Posts Tagged ‘wages’

ST-2014-07-17-multigen-households-01 ST-2014-07-17-multigen-households-02

The Pew Research Center reports that a record number of Americans—57 million or or 18.1 percent of the population—lived in multi-generational households in 2012, double the number who lived in such households in 1980.

After three decades of steady but measured growth, the arrangement of having multiple generations together under one roof spiked during the Great Recession of 2007-2009 and has kept on growing in the post-recession period, albeit at a slower pace. . .

Historically, the nation’s oldest Americans have been the age group most likely to live in multi-generational households. But in recent years, younger adults have surpassed older adults in this regard. In 2012, 22.7% of adults ages 85 and older lived in a multi-generational household, just shy of the 23.6% of adults ages 25 to 34 in the same situation.

What’s the explanation for the growth in multigenerational households? Pew cites young adults’ decisions to marry at later ages and to stay in school longer as well as the country’s changing racial and ethnic composition (since racial and ethnic minorities generally have been more likely to live in multi-generational family arrangements).

The cause that should worry us is the deteriorating economic situation of young adults:

the declining employment and wages of less-educated young adults may be undercutting their capacity to live independently of their parents. Unemployed adults are much more likely to live in multi-generational households than adults with jobs are. A 2011 Pew Research report found that in 2009, 25% of the unemployed lived in a multi-generational household, compared with 16% of those with jobs.

As Heidi Shierholz [pdf] recently testified, the wages of young graduates have fared extremely poorly during the Second Great Depression.

The real (inflation-adjusted) wages of young high school graduates have dropped 9.8 percent since 2007 (the declines were larger for men, at 11.0 percent, than for women, at 8.1 percent). The wages of young college graduates have also dropped since 2007, by 6.9 percent (for young college graduates, the declines were much larger for women, at 10.1 percent, than for men, at 4.0 percent).

But they were doing poorly even before the most recent crisis.

they saw virtually no growth over the entire period of broad wage stagnation that began during the business cycle of 2000–2007. Since 2000, the wages of young high school graduates have declined 10.8 percent (11.4 percent for men and 10.7 percent for women), and the wages of young college graduates have decreased 7.7 percent (0.5 percent for men and 14.2 percent for women). These drops translate into substantial amounts of money. For full-time, full-year workers, the hourly wage declines since 2000 represent a roughly $2,500 decline in annual earnings for young high school graduates, and a roughly $3,000 decline for young college graduates.

As a result, young adults have been increasingly forced to have the freedom to stay or move back in with their parents, thus increasing the number of Americans who are living in multigenerational households.

rate of profit

Some Marxists put a great deal of stock in inexorable laws of capitalism, such as the tendency of the rate of profit to fall. I don’t. I don’t look at capitalism with the presumption of any kind of laws of motion nor do I look for them as the outcome of an analysis. For me, it’s all conjunctural.

And, in the current conjuncture, the tendency is for the rate of profit to rise. Not inexorably (there are lots of conjunctural causes). And not evenly (precisely because of changing configurations of those conjunctural causes). But, if you look at the data (such as the rate of profit calculated in the graph above*), we can see the capitalist rate of profit—an index of capitalist success if there ever was one—rising. It’s been rising on average (through a series of upturns and downturns) since 1990 or so, and it’s been rising (even more dramatically) since the onset of the Great Recession.

That, in my mind, is what matters. Right now, what we’re witnessing—precisely because of the measures taken to solve the crisis the capitalists themselves made (starting with the bailout of Wall Street and then continuing through various rounds of quantitative easing, high unemployment, the stagnation of wages, and so on)—is a tendency of the rate of profit to rise.

 

*I understand that “my” rate of profit (based on total corporate profits, flows of investment, and labor compensation) doesn’t exactly correspond to what others calculate as the Marxian rate of profit (which generally includes the stock of capital). I can defend my proxy (for r=s/[c+v]) theoretically. It also tracks other estimates (such as those by Fred Moseley) pretty well.

TMW-07-07

Special mention

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fredgraph

The top-of-the-page articles today (e.g., in the New York Times) are all about strong job growth, lower unemployment, and higher wages.

All true. But, as Neil Irwin cautions, we should hold the fireworks. His view is not there is a “soft underbelly,” but that “this halting, sluggish recovery has taught us anything, it is to not let our assessments of the economy be driven by hope, but rather by sustained and credible improvement in a wide range of economic data.”

My view is that—notwithstanding recent job growth, falling unemployment, and higher wages—there is still an enormous gap (as reflected in the chart above) between the wealth workers are producing and what they’re receiving in compensation.

That’s why the stock market continues to soar (this morning, the Dow broke 17,000 for the first time ever), benefiting a tiny minority at the top, while the 99 percent continue to fall further and further beyond.

 

productivity-growth

The gap between the growth of productivity (now at 11.4 percent above January 2007) and that of wages (only 1.5 percent higher) continues to widen (according to Reuters).

Is it any wonder, then, that income inequality continues to rise?

state min wage

Here, based on a study by Arindrajit Dube [pdf] is a chart designed by Alissa Scheller (for the Huffington Post) of what each state’s minimum wage would be if it met the minimum standard of being equal to one-half the median wage in each state.

As Dubit explains,

A natural target is to set the minimum wage to half of the median full-time wage. This target has important historical precedence in the United States: in the 1960s, this ratio was 51 percent, reaching a high of 55 percent in 1968. Averaged over the 1960–1979 period, the ratio stood at 48 percent. Approximately half the median full-time wage is also the norm among all OECD countries with a statutory minimum wage. For OECD countries, on average, the minimum wage in 2012 (using the latest data available) was equal to 49 percent of the median wage; averaged over the entire sample between 1960 and 2012, the minimum stood at 48 percent of the median (OECD 2013). In contrast, the U.S. minimum wage now stands at 38 percent of the median wage, the third-lowest among OECD countries after Estonia and the Czech Republic.

Chart of the day

Posted: 13 June 2014 in Uncategorized
Tags: , , , ,

CEO-worker

In charting the amount of the surplus that ends up in the hands (or, if you prefer, pockets or bank accounts) of CEOs, the Economic Policy Institute finds that:

  • Average CEO compensation was $15.2 million in 2013, using a comprehensive measure of CEO pay that covers CEOs of the top 350 U.S. firms and includes the value of stock options exercised in a given year, up 2.8 percent since 2012 and 21.7 percent since 2010.
  • From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker’s compensation over the same period.
  • The CEO-to-worker compensation ratio was 20-to-1 in 1965 and 29.9-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 295.9-to-1 in 2013, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.
  • If Facebook, which they exclude from their data due to its outlier high compensation numbers, were included in the sample, average CEO pay was $24.8 million in 2013, and the CEO-to-worker compensation ratio was 510.7-to-1.

 

c_trends_mining

There hasn’t been a war on coal in the United States. There’s been a war by the coal industry on coal miners.*

The modern peak of coal employment was in 1984, when 177,848 miners (about .16 percent of the national labor force) were employed by the coal industry. Since then, coal production grew but mining employment decreased. Thus, by 2011, the coal industry employed only 88,000 miners (about .06% of the labor force), a decrease of 51 percent, while producing 22 percent more coal than in 1984.

Here’s the decline in total mining employment in the United States:

coal employment

The coal industry’s modern war on miners has consisted of two major shifts: one technological, the other geographic. The switch to surface mining meant an increase in labor productivity (many fewer miners are required to extract each ton of coal with mountaintop removal and other forms of surface mining). The move to the west—within and across states—has meant a sharp decline in coal production and employment in old coal regions (such as Appalachia) and an increase in production (with some increase in employment) in newer regions (such as western Kentucky and Wyoming).

The fact is, the coal industry won the war on miners. And there’s no hope that a revitalization of the coal industry will do anything more than line the pockets of the owners of the coal mines.

 

*Actually, the mining industry has engaged in a permanent war on miners: early on, it involved an attack on miners’ pay, safety, and unions (think Blair Mountain and Harlan County); since the mid-1980s, it’s been a war on miners’ jobs.

onepercent_590_356

Special mention

fifa_world_cup_2249865 June 8, 2014

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With 217,000 new jobs created in May, the U.S. economy is finally—finally, after 50 months!—back to the pre-recession employment level.

Except it isn’t. Not by a long shot. Not when we consider the “jobs gap”—which we can calculate in one of two ways: by the amount of time it will take at this rate to get back to pre-recession employment levels while also absorbing the people who enter the labor force each month (4 years) or by the difference between payroll employment and the number of jobs needed to keep up with the growth in the potential labor force (6.9 million jobs).

HP-jobs

stateofworkingamerica

And that’s not even considering the kinds of jobs that have been created or the pay for those jobs or the percentage of the unemployed who have been without a job for 27 weeks or more.

Or, for that matter, the fact that all those how have been lucky enough to keep their jobs or to get a new job are forced to have the freedom to work for a small number of employers who are able to capture and do what they will with the profits their workers create.