Tyler Durden/Zero Hedge
We haven't had this low a percentage of working-age Americans actually working or trying to get a job since the early 1980s (chart above). In April alone, more than half a million people gave up, which is scary.
Meanwhile, productivity continues to rise while wages stagnate (chart below). Workers are doing more with less, and often for less. Sound familiar, where you live?
The Economic Policy Institute/The State of Working America
(H/T Felix Salmon, Andrew Sullivan; charts from Zero Hedge and Economic Policy Institute)
Leave a Comment:
These charts are really important. They point out long term trends that have more to do with the rise of technology, the change in the nature of work and the reduced value of labor when compared to capital than with political policies. What is now obvious is that a lot more middle class families are getting by on the equivalent of one income than we thought. Since ours is a demand economy we have got to find ways to improve median income that aren't tied to labor. There just aren't enough people in the 1% to create the damand needed to keep the factories humming.
Thanks Laura, this is an important post. I wonder if any of the political junkies will notice.
Unless you define "rise of technology" quite narrowly, everything you mention in your post seems to have an awful lot to do with political parties.
The more interesting questions are, what happens if the divergence continues to grow? And where is the tipping point?
They're fudging the books. The Financial Times noted that a lot of the productivity companies are reporting are overseas. Workers HERE get nailed while profits are overseas. And they want to bring them home tax free. One reason NOT to vote for Willard and his 1%...
That comment the former spokesman made about your appearance and the necklace is still bothering me, so I am going to assume that others found it a comment that was uncalled for; just wrong. We probably should not know more about you than that interaction we all share during the course of you doing your job. Privacy is important and should be expected. After a performance and the related interactions afterwards, I like my privacy respected. That person is not your employer. That person is not your major audience segment. You are employed. You are one of the Americans who is trying to give others a perspective and through that perspective a hand up. A lot of the comments on blogs are necessarily polarizing and an all or nothing position, sometimes mean. The former spokesman comment about your grown up decision on how to present yourself, a very successful host of a popular and meaningful show, was different. It crossed a line.
Well said. As a professional woman, I am particularly disturbed that Rachel should be tagged because she hasn't "dolled up" to do her job. No professional woman should be treated this way.
I've taken a proactive approach to this phenomenon: I purposely screw around at work, take naps on the job, show up late, take mind-altering substances, and yet I can't be fired because they can't replace me. In fact, they look at my unique attitude and demeanor as being a plus for the company, so I get paid more than my co-workers.
I used to give it my all, then I realized that working hard and rolling over to the powers that be doesn't get you respect or more money. Or, as Bart Simpson would say: work is for suckers.
I learned long ago that the reward for hard work is that you have a 50-50 chance of being let go in the second round of layoffs.
If the private sector can't or won't produce any jobs, then the government needs to make jobs. We all know the republicans are against the US government producing jobs.
Supply and demand won't work with major corporations, I've seen it many times, the demand goes down, the price goes up.
68% OF JOB CREATION IS FROM SMALL BUSINESS.The 1% only creates jobs in other countries but expect us to purchase their products.Got to come a day when WE THE PEOPLE stand as one and say ENOUGH IS ENOUGH and turn OUR noses at their products...Let's take that stand TOGETHER...Why?1985 the top 5% total value was $8 trillion and in 2010 the top 5% total value is $41 trillion.$33 trillion is what they made since 85'.Thats is more money then the whole world made up until 1980.THE WHOLE WORLD!!! STAND TOGETHER FOR REAL CHANGE!!!
So if 68% of job creation is small business, then maybe large businesses should have a higher tax rate.
I never did like how stock would go up if people were fired. To me, if you're hiring, you're doing well. Stock should go up. If you're firing, you're in trouble and having to cut. Stock should go down. As it is, system is rigged to fire workers and help the 1% with their capital gains.
I wonder what these charts will look like when we start to bring massive amounts of troops home and separate them from their military jobs?
The government would or would not calculate the military as being in the labor force. Lots of that playing with the numbers under Reagan. After a while, its all a lie.
How many of the non-participants have moved to the underground cash economy? Or have dropped from the "labor force" to work for themselves?
Self employed counts as work.
Richard Wolff has a lot to say about that gap, as do I :-)
I think it's explained by more women entering the work force and technology replacing many of the jobs.
My idea of a solution is rather progressive, but I actually do think (with some tweaking) it's appropriate. We should cut the 40 hour work-week in 1/2 and thereby create more jobs.
Sounds crazy in todays political climate, but Germany has had some success with things like it, called the "mini-job".
Here's my little post about it:
http://open.salon.com/blog/triviacompanion/2011/10/27/is_the_20_hour_workweek_right_for_america
Richard Wolff says the solution is a more democratic workplace, that sounds good too.. but, I think it's equally improbable in the implementation. (the 99% really doesn't have much leverage)
The flaw in this thinking is that people would be able to get along on half a job. C'mon, at a time when household earning power is declining, and fewer people of working age within each household are fully employed and wish to be, how is halving their existing incomes supposed to improve anything? Having "a job" is not the solution. If it were, there'd be many more Ph.D.s flipping burgers than there are. Having a secure job with some prospect of improved future earnings and a living wage is what is needed.
I think that a more effective approach would be to penalize overtime, as do the French, ensuring that more people are hired for a normal work week instead of working a smaller number of workers to death. For this to work, we'd need to do some things to meet employers in the middle, like instituting universal, single-payer HC to remove the employer's overhead.
Big thing is Europe taxes the heck out of the rich. We used to do that. Used to give tax incentives to hire workers and build plants. Now we give tax incentives to ship jobs overseas. And we cut taxes on the rich. Which has led us to this mess.
I think Hugh is correct. I wonder how they count me. I started my own company 21 years ago and work as an independent consultant. When I need help, I contract with other independent contractors to work on specific, temporary projects. How are they counted? When the standard corporate model does not serve the employee or the client(s) best, other ways are naturally created to fill the need. At least for me, it works better and I think it serves the client (end user) better also.
One set of labor statistics is based on phone surveys, who in household has a job or works, who is looking for work, how long. Earning money if self employed counts as work. Other statistics are based on population and how many elgible adults are in the labor force according to the IRS and other statistics. Devil is in the details and how the information is put out there.
How hard are you willing to work when you know those you work for offer low pay and zero retirement?
I think we should ask ourselves a question. Do you want employees who get paid too little to live on and no benefits cooking your meals or serving your coffee?
Something the wealthy folk who run companies and outsource jobs should ask themselves is-once America becomes unsafe for greedy bastards just where will you go?
Nope, productivity declined. Here's a source I think you can trust on this:
http://economywatch.msnbc.msn.com/_news/2012/05/03/11521951-employers-stretch-their-workers-to-the-limit?lite
What would the unemployment rate be if public sector jobs had remeained unchanged for the last four years?
What impact does the Baby Boom generation have on these numbers? The oldest Boomers are turning 67 this year, and some of the younger Boomers around my age (52) have taught for 30 years and are therefore eligible for retirement now, too. Perhaps this large generation of folks leaving the workforce would open up more jobs for younger people, but that would probably be wishful thinking!
If you look at the chart right around 71-72 after President Nixon stop the gold standard this trend started. This is because we started printing money and giving it to the 1% in the form of dividends. We need a return to the gold standard and ONLY Ron Paul will do that. End the Fed.
http://www.dailypaul.com/230573/dailypaul-the-illustrated-history-of-you-being-screwed-by-people-like-ben-bernanke
The reality is a work and creativity standard. Gold is of little necessity. Of course, one could be just as obsessed by Tulips.
People who quit were not replaced, they ended up with a third of the workforce they used to have, Then they wanted to know why we were having trouble keeping productivity up.
Productivity is a measure of output per worker, so people leaving or being forced out does not lower productivity. Productivity is not just a measure of goods produced but a measure per worker or labor hour. For more info see this link.
No, it did in this case, but this is anecdotal, it may not be the norm.
The team was better able to specialize, some people could be wholly devoted to one task throughout the day, after the numbers dropped we could no longer work like that. So each person had to do more than one task, and often had to switch between tasks, it increased the amount of effort total to get through the workloads. Trust me productivity definitely dropped, not just in total, but factored out for each worker.
But again, I don't know how that would work on a larger scale or whether that was even typical.
If the Republican party wants the US consumer to no longer be the economic driver for the world economy; believe me, there are consumers, and other countries, who do want the task. Once given away, well...prosperity, like freedom, is only really appreciated when it is lost.
But, but, but, the GOP is for important stuff like abortion, they're against that - and President Obama wants to take your gun away from you - and , and and - they want to have gay marriage. And the lemmings walk over the cliff and the Republic goes downhill.
Yes, a lot of us are struggling to stay afloat after the last administration rammed us all second class cabin passengers into a freezing iceberg, but all Captain Romney and the rest of his republican crew are trying to do now is leave us all out in the cold without a lifeboat, or even a life jacket to remain afloat. Wow! It's been one a hell of a cruise for the past twelve years, hasn't folks? Better brace yourself while the ship is still above water.
We have pretended all these 35+ years that technology and American business management smarts drove improvement in productivity (efficiency) when it was instead lowering the denominator of the ratio, wages, while actually increasing the enrichment of management.
Yes, and why we have pretended is the mystery. Increased productivity means increased output per worker. Obviously to maintain a reasonable inequality of income and assets, worker pay has to increase to meaningfully reflect that increased output.
It hasn't, it doesn't, and a reasonable inequality is a dead dream of the American past. Don't forget that even the aristocrats who founded the country knew and said that immense concentration of wealth in too few hands would destroy democracy.
CNC machine tools, high speed automated production lines.
Today what use to take 4 dudes and 4 separate machines and 6-8 hours to make a part, today one guy operates one machine and makes the same part in 2 hours.
But leave to the liberals to make some hay out this non issue.
Chart shows increasing productivity, that is obvious. It also shows the productivity is not being returned to the worker. Unless you return productivity to the worker in the form of higher wages you will not have the mass market for the increasing production, which will result in high unemployment, as we see right now.
Let's learn basic economics.
well what should I call you, stupi or dita?
Anyway, you have a point but it is irrelevant. If the 4 guys and 4 machines had not been replaced by 1 machine which required only 1 guy, the above 4 machines would have been moved to (country of choice) and the 4 guys here left to compete with guys from (country of choice) for taxi driving gigs - only to find taxi drivers were no longer employees but now lessees of equipment.
The average wage in 1947 was around $2800 a year, in 2010 it was $50,000 a year.
Anyway explaining economics to a liberal is like explaining quantum physics to a 5 year old.
Just because the anonymous internet poster said so. And that's that.
bls.gov
tell them they are full of bs, not me as that is were I got my numbres.
So the fact that the average wage has not kept up with rising cost of living is moot? The fact that these machines require more skills but the worker gets his benefits cut and again his wage stagnates behind his cost of living is irrelevant?
By average wage are we referring to wage? Or are we taking into account the one percent who reap the vast majority of the money?
If you take a wage of ten thousand dollars for a hundred working stiffs and toss it in with one high roller that rakes in a sum total of ten million you get an average wage of over one hundred and eight thousand but the working stiff is still poor.
The fact is, a machinist today has less skills than the machinist of yesterday.
CNC machine tools make it much easier for the machinist, hence less kills are required.
Then skill the machinist of today needs is the knowledge of how to write G code to part program the CNC machine.
If not for CNC machine tools and high speed automation, the cost of durable goods would be out of reach for almost all Americans.
So programming a CNC machine is easy? So the skill of which tool to chuck up for each operation is...
How long have you been a , ahem, mochinist?
The tool(s) are cutters and endmills, and indexable carbide insert for facing and turning.
So no need for the machinist to grind his own tools. The changing of the tools is controlled by the CNC machine, so no need for the machinist to reset the tooling for the next operation.
And G code is easy to learn and write.
My family has own (sense 1940) a machine shop, job-shop and contract work long & short runs, and I have my MSME.
What's in your war chest?
Yet only a few years ago unemployment was 4.5% and in Y2k was 4.0%. This shows people WILL take jobs if offered and belies Republican claims that the lazy dependent working class is only after government handouts.
Low taxes on the rich have allowed the rich to pocket the returns on increasing productivity. Increasing taxes on the rich and spending the money on public benefits will make jobs, grow the economy, and return more to the rich than the higher taxes. It's not a secret, it only takes nerve, just as everyone knew raising interest would cure the inflation in the '70s, and it did, once someone with nerve did the deed.
Financial Times had a good article that the tax cuts on the rich by Bush exploded the foreign stocks in the US as money was shipped overseas for jobs and investment. It didn't stay here. Went to foreign nations and our jobs and workers suffered. not that an American reporter could figure out this story, took a British publication to do it.
The Financial Times never ran any such story.
Foreign stocks did not explod because of the bush tax cuts, and oh by the way the bush tax cuts effect everyone not just the "Rich".
Income tax in the USA has no effect in other county's.
I believe companies pay wages that are similar and competitive with wages in the local area. To increase wages at the same rate as productivity increases really isn't necessary as long as the company can pay well enough to keep turnover to a minimum. One thing the graph shows me is the loss of union involvement in trying to raise wages to match productivity. Look at the graph and wonder why car manufacturers and other manufacturers locate in the right to work states.