Makes my blood boil. I refuse to let a Near-Great Depression happen every "5 to 7 years."

When i grow up i'm gonna save the world lots of headaches. Trust me.

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Adding video to channels (Comedy, Latenight, News, Politics) - requested by NetRunner.

"This is america's middle class; we've hacked at it, chipped at it and pulled on it for 30 years now."

Is that true? Normally this meme is based on a comparison between the average compensation rates between today and 1973. The appearance of stagnation is generated by at least 3 points that should make evidence-based thinkers uncomfortable.

1. The calculation uses sleight-of-hand to switch to 'wages' instead of 'compensation,' because the latter includes the entire picture, such as substantially increased compensation in the form of healthcare coverage.

2. The calculation is skewed downward by including not just the existing middle class that we're trying to expand, but also including the continual bulking up of the lower class through importing low-wage workers from other countries. That's great if we want to give low-wage workers from abroad opportunities, but it would be poor data policy (i.e. we decrease our intelligence ) if we count those statistics in the column of middle class families falling behind ("being chipped at," as Ms. Warren put it).

3. The calculation is based on the consumer price index (e.g. groceries), and values technology available now that wasn't available in 1973 (i.e. it was unobtainable even at a pricepoint of millions or billions of $) as an improvement of 0. For example, you want your diseases treated with modern cures instead of 1973 medicine? That's worth $0.00 to you. You want access to the sum total of human knowledge from your living room or on your iPhone walking down the street? That's worth $0.00 to you. Apparently, access to your iPhone is worth less to you than a napkin.

It'd be interesting to see figures like Ms. Warren delve into these kinds of fascinating intellectual topics, but her job is to say whatever she wants, using whatever data policy she wants to, as long as it's in agreement with the cognitive temperament of the audience.

1. Is that new healthcare coverage, or covering the cost of healthcare inflation under our current crapstorm of a system? "Good work this year Johnson! We're increasing your compensation! No not a raise, healthcare premiums went up, and we're going to cover half of the cost. See you next year!"

3. I don't see how this applies. "Good work this year Johnson! We're increasing your compensation! No, not a raise. You will now have the opportunity to buy a Nexus One and the H1N1 vaccine. See you next year!"

I have nothing snarky to say about number 2. Let me think on it.

>> ^MaxWilder:
1. Is that new healthcare coverage, or covering the cost of healthcare inflation under our current crapstorm of a system? "Good work this year Johnson! We're increasing your compensation! No not a raise, healthcare premiums went up, and we're going to cover half of the cost. See you next year!"
3. I don't see how this applies. "Good work this year Johnson! We're increasing your compensation! No, not a raise. You will now have the opportunity to buy a Nexus One and the H1N1 vaccine. See you next year!"
I have nothing snarky to say about number 2. Let me think on it.


1. Healthcare inflation is occurring in even the most socialist of countries, and in government funded healthcare in the US. That's what happens when we vastly increase medical knowledge, technology, and treatments. Bottom line: if scientists stopped all that pesky research, healthcare costs wouldn't be increasing faster than inflation.

The new miracle treatment, for example, that was developed in the events portrayed in the new Harrison Ford / Brendan Fraser movie, costs $300,000 every year for the rest of the patient's life.

3. The point is that, even if our employer didn't give us as large a raise as we wanted relative to 1973 compensation, the goal posts have been moved in our favor. We're all shifted toward being upper class, because we can take for granted things that the upper class couldn't dream of affording in 1973.


"I have nothing snarky to say about number 2. Let me think on it." Much appreciated

^ Not following that, Chilaxe.

Real wages have fallen significantly for the working class since 1973.

>> ^rougy:
^ Not following that, Chilaxe.
Real wages have fallen significantly for the working class since 1973.


1. It doesn't seem intellectually honest for public intellectuals to not speak of compensation, and instead speak only of the part of compensation that shows what we wanted to hear.

Although wages have fallen behind inflation for over a generation now, other nonwage components of worker compensation, particularly health care benefits, have grown more quickly than inflation. The graph below shows that in fact total compensation shows a steady long-term upward trend relative to inflation that has if anything accelerated in recent years. [Total compensation is up around 50% since 1974.] http://www.econbrowser.com/archives/2005/12/declining_real.html

>> ^chilaxe:
>> ^rougy:
^ Not following that, Chilaxe.
Real wages have fallen significantly for the working class since 1973.

1. It doesn't seem intellectually honest for public intellectuals to not speak of compensation, and instead speak only of the part of compensation that shows what we wanted to hear.

Although wages have fallen behind inflation for over a generation now, other nonwage components of worker compensation, particularly health care benefits, have grown more quickly than inflation. The graph below shows that in fact total compensation shows a steady long-term upward trend relative to inflation that has if anything accelerated in recent years. [Total compensation is up around 50% since 1974.] http://www.econbrowser.com/archives/2005/12/declining_real.html

>> ^rougy:
>> ^chilaxe:
>> ^rougy:
^ Not following that, Chilaxe.
Real wages have fallen significantly for the working class since 1973.

1. It doesn't seem intellectually honest for public intellectuals to not speak of compensation, and instead speak only of the part of compensation that shows what we wanted to hear.

Although wages have fallen behind inflation for over a generation now, other nonwage components of worker compensation, particularly health care benefits, have grown more quickly than inflation. The graph below shows that in fact total compensation shows a steady long-term upward trend relative to inflation that has if anything accelerated in recent years. [Total compensation is up around 50% since 1974.] http://www.econbrowser.com/archives/2005/12/declining_real.html

...Nonwage components of worker compensation, particularly health care benefits, have grown more quickly than inflation. The graph below shows that in fact total compensation shows a steady long-term upward trend relative to inflation that has if anything accelerated in recent years. [Total compensation is up around 50% since 1974.] http://www.econbrowser.com/archives/2005/12/declining_real.html

@chilaxe

I don't think that's an honest measure.

For one, what percentage, and what quantity of the work force is receiving that alleged 50% increase as compared to forty years ago? I don't think that's a one-to-one measurement.

Secondly, can that be considered a realistic "gain" for the working class when the lions share of that alleged increase is passed through to the insurance companies themselves? I think that premiums have increased seven fold in the past ten years alone.

Premiums have risen, and so have deductibles and copays. At the same time, overall coverage has shrunk.

I would take that 200% increase in real earnings--like the CEOs got--any day.

A 200% increase in earnings beats an alleged 50% increase in compensation, in the intellectually honest sense.

Edit:

I'm looking more closely at your source reference and it clicks back twice to this blog:

http://macroblog.typepad.com/macroblog/2005/12/are_workers_los.html

He may be right, but I don't see the source he used for that graph.

Also, remember to be suspicious of averages.

If 99 poor men are standing in a room and Bill Gates walks in, suddenly the average wealth of all the men is in the multi-millions.

In reply to this comment by rougy:
@chilaxe

I don't think that's an honest measure.

For one, what percentage, and what quantity of the work force is receiving that alleged 50% increase as compared to forty years ago? I don't think that's a one-to-one measurement.

Secondly, can that be considered a realistic "gain" for the working class when the lions share of that alleged increase is passed through to the insurance companies themselves? I think that premiums have increased seven fold in the past ten years alone.

Premiums have risen, and so have deductibles and copays. At the same time, overall coverage has shrunk.

I would take that 200% increase in real earnings--like the CEOs got--any day.

A 200% increase in earnings beats an alleged 50% increase in compensation, in the intellectually honest sense.

Edit:

I'm looking more closely at your source reference and it clicks back twice to this blog:

http://macroblog.typepad.com/macroblog/2005/12/are_workers_los.html

He may be right, but I don't see the source he used for that graph.

Also, remember to be suspicious of averages.

If 99 poor men are standing in a room and Bill Gates walks in, suddenly the average wealth of all the men is in the multi-millions.


1. Businessweek gives a figure of 9% decline in wages for the working class:

Shockingly, pay for production and nonsupervisory workers—80% of the private workforce—is 9% lower than it was in 1973, adjusted for inflation. http://www.businessweek.com/magazine/content/10_03/b4163032935448_page_4.htm

Non-wage compensation has certainly increased much more than 9%.

So what kind of compensation are you talking about?

And for whom? For how many? Most Americans don't get any compensation at all other than maybe sick days. A very large portion of our work force receives no compensation whatsoever and they never have.

And again, what are the real numbers here and who are the real beneficiaries? To claim that the average compensation has risen but neglect to provide a break-down of that data renders it meaningless.

Elizabeth Warren's claim is that the middle class has been "hacked at." That's different from saying rich people make too much money, which, even if it's right, doesn't decrease the standard of living of the middle class.

Isn't it obvious that the money that is getting funneled to the rich is the money that would have otherwise been distributed to the middle class?

Furthermore, I think it's obvious that our health care costs are rising at an expedited rate unrelated to any rise in sickness or real costs.

Our health care costs are rising because the insurance industry itself has seen fit to write its own check.

>> ^rougy:
Non-wage compensation has certainly increased much more than 9%.
So what kind of compensation are you talking about?
And for whom? For how many? Most Americans don't get any compensation at all other than maybe sick days. A very large portion of our work force receives no compensation whatsoever and they never have.
And again, what are the real numbers here and who are the real beneficiaries? To claim that the average compensation has risen but neglect to provide a break-down of that data renders it meaningless.
Elizabeth Warren's claim is that the middle class has been "hacked at." That's different from saying rich people make too much money, which, even if it's right, doesn't decrease the standard of living of the middle class.
Isn't it obvious that the money that is getting funneled to the rich is the money that would have otherwise been distributed to the middle class?
Furthermore, I think it's obvious that our health care costs are rising at an expedited rate unrelated to any rise in sickness or real costs.
Our health care costs are rising because the insurance industry itself has seen fit to write its own check.


Healthcare costs are skyrocketing in every single country in the world that provides socialized medicine. You're getting stuck because you're only looking at the country of your nationality.

Elizabeth Warren has a made a mistake. We can say 'it can be argued she meant it this other way in which she'd be at least partially correct," but her job is to make statements that are accurately worded and best fit the data. An outsider to this issue would find it surreal that she would refuse to talk about the complete picture of "compensation."

The burden of proof isn't on reasonable skeptics. She needs to prove that there's reason to intentionally not look at the big picture. If skepticism turned out to be wrong in this case, I'd certainly admit it. Would her defenders admit it if she turned out to be wrong?

@chilaxe

As a reasonable skeptic, I'll ask you again:

What kind of compensation are you talking about?

What kind of compensation does your linked graph include?

It provides no source and no breakdown.

In reply to this comment by rougy:
@chilaxe

As a reasonable skeptic, I'll ask you again:

What kind of compensation are you talking about?

What kind of compensation does your linked graph include?

It provides no source and no breakdown.
Certainly. Regarding nonwage compensation, the source of the graph, David Altig, a Federal Reserve official and economics professor at the University of Chicago, provides this description:

I'd argue the problem is that hourly wages or earnings are an inadequate measure of labor compensation, primarily because they exclude nonwage forms of compensation -- health care benefits, employers' share of social security contributions, and the like. These forms of compensation are an increasingly important part of what workers receive from employers in exchange for the sweat of their brows.

It's still a bullshit slight of hand without any real basis in fact.

Gains in "compensation" are meaningless to the millions of people who do not, and never have, received any compensation at all.

This is a really shitty way of wiggling out of the fact that the working class has gotten totally screwed.

Also, compensation is meaningless when it's in a form that is never realized, or only realized in one form.

If your employer promises you an apple a day, and the price of that apple goes up, you still only get an apple a day. That is not a gain. The absence of loss is not a gain. The same applies to health care.

And last but not least, your source didn't provide a source or a breakdown of what the "compensation" really was.

It's only assumed it was primarily health care, which may be true, but it leaves out the other forms of compensation that are essentially restricted to the upper tiers of the corporate world.