep the shape of that distribution static. I don't think that's the case.
He then cites a paper by Meyer and Sullivan [2] which, amongst other things, argues that
the poor shouldn't count because they get food stamps;
the fraction of poor people with a/c doubled between 1981 and 1999 (I didn't realize you could eat A/C)
more poor people have cars w/ power breaks and steering (I am surprised you can buy a car in the last decade w/o either of the above)
etc etc -- the authors go on at length about how consumption rather than income should be a measure of poverty. Which is a classic, but stupid, argument. If you can barely afford rent, are living paycheck-to-paycheck, but now your apartment has a dishwasher, you are not better off. If your used car has power steering, it does not make you better off.
Meanwhile, back over in reality, food insecurity continues to be a problem, the hours at minimum wage required to afford minimal housing in major metropolitan areas continue to rise far beyond possibility, etc etc. But this is what AEI is for -- to kick up confusion about reality in the service of conservatives and the rich.
[1] http://aspe.hhs.gov/poverty/14poverty.cfm
[2] http://www.aei.org/files/2011/10/25/Material-Well-Being-Poor...