As share of GDP, profits soar and paychecks plummet
NARRATIVE #1:
Barack Obama is a socialist, secular Marxist who hates business and wants to steal from the producers and give to the “takers.” Through overregulation, high taxes and “uncertainty,” he has made it all but impossible for American business to make a profit.
————————
NARRATIVE #2 (in graphic form) :
Source: New York Times, U.S. Bureau of Economic Analysis
As Floyd Norris notes in the New York Times:
“In the eight decades before the recent recession, there was never a period when as much as 9 percent of American gross domestic product went to companies in the form of after-tax profits. Now the figure is over 10 percent.
During the same period, there never was a quarter when wage and salary income amounted to less than 45 percent of the economy. Now the figure is below 44 percent.
For companies, these are boom times. For workers, the opposite is true.”
Now, which competing narrative should you accept? I suppose it’s like shopping for a new car or television set — it depends on what you want in a narrative. If you are less concerned with attributes such as accuracy and hard data, but more in emotional satisfaction and confirmation of pre-existing bias, if you like to believe that government taxation and regulation are killing the economy and you don’t require data to sustain that notion, you’d go with Narrative #1.
On the other hand, if you like your narratives to be data-driven and fact-based, you might find Narrative #2 more to your liking. In addition to the charts above, Narrative #2 is supported by the fact that total corporate taxes as a percentage of corporate profit are considerably lower than at any time in the past 50 years, and that personal taxes as a percentage of personal income are also much lower than the 50-year average.
Some words of warning, however:
Should you subscribe to Narrative #2, you have to confront the fact that the long-term trends documented in the charts above show no signs of abating. To the contrary, there is every reason to believe that wages and salaries will continue to fall as a proportion of economic output, and that corporate after-tax profits will continue to increase.
And should you subscribe to Narrative #1, there is again every reason to believe that wages and salaries will continue to fall as a proportion of economic output, and that corporate after-tax profits will continue to increase. But you will be blissfully unaware of such things.
– Jay Bookman
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252 comments Add your comment
Lord Help Us
November 28th, 2011
3:24 pm
‘Obama’s socialist/Marxist leanings are fully documented and on display.’
Oh, fer cryin’ out loud…where?
Brosephus
November 28th, 2011
3:26 pm
And if recent years haven’t demonstrated how little oversight there is to the point where even elections where all the incumbents get booted that nothing changes, then nothing ever will convince you fools that handing more money and power to the government that already has money and power dwarfing all the rich people and corporations in the world is a BAD idea.
How about this for logic??? The re-election rate for Representatives has not been lower than 80% since 1964. For Senators, the only time less than 80% have not been re-elected since Reagan took office was 1986 (75%), 2000 (79%), and 2006 (79%). I’m not sure what election you’re referencing in saying that all incumbents got booted, but we have not had anything remotely resembling that since 1980 when only 55% of incumbent Senators won re-election. Even with that happening in the Senate, 91% of House incumbents won re-election that same year.
http://www.opensecrets.org/bigpicture/reelect.php
Brosephus
November 28th, 2011
3:29 pm
So you’re saying that because I don’t believe Obama is up to the job as president and that the country needs a change, I harbor a blind hatred for Barack Obama.
No, I’m saying you and others harbor a blind hatred for Obama because you can’t even acknowledge ANY right that he has done. It’s one thing to be critical of someone, because even a critic will give credit when credit is due. However, when you continuously beat someone down like they’re a baby seal filled with gold, then that’s something entirely different.
Did you make those kind of assumptions about people you didn’t even know personally as a retail store manager?
When you don’t know someone personally, all you can do is make assumptions about them based on how they present themselves. Change the way you present yourself, and you change how people perceive you.
Adam
November 28th, 2011
3:30 pm
I loves me some statistics! Thanks, Brosephus!
Jimmy62
November 28th, 2011
3:30 pm
Adam: Wow, just one strawman argument after another. No, I didn’t work hard in school, I didn’t have to, I got all A’s without any effort and 99th percentile on the SAT. And I don’t make much money, but I don’t blame anyone but myself for that, and never have.
I have lots of suggestions for bettering education in this country, and have made those suggestions many times in responses to Bookman columns as well as other places. For one, I would get rid of the Federal Department of Education, which costs a lot of money and has overseen nothing but failure since the day it was formed.
As far as making kids work from the moment they get home to the moment they go to sleep, I think that’s a dumb suggestion and don’t know why you brought it up. However, making them work from the moment they get to school till the moment they leave is not a bad idea. I know a lot of teachers, and one of their biggest complaints is how anti-education attitudes in pop culture make their lives much more difficult because students don’t want to learn, and parents don’t care if they are learning as long as their grades are fine.
But hey, you posted a bunch of strawman arguments on a web forum, so you must know more than me about this stuff.
Butch Cassidy
November 28th, 2011
3:32 pm
Jimmy62 – “When you have an urban culture that looks upon hard work and study in school as a bad thing, it should be expected that average wages have gone down.”
Agreed, then why not hire the 40 + crowd that have not only the education but also the experience? If todays college grad isn’t worth the paper the diploma is printed on, then the obvious solution would be to turn to the older folks that know what they’re doing. Unfortunately, the latter does require to be paid in accordance with their experience and background, which inherently cuts into the sacred corporate profits. So what will it be, slackers that can’t read or write but work on the cheap, or experience and knowledge that require compensation commensurate with their background?
Janney
November 28th, 2011
3:33 pm
Soothsayer, 2:01 AMEN!
Recon 0311 2533
November 28th, 2011
3:35 pm
“This ongoing myth of obama the socialist, business destroying president, has gone so far off the rails that it has become an hallucination believed by the masses of foolish minds who are weak and easily programmed…”
Mick, I don’t believe that the majority of Americans are weak and easily programmed, although I’d agree that some probably are. The issue isn’t about myths or hallucinations, it’s about the results metric. People haven’t been seeing positive economic results along with suspect foreign policy decisions. As the polls suggest if the national elections were to be held today Obama would likely lose.
Common Sense
November 28th, 2011
3:36 pm
Narrative II:
The government collects NEARLY as much in taxes as companies earn in profits. 12.8% versus 13%.
And during the recession, the government collected much more in taxes than companies earned in profit.
So even in bad times the government comes out ahead.
Now if ONLY they could control their spending.
We won’t even touch on which added more value to society.
Corey
November 28th, 2011
3:37 pm
Thanks Jay, but I’m afraid your detractors would rather hear Herman Cain say, “If you’re not rich, and you don’t have a job it’s your fault.” Maybe they would rather hear Newt say, “Get a job and take a bath.”
Gator Joe
November 28th, 2011
3:40 pm
Jay:
There is no such thing as “enough profit or enough wealth” for the Corporate Right Wing and the wealthy Right. Both are criminally selfish. This will never be a truly great country as long as there is the poverty we have and a declining middle class.
Shame on the Corporate Right and Wealthy Right Wing, they’ll never be affected by the programs cut which affect the poor, except to further enrich themselves.
PS
Boycott the products of companies owned by the Koch brothers, as a good starting point to fight these people.
Lord Help Us
November 28th, 2011
3:42 pm
‘As the polls suggest if the national elections were to be held today Obama would likely lose.’
Not according to Rasmussen…
http://www.rasmussenreports.com/public_content/archive/election_2012_archive/november_2011/election_2012_obama_44_romney_38
And…
http://www.rasmussenreports.com/public_content/archive/election_2012_archive/november_2011/election_2012_obama_46_gingrich_40
And, don’t forget ol’ Herman…
http://www.rasmussenreports.com/public_content/archive/election_2012_archive/november_2011/election_2012_obama_46_cain_36
JamVet
November 28th, 2011
3:46 pm
Man, the mental gymnastics here are reminiscent of Nadia Comenici getting perfect 10s in the 1976 Summer Games!
American workers aren’t smart enough, aren’t good enough and doggone it, people don’t like them!
Wake the ____ up!
When you have a handful of men in a paneled boardroom who make more money than hundreds, even thousands of employees, in a company combined, where do you Einsteins think the profits are going???
One thing I do have to give you servile, trickled-on economic liberals credit for though. You have become so enured to getting fiscally raped, that you no longer even need Vaseline…
Recon 0311 2533
November 28th, 2011
3:48 pm
“Change the way you present yourself, and you change how people perceive you.”
I don’t feel any compelling reason to change how I present myself on Jay’s blog. BTW…don’t you think that statement comes across a bit pompous? Rather than assume that I and others you say refuse to acknowledge Obama’s successes and therefore hate him why don’t you list all of his accomplishments and present arguments on that basis. You left wingers come up with everything other than stating specific accomplishments Obama’s delivered, instead you just dismiss those who disagree with your political opinions as haters.
Adam
November 28th, 2011
3:48 pm
Jimmy62: You must have missed the part where I told you exactly where the arguments came from. They aren’t straw men, they are REAL arguments people are making that I don’t like. Kids are working harder than ever in school and after school. There is no lack of hard work here. Now if some localities have issues, then they should address those issues on the side of education, instead of whatever reasoning they might have for NOT addressing those issues, such as saying “but the parents…”
So you didn’t work that hard because you are smart. Me too. That’s neither here nor there. Your suggestion is that no child works hard anymore, and therefore doesn’t learn. I do not see the same thing you do, frankly, and I also don’t see you answering my question about what solutions you would provide.
Back Seater
November 28th, 2011
3:54 pm
Adam
November 28th, 2011
2:14 pm
Solyndra! Socialism!
Anyone want to throw in Soros? I have a bingo card ready!
Adam, you are getting slow, way too late. I know the DNC wants better of you with you timely updates
Back Seater
November 28th, 2011
3:58 pm
Jimmy62,
Adam uses his DNC playbook, you know Divert/Deflect method, the libs are so good at that
Adam
November 28th, 2011
3:59 pm
Back Seater: Adam, you are getting slow, way too late. I know the DNC wants better of you with you timely updates
Someone said Soros and I missed it? Damn, you’re right. I am getting slow. Better drink more coffee tomorrow….
Back Seater
November 28th, 2011
4:01 pm
Adam,
No it is not the coffee, you just forgot todays mission statement, you need to get caught up, you are slipping, not getting paid enough, which is it?
Brosephus
November 28th, 2011
4:09 pm
You left wingers come up with everything other than stating specific accomplishments Obama’s delivered, instead you just dismiss those who disagree with your political opinions as haters.
So, because I don’t parrot the GOP speak as you and others do, you automatically presume I’m a left winger. Did you make those same kinds of perceptions of your chain of command while you were in the Marines?
I’ve never listed any successes or failures of Obama because I believe it is way too early to judge his administration. Believing as I do, I don’t see any successes as of this date. I also don’t see any failures. You have not heard me champion any successes, so your feeble attempt to link me to Obama cheerleaders is as much a failure as you perceive Obama to be.
Also, I don’t think that statement is any more pompous than anything else said here as people seem to believe they are right 100% of the time and never wrong. I see many here call Obama a complete failure, but not a single thing that is actually a failure has been listed. That’s just as pompous of you to call him a failure, when he has not even finished his term. So, don’t come at me being pompous when you’re doing the exact same thing.
As far as changing how you present yourself, you have done that whether you see it or not. When we first exchanged dialogue on this blog, you never came off as one of the far right ramblers. However, nowadays, I haven’t seen you post too much of anything that has not been an anti-Obama tirade or something to that effect. I can’t tell whether your words are angry or not as there’s no way to perceive your context just by reading words, but if it doesn’t pertain to the far right agenda, I haven’t seen any positve from you.
Schrodinger's cat
November 28th, 2011
4:09 pm
Adam…do you feel like you represent a party, an ideology, something greater than yourself, the 99%, or yourself?..
Schrodinger's cat
November 28th, 2011
4:10 pm
or something else?
EJ Moosa
November 28th, 2011
4:11 pm
In a truly capitalist society, higher profits margins over time (as in more than just a few quarters coming off a recession) would lead to new business startups engaging and competing for those profit dollars.
So the question that needs to be asked is why aren’t other companies showing up to compete?
Government has erected to many barriers to begin a new business. Regulations and rules stifle potential start up companies. Many leaders, including the founders of Home Depot, have stated they could not even start a Home Depot today.
When the costs to start a new business are so high as to be a deterrent to doing so, you need to figure how to get government out of the way of those small businesses.
By the way, those cute charts that Jay posts are not necessarily accurate. Those numbers are shaked and baked with seasonal adjustments. The real numbers are anyone’s guess.
I notice Jay did not average the profit numbers over a series of years, for a better reflection of the profit trend.
He also is not going to tell you that year over year profit growth is falling, not rising. And before he says that it’s still positive growth, I will also say that when the government has year over year budget increases but at ever lower rates, well, they call that a cut.
Back Seater
November 28th, 2011
4:13 pm
Schrodinger’s cat
November 28th, 2011
4:09 pm
He will need to consult is DNA playbook before he replies
Back Seater
November 28th, 2011
4:14 pm
DNC
yepper
November 28th, 2011
4:15 pm
Just like with global warming, someone sees a snipet of a correlation and tries to assert a causation. The depression of wages can also be attributed to the globalization of the workforce, wherein lower wage countries depress the salaries of domestic workers. So, how are you going to fix that? increase tariffs? do that, and our domestic products will be taxed to oblivion overseas. Tax the wealthy? Tax corporations more? do that, and see our jobs move even more offshore.
Adam
November 28th, 2011
4:16 pm
Back Seater: You’re right. I am not getting paid enough by the DNC. I should ask for more than $0.00
Adam
November 28th, 2011
4:17 pm
Schrodinger’s Cat: do you feel like you represent a party, an ideology, something greater than yourself, the 99%, or yourself?
Mostly myself, and if that happens to align with other stuff then, ok I guess? It’d be nice to find a party, ideology, or something else that supports ALL of the same stuff I do, but I don’t think that exists.
Shep
November 28th, 2011
4:18 pm
I agree carlosgvv, one day, perhaps not in my life time, this country will erupt in another civil war if we continue to go down the current path. Just look back in history and you will see a trend repeating itself.
Common Sense
November 28th, 2011
4:19 pm
Don’t buy into the bogus lower wage argument.
Add up your monthly expenses. Energy, food, insurance, property taxes, education expenses. More than 3/4 of your monthly expenses are at American wage rates, not foreign wage rates.
It’s just a red herring.
Jack
November 28th, 2011
4:25 pm
Profits don’t always go into the owner’s pockets. There’s equipment to buy and notes to service if he’s going to stay in business. I suspect Bookman will realize this when he starts his own business.
real john
November 28th, 2011
4:35 pm
So what’s your solution Jay?? Take money and redistribute it?
It’s simple, if you don’t feel like you make enough money, then go find another job…it’s that simple. I’ve yet to find anywhere in the Constitution that says we have a right to a certain wage.
Don’t tell me there aren’t any good jobs. If you are good at what you do, you can ALWAYS find work. Or, get with some of your co workers and organize a walk out. The bottom line is, corporations will pay less if you let them. However, if you are bringing in a lot of business to them; just see how they will bend over backwards to keep you as an employee. Thats the way it works folks…its not that hard to understand.
Welcome to the Occupation
November 28th, 2011
4:36 pm
Profits don’t always go into the owner’s pockets. There’s equipment to buy and notes to service if he’s going to stay in business
The purpose of which is — to earn more profit (when it’s not undercutting and trying to drive competitors out of business).
back in business
November 28th, 2011
4:39 pm
We keep hearing all this about there being too many regulations and rules preventing businesses from starting and supposedly it’s because of the current administration being “anti-business”. But they were calling him anti-business before he even took office. And no one can seem to point to all these stifling regulations that have occurred since his election. When did Congress pass all of these horrible policies that he signed into law and why hasn’t the current Congress set out to repeal them?
Recon 0311 2533
November 28th, 2011
4:43 pm
As far as changing how you present yourself, you have done that whether you see it or not. “When we first exchanged dialogue on this blog, you never came off as one of the far right ramblers. However, nowadays, I haven’t seen you post too much of anything that has not been an anti-Obama tirade or something to that effect. I can’t tell whether your words are angry or not as there’s no way to perceive your context just by reading words, but if it doesn’t pertain to the far right agenda, I haven’t seen any positive from you.”
This an opinion blog. A political opinion blog and our host is on the political left. He slams conservative Republicans daily and he gets contrary view points from those of us on the conservative right. My political views haven’t changed since I began blogging here 3 or 4 years ago. By your above statement you haven’t formed a point of view regarding Obama’s performance as president. That’s hard to believe since you seem to challenge my posts where I clearly state my dissatisfaction with his performance. If you really don’t have a point of view you’re really in no position to challenge those of us who do have one. Should you comment on my posts in disagreement again please have the courage to present your counterpoints. Simply calling me a hater won’t produce any future replies or for that matter gain my respect.
LOL
November 28th, 2011
4:43 pm
What is your point Jay? Is it that Corporate taxes need to be raised? That the evil rich need to be taxed more? What is it? You can’t make corporations or individuals pay someone a higher wage. Sure you can tax more but that money is not going to get back to those wage earners, it will simply go to the government to spend in even more bizarre ways. We all know it won’t go to the deficict, it will go to more government programs, that we won’t be able to afford over any length of time.
jarvis
November 28th, 2011
4:43 pm
How has GDP looked over the same period?
Poor.
Joe Hussein Mama
November 28th, 2011
4:46 pm
Jack — “Profits don’t always go into the owner’s pockets. There’s equipment to buy and notes to service if he’s going to stay in business.”
That’s not profit. That’s capital expenditures in the first case (for equipment, the cost of which, BTW, you can probably amortize and possibly even write off) and operating expenses in the second case.
jarvis
November 28th, 2011
4:50 pm
Notice Jay’s charts cut off at 2010.
Here’s a link to some GDP charts that will show how bad the ones Jay quoted are.
http://www.data360.org/dsg.aspx?Data_Set_Group_Id=274
It doesn’t take much to increase against something that is falling like a turd from a mastiff. If profit had stayed flat it would have increased by large percentage points against the GDP.
SPC
November 28th, 2011
4:51 pm
Does the wages and salary chart include fringe benefits that accrue to the benefit of employees? If not, it probably should and would probably flatten the curve a bit. Corporate profits have been driven by technology that has resulted in higher efficiency. For example, a lot of human labor has been replaced by robots in the automobile industry. Robots require a capital investment and operating and maintenance cost, but they don’t require healthcare and subsistance after they are retired. With information technology executives can now manage large and diversified enterprises with fewer managers. Efficiency is a good thing and the result should be increased profitability. I believe the problem here is a disconnect between what industry needs and what labor provides. I attribute this problem to our educational system and labor that is more interested in the status quo than the future. If this doesn’t change, the trend will continue as you suggest. The fix isn’t with the stroke of a pen (redistribution through legislation); it will require a lot of hard work, pain, and suffering and this is no longer politically feaible, absent a major crisis.
dbm
November 28th, 2011
4:54 pm
Government regulation didn’t start with Obama. It started before the Civil War. One example is protective tariffs, which date back to before the Civil War. They were supposed to help business, but by making us less competitive they helped set us up for the problems we’re having now.
Brosephus
November 28th, 2011
4:56 pm
That’s hard to believe since you seem to challenge my posts where I clearly state my dissatisfaction with his performance. If you really don’t have a point of view you’re really in no position to challenge those of us who do have one. Should you comment on my posts in disagreement again please have the courage to present your counterpoints.
The only view I’ve formed about Obama is that he has no backbone. I’ve stated that here numerous times. As I said, “I”, meaning my opinion, is that you can’t judge someone as a success/failure while they’re still doing the job. You won’t hear me call Obama a success or a failure, nor will you hear me call Bush one. I have no problem with stating things I think he’s done that is wrong, but just because he did something wrong doesn’t necessarily equate to failure.
I didn’t agree with Obama sending more troops to Afghanistan. I didn’t agree with getting involved, in any form, in Libya. I didn’t and still don’t agree with his lack of effort in nominating people for vacancies in the different agencies. If you wanna put a finger on why the government appears to run in circles, just look at the number of agencies that do not have a leader and are being run by interim selections. I didn’t agree with the stimulus plan as it came out because I think it was inadequate and misdirected for what the intent was.
At the same time, I applauded Obama for essentially shutting down Guantanamo Detention Center. Instead of capturing combatants and holding them, his policy appears to be just blow them away. It essentially saves tax dollars because we’re not housing and feeding someone indefinitely. I applauded Obama’s effort (as limited as it was) to try to negotiate a deal during the debt debate. I also applauded his lack of interaction with the super committee as Congress essentially gave him the finger when he tried to negotiate before. Any deal that’s done has to be legislated by Congress, so they should do their job instead of crying that Obama’s not doing it for them.
All things considered, I won’t say he’s a failure or success because he’s still doing the job. That’s about the best way I can explain it to you. If that doesn’t clear things up, then it’s about all I can do online.
DEM
November 28th, 2011
5:00 pm
Amazing that Jay would try to pass this off without making clear that the wage data EXCLUDES benefits and the employer side of payroll taxes. If you include those the wage share of GDP is 54% freaking percent, far above what is shown on that graph. The NYT article sheepishly admits this at the tail end, but “data-driven” Jay pretends it does not exist. This is almost always the case with stats purporting to show the middle class falling behind; the creators of the data simply pretend that benefits aren’t pay, which is ridiculous.
Now the first grapgh shows a spike in profits as a percent of GDP but it is still tiny when compared to the adjusted wage data. Is it for some reason unreasonable for 10% of GDP to be represented by corporate profit? If so, why? To me it seems rather small. And clearly the workers are getting a much higher “share” of GDP even if you don’t adjust for benefits. How is this out of whack? Again, “data-driven” Jay does not bother to explain, because to raise that issue would spoil the whole “rich v poor” struggle he is trying to push here.
It’s one thing to make an argument using shoddy data. Anyone can fall victim to that, even unwittingly. To do this repeatedly while cloaking yourself in the guise of an objectively data-driven truth teller is, on the other hand, merely the mark of a charlatan.
Tom Middleton
November 28th, 2011
5:02 pm
I loves me some reliable facts, Jay – why I’m a Democrat, why I’ve read your blog (and Cynthia’s when she was in production), and why I never watch Fox News. But since this is the South, where prejudice, not reliable facts, rule our politics and attitudes,,,well, you know the rest. But when will it end, if, in fact, it ever does?
We always hurt ourselves more with this stuff than anybody else, but still we go on, like somehow we think we’re right and everybody else is wrong, and that if we can just believe that things are different than what the facts tell us, life will get better (in a prejudiced sort of way).
I’m sorry for what’s coming for us, for it’s the ones who live in the real world that will always come out on top, and that ain’t the South. While we’re still sitting around waiting for the Old South to rise again, the rest of the country (and world) will be moving up to the next level and the one after that and so on, until we’re nothing we thought we wanted.
I remember the last time someone – a Republican – told me “The South will rise again.” I told her, “Yeah, in hell.” She laughed and replied, “Probably,” and there you go, Jay: At least the Republican Party will have a permanent home, God help us!
Jay
November 28th, 2011
5:04 pm
Jarvis, you might have a valid point if after-tax corporate profits hadn’t soared to record levels in real terms, completely independent of what GDP had done.
See:
http://research.stlouisfed.org/fred2/series/CP
Jay
November 28th, 2011
5:10 pm
DEM, the NY Times piece doesn’t “sheepishly” acknowledge it. It states, and I quote:
“The figures for wage and salary income arguably understate the cost of hiring, since they exclude both the employer’s share of payroll taxes and the cost of other benefits, like health insurance. Including those costs, total compensation of employees came to 54.3 percent of G.D.P. That figure is not a record low, but it is the smallest share for any period since 1955.”
In other words, including benefits STILL produces the smallest share of GDP for wages, salaries and benefits since 1955, which is 56 years ago.
Contrary to your claim, the analysis still holds; the trend still holds. In fact, the data you point to strengthen the conclusion.
DEM
November 28th, 2011
5:23 pm
Oh, it’s sheepish alright, buried at the end and excluded from the graph altogether. It’s also unacknowledged in your post which you don’t try to explain. It took 5 pages of comments for someone to click over, read the buried lede and bring to anyone’s attention.
As for strenghtening your conclusion, the 54.3 percent relates to a single year. How then do you know the trend still holds? Did you re-produce the graph with the corrected data?
Jay
November 28th, 2011
5:33 pm
DEM, as the NYT piece says explicitly, and as I quoted, the share of GDP going to wages, salaries AND benefits is now the lowest it has been since 1955.
I’d say that demonstrates the trend pretty conclusively, don’t you? Or are you trying to claim that since it’s not the lowest on record, but merely the lowest in 56 years, that somehow the trend itself evaporates?
Adam
November 28th, 2011
5:43 pm
Funny what it takes to shut up a BACK SEAT DRIVER.
I am sure there’s a spot on the bingo card for “You’re paid to blog liberal things.”
I do wonder about people who make the charge, like they think the only reason people would post on a blog is because they are paid to do so. Makes me wonder where THEIR money comes from.
DEM
November 28th, 2011
6:10 pm
Jay I don’t know what you are taking about. For one thing the graph itself makes no reference to benefits and the NYT made clear at the end that benefits are excluded from the graphed data. And the first sentence of the NYT article that mentions wages says “[d]uring the same period, there never was a quarter when wage and salary income amounted to less than 45 percent of the economy.” “Wage and salary” means benefits are not included, as if your employer’s share of you health insurance isn’t compensation.
I also re-scanned your post and see no quote that includes the “AND benefits” part. Your message immediately above does say that, but again, there you are referring to a single year of data. Are you claiming that one year makes a trend? It can’t possibly. That trend may exist but the NYT data does not show it because benefits are excluded from that data entirely. You are claiming a trend in the absence of evidence AND claiming tobe basing your analysis on objective data at the same time. Both can’t be true.
George P. Burdell
November 28th, 2011
6:27 pm
DEM:
The following link has the graph ( it is number 2) you are looking for albeit only through 2009. When you add in benefits, payroll taxes, and insurance costs, the total paid by business for labor is no where near as big a drop off as is shown in the chart above. Right now is probably the lowest ever but it is within a couple of percent of the long term average. This graph clearly shows wages and salaries have decreased, but the decreases have been more or less matched by increases in other costs.
http://www.kff.org/insurance/snapshot/chcm012808oth.cfm
DEM
November 29th, 2011
8:59 am
Thanks George. I think this just about makes mincemeat out of Jay’s analysis of flawed data, though it would be nice to see yor chart extend through 2010. One does note that as the wages total falls the benefits portions get larger. Compensation hasn;t been falling, it’s just that more of our compensation has shifted to other forms such as employer-provided heatlh insurance (thank you tax code).
In any case, the meme of “falling middle class wages” will no doubt survive because the left is desperate to convince Americans that it is true.