QandO’s Jon Henke breaks his blog shackles and pens a Tech Central Station column on the rhetoric and reality of wages and compensation in the US. In short, he says, we’re doing better than the data-mining from Paul Krugman and the Democratic Party would have us believe. From “‘Real Wage’ Slaves?”:
In the Census Bureau’s 2005 Report on Alternative Income Estimates in the United States: 2003, it’s true that Median Household Income fell by one tenth of one percent when measured simply as “Money Incomeâ€Â.
But when additional compensations were included, Median Household income jumped. Counting “Money Income plus realized capital gains (losses), less income and payroll taxes, plus value of employer provided health benefits and all non-cash transfers except Medicare and Medicaid‗essentially adding in non-wage compensation—Median Household income actually jumped 1.2 percent.
Finally, it’s also worth noting that Real Disposable Personal Income—the inflation-adjusted portion of compensation that we the proletariat get to pocket (i.e., spend or save)—has risen by 3.1 percent, 2.4 percent and 3.4 percent over the past three years.
But still, what about those stagnant wages? It’s a testament to the immutable characteristics of economists and politicians that, good times or bad, the capacity to find data that supports their conclusions remains undiminished. In good times, they just have to dig a bit deeper.
The bounceback in the economy since 911—indeed, the rather short and minor recession that 911 precipitated—are a testament to the strength of our economic system at its core; similarly, there can be no question that the Bush tax cuts aided in minimizing the impact of that attack on the American economy.
Yet still—with unemployment below 5% and the DOW threatening 11000—many economists at odds with Bush’s economic philosophy insist that Americans are somehow worse off, that their jobs are a inauthentic, that their situations really are far more dire than they themselves are able to understand.
Which is why for years now, I suspect, the health of the economy has not polled well among the American public, many of whom continue to recognize that though they are doing just fine, others must necessarily be suffering greatly—because this is the dour economic news they receive day in and day out from people like Krugman, who find indicators to fit their theses (a popular one being “that real median household income ‘remained unchanged between 2003 and 2004 at $44,389’, and that 2004 was ‘the second consecutive year that households did not experience an annual change in real median income’”—a charge our very own Kiwi contrarian Phoenician in a Time of Romans is fond of dropping in the comments as his de facto, debate-ending trump card. Wages are flat, Democrats argue, and so the Bush economy is not working for working Americans.
But as Henke points out—and what the Dems are at pains to obsure—are the several instances of massaging the numbers that allow for such dour proclamations (see, for instance, the toll taken by environmental regulations, as discussed by Craig Marxsen):
[…] there’s a statistical sleight of hand here: workers earn wages, but that’s not all they earn. In recent decades, compensation composition has changed, with benefits now accounting for 32.2 percent of compensation costs. This is sometimes known as the total compensation package.
Focusing on real wages—which accounts for changes in inflation, but doesn’t account for compensation that helps to cover those increased costs—obscures the fact that total compensation has increased faster than inflation. In fact, total compensation has been growing faster than it did during much of the latter half of the 1990s, while inflation, though more volatile, has remained about the same.
My emphasis.
I discussed this phenomenon in a different context the other day (on which more later, time permitting), but what we see here time and again is a willingness, on the part of partisan advocates, to try to “create” a particular reality, and then to turn around and cite that reality as proof of the premises that were used to create it in the first place.
The result is, Americans—a compassionate people—are often concerned about this phantom suffering of others in the abstract, and will react less confidently to the current state of the economy based on how they believe others are suffering under it, even while they themselves note (often with some degree of secret shame) that they seem to be doing just fine.
It is the politics of middle class guilt, and—when it is reinforced by numbers and furrow-browed pronouncements by the austere economists who lecture us daily from the nation’s most prominent papers, it is sure to take its toll. Perception drives the market, certainly; but perception likewise drives the economy—and when that perception is finessed to talk down the economonic health of the nation, this hurts expansionism and consumer confidence.
Thankfully, Henke does an admirable job of exposing some of the tricks that allow for certain repetitive rhetorical tropes to physically influence the nation’s economic health.
I once heard this described as “I’m doing fine, but I’m worried about my neighbors”. When you ask the neighbors, you get the same answer.
“Years now.” I’m thinking about about five of ‘em.
I think what bothers me most about the current state of politics is that the reek of party gets all over everything. Thus the same economy is “booming” under Clinton and “worrysome” under Bush.
I’ve maintained for years now – and admittedly, it’s not a unique observation on my part – that if Clinton had done excactly the same thing as Bush has done w/r/t the GWOT, the leftists would be cheering, and the conservatives would be grumbling. I’ve bounced this theory off a couple of my leftist friends and the result has been rather unpleasant.
But…but…burgeoninghealthcarecostsareRepublicansfault!
Does this mean I can stop eating Ronin Noodles?
Dunno. Conservatives are much more likely to, say, give Clinton for things he did they agree with than libs are to credit Bush. Contrast conservative reaction to Clinton’s signing NAFTA to libs reaction to Bush signing an education bill practically written by Kennedy.
Does this mean I can stop eating Ronin Noodles?
Ah, yes…the noodles with no master.
I can’t stand the whole guilt complex to begin with. If your success comes from hard work, and you broke no laws to obtain it, why would you apologize for it? Be proud, you earned it. Even those who obtained wealth by other means, inheritance or good fortune, shouldn’t be ashamed.
Sanjuro-brand, probably.
Because of the Mifune!
Yes, but what are you American interlopers doing for your Native Americans wards?
Uh-huh
Here’s to keeping the discussion on track,
Smallpox in a Time of Vaccinia Immune Globulin
Americans are obsessed with statistical perfection. Sure, the University of Texas beat the University of Southern California in the Rose Bowl to win the NCAA Division I football championship in an uncontested matchup of Numbers 1 and 2 but what about Auburn University last year? This African-American dominated team was denied a chance at a national championship even with a perfect record, which speaks volumes to the current state of race relations in America.
Buggywhip in a Time of Model A’s
Fuck em!! I got mine!!
How’s that for a typical wingnut response?
TW: problems – Problems? What problems??
It’s perception verses reality. Is the glass half full or half empty?
A good example of this would be my liberal sister-in-law. She is a self proclaimed Bush hater. One day she went on a tirade about how Bush has destroyed the public education system and that teachers do not earn a decent wage, etc.
So I took it upon myself to download national teacher salaries, national test scores for the past three years, and how the ‘No Child Left Behind’ was formed. I stapled it all together and gave it to her. She was infuriated.
She learned by this tutorial that test scores have been steadily rising, that she earned $10k less than the average state teacher salary, and that ‘No Child Left Behind’ was draftd by the Democrats under a different title 5 years earlier (and passed by a large margin in the Senate).
Liberal propoganda is a very effective tool for the weak minded. I give her credit since she accepted these facts and never brought it up again.
Fuck em!! I got mine!!
How’s that for a typical wingnut response?
Somehow, someway those poor down trodden people just gave up and stopped becoming responsible for their own well being. Well to be sure, a Dem party theory is to keep them that way…..
Oh by the way, I have enough to to ponder than worry about people who don’t care to provide for their own family. Give up and that is where you are…Uncaring? maybe…
I blame it on Walmart. That store increases my monthly paycheck—so, I can get the Jacuzzi, the above-the-ground pool, and the new Ranger bassboat with a 250 hp Merc!
Those prices can’t be beat.
I save at their SuperCenters everyday—every meal. Like, I get twelve cans of dog food or six bags of ronin noodles at Walmart—to serve my family for dinner. The dollars just don’t stretch at Kroger’s. There, I can get only 6 cans of dog food or three bags of noodles.
Was that snark? I can’t tell, since I’m just a stupid wingnut (alliteration, right?).
Listen, I grew up poor, and like many others I worked my way out of poverty. Most of those who remained poor are responsible for their own failure. Mainly through bad habits and an unwillingness to save and plan for the future. I’m not saying the poor are lazy, most aren’t, many just suffer from a clear lack of impulse control, which leads them to fritter away money as soon as they get it.
Another point is the simple fact of income mobility. Many who start life poor do not finish it that way. The opportunities for education and advancement in this country are amazing. The fact that folks like Krugman can’t seem to wrap their minds around this fact are astounding. They are either blind, or willingly ignore this to promote their own agenda. This article is just further proof of that fact.
TW -making as in this Rhode scolar for the dollar is making a nice little sum.
And vice versa, I know more than a few kids who inherited money but had the same issues you relate and wound up poor rather quickly. Ever notice how many lottery winners piss the money away in a matter of months?
How many people want to leave this economy and go elsewhere to be part of another? How many want to leave their economy and come here to be part of ours? What would be the ratio, a million to one? Ten million to one? And one thing folks are hard-headed about, it’s the income–the food it puts on the table several times every ding-dong day.
That’s a tremendous post, up there, host. Phoneyroman never DID want to include ‘household net worth’ in his/her attack, as it clearly reflects the rising value of USA assets.
Love it or leave it.
You have been absorbed.
Garbage, actus. If my father could move here in the 1950s for a job, and my mother’s father could move here in the 1920s for a job, people can sure as hell leave as a job.
I think your reflexive sneering at “Love it or leave it” is a bit of mental defense you’ve erected so you can ignore the fact that historically, people don’t like living under governments you approve of.
Light up or leave me alone.
It can’t be reflexive sneering at the argument that because there is no better economy there can’t be a way to improve this one. That would be the mental defense others have erected.
Sure, actus. Lots of people are claiming that the US economy is perfect. Keep telling yourself that.
Meanwhile, why do you think that I should listen to fat, comfy, people like you, blubbering that they are in hell because their flan is too stiff, while people have literally died on barbed wire in an attempt to change places with you?
I don’t need to tell myself anything about this. Just need to reply to this sort of stuff.
“How many people want to leave this economy and go elsewhere to be part of another?”
Like I said. There is no way to make this place better such that even more people would want to change places with fat (no thanks), comfy (thanks!) people like me. I just have to look at my cousin, who has an EU citizenship and is here illegally if I want to see that.