Posts Tagged ‘immigration’

wage share-growth

We’ve been hearing this since the recovery from the Second Great Depression began: it’s going to be a Golden Age for workers!

The idea is that the decades of wage stagnation are finally over, as the United States enters a new period of labor shortage and workers will be able to recoup what they’ve lost.

The latest to try to tell this story is Eduardo Porter:

the wage picture is looking decidedly brighter. In 2008, in the midst of the recession, the average hourly pay of production and nonsupervisory workers tracked by the Bureau of Labor Statistics — those who toil at a cash register or on a shop floor — was 10 percent below its 1973 peak after accounting for inflation. Since then, wages have regained virtually all of that ground. Median wages for all full-time workers are rising at a pace last achieved in the dot-com boom at the end of the Clinton administration.

And with employers adding more than two million jobs a year, some economists suspect that American workers — after being pummeled by a furious mix of globalization and automation, strangled by monetary policy that has restrained economic activity in the name of low inflation, and slapped around by government hostility toward unions and labor regulations — may finally be in for a break.

The problem is that wages are still growing at a historically slow pace (the green line in the chart above), which means the wage share (the blue line in the chart) is still very low. The only sign that things might be getting better for workers is that the current wage share is slightly above the low recorded in 2013—but, at 43 percent, it remains far below its high of 51.5 percent in 1970.

That’s an awful lot of ground to make up.

productivity-wage share

The situation for American workers is even worse when we compare labor productivity and the wage share. Since 1970, labor productivity (the real output per hour workers in the nonfarm business sector, the red line in the chart above) has more than doubled, while the wage share (the blue line) has fallen precipitously.

We’re a long way from any kind of Golden Age for workers.

But, in the end, that’s not what Porter is particularly interested in. He’s more concerned about what he considers to be a labor shortage caused by a shrinking labor force.

So, what does Porter recommend to, in his words, “protect economic growth and to give American workers a shot at a new golden age of employment”? More immigration, more international trade, cuts in disability insurance, and limiting increases in the minimum wage.

Someone’s going to have to explain to me how that set of policies is going to reverse the declines of recent decades and usher in a Golden Age for American workers.

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Trump

It wasn’t a homogeneous block—whether the white working-class or anti-immigrant nativists or the victims of globalization—that put Donald Trump into the White House. That’s the kind of reductionist narrative that has proliferated both before and after the fateful 2016 presidential election, all in an attempt to make sense of Trump’s “base.”

Instead, it was a complex coalition of voters, with different resentments and desires, that combined, at least via the electoral college (but not, of course, in the popular vote), to defeat Hillary Clinton and elect Trump.

That’s the conclusion arrived at by Emily Ekins [ht: db] of the Cato Institute and the Democracy Fund Voter Study Group.

According to Ekins, there were five unique clusters of Trump voters—American Preservationists (20 percent), Staunch Conservatives (31 percent), Anti-Elites (19 percent), Free Marketeers (25 percent), and the Disengaged (5 percent)—who hold very different views on a wide variety of issues, including immigration, race, American identity, moral traditionalism, international trade, and economics.

Here’s how Ekins describes these different clusters:

Staunch Conservatives are steadfast fiscal conservatives, embrace moral traditionalism, and have a moderately nativist conception of American identity and approach to immigration.

Free Marketeers are small government fiscal conservatives, free traders, with moderate to liberal positions on immigration and race. (Their vote was a vote primarily against Clinton and not a vote for Trump.)

American Preservationists lean economically progressive, believe the economic and political systems are rigged, have nativist immigration views, and a nativist and ethnocultural conception of American identity.

Anti-Elites lean economically progressive, believe the economic and political systems are rigged, and take relatively more moderate positions on immigration, race, and American identity than American Preservationists. They are also the most likely group to favor political compromise.

The Disengaged do not know much about politics, but what they do know is they feel detached from institutions and elites and are skeptical of immigration.

Call it the “unholy alliance” of Trump voters—clusters of people who had different motivations in mind when they went to the voting booth.

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A good example of their diversity is their response to the question, do you have favor raising taxes on families with incomes over $200,000 a year? Overwhelming majorities of American Preservationists and Anti-Elites (and a plurality of the Disengaged) favor raising taxes, while Staunch Conservatives and Free Marketeers are opposed.

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Much the same differences arise when asked if the economic system in the United States is biased in favor of the wealthiest Americans.

In fact, Ekins found only four issues that clearly distinguish Trump voters from non-Trump voters: an intense dislike of Clinton, a more dismal view of their personal financial situations, support for a temporary ban on Muslim immigration, and opposition to illegal immigration. Otherwise, as Ekins explains, Trump voters diverge on a wide variety of salient issues, including taxes, entitlements, immigration, race, pluralism, traditionalism, and social conservatism.

As I see it, Ekins’s analysis of Trump voters is significant for two reasons: First, it reveals how complex—and shaky or unstable—the coalition is. It’s going to make it difficult for Trump and the Republican Congress to govern in any kind of unified fashion. Second, it creates real opportunities for the political opposition, depending on how it reorganizes itself in the months and years ahead and whether or not it is able to move beyond the Clinton-dominated wing of the Democratic Party, to peal off significant numbers of Trump voters.

That’s only possible if, as Ekins writes, we acknowledge that “different types of people came to vote for Trump and not all for the same reasons.”

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