« prev   random   next »

2
0

Income vs. productivity

By 6rdB following x   2019 Feb 23, 5:04pm 1,659 views   49 comments   watch   nsfw   quote     share    


There was a post on Patnet about income vs. productivity. Something happened in middle 1970's, and they diverged. In short, most of income gains since early Carter times do not go to people who do the actual work. They go to owners of resources.
I was struggling with explanation (what happened in mid-1970's) and I am still not sure. One potential explanation is in this link:

https://www.tbwns.com/2019/02/18/the-bears-lair-ben-bernanke-killed-the-world-economy/#more-1601

The paper,“Low interest rates, market power and productivity growth” by Ernest Liu, Atif Mian and Amir Sufi, examines the behavior of firms in a competitive marketplace as interests decline, and demonstrates that, although lower interest rates at first increase competitiveness through increased investment, they also increase the comparative advantage of large firms, thus after a time discouraging the smaller firms from investing and making the market less competitive.

Small firms lose out competition to large, well-connected ones under low-interest rate environment. Does not explain everything (interest rates were high during early Reagan years), but perhaps they play a role. I would love to hear thoughts of other Patnetters. For record, this income vs productivity gap has increased through both R and D administrations. More regulations?

« First    « Previous    Comments 10 - 49 of 49    Last »

10   PeopleUnited   ignore (1)   2019 Feb 26, 6:34am   ↑ like (0)   ↓ dislike (0)   quote   flag        

How is it that everything Frank Capra tried to warn us about in Jimmy Stewart's It's a wonderful life came true and we are living in Pottersville ?
11   Patrick   ignore (1)   2019 Feb 26, 7:19am   ↑ like (2)   ↓ dislike (0)   quote   flag        

I suspect one would see that the gap between the two lines is filled in nicely by the increase in Chinese median incomes as US executives moved our manufacturing over there to take advantage of crazy low wages, no unions, and no environmental laws.

The workers and companies who were exporting those jobs were very "productive" at increasing corporate profits at the expense of our working class.
12   CBOEtrader   ignore (5)   2019 Feb 26, 7:29am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Patrick says
I suspect one would see that the gap between the two lines is filled in nicely by the increase in Chinese median incomes as US executives moved our manufacturing over there to take advantage of crazy low wages, no unions, and no environmental laws.

The workers and companies who were exporting those jobs were very "productive" at increasing corporate profits at the expense of our working class.


https://history.state.gov/milestones/1969-1976/nixon-shock

No coincidence this happened in 1972, right when the divergence began?
13   Quigley   ignore (0)   2019 Feb 26, 7:50am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Technology and automation are the most likely culprits. Every advance in tech has made things easier to organize and produce and eliminated drudge jobs.
14   6rdB   ignore (1)   2019 Feb 26, 7:50am   ↑ like (0)   ↓ dislike (0)   quote   flag        

CBOEtrader says
No coincidence this happened in 1972, right when the divergence began?

Thx, nice thought and this sounds right.
Patrick says
I suspect one would see that the gap between the two lines is filled in nicely by the increase in Chinese median incomes as US executives moved our manufacturing over there to take advantage of crazy low wages, no unions, and no environmental laws.

Must have been other place than China as industries started moving to China only in late 80's. But the idea is perhaps correct - and may be the underlying cause is one referenced by @CBOEtrader.
15   6rdB   ignore (1)   2019 Feb 26, 7:51am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Quigley says
Every advance in tech has made things easier to organize and produce and eliminated drudge jobs.

May be, but until 70's increase of automation did not cause this divergence.
16   Quigley   ignore (0)   2019 Feb 26, 8:24am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Computers made a huge difference in organizing data and thus made tons of office workers obsolete. A couple of guys working punch cards replaced a roomful of clerks. And every advance made this difference more stark. I think computers have been the most disruptive technology we’ve seen so far, and eliminated the most jobs.
However, they’ve made so many things possible that were impossible before, they’ve created more jobs than they eliminated.
Turns out people can want/need things they never had before. Like a Facebook account, or cloud storage for their digital photos. Or a video game machine with games to go with it. The list is endless.

But workers can get more done these days with a few directed button pushes than ever before. Thus, productivity increases, but the constant elimination of jobs means there are still plenty of workers left to compete for wages.

What we don’t want is to make this problem worse with uncontrolled immigration or programs that replace all our college grads with workers from India.
Trump is working on the problem.
Meanwhile, tech marches on.
17   Heraclitusstudent   ignore (2)   2019 Feb 26, 9:54am   ↑ like (2)   ↓ dislike (0)   quote   flag        

d6rB says
Something happened in middle 1970's, and they diverged.
d6rB says
I was struggling with explanation (what happened in mid-1970's) and I am still not sure.


Seriously?? Isn't that obvious?

Globalization started :
- offshoring.
- Competition with low wages workers abroad.
- winner take all worldwide dynamic.
- Coupled with massive immigration of low wages workers.
- All this labor supply nailed wages in the US to the floor....
- ... which put huge downward pressure on interest rates ever since.
- ... while finance made up the rest of the end demand growth. i.e. debts started exploding.
- inequalities started soaring.
- Housing prices started to go on a rampage
- etc...

All of the above linked in the same policy package.
The short history of the past 40 years in a nutshell.
And it felt good at the beginning, but we are now seeing the price being paid.
18   HeadSet   ignore (1)   2019 Feb 26, 9:57am   ↑ like (1)   ↓ dislike (0)   quote   flag        

What we don’t want is to make this problem worse with uncontrolled immigration or programs that replace all our college grads with workers from India.
Trump is working on the problem.


+1000
19   anonymous   ignore (null)   2019 Feb 26, 10:02am   ↑ like (0)   ↓ dislike (0)   quote   flag        

What we don’t want is to make this problem worse with uncontrolled immigration or programs that replace all our college grads with workers from India.

Trump is working on the problem.

---------------------------------------------------------------------------------------------------------------------------
Thread https://patrick.net/post/1222697?offset=0#comment-1573385

Comment # 1

Telemigrants are coming for your white-collar job, and a wall won’t stop them, workers stay in their country and telecommute to jobs in the U.S. and earn far less than an American.
20   anonymous   ignore (null)   2019 Feb 26, 10:05am   ↑ like (0)   ↓ dislike (0)   quote   flag        

What kind of wall is Trump going to build to prevent international telecommuting including replacing coders in the U.S. ?
21   anonymous   ignore (null)   2019 Feb 26, 10:07am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Quigley says
plenty of workers left to compete for wages


That translates to we can offer whatever shitty wages and benefits we want because what one person does not take, someone else will and be happy they got the position.
22   APOCALYPSEFUCKisShostikovitch   ignore (41)   2019 Feb 26, 10:07am   ↑ like (0)   ↓ dislike (0)   quote   flag        

The real ENEMY! of FREE!dom is the 13th Amendment.
23   anonymous   ignore (null)   2019 Feb 26, 10:09am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Quigley says
Turns out people can want/need things they never had before


They didn't need them before and they still don't need them but peer envy greases the skids so people buy things they think the need.
24   Heraclitusstudent   ignore (2)   2019 Feb 26, 10:19am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Kakistocracy says
What kind of wall is Trump going to build to prevent international telecommuting including replacing coders in the U.S. ?


The Trump solution is obviously tariffs. It's built, even partially, outside the US: pay up.

But leaving the Trump aside, the problem is obviously there: You can import programmers, you can have remote workers abroad, or you can compete with companies in India: it's all the same. And there is no good solution. You can't fully disengage from the rest of the world because you want US productions to sell abroad. Without it, the US will sooner or later be left behind. It sucks but you want that competition.

What you really don't want on the other hand is on 1 side this competition and the other foreign companies stealing your technology by forced transfer or hacking. Because then you have nothing left.
25   AD   ignore (0)   2019 Feb 26, 11:00am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Patrick says
I suspect one would see that the gap between the two lines is filled in nicely by the increase in Chinese median incomes as US executives moved our manufacturing over there to take advantage of crazy low wages, no unions, and no environmental laws.

The workers and companies who were exporting those jobs were very "productive" at increasing corporate profits at the expense of our working class.


I agree. The rate of output likely remained the same, but the rate of input decreased since it is a lot cheaper to produce in China, India, Mexico and other countries that marginalize safety and environment standards, as well as pay 3rd world hourly rates. Globalization is viewed by its corporate supporters as a reason to offer minimal salary raises in the USA since they view consumer prices (i.e., goods sold at Walmart) as not increasing more than 2% a year.
26   HonkpilledMaster   ignore (5)   2019 Feb 26, 11:05am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Kakistocracy says
Telemigrants are coming for your white-collar job, and a wall won’t stop them, workers stay in their country and telecommute to jobs in the U.S. and earn far less than an American.


Then, when you sue them for non-performance, the Indian Judge rules in their favor after a bribe.
27   6rdB   ignore (1)   2019 Feb 26, 11:06am   ↑ like (0)   ↓ dislike (0)   quote   flag        

What everyone here is saying that outsourcing began in 1970's? It was my understanding that it started on a large scale only in mid to late 80's.
28   Heraclitusstudent   ignore (2)   2019 Feb 26, 11:10am   ↑ like (0)   ↓ dislike (0)   quote   flag        

The divergence really becomes tangible after 1980.
Reagan!
29   Heraclitusstudent   ignore (2)   2019 Feb 26, 11:15am   ↑ like (1)   ↓ dislike (0)   quote   flag        

The part of globalization that really hurt Americans workers is not just that they were made to compete with poor people, it is that the managers of this country took American technologies, know-how, factories, etc... and sent all of it to foreign countries, then put American workers in competition with thus equipped low wage workers.

This was hardly specialization in the Adam Smith wealth of nation sense.
30   HonkpilledMaster   ignore (5)   2019 Feb 26, 11:30am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Heraclitusstudent says
The part of globalization that really hurt Americans workers is not just that they were made to compete with poor people, it is that the managers of this country took American technologies, know-how, factories, etc... and sent all of it to foreign countries, then put American workers in competition with thus equipped low wage workers.


In order to pump up Asian Countries against communism, we allowed Japan, South Korea, Malaysia, Thailand, etc. to export with minimal tariffs, while tariffing US imports.

Once business got a taste, they loved it. When the Wall fell, they pushed MFN with China and similar deals to be made with Vietnam, India, etc.

On the other side of things, we imported 10s of millions of unskilled workers where the male is working off the books while the female and children are 110% on welfare.

We should have 30-50M fewer people in the USA. 20% of the country is now foreign born.
31   anonymous   ignore (null)   2019 Feb 26, 12:20pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

MisterLearnToCode says
20% of the country is now foreign born


Any idea what those statistics come out to on % basis say from 1890 to about 1920 ?

Wonder how many would be here commenting if millions of unskilled workers were not allowed in during that period

.MisterLearnToCode says
10s of millions of unskilled workers where the male is working off the books while the female and children are 110% on welfare.


Anything to back up that 10s of millions allegation ?

Something released in the last 12 months or so covering a reasonable period of time that shows the male is working "off the books" while the rest of the family is on the dole.

What about poor native born - all races ?

And what about the employers of all those 10 of millions - who might they be ?

Come, come comrade. This proof, share. Have drink of vodka, loosen toungue
32   OccasionalCortex   ignore (3)   2019 Feb 26, 12:51pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Yeah, something happened already. We went off the gold standard.

The value of the middle class' savings and wages haven't kept up since because the banksters would extract that away unlike before.
33   HonkpilledMaster   ignore (5)   2019 Feb 26, 12:52pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Kakistocracy says
Wonder how many would be here commenting if millions of unskilled workers were not allowed in during that period


No welfare back then, you worked or you died.

No Somalian Refugees on welfare for 20-25 years.
34   HonkpilledMaster   ignore (5)   2019 Feb 26, 12:53pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Kakistocracy says
Something released in the last 12 months or so covering a reasonable period of time that shows the male is working "off the books" while the rest of the family is on the dole.


Let the census ask the citizenship question and we'll know for sure.

Meanwhile, go hang out at a 7-11 or Home Depot and count the men working off the books with wedding rings.

Kakistocracy says
What about poor native born - all races ?


Lowered wages due to a Business/SJW deliberate glut of unskilled barbarians from the third world.
35   anonymous   ignore (null)   2019 Feb 26, 1:01pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

MisterLearnToCode says
Meanwhile, go hang out at a 7-11 or Home Depot and count the men working off the books with wedding rings.


That seems to have been left behind when I left California. Not seeing any of that around here - ever - not one single time since 2014

Technical note - if someone is standing around - they are not working unless employees from a State Department of Transportation are involved.

Those people can stand around all day and do nothing and we all get to pay for it.

Isn't that great and sometimes there is a one active worker to 5 idle standers ratio as well - that is on the days when something actually gets done.

MisterLearnToCode says
Lowered wages due to a Business/SJW deliberate glut of unskilled barbarians from the third world.


Funny - those same concerns were around during the great migration of Europeans, Scandinavians, Irish, Slavs etc. around the time period I reference above.
36   AD   ignore (0)   2019 Feb 26, 1:23pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

Kakistocracy says
Funny - those same concerns were around during the great migration of Europeans, Scandinavians, Irish, Slavs etc. around the time period I reference above.


You can't compare that to today since the conditions are a lot different. I am not sure if you foreign trolls (i.e., Moscow, Tel Aviv, Beijing, Tehran, Berlin, etc.) know this but rather contribute to the fallacy because it promotes your anti-American agenda.

First, there are the social costs (i.e., medicaid spending, public school spending, infrastructure, etc.) today that were not around back then. I posted about the Medicaid usage rate of Hispanics in California, and Arizona based on the Kaiser Family Foundation website.

Second, there was a need for immigration more back then compared to now. Think about the debt and tax revenue trends in California, particularly the influx of net-takers compared to the costs for pensions and salaries of Californian government employees (i.e., school teachers, social workers, police, etc.). Those current trends nowhere existed in the past when there was a major influx of European immigrants.

Third, there is more of a cultural domination of one group (i.e, spanish speaking) compared to more of a melting pot and diverse mix back to the period you are referencing. Examine the education pursuits and ambitions of today's group to the past's group, for example. Or examine the living conditions or standard of living as well.
37   Quigley   ignore (0)   2019 Feb 26, 1:32pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Kakistocracy says
They didn't need them before and they still don't need them but peer envy greases the skids so people buy things they think the need.


I never had a cellphone until I was 22. Back then it couldn’t do that much either. Just talk, cuz I hadn’t paid for texting service.
But I’m not sure I want to navigate this world without a smartphone anymore. Things have become so complicated, a tool like this seems necessary to keep track of everything that’s going on. But if you think that my desire to have a smart phone is just a function of peer envy, why don’t you give up yours permanently?
38   Quigley   ignore (0)   2019 Feb 26, 1:34pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

Kakistocracy says
That translates to we can offer whatever shitty wages and benefits we want because what one person does not take, someone else will and be happy they got the position.


I’m glad you were following along.
39   Quigley   ignore (0)   2019 Feb 26, 1:40pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

If we have to have more immigration, how about we import more Asian people? As an ethnic group they have the lowest crime rate, the highest IQ, the most educated population, and one of the hardest work ethics. They’re responsible for much of the science and tech advancement in the past couple of decades, and have been having a positive impact on America since they arrived.
It’s hard to imagine a more ideal bunch of people to help grow America.

Tell me again why we want poor,violent, uneducated Central Americans?
40   Heraclitusstudent   ignore (2)   2019 Feb 26, 2:06pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Maybe smart enough people don't want to come anymore. You take what you can.
41   anonymous   ignore (null)   2019 Feb 26, 2:07pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Quigley says
But if you think that my desire to have a smart phone is just a function of peer envy, why don’t you give up yours permanently?


Mine went away on 1 February 2009 - permanently and I have never missed it one iota. That was the day my retirement became official and I no longer had to answer stupid bullshit calls from anyone in the company.

Have never sent a text, got one once and could not figure out how to answer since I never used text. Not interested to learn how.

Take a good hard look around on the next excursion to the mall, grocery, airport - what have you. Mindless clueless people with their faces buried in little screens oblivious to the world around them. And for what ? Some meaningless drivel that could easily wait especially when they are driving.

If someone wants to talk to me bad enough - I have a landline, several email accounts and of course their is old fashioned mail. I like old fashioned mail - means someone took some time and thought and actually gives a shit.

There is absolutely nothing in my life that requires me to pack around a phone 24 x 7 - nothing.

If I miss something, my loss and most likely I wasn't going to interested anyway.

Someone dies and someone else thinks I need to know - that's nice but my knowledge of the event is not bringing that person back to life.

Same for other "emergencies". Nice to know information - can I change what as happened - no.
42   Quigley   ignore (0)   2019 Feb 26, 3:30pm   ↑ like (1)   ↓ dislike (1)   quote   flag        

Kakistocracy says
Mindless clueless people with their faces buried in little screens oblivious to the world around them.


And burying your face in a somewhat larger screen at home all the time is somehow better? You must be on your computer quite a bit to be this responsive. Unless it truly is your job to shill for the Leftist oligarchs...
43   anonymous   ignore (null)   2019 Feb 26, 5:56pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Quigley says
You must be on your computer quite a bit to be this responsive.


Not really that much at all in aggregate time. I type fast and read faster

Starting to sound like the poster from Jersey a bit - surely there is better material out there to work with

Quigley says
Unless it truly is your job to shill for the Leftist oligarchs...


Just trying to even things out here - god only knows there are some really heavyweight shills on here for the right

Do my stuff pro bono

Any other questions ?

If not- have a nice evening and best wishes for a continued pleasant chat experience on the forum.
44   HonkpilledMaster   ignore (5)   2019 Feb 26, 7:03pm   ↑ like (4)   ↓ dislike (0)   quote   flag        

AD says
Second, there was a need for immigration more back then compared to now. Think about the debt and tax revenue trends in California, particularly the influx of net-takers compared to the costs for pensions and salaries of Californian government employees (i.e., school teachers, social workers, police, etc.). Those current trends nowhere existed in the past when there was a major influx of European immigrants.


Shit, think about the new Tool and Die every block in Chicago and New York. 7%+ Chinese Growth Rates back in the 1890s-1920s. Not today!

AD says
Third, there is more of a cultural domination of one group (i.e, spanish speaking) compared to more of a melting pot and diverse mix back to the period you are referencing. Examine the education pursuits and ambitions of today's group to the past's group, for example. Or examine the living conditions or standard of living as well.


You mean in the 50s and 60s a man with a factory job could own a house, TV, car, pension, etc. with a stay at home wife as whole new industries were created regularly, with patents up the ass, with everything from microwaves to color tv to transcontinental commercial air and spaceflight?

That was evil Modernist White Protestant America.
45   FortWayneIndiana   ignore (4)   2019 Feb 26, 8:10pm   ↑ like (3)   ↓ dislike (0)   quote   flag        

MisterLearnToCode says
You mean in the 50s and 60s a man with a factory job could own a house, TV, car, pension, etc. with a stay at home wife as whole new industries were created regularly, with patents up the ass, with everything from microwaves to color tv to transcontinental commercial air and spaceflight?

That was evil Modernist White Protestant America.


+1

And I bet most young liberals don't know that all that came from military industrial complex. They aren't old enough to know, and don't educate themselves enough to learn a damn thing.
46   HeadSet   ignore (1)   2019 Feb 27, 8:14am   ↑ like (2)   ↓ dislike (0)   quote   flag        

You mean in the 50s and 60s a man with a factory job could own a house, TV, car, pension, etc. with a stay at home wife

Not just factory jobs, even jobs like a coal miner or a manager of a Gulf gasoline station.
47   HonkpilledMaster   ignore (5)   2019 Feb 27, 9:21am   ↑ like (1)   ↓ dislike (0)   quote   flag        

FortWayneIndiana says
And I bet most young liberals don't know that all that came from military industrial complex. They aren't old enough to know, and don't educate themselves enough to learn a damn thing.


To see them (or a hard libertarian) really squirm: Mention the internet isn't just from DARPA, but that Internet Protocol prototypes date back to the 50s and 60s, 100% funded by the Pentagon. Oracle and Databases too.
48   anonymous   ignore (null)   2019 Feb 28, 4:12am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Mindless clueless people with their faces buried in little screens oblivious to the world around them....

Pedestrian deaths hit a 28-year high, and big vehicles and smartphones are to blame

•A new report estimates the number of people hit and killed a vehicle climbed to its highest level since 1990.

•An estimated 6,227 pedestrians were killed in 2018, an increase of 250 victims compared to 2017, according to the Governors Highway Safety Association.

•Pedestrian fatalities in the U.S. have increased 41 percent since 2008 and now account for 16 percent of all traffic fatalities, the GHSA said.

Roads throughout the U.S. have become deadlier for pedestrians according to a new report which estimates the number of people hit and killed a vehicle climbed to its highest level since 1990.

An estimated 6,227 pedestrians were killed in 2018, an increase of 250 victims compared to 2017, the Governors Highway Safety Association (GHSA) said. The association based its estimate on data collected by state highway safety offices.

"The alarm bells continue to sound on this issue," Jonathan Adkins, GHSA executive director, said in a release about the rising number of people hit and killed by vehicles. "It's clear we need to fortify our collective efforts to protect pedestrians and reverse the trend."

Pedestrian fatalities in the U.S. have increased 41 percent since 2008 and now account for 16 percent of all traffic fatalities, the GHSA said.

Why are more people being killed by vehicles?

For starters, America's growing love affair with pickups, SUVs, and crossover utility vehicles means pedestrians are being hit by bigger, heavier, and more powerful automobiles. As a result, pedestrians who are hit by vehicles are more likely to die or suffer life threatening injuries, the association said. Pedestrian fatalities involving SUVs jumped by 50 percent between 2013 and 2017, the GHSA estimates.

Another factor is the growing population in many states, which has lead to more deadly encounters between drivers and pedestrians. The GHSA report also blames people being distracted by their smartphones and not being focused on the road as contributing to pedestrian fatalities.

Add in a strong economy with relative cheap gas prompting more people to drive more miles and it's a deadly recipe for people walking along or crossing streets.

The GHSA estimates five states — Arizona, California, Florida, Georgia, and Texas — accounted for almost half the pedestrian fatalities in the U.S. in the first half of 2018. The report says New Mexico had the highest pedestrian fatality rate per 100,000 residents in the first half of last year while New Hampshire had the lowest fatality rate.

https://www.cnbc.com/2019/02/28/pedestrian-deaths-hit-a-28-year-high-and-big-vehicles-and-smartphones-are-to-blame.html
49   6rdB   ignore (1)   2019 Feb 28, 9:13am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Kakistocracy says
Mindless clueless people with their faces buried in little screens oblivious to the world around them

same with driving - cellphones now supposedly cause more traffic deaths than drinking and driving.

The National Safety Council reports that cell phone use while driving leads to 1.6 million crashes each year.
Nearly 390,000 injuries occur each year from accidents caused by texting while driving.
1 out of every 4 car accidents in the United States is caused by texting and driving.
Texting while driving is 6x more likely to cause an accident than driving drunk.

When will we see organizations such as Mothers against Texting and Driving?

« First    « Previous    Comments 10 - 49 of 49    Last »


about   best comments   contact   one year ago   suggestions