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Technology Change Not the Culprit in Wages Falling Behind US Productivity Gains


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2018 Feb 21, 9:51am   2,335 views  13 comments

by Patrick   ➕follow (55)   💰tip   ignore  

https://www.nakedcapitalism.com/2018/02/technology-change-not-culprit-wages-falling-behind-us-productivity-gains.html
Pay growth for middle class workers in the US has been abysmal over recent decades – in real terms, median hourly compensation rose only 11% between 1973 and 2016.1 At the same time, hourly labour productivity has grown steadily, rising by 75%.

This divergence between productivity and the typical worker’s pay is a relatively recent phenomenon. Using production/nonsupervisory compensation as a proxy for median compensation (since there are no data on the median before 1973), Bivens and Mishel (2015) show that typical compensation and productivity grew at the same rate over 1948-1973, and only began to diverge in 1973 (see Figure 1).



... At the same time, non-purely technological hypotheses for rising mean-median inequality include the race between education and technology (Goldin and Katz 2007), declining unionisation (Freeman et al. 2016), globalisation (Autor et al. 2013), immigration (Borjas 2003), and the ‘superstar effect’ (Rosen 1981, Gabaix et al. 2016).


Gosh, I wonder if declining unionisation, globalisation, and immigration could possibly have had an adverse effect on the wages of the working classes, letting capital run away with most of the workers' productivity gains since 1973. Could it possibly be?

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1   🎂 Tenpoundbass   2018 Feb 21, 10:09am  

The biggest theft was how Obama handled the Economy that was Toxic Capitol ism that gives rise to Marxist making their case that it is true Capitalism. They use it as an Argument that Communism is better.

What Obama did was gave out open ended Checks to Companies and the Execs that already intentionally ran those companies into the ground. They were given money throughout the whole eight years. They hoarded the money, and cooked the books to show growth because their capital was growing. These are the Stocks that are going to crash hard, while not affecting the real economy and growth that may take place under Trump.
The worse thing Trump could do to undermine a real Growth economy would be to bailout any of these behemoth Giants that will fail over the next 2 to 4 years. They should have failed in 2009, when the Toxic economy came to light, but they were propped up. Trump needs to let these companies fall and fail. For everyone huge major company fails on Wall street, 10's of thousands of small companies and opportunities are created. It's the natural order of things that has created the American economy we enjoyed.
We didn't have these small companies growing through the ranks replenishing our Employment numbers. Those are also the innovation factories. We had no real innovation.
After 8 years of that Sham what have we got to show for it.

Elon Musk is trying to top himself with a stupid shit stunt everyday. Sending cars to mars, a giant clock in the side of a mountain. What happened to his future City?
2   Heraclitusstudent   2018 Feb 21, 10:38am  

Exactly. Technology causes productivity gains, but in the past wages tracked productivity gains.
So technology is not the cause of the current wage stagnation, though it's always presented as such.
3   NuttBoxer   2018 Feb 21, 11:22am  

Patrick says
Wages Falling Behind US Productivity Gains


You don't understand, minimum wage raises GUARANTEE employees are always fairly compensated. And if that doesn't work, they can move to Stockton, where government have some much money, they're giving it away!
4   bob2356   2018 Feb 21, 11:41am  

Which companies were those? Tenpoundbass says

What Obama did was gave out open ended Checks to Companies and the Execs that already intentionally ran those companies into the ground.


That would be the Obama bailout of banks and auto makers? Oh shit, that was the bush bailout. Never mind.

Pretty funny stuff TPB.
5   anonymous   2018 Feb 21, 12:08pm  

Patrick says
Gosh, I wonder if declining unionisation, globalisation, and immigration


In my opinion, immigration is by far the least of these three in terms of causation. But the first two are huge.

I believe globalization was inevitable, that is if you want to advocate for free and open global capitalism. That is if you want to say that what's good for us is good for the world. It was probably the biggest cause. As for the decimation of unions and pensions, that was an anti-labor movement that started in the seventies, but kicked in overtime under Reagan.

Since Clinton, we've been getting hosed by both sides, but still far worse from the right than the left. Even now. Again, my opinion. But it's easy to back this up with tons of evidence.
6   🎂 Tenpoundbass   2018 Feb 21, 12:08pm  

bob2356 says
Pretty funny stuff TPB.


You laughed at my Obamacare assessment while everyone was sucking his dick for a healthcare plan that had not been realized what I reported it would be a year before.

You are so far behind the curve, we're turning the corner and you're losing sight of it all.
7   mell   2018 Feb 21, 12:09pm  

anon_9f75b says
Patrick says
Gosh, I wonder if declining unionisation, globalisation, and immigration


In my opinion, immigration is by far the least of these three in terms of causation. But the first two are huge.

I believe globalization was inevitable, that is if you want to advocate for free and open global capitalism. That is if you want to say that what's good for us is good for the world. It was probably the biggest cause. As for the decimation of unions and pensions, that was an anti-labor movement that started in the seventies, but kicked in overtime under Reagan.

Since Clinton, we've been getting hosed by both sides, but still far worse from the right than the left. Even now. Again, my opinion. But it's easy to back this up with tons of evidence.


No immigration is the most important factor and the numbers are clear, esp. low-skilled and illegal immigration. Taking away simple worker's jobs and depressing wages. And it has been mostly perpetrated by the left though also by many cucked and/or bought for mainstream Repubs.
8   anonymous   2018 Feb 21, 12:33pm  

mell says
No immigration is the most important factor and the numbers are clear, esp. low-skilled and illegal immigration.


I can't see any logic in this. Say we don't have undocumented workers to pick crops, be your childs nanny, or do the landscaping at your condo. So we all pay more for those things, and some people step up and do those jobs for higher pay.

How does that affect the pay of an entry level job for a college graduate ? Or an ambitous high school graduate for that matter ? I honestly can not begin to see it..

People claiming this are the same people that would liketo see government workers payed less. Not seeing that this is a huge part of the labor market that you are advocating lower pay for. That kind of thinking is what destroys salaries. PRivate sector can pay less if the public sector does. This is simple logic. The labor market is a market.
9   anonymous   2018 Feb 21, 12:36pm  

Gerald Celente;
When people lose everything & have nothing left to lose,they LOSE IT.
10   bob2356   2018 Feb 21, 12:44pm  

Tenpoundbass says
bob2356 says
Pretty funny stuff TPB.


You laughed at my Obamacare assessment while everyone was sucking his dick for a healthcare plan that had not been realized what I reported it would be a year before.

You are so far behind the curve, we're turning the corner and you're losing sight of it all.


What obamacare assessment was that and when? I don't see how I could have laughed since I was always totally opposed to the ACA. Post that one back for me. It's certainly philanthropic that you don't use your amazing predictive analytical skills to build a large fortune rather than just regaling us on patnet with your prescient predictions.

You skipped the question. Which companies?
11   mell   2018 Feb 21, 1:38pm  

anon_30051 says
mell says
No immigration is the most important factor and the numbers are clear, esp. low-skilled and illegal immigration.


I can't see any logic in this. Say we don't have undocumented workers to pick crops, be your childs nanny, or do the landscaping at your condo. So we all pay more for those things, and some people step up and do those jobs for higher pay.

How does that affect the pay of an entry level job for a college graduate ? Or an ambitous high school graduate for that matter ? I honestly can not begin to see it..

People claiming this are the same people that would liketo see government workers payed less. Not seeing that this is a huge part of the labor market that you are advocating lower pay for. That kind of thinking is what destroys salaries. PRivate sector can pay less if the public sector does. This is simple logic. The labor market is a market.


No the logic is totally sound, illegal and unskilled - even some skilled - legal immigration destroys salaries. They should pay more because those who pay for these services have more money. You think a big poor family in the US has a nanny?? They have family members take turns instead. And government workers should be paid less as they most often provide no value for society. Leave military, police and teachers out and you're left with the bureaucrats living off of taxpayer money collecting fat salaries and big pensions. The left has fostered and enabled those people and that's why most of those people are leftists, they marched through the institutions to become the taxpayer dry-sucking globalist shills they are today. The graph in the OP doesn't lie.
12   Heraclitusstudent   2018 Feb 21, 1:59pm  

anon_9f75b says
I believe globalization was inevitable, that is if you want to advocate for free and open global capitalism. That is if you want to say that what's good for us is good for the world. It was probably the biggest cause.


What was not inevitable was the way it was done: i.e. let your companies take their technology and their capital and leave the US for other countries. Just replacing Americans with Chinese workers.

This was not trade between countries, or letting countries specialize on what they good at. It was just replacing workers with cheaper workers.

The result is we built China into a super power in a record time. Great job!
13   Heraclitusstudent   2018 Feb 21, 2:39pm  

Trump late stage stimulus may shake the coconut tree and unlock new found productivity growth.

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