Real median household income rose more in the 20 years after NAFTA than the 20 years before it

[Recursion]

Last edited Sat May 30, 2015, 09:02 AM - Edit history (2)

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

http://www.census.gov/prod/2013pubs/p60-245.pdf

In 1974, the median household income in 2014 dollars was $47,519.

In 1994, the median household income in 2014 dollars was $49,929. So the median household income rose $2410 in those 20 years.

In 2014, the median household income in 2014 dollars was $52,537. So the median household income rose $2618 in those 20 years. (Edit: I had the wrong year's number there.)

The high point of median household income, incidentally, was 2007 -- without the financial collapse, median household income would have risen much more after NAFTA than before.

Median household income rose more after NAFTA than before it. Can we please find a different punching bag?

Edit, because obviously this was unclear: of course I don't think NAFTA caused that rather insignificant increase in wage growth. But the claim that it "lowered US wages" is presented with zero evidence all the time here (it's mostly presented with anecdotes about jobs that went to China, a country we don't have a free trade agreement with).

Edit 2, because I'm still not being clear apparently: wages have been roughly static the whole period. That's the problem, and it has nothing to do with trade agreements.

[cali]

1. median income. what deceptive crap

Translation: the rich got richer. Everyone else got fucked.

[Recursion]

4. No, you're thinking of mean. This is median.

Median means the middle American. Not "add up everybody's money and divide by population".

[cali]

9. bullshit

And here
http://everydaylife.globalpost.com/definition-median-household-income-26999.html

[Recursion]

11. Yes, you should read your link.

Thank you, I was about to link you that very article. You should read it.

Median income is not skewed by the super-rich. Bill Gates is just one more person who is above the median.

Line up the entire United States in order of income. If there are 320 million Americans, pick person number 160 million in that lineup. The super-rich don't skew that, like they do the mean.

[cali]

12. from my link

The median income is the income level in the middle of a list of ranked incomes. For an area that has five households with incomes of $10,000, $35,000, $40,000, $47,000 and $250,000, the median income is $40,000

[Recursion]

13. Right. If the richest one makes a million dollars the median is unchanged

It's a measure of what a normal income in the US is.

[Hoyt]

153. Good luck posting to folks who prove our education system has failed us. I've given up.

I see there are a bunch like that in the 150, or so, posts in this thread right now.

The one above, always starts her/his posts with "Bullshit" or similar invective.

[Jesus Malverde]

162. Invective

JM

[progree]

170. What about average household size declining, and more people living alone?

Last edited Sat May 30, 2015, 01:34 PM - Edit history (1)

People have mentioned that more wives / live-in partners are in the paid labor force now than back in the 1960's etc., and so that unfairly inflates household income statistics -- or in other words, real household median income has been kept from falling only because more wives have joined the paid labor force.

Although, as you point out in #69, from 1994, when NAFTA began, to 2014 the female labor force participation rate has only increased by about 1 percentage point, so no need to go over that again....

But, do you have backing for your [font color = blue]"136. The rate of two earner households in 94 is the same as today. Or within a couple of percent."[/font]. Given that the overall (male & female combined) labor force participation rate has fallen by 3.6 percentage points -- from 66.6% in 1/1994 to 63.0% in 1/2014 http://data.bls.gov/timeseries/LNS11300000 . It looks like we have less earners overall (as a percentage of the adult population) (not surprising with baby boom retirements). ).

Actually, employment to population ratio (ETPR) would be better for the purpose of determining how many earners there are:
1/1994: 62.2%, 1/2014: 58.8%. A decline of 3.8 percentage points
http://data.bls.gov/timeseries/LNS12300000

The male ETPR fell by 5.6 percentage points and the female ETPR fell by 1.2 percentage points from 1/1994 to 1/2014.

Anyway, I keep reading that average household size is declining, and more people are living alone.

Average household size: 1974: 2.97, 1994: 2.67, 2014: 2.54
http://www.statista.com/statistics/183648/average-size-of-households-in-the-us/

Percent of households with one person: 1974: 18%, 1994: 24.5%, 2011: 27.5%
(my rough eyeball readings, slide 6, from https://www.census.gov/newsroom/pdf/cah_slides.pdf

Anyway, don't the above 2 factors skew the median household income downward? Or to put it in other words, had average household size and the percent of one-person households stayed the same as in 1994, wouldn't the median household income be higher?

==========================================================
Labor force participation rate:
. . Overall: LNS11300000 Male: LNS11300001 Female: LNS11300002
Employment To Population Ratio:
. . Overall: LNS12300000 Male: LNS12300001 Female: LNS12300002

[Recursion]

239. I'm not sure what to make of household size. The labor force is in a weird place demographically

A lot of people in their 50s and 60s, a lot of people in the 20s and 30s, and very few people in their 40s (we're just a small cohort to begin with).

I would imagine the younger workers live alone more.

don't the above 2 factors skew the median household income downward?

I would assume so, though that would take crosstabs we don't have.

[HooptieWagon]

229. Same as if the lowest wage earners decline.

So if NAFTA is driving down wages below the mean, your "statistic" is concealing it.

[Recursion]

231. It's true that the median isn'the affected by losses at the bottom

Though in fact all five quintiles have seen (very small) gains in real income over the past 20 and 40 years. Just nothing remotely like at the top,

[hollysmom]

236. does it count those with 0 income?

[Recursion]

243. Literal zero income households are very uncommon, but yes (nt)

[1939]

23. What is the "mode" or "most likely" income?

Income tends to follow the Pareto or log-normal distribution. The mode or peak of the curve is always less than the median.

[Recursion]

26. That's a good question. I'll try Wolfram (nt)

[Recursion]

71. None, apparently. Very few households make *exactly* as much as any other household (nt)

[zeemike]

134. The key word is household.

In 1974 there was typically one wage earner working 40 hours a week...now there are 2 working a total of 80 hours a week...how can that be an income increase?...I see it as a 50% loss.

It's just a case of figures lying.

[Recursion]

136. The rate of two earner households in 94 is the same as today

Or within a couple of percent.

[zeemike]

141. But you compared it to 74.

When you could live on wages of 40 hours a week.

[Recursion]

144. Right. That changed between 1974 and 1994

In 1974, two earner households were uncommon. In 1994 they were standard.

[zeemike]

148. So let's do it again.

And we can put the kids to work, and maybe the grandparents too...the lazy bastards.

[Recursion]

149. Do what again? The change predated NAFTA

NAFTA didn't drive women into the workforce; the wage stagnation since 1970 did, and railing against trade agreements is a convenient way to distract from that.

[zeemike]

150. Well I am old enough to have lived and worked for a living in those times.

And I call bullshit on it.

[Sherman A1]

186. Agreed

[davekriss]

216. Yes but that means we are doing horribly...

...compared to 1974.

1973, btw, I believe the year of the Oil Embargo, U.S. often mentioned as the high-point for the middle class. Life was never so good before nor since. The "middle class" as many think of it is very much a historical aberration.

[Recursion]

225. Yes, but well compared to 1993

The losses to workers of the Reagan years were mostly made up after NAFTA (until the Bush Recession in 2008, but even it could not wipe out all the gains).

[davekriss]

251. Point taken. :)

[1939]

157. If you know the mean and the median

you can solve for the mode algebraically assuming that household income or per capita income are log-normally distibuted whioch is a pretty good bet.

http://en.wikipedia.org/wiki/Log-normal_distribution

Note the formulae for mean, median, and mode of a log-normal curve on the right side of the page. Given that you know the value of the mean and median, you have two equations with two unknowns which are the mean (mu) and standard deviation (sigma) of the normal curve which is the logarithm of the log-normal curve. Solve the two simultaneous equations with two unknowns to calculate mu and sigma. Use the calculated values of mu and sigma to solve the equation for the mode.

[DCBob]

68. Such brilliant thoughtful retorts..

and so wrong.

[Android3.14]

121. Hey cali, as far as the use of median versus mean

Recursion is correct. I'll have to consider his assertion about median income rising faster after NAFTA.

[Enthusiast]

57. The key word in this particular little deception is "household" income.

After NAFTA it was necessary for both a husband and wife to work full time to keep up.

[Recursion]

69. Nice try. That change happened before NAFTA

In 1974 the female labor participation rate was 36% or so. In 1994 it was 62%, and it's 63% today.

The transition to two-income families happened before NAFTA

[Enthusiast]

72. Your own stats say I win.

[Recursion]

74. Nope. Women joined the workforce en masse *before* NAFTA

Which is the opposite of what you claim.

In fact, by your logic wages were going up much faster after NAFTA (this is true, incidentally) because the same period didn't see a huge influx of new workforce participants but the household income growth matched the pre-NAFTA period.

[kenfrequed]

169. Do you have numbers?

Any data that explains the rate and numbers as to the percentage of dual income households and whether these have changed?

Because that does seem to be a real flaw when someone uses numbers based on "households"

http://en.wikipedia.org/wiki/Real_wage#/media/File:US_Real_Wages_1964-2004.gif

I would posit the temporary bump in real wages is more about the tech boom than any benefit of NAFTA. Minus the Tech bubble/boom wages have stagnated.

I don't know why you would want to defend NAFTA anyhow? All it does is allow a race to the bottom for wages and moves work to places with lower environmental standards. How the hell is that progressive?

[progree]

174. Here's real earnings 1964 through April 2015

http://data.bls.gov/timeseries/CES0500000032


I suspect the big zag upward in late 2008 was the impact of last-hired first-fired layoffs that occurred. Anyway, this data series makes 1994 look like a great turning point.

Being an average, they are skewed by the earnings at the top.

Although these are non-supervisory employees -- they are people who work for someone else, and have nobody reporting to them, so they don't include CEOs, executives, managers, or even supervisors. Nor business owners.

I can't find a BLS series for all employees -- that goes before 2006. (There's probably some discontinued data series before that, I haven't looked yet). Anyway, here is all private sector employees from 3/2006 to April 2015

http://data.bls.gov/timeseries/CES0500000013

[Recursion]

238. I only noticed today that after 1994, AHETPI goes up during recessions, but before 1994 it went down

That could mean a lot of things. My guess is that after 1994, recessions were used to shed low-paying jobs, and before 1994 they were used to shed high-paying jobs.

[pipoman]

92. now take into account the disparity of wages in 74 and today

The numbers are not helpful and the assertion is deceptive..false...actually not even a good attempt....

[treestar]

101. That was happening long before NAFTA

and women wanted independence - that's why they went out and worked. That increased the labor pool. So it's amazing the median wage still went up. Remember Reagan lecturing that working women were causing unemployment and lower wages.

[pampango]

156. The labor force participation rate did increase under Clinton, as did wages and employment.

Labor force participation:

Manufacturing wages:

After NAFTA it was necessary for both a husband and wife to work full time to keep up.

That would mean that wages fell after NAFTA so that "both a husband and wife to work full time to keep up". It would mean that the labor force participation rate would have increased while wages decreased. That is not what happened.

Actually wages had been falling for 15 years before NAFTA AND the labor force participation rate was increasing at the same time. Those 15 years before NAFTA better meet the scenario you describe of "both a husband and wife to work full time to keep up".

As wages and available jobs increased under Clinton, the labor force participation rate did continue to increase. At least the wages the "husband and wife" were earning were increasing too under Clinton.

Labor force participation did reverse the upward trend and begin to fall under Bush. While wages fell or were flat under Bush, so did the labor force participation rate.

[DCBob]

181. That was a different dynamic and would have happened with or without NAFTA.

Woman wanted to have career and not just stay at home. Then eventually a two income family became the norm if you wanted to keep up with the Jones.

[progree]

185. The rate of two earner households didn't increase after NAFTA...

Recursion says in #136 that "The rate of two earner households in 94 is the same as today. Or within a couple of percent."

I've asked him in #170 what the basis of that is.

Actually, the female Employment to population ratio fell by 1.2 percentage points from 1/1994 to 1/2014 (and the male ETPR fell by 5.6 percentage points)

Employment To Population Ratio:
. . Overall: LNS12300000 . . Male: LNS12300001 . . Female: LNS12300002

So I'm not seeing any increase in two earner households after NAFTA. That dynamic occurred in the 20 years before NAFTA. And we've seen a big increase in one-person-living-alone households (see #170).

Now it may be true that many more wish they could find jobs!

[DanTex]

81. Actually, median income is not deceptive. The rich getting richer doesn't affect the median.

Everyone else getting fucked, if that had happened, would have shown up in the median. The deceptive number you're thinking of is "mean income".

[yeoman6987]

203. Median means we all make more

There will always be a 50 percent above the mean and 50 percent below the mean. Impossible not to. There will always be the person in last place.

[cali]

2. your op deserves hundreds of unrecs

As a plug for the tpp, this is not only lame, but terribly intellectually dishonest

[Recursion]

8. The consistent and high-volume untruths about what actually happened after NAFTA deserve the unrecs

Seriously. Find a different punching bag. NAFTA didn't do what you claimed.

[canoeist52]

45. Our mileage was different.

My husband and 500 other employees lost their high-paying jobs with earned benefits and the workers, many who were close to retirement, who actually found new jobs, had to start over as temps at lesser pay and no benefits.

For some of us this isn't and wasn't a game.

[Recursion]

49. Were the jobs lost to Mexico, or to Canada? (nt)

[Enthusiast]

58. Me too. Similar story. "For some of us this isn't and wasn't a game."

And I am growing weary of the propaganda.

[Art_from_Ark]

159. I can think of at least 5 production facilities in my hometown area that moved to Mexico

after NAFTA. No doubt there were/are more.

[pampango]

191. And yet manufacturing employment and wages increased after NAFTA - until Bush came along.

If those 5 production facilities moved to Mexico after NAFTA and before BUSH, there were even more that moved here or expanded here or began production here between 1994 and 2000 because manufacturing employment rose during those years.

[Art_from_Ark]

210. How much of that "manufacturing employment" included burger flipping?

http://www.nytimes.com/2004/02/20/business/in-the-new-economics-fast-food-factories.html

Pffft

[pampango]

211. Classifying fast food jobs as 'manufacturing' did come up under Bush (2004) long after Clinton.

Pretty stupid idea wasn't it?

[Art_from_Ark]

212. I wouldn't say "stupid"

More like "intentionally deceptive"

[Recursion]

226. None of it and I've called you out on this before

The guy heating burgers at McDonald's does not count as a manufacturing job and it's dishonest to keep saying that.

The guy in a factory manufacturing the pink slime the Big Mac patties are made of is counted as manufacturing, because that's what he's doing.

[treestar]

106. The problem is that this punching bag is needed

as it is the basis of the hysterical TPP reaction. It's weird they try to put it out there this way to people who lived through the 90s. Yeah I don't recall any big economic disasters, and I would have had they occurred.

[tenderfoot]

167. +100

Go cali!

[GreatGazoo]

3. The average HH median income includes the Romneys and the Cheneys.

Try looking at the real minimum wage instead (or anything that excludes the wealth extractor class).

[Recursion]

6. No, you are also thinking of mean. This is median.

Median means line up the entire population in order of wealth and pick the middle person. How much money Bill Gates makes doesn't skew that; he's just another person above the median

I don't see how the minimum wage is relevant; about 1% of workers make the minimum wage..

[merrily]

139. Bill Gates and Warren Buffet, etc. don't skew where the middle is?

[Recursion]

142. Not when you're using the median

When you calculate the median Bill Gates might as well make $55,000. It would have the same impact.

[DCBob]

182. Amazing how many seemingly intelligent people don't understand that simple basic math concept.

I admire your patience and persistence.

[1StrongBlackMan]

232. Yes ... read the above ...

I was like

And these same people (lacking the basic of numerical literacy) are primary pushers of what is economically wrong.

[cali]

5. do tell where all that income went. waiting with bated breath

[Recursion]

10. Consumer spending and houses, mostly

Consumer spending is the largest sector of our economy.

[HughBeaumont]

27. And depriving consumers of spending via killing careers and wage progress . . ..

. . . seems like the best way to flourish a consumer spending based economy, no?

http://www.motherjones.com/politics/2011/06/speedup-americans-working-harder-charts

[Android3.14]

131. Cell phones, televisions, Internet, computers, gasoline, perhaps?

Even so, according to California statistics, one of the most expensive places to live, the cost of all goods is what is going up.

Though the cost of clothing and durable goods is relatively static.

[Recursion]

138. Most of that is health care and education

That's what drives that "all goods and services" up so much.

[pampango]

7. FYI, if something is good, NAFTA had nothing to do with it. If it is bad, it is all NAFTA's fault.

The 20 years before NAFTA were terrible for jobs and income. The 20 years after have been better.

One can only imagine how much better these last 20 years would have been without 8 years with the regressive tax, regulatory and 'trickle-down' policies of Bush.

[bread_and_roses]

14. Tell it to the Rust Belt

Tell them how much better they have it.

Your shilling for the TPP has become hilarious.

[Recursion]

15. Depends on the city. Some rust belt cities are better off than in 1974 and some are worse

Milwaukee did pretty badly; they have higher than average poverty and higher than average inequality. Baltimore did pretty well; they have lower than average poverty and lower than average inequality. Pittsburgh pretty much tracked the nation as a whole.

[HughBeaumont]

32. Some?

If by "some" you mean "five" as opposed to the dozens that haven't recovered.

[Recursion]

83. If your claim is that every city in yellow is worse off now than in 1994, that's clearly false

But I doubt you are making that claim, so maybe you can clarify?

[jopacaco]

91. Pittsburgh and Maine

Pittsburgh fell apart earlier than most US cities when steel left in the 70's. They rebounded with healthcare. The former US Steel building is now UPMC, University of Pittsburgh Mediical Center. So they shouldn't be included in this NAFTA debate. Now, Maine, where I currently live, was devastated by NAFTA when the paper, lumber, and shoe industries left shortly after the agreement. This state is hurting as a direct result.

[Recursion]

97. Maine has average income and better than average inequality

Maine is one of the 10 least unequal states by income, and #26 by median income.

[Android3.14]

127. Median income in Maine

$48,453, so also with the median income, the increase occurred as Recursion points out.
http://quickfacts.census.gov/qfd/states/23000.html
As a TPP critic, I find this quite interesting.
I may be changing my opinion.

[bread_and_roses]

260. The city is one thing - travel through the old "Mill Towns" down the Ohio

That's where I grew up - in a little "Mill Town" along the Ohio. Those were solid working class towns. The steel mills supported them. THEY have never recovered. No fancy insurance companies want to locate in them, I assure you. Young people who could left. For those who remained, there were - and are - no jobs. The towns are poor and crumbling.

Yep. Hurrah for NAFTA! Bring on the even far, far worse TPP! Corporate rule at its best! Maybe they'll give us company barracks to live in! And chits so we can buy our canned beans at the company store!

Our unlabeled GMO canned beans btw .... since it would impede profits to let people know what their food actually was, and can't have that!

[gollygee]

125. The industrial rust belt cities I'm familiar with

are worse.

It doesn't feel like a fair trade to me, for my city to be so badly hurt in exchange for other cities to do about as well and a few people on one coast or the other to do very well.

[Recursion]

126. Economies shift. Kansas City used to be the center

of an agricultural powerhouse. It's still an important ag city but ag doesn't employ people like it used to. Manufacturing is going the same way: higher output (the US produces more manufactured goods now than ever before) from fewer employees.

And in another fifty years the same thing will happen to the cities that are doing well now.

[gollygee]

128. So we've moved from "the rust belt is fine" to "that's just the way things go."

I'm not supporting anything that's going to hurt the area where I live.

[bhikkhu]

270. Before labor-intensive manufacturing we had labor-intensive agriculture

...and that went away.



Nobody blames that on imports or trade pacts, and its well known and accepted that advances in mechanization replaced all those jobs.

I think the one thing that many people who are resolutely against trade pacts miss is that the same thing happened in manufacturing, only a little later in time. The main driver wasn't cheap overseas labor, it was technology. The US produces more food than it ever before, with less people. The US also manufactures more goods than ever before, also using less people.

It is a less compelling realization, as its hard to get mad about something that can't really be blamed on anyone.

[Enthusiast]

59. It's hilarious but it isn't funny.

[Orangepeel]

86. Were those job losses to Mexico or to China?

I'm thinking that the loss in U.S. Manufacturing jobs has a lot more to do with increased use of Chinese prison labor than it does with anything else.

Im not saying that means NAFTA was *good*. But as far as I know, it didn't have anything to do with so much manufacturing moving to China, and I'm under the impression that most of it went there.

[gollygee]

109. in my rust belt town

It was because our largest employer, GM, moved our plant to Mexico.

[Art_from_Ark]

175. In just my hometown area alone

at least 5 factories moved to Mexico. And some factories that couldn't move (like poultry processing plants) started bringing in workers from Mexico.

[MattSh]

16. Check your math...

Sorry to tell you this, but 51,939 - 49,929 is not 2510, it's 2010.

Sort of blows your theory out of the water, doesn't it?

And even if the claim of $2510 was correct (which it is not), let's look at the percentages.

1974 - 1994 = a rise of 1.0507%
1994 - 2014 = a rise of 1.0502%

so again, your theory does not hold water.

[Recursion]

17. Actually it's neither

51939 was 2013 (I pasted the wrong cell). 2014 was 52527, for 2618 in income gains since 1994.

[MattSh]

20. Using the revised numbers...

1974 - 1994 = a rise of 1.0507%
1994 - 2014 = a rise of 1.0520%

For statistical purposes, I'd consider that negligible.

[Recursion]

21. I totally agree it's noise (nt)

[Stevepol]

25. In other words,

the growth after NAFTA was only 83% what it was BEFORE, a drop of 17%.

Plus, you have to keep in mind the number of jobs the average household is now working just trying to hold on. A fall of 17% is a really big deal for a single household already on overdrive, and it's an even bigger deal for the economy as a whole. Just a small percentage in lost revenue means, "Let's close up shop here and move to Thailand or we won't be able to compete."

[BainsBane]

18. Correlation is not cause

and American families have only keep apace since 74 because they have gone from one to two income earners.

[Recursion]

22. The big jump in women working was between 74 and 94

Female labor force participation is pretty much the same now as it was in 1994

[BainsBane]

28. Yes, I edited it after I realized I had the years wrong

but I don't think it's at all sound to argue that NAFTA raised wages. Wages have largely been static. I think NAFTA is a symptom more than a cause of the kind of change in the economy that has led to a flattening of the standard of living, lowering for some. Your numbers essentially show a flat line. But even if one were to argue that small amount constituted an increase, you don't have evidence that NAFTA was responsible for it.

[Recursion]

42. I agree it's not sound to argue that NAFTA raised wages, and I don't

However, it's even less sound to argue that NAFTA lowered wages, which I'm arguing against.

[pipoman]

96. That is when the "bump" occurred..the second bump

Was between 94 and 14 when income equality began actually leveling off. Are all of the income issues in the US tied to NAFTA? No. Only a fool would try to argue that incomes are unaffected by NAFTA, and a liar would argue they have improved since NAFTA.

[Recursion]

108. No, a liar would say incomes are down since NAFTA

That would be a lie, because it's untrue. Incomes are up in all quintiles in real dollars since 1994.

[truebluegreen]

154. Up 1.05% Yea!

Something to post in a forum about!

[1939]

29. Median income and employment went up

During the period that Newt Gingrich was Speaker of the House. We need to have Newt return as speaker to get out of our current economic malaise! Post hoc ergo propter hoc (or something like that).

[Erich Bloodaxe BSN]

19. 11 bucks a month gain vs 10 bucks a month benefit?

Are you sure that buck had anything to do with NAFTA? You already acknowledge that other factors influence things, since you point to a financial collapse.

[Recursion]

24. I doubt any of it had to do with NAFTA

Trade with Mexico is about 3% of our GDP, and I doubt we lost very many jobs at all to Canada.

[DanTex]

30. Which means nothing, because the 20 years before NAFTA were the Reagan years and the

late 70s stagflation, and the 20 years after NAFTA included a decade of tech boom. None of which had anything to do with NAFTA.

No serious economist would make this argument. Why are you making it?

[Recursion]

39. What "argument" do you see me making?

I'm not making an argument.

[DanTex]

43. You seem to be implying that NAFTA either helped or didn't hurt the middle or working class.

At the very least, you're making an argument that people should stop criticizing NAFTA, and the reason they should is because of the median income data.

I mean, maybe this OP is just some postmodernist piece of art, with a bunch of numbers that don't mean anything, but that's not the impression I got.

[Recursion]

47. I'm presenting a piece of evidence that counters a common unsupported argument here

namely, that NAFTA hurt US wages.

So, I suppose in that sense it's an "argument", but I think of it more as a refutation. It's difficult to argue that NAFTA hurt US wages when their increase over the 20 years before and after are essentially equal.

[DanTex]

56. OK, then you are making the argument I thought you were making.

And my response stands. This piece of evidence says little if anything about the effects of NAFTA.

The question, with regard to wages, is whether they would have been higher or lower now without NAFTA. Changes in median wages caused by events coincidental to NAFTA aren't evidence of anything.

Now, if you had instead said in the OP, figuring out the effects of NAFTA is difficult, I would be with you. Maybe you could have, for example looked at the trade deficit with NAFTA countries, and a bunch of other numbers, to show just how difficult it is to isolate the events of NAFTA from everything else that happened.

But that's not what you said. You said, look, median incomes went up, therefore people should stop using NAFTA as a punching bag. This is not a good argument. Or a good "refutation" or whatever else you want to call it.

[Android3.14]

140. Curious. Here are stats about median wages

[DiverDave]

218. Tell that the workers that lost their jobs

in the factory's I moved to mexico. I dare you.

[Recursion]

228. I personally don't know any, just people who lost jobs to China and Bangladesh

And if you lost your job to China you didn't get any retraining money like you did with Mexico.

[DiverDave]

257. Great reading

comprehension... I drive a truck. I'm still driving a truck, 22 years later. no outsourcing here.
I suggest you read my post again.

[Recursion]

258. I read it. I responded.

You said go tell it to the workers whose factories you trucked to Mexico

I said "I don't know any of them. I only know workers whose jobs were moved to China."

Seems like a pretty clear reply to what you said.

[DiverDave]

267. Seriously?

"And if you lost your job to China"

Reading. Comprehension.

Yeah, you understood, all right.
Lets get away from this, people lost good paying jobs, not a few, a lot.
nafta hurt people and to say it didn't is a lie. period.
last reply to you.

[DanTex]

61. Just to add, saying "more" in the title is technically true, but very misleading.

The correct thing to say is that the growth of median income is statistically indistinguishable in the 20 years before and after NAFTA.

And another thing, you seem to at least be aware of other factors affecting macroeconomic statistics when you point out that the financial crisis, which was unrelated to NAFTA, lowered median income growth rate post-NAFTA. But then you don't mention other factors that point in the opposite direction, such as the 70s stagflation, the engineered recession that ended it, Reaganomics, and the tech boom. How can anyone believe you are even trying to make an honest argument/"refutation"?

[Recursion]

73. Yes, it's noise, but larger is larger, and I guaran-damn-tee you that if the numbers were reversed

this would be trumpeted around this site as a sign that NAFTA hurt wage growth.

As it is people simply claim it without any sort of evidence.

[DanTex]

78. Yes, it would. In which case I would be responding to those people that there's

way too much noise in these aggregate economic numbers to draw any conclusions one way or the other. But since you're doing it, then I'm responding this way to you.

[Sanity Claws]

31. Back in 1974 households usually had one

Earner. Now all adults in a household must work in order to keep their heads above water.

[HughBeaumont]

37. Not to mention we now work longer hours than our 1970s counterparts.

PROGRESS

[KansDem]

33. $47,519 in 1974 would be $142,846.16 in 1994.

http://data.bls.gov/cgi-bin/cpicalc.pl

I'm not an economist, but it appears purchasing power has dropped significantly during those 20 years.

[Recursion]

40. That's what "real" means.

Those are all 2014 dollars

[KansDem]

75. Given your rationale, then...

$49,929 in 1994 would be worth $79,757.03 in 2014. Therefore, it appears the increase of $2,618 during that 20-year time frame is rather dismal considering someone would have to be making $29,828 more just to have kept up with inflation.

[Recursion]

77. Sigh. No. The point of using real dollars is the inflation is already calculated in

The actual nominal mean household income in 1994 was something like $28,000, but this table adjusts those 1994 dollars into 2014 dollars.

[Exilednight]

34. You missed this part....

Median inflation-adjusted ("real&quot household income generally increases and decreases with the business cycle, declining in each year during the periods 1979 through 1983, 1990 through 1993, 2000 through 2004 and 2008 through 2012, while rising in each of the intervening years.[17] Extreme poverty in the United States, meaning households living on less than $2 per day before government benefits, more than doubled from 636,000 to 1.46 million households (including 2.8 million children) between 1996 and 2011.[18]

[Recursion]

41. Why would you ignore government benefits?

Yes, if we didn't have any government spending, poverty would be much worse today than it was in 1994. But we do have government spending, and it does a great deal to lift people out of extreme poverty.

[Exilednight]

90. I'm not ignoring them. It's the fact that extreme poverty doubled shortly after NAFTA.

[Recursion]

120. Which is why social spending is so important in a global economy

and why we both fight tooth and nail against the GOP's attempts to cut it.

If we had the sort of social safety net that Europe does, we'd be doing much better (remember, European countries trade a lot more than we do).

[jtuck004]

35. Went up, yet millions less are working, millions more in poverty on both sides of the border.

Here.

And this just one of many stories...all tell us that things are getting worse for a large number of people not among the thieving rentiers and bank$ter/donors...

http://www.alternet.org/economy/latest-jobs-and-housing-reports-show-americans-are-struggling-more-ever

"“Consider women, whose unemployment rate stood at 8.1 percent, up almost 2 percentage points from when Mr. Obama took office… Today it is at 5.7 percent, a seemingly shining number for Democrats…

“But while the number of women out of work appears to be much improved, the number of women employed compared with the total female population 55.2 percent, actually worse than it was in October 2010. Progress, in fact, is a mirage, the product of what ecomomists call the disappearing work force: people giving up and dropping out.”

There are other discouraging statistics reflecting the true state of the working and middle-class America in the BLS report. Nearly 6.7 million people said they had multiple jobs in 2010; now that figure is over 7 million. In October 2010, more than 2.57 million people said they could only find part-time work. This April, that figure was 2.62 million. BLS also reported that workers are not as afraid of being fired, as they were during the recession, but are more risk-averse to leaving a job voluntarily to try something else.

Wage stagnation frames this same story another way. When Obama took office in 2009, the average hourly wage was $18.46 an hour. This April, it was $24.31—but, after adjusting that figure for inflation, it’s equal to $20.40 in 2009’s dollars. Compare that to pre-tax income for the top 1 percent, which grew 31 percent in that same time period—from 2009 to this past April.
...

[HughBeaumont]

36. I don't know what's more pathetic . . . .

. . .. that you continue to shill for progress-destroying continental labor shifts or that you consider such a minuscule percentage increase in household income (while the wealthy have sucked up all productivity and income gains in that same time period) "progress".

I don't know . . . maybe you ought to experience the pain of having laid-off Masters degree holders with years of experience crying on your shoulders after they've just been shitcanned and their lives upended for no good reason except their overbosses took risks and failed. But who always, always ALWAYS pays the price? THE WORKER, that's who. COME on.

[Recursion]

44. Calm down and read my post

Wage progress before and after NAFTA are essentially indistinguishable after the 2008 crash (that wiped out a whole lot of middle income gains).

The stagnation of wages long predates free trade agreements, and focusing on FTAs means not focusing on what's actually causing wage stagnation.

[Joe Chi Minh]

50. Well? What have you got to say for yourself, Recursion?

Silence came the stern reply.

[Recursion]

52. It's especially funny that you replied after I did (nt)

[Pooka Fey]

184. +1

[raccoon]

187. Great post, the one you linked to. nt

[Katashi_itto]

38. What a total pile of BS

shilling must be profitble

[Major Nikon]

133. Results...

On Sat May 30, 2015, 09:18 AM an alert was sent on the following post:

What a total pile of BS
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=6751017

REASON FOR ALERT

This post is disruptive, hurtful, rude, insensitive, over-the-top, or otherwise inappropriate.

ALERTER'S COMMENTS

calling a long time member a paid shill.

You served on a randomly-selected Jury of DU members which reviewed this post. The review was completed at Sat May 30, 2015, 09:24 AM, and the Jury voted 2-5 to LEAVE IT.

Juror #1 voted to HIDE IT
Explanation: Instead of name calling, poster should have presented facts as to why the OP might be bs.
Juror #2 voted to LEAVE IT ALONE
Explanation: No explanation given
Juror #3 voted to HIDE IT
Explanation: i am pretty liberal when it comes to letting posts stand but that post is just not nice.
Juror #4 voted to LEAVE IT ALONE
Explanation: They didn't mention being paid.
Juror #5 voted to LEAVE IT ALONE
Explanation: No explanation given
Juror #6 voted to LEAVE IT ALONE
Explanation: No explanation given
Juror #7 voted to LEAVE IT ALONE
Explanation: Not a big fan of people who throw around the banal shill thing, but not gonna vote to hide it. I see it as nothing more than lame-ass nonsense thrown around by people who think they are clever, but ain't. Seems to be quite popular around here for some reason.

[Taitertots]

46. You can tell NAFTA was responsible because nothing else happened during those 40 years.

No need to develop a coherent model for the economy, determine how NAFTA would impact that model, and use rigorous statistical analysis to determine if the outcome matches our expectations.

[Recursion]

51. Thank you!

NAFTA is a rather minor part of what's happened to the US economy in that time period, and I'd like people to find a different boogey monster.

[Exilednight]

93. Nothing else except the .com bubble, followed by the housing bubble. n/t

[Recursion]

107. You want to talk about destroying jobs? The Internet killed the entire travel agent industry

Should we repeal it?

[Exilednight]

112. nice attempt at trying to change the subject. n/t

[randome]

48. I don't understand the controversy on this.

The World Wide Web transformed the world during this same time. Because of this, I would think the most objective possible view is that society changed so much because of other factors that NAFTA's effect is, at best, muddled and thus a non-issue.
[hr][font color="blue"][center]Stop looking for heroes. BE one.[/center][/font][hr]

[Recursion]

66. Symbols make bad policy and NAFTA has become a symbol

I'm actually all for de-listing China and India from MFN status, for instance. I just want people here to address actual trade agreements and what their actual effects were rather than shoving everything they don't like under the rubric of "NAFTA".

[randome]

84. I hear you.

[hr][font color="blue"][center]Stop looking for heroes. BE one.[/center][/font][hr]

[hobbit709]

53. And those dollars buy half as much now.

[Recursion]

64. No, that's what "real" means. Those are all 2014 dollars (nt)

[hobbit709]

67. There's nothing "real" about a dollar that buys half of what it used too.

[Recursion]

70. No, you're missing the point. The actual dollar wages in 1994 and 1974 were much lower than listed

But, as you say, the dollars bought more back then, so they are adjusted up into "real" or "inflation-adjusted" dollars.

[Taitertots]

65. No. it's the real value

[Half-Century Man]

54. How valid a point is this?

As you present your argument around median income, I have a hard time seeing it as anything more than a diversion from the real issue of class warfare conducted from above.
There are a lot of variables in the question.

During that same forty year period, how much has the population changed?
Percentage wise, how many in each twenty year period were working?
How many dependent on those working?
Of the sample group from which the median was taken, how many were in each group?

"Median Household"; how many members of a family and how many jobs each, does it take to reach this median?
How many hours of work were required to reach this median?

This overall roughly 10% increase in median income verses 200% increase in productivity in the last forty years is justified how?
http://www.huffingtonpost.com/2013/06/10/minimum-wage-productivity_n_3416866.html
Compared to the 10% increase in median income, how much has the cost of goods and services increased?

With or without NAFTA, we have been screwed wage wise.


NAFTA cost jobs; manufacturing jobs, transportation jobs, support jobs, etc.
It caused more harm than good for the average American.

[Recursion]

62. If the numbers were reversed, do you think people would post "NAFTA slowed US wage growth" and use

that table to prove it?

NAFTA cost jobs; manufacturing jobs, transportation jobs, support jobs, etc.
It caused more harm than good for the average American.

Got any evidence for that claim?

[Half-Century Man]

94. Were the results of NAFTA to be reversed

If it had done more good than harm; wouldn't you think the Democratic party and particularly the Clintons be screaming it from the rooftops? Would that not have been a cornerstone in HRC's bid for the 2008 election cycle?
I would never have shut up about it.

As for proof, I have noting more then anecdotal proof.
I am, or was, an UAW journeyman electrician specializing in robotics. I built multiple automated cells integrating several machine tool centers. I did it for over thirty years. I worked in the parts manufacturing side of the automotive industry.
NAFTA sent a great majority of the parts manufacturing industry to Mexico, until Mexican workers unionized and demanded higher wages. Those new state of the art plants were shut down and the jobs shipped to the Honduras.
With thirty years of experience, being multilingual, having a college degree, a veteran, and even graced by white privilege; I couldn't find a job. During said job search and pursuit of my degree(training made possible be the outsourcing of employment) , I met many skilled tradesmen from the 17 manufacturing plants closed down (2005-2010) in the south central Wisconsin/Northern central Illinois area. In every case of plant closure, operations moved overseas or a multinational corporation bought and closed a smaller plant to reduce competition.


Do you have any evidence to refute my claim? A chart comparing the plants closed verses the plant opened by NAFTA.

[DanTex]

155. Don't be offended by the lack of response. This is the usual spot where Recursion drops out of

NAFTA/free trade arguments.

[Recursion]

160. You can't respond to anecdote

I'm sure stuff like that happened. Before and after NAFTA. I can only point to the aggregate effects.

[DanTex]

164. Of course you can. For example, you could acknowledge that factories have in fact closed due to

moving to cheaper countries, and that for the most part those people who lost jobs didn't suddenly become tech entrepreneurs, instead they ended up earning less money afterwards. And as you know, this isn't just anecdote, there are actual studies, looking at the total number of jobs displaced in this way.

http://www.epi.org/publication/heading_south_u-s-mexico_trade_and_job_displacement_after_nafta1/

What you are doing is not "pointing at aggregate effects." You are intentionally looking at numbers that you know are too noisy and affected by too many other factors to be of use in determining the specific effects of NAFTA. In essence, your argument is that you personally have done a truly awful job of trying to discern the effects of NAFTA from the data, and you (predictably) couldn't find any, therefore there aren't any.

[Joe Chi Minh]

172. 'Of course you can. For example, you could acknowledge that factories have in fact

closed due to moving to cheaper countries, and that for the most part those people who lost jobs didn't suddenly become tech entrepreneurs, instead they ended up earning less money afterwards. And as you know, this isn't just anecdote, there are actual studies, looking at the total number of jobs displaced in this way.'

Hey! Steady on, DanTex. That would be kinda 'rocket science' to Recursion. It's not fair is it, Rec?

[Exilednight]

102. The trade deficit is a good indicator. I noticed you focused on ONE metric

That has absolutely nothing to do with trade.

[Recursion]

104. Got any evidence that a trade deficit lowers income?

I used household income because that's what matters to the economy at the end of the day: how much money do people have to spend on stuff they need and want?

[Exilednight]

110. I can see you know little about economics. Trade drives an economy

In the long run of things. Since NAFTA, twice as many families fell into extreme poverty while the top 1% made even more.

Focus on income inequality and you would have a better metric.

[Recursion]

111. So, it should be very easy for you to provide some evidence that trade deficits lower incomes

I'll be waiting.

[Exilednight]

114. Yes, I can prove it. Enroll in my class at GWU and You can learn. n/t

[Recursion]

116. No, just a simple few pieces of evidence will do

Remember, economics isn't a science because it involves math, but because you guys are allegedly supposed to look at evidence occasionally.

[Exilednight]

124. There's no such thing as simple and few. NAFTA by itself takes up 3 weeks of the course. I have at

Least sixty handouts and two text books just to cover it.

Trade deficits, income inequality and economic bubbles not related to trade all played a huge role in the 90s and early 2000s.

[BainsBane]

123. So he has to pay thousands of dollars

to benefit from your great knowledge. How egalitarian of you. Viva capital!

[Exilednight]

129. It's not a simple subject. People a lot smarter than me have studied NAFTA for decades and have

accumulated mountains of research.

The bottom line on NAFTA: net effect for the U.S. was a negative, but it did help lift millions in Mexico and Canada out of poverty.

The overall net effect was a positive when compared to where EVERYONE started out, but that success came at a cost to the United States when it came to trade deficits and income inequality.

The same can be said for environmental protections. Mexico raised some of theirs, but the U.S. and Canada lowered others.

The same was done with big Ag.

[BainsBane]

132. I opposed NAFTA, and I oppose TPP

I just thought your remark to sign up for your class sort of ironic.

I don't have a background in economics, but I do have academic training in history. My sense is that these trade agreements reflect and facilitate economic changes already underway rather than cause them. Deindustrialization proceeded NAFA by at least 15 years, and the shifting of consumer markets to Asia is well under way and will continue without or without TPP.

[Exilednight]

146. You're right about facilitating change, at least to some extent. Jobs were

Already beginning to shift to areas with lower wages and regulations.

NAFTA was sold as a way to level the playing field, what they didn't tell us was that in that leveling some would rise and others would sink. We were on the sinking end.

[Pakid]

55. I must know a lot of poor people

Because no one that I know come's even close to making that kind of money.

[Recursion]

60. That's household income, so it includes both people in a married couple (nt)

[hobbit709]

63. You and me both. Maybe 20% of the people I know come close to that number.

In the last ten years our household has dropped a total of 60% and living expenses have effectively doubled.

[tammywammy]

227. I only know a few people that make below median

Some entry level people at work would and a few friends do, but the vast majority of people I know make above median, myself included.

[Spider Jerusalem]

76. Two things: 1) Correlation is not causation. 2) "median" is skewed by the growth at the top. (n/t)

[Recursion]

80. Two things: 1) I'm not arguing causation. 2) You're thinking of "mean". Median specifically *isn't*

skewed by growth at the top.

If a street has three families, and their income is $25,000, $50,000, and $100,000, the mean income is $58,333 and the median income is $50,000.

If the richest family is suddenly making $1,000,000, the mean jumps to $385,333 but the median stays at $50,000. That's why the median is a more useful metric for income distributions, because the mean gets skewed by the Bill Gateses of the world.

Secondly, where did I say NAFTA caused anything? The two growth rates are essentially indistinguishable.

[Spider Jerusalem]

87. You heavily implied it

and you're wrong anyway, have you never heard of inflation? Inflation-adjusted household income in 1974? Equivalent to $47,014. In 1994? Equivalent to $49,429. In 2014? $51,939. In constant dollar terms real inflation-adjusted income has increased since NAFTA by a negligible amount compared to the 20 years before NAFTA (0.1%). See for instance this:

?w=610&h=457

If you're not saying that NAFTA caused anything (or didn't) then your entire post is kind of meaningless.

[Recursion]

88. That's what "real dollars" means; inflation is factored in

The actual nominal incomes in 1994 and 1974 were much lower; they've been adjusted up to match the purchasing power of a 2014 dollar.

[rpannier]

79. Gonna rec it for conversation

I think it is missing certain things
like numbers of households where there are two or more wage earners from 74-94 and 95-2014
the number of people doing 2 or more jobs
the rise and fall of poverty rates within the US during both 20 year spans
etc

[Recursion]

82. The two wage earner rate shot up between 74 and 94, it's slightly higher now than in 94

The two or more jobs question is a good one, and I don't know.

The poverty rate I can get, but it varies based on whether you count government benefits (in which case it's better now than in 1994) or you don't (in which case it's worse now).

[rpannier]

85. no need to go hunting. i believe you

As I said, for conversation purposes, I consider it a rec worthy post
I don't always agree with everything that's posted, but some things should have a wide range of discussion (economic, environmental) so that there is as much information available

I can (and will) look up the information for myself
Likely would not have, had you not posted this

As I said, It's rec worthy

[ucrdem]

89. I believe you're onto something.

Props for exposing yet another vast right wing conspiracy theory because I'm more and more certain that's what the NAFTA meme has been since even before Perot made his sucking noise. The Clintons were all about growing the economy and I don't think Bill was either a) bamboozled, b) bought off, or c) wrong about NAFTA. It did what he said it would do, along with the rest of the Clinton program, and as soon as the Clintons left the building the whole thing crashed. But it wasn't because of NAFTA.

[Recursion]

103. I've hesitated to say it's a RW con job, but I'm leaning that way

And, yeah, hearing Perot's arguments on a "liberal" board always worries me.

[roomtomove]

95. Not a true barometer, and the implied cause and effect is a fallacy

Of course the lower half of the "median" in this analysis is ignored. That includes the unemployed and the underemployed. So income rose a whopping $2618 in 20 years??? WOW! Factor in inflation and it DECREASED.

[Recursion]

99. "Real dollars" means inflation was already factored in

So, no.

The lower half and the upper half are both ignored by the median; it is the wage that half of Americans earn more than and half earn less than. The distribution is not Gaussian, but it is lumped in the middle.

I didn't imply any causation whatsoever, and I don't think NAFTA really had much to do with it at all.

[Joe Chi Minh]

173. '...and I don't think NAFTA really had much to do with it at all.'

Oh well, that settles it. Case closed.

[treestar]

98. Having lived through the 90s

It was quite obvious that we survived NAFTA. The crash in 07 had to do with Bush's policies. The presumption that NAFTA was some kind of disaster has always seemed crazy to me.

[Fumesucker]

100. A lot of corporate representatives have been part of the TPP negotiations..

Who has been representing labor and environmental issues in these negotiations?

[Recursion]

105. Well, no, they haven't

The USTR's mission includes only officers of the united states government.

The USTR has consulted with industry, labor, and environmental groups on specific points of negotiation. He probably consulted the industry groups more than I would like and the labor groups less. But Monsanto doesn't have a representative at the negotiating table.

As a side note, I'm on the fence on the TPP because it's sounding like it's too much of a giveaway to US agriculture and software/entertainment, but I'll wait to see it before I decide which side of the fence to jump down on.

[Fumesucker]

130. Why don't we wait and see who they go to work for in a few weeks/months/years?

Of course by then it will be too late.

The very highest return investment a company can make is in a government official.

[smiley]

113. If you ask me...

a 2000 dollar increase doesn't seem like much for a 20 year period. And, if the difference is only $208 from the 20 year period before and after, then I'd have to say NAFTA did little to help the middle class, especially when you consider the increase in corporate profits and the loss of manufacturing jobs. (Maybe not to China, but they had to go somewhere)

[Recursion]

117. Wages have been roughly stagnant the whole period

That's a huge problem, and it has nothing to do with free trade blocs.

[JEB]

161. For a working class person there is no reason

to support these trade agreements. Designed to enhance corporations and trickle down is a Reagan myth. Raise wages a whole lot, raise taxes on corporations, end their loopholes and then perhaps I'll give a bit of consideration to another "trade" agreement.

[smiley]

192. Ok then...

What are the benefits from NAFTA then? I'm not economist and I'll concede to your point since you seem to know what you are talking about, but what benefits has the common worker seen since the passing of that trade agreement? Maybe stagnation in wages had nothing to do with the agreement, but would they have gotten worse or better (in your opinion) had NAFTA never been put on the table?

Thanks for this interesting discussion.

on edit:This guy seems to think NAFTA had an impact on wages.

[Recursion]

242. The benefits of NAFTA in the US were mostly to agriculture and heavy manufacturing

We get to sell soybeans and corn to Mexico (talk about "coal to Newcastle"...) and we sell the big machinery they use in the factories that got built in Mexico. We probably also had a few job gains in the other direction, with Canadian firms moving south for cheaper US labor (I doubt that was more than a drop in the bucket, though).

23 million net jobs were created in Bill Clinton's 2 terms. People will say "700,000 jobs were lost due to NAFTA", which is conceivably true, but about 1,000,000 jobs were created by NAFTA if you use the same metrics that came up with 700,000. In either case, we're talking about 3% to 4% of the net job creation during the period. And, trade with Mexico being only about 3% of our GDP, that's probably about as much as one would expect.

NAFTA itself probably did not have a very big impact on the economy in the past 20 years (I doubt these numbers would be very different if it hadn't passed). Much, much larger global, demographic, and monetary forces are at play than our trade with Mexico. NAFTA was one of many attempts to nudge some of those forces more in a direction that we wanted them to go, and I'd say it was marginally effective.

[Gore1FL]

115. I would like to know the mean the mode and standard deviation, too.

In the following example, the median income went up.

Before: $2 $2 $2 $2 $20 $21 $22 $1000 $2000 $3000

After: $1 $1 $1 $1 $1 $22 $22 $8000 $9000 $30000

[Recursion]

118. Me too. I'll see if Wolfram has it (nt)

[kristopher]

119. As others have said, you aren't measuring the effects of NAFTA.

Note the slope of the red line post NAFTA.


Here it is related to productivity.


And there is a shifting tax burden affecting real buying power.




While your claims are supportable within the context of your cherry picked use of median income as "the" meaningful metric, the implication that trade agreements are at worst benign doesn't stand up to a more comprehensive look at the overall package of policies of which these types of trade agreements are an intrinsic part.

[Recursion]

122. I see multiple charts that don't show any harm to most Americans' incomes after NAFTA

If you're saying the super-rich got super-richer after NAFTA, that's true. Which is why we should tax them at a much higher rate to pay for more social spending on the bottom three quintiles or so.

[kristopher]

214. When you say you think "those charts don't show harm..."

You are making a value judgement.

I don't share the values that lead to that conclusion.

[Recursion]

253. "Harm" as shorthand for "decrease in inflation-adjusted income"

I see the bottom three quintiles up so little that you might as well call them flat, the second-to-highest quintile up a good deal, and the top quintile up a lot.

The bottom three quintiles are treading water. That's not good, but it's also not harm

[kristopher]

255. I already stated we do not share the values that make that conclusion possible.

Those charts show more than income, they show the implementation of a set of values about the nature of power in culture. So, I think that there are more metrics involved than the one you've selected. YOU define harm as "decrease in inflation-adjusted income". To me that says you have a myopic view of the event you are trying to characterize. That myopic view is almost certainly linked to a set of values and beliefs that make you comfortable viewing the world in that fashion.

I don't share those values and I clearly have beliefs that are wildly different than your own.

[A Little Weird]

145. Thanks for the charts

The change in share of income is interesting. It sure looks like 1994 was the point where the share of income to the wealthiest really started going up.

Nobody that I know benefited from NAFTA. Several lost their good-paying jobs when the factories moved to Mexico. A lot of them are now working two or three crap jobs just to make ends meet. As far as I can see, NAFTA didn't help anyone in the US except the rich.

[mopinko]

135. using facts

is strongly discouraged around here, bubby. what are you some kind of outside agitator?

[merrily]

137. Income is different from real wages and household income does not reflect how many jobs the

"household" is holding down.

The boss of a relative of mine died, leaving my relative unemployed. To replace that income he now has two part time jobs (requiring more work than one full time jjob), his wife got a full time job and caters food and they still don't match his one original job plus benefits. As soon as his son turns 16, he'll probably get a part time job to help out.

That has nothing to do with NAFTA, but it shows that household income is not a meaningful measure of much.

[ananda]

143. BS

Let's consider inflation, cost of living, and factor out
the 1%.

Then that rosy scenario might look like what it really
is: a pile of dreck

[Recursion]

147. Yes, I did. That's what "real" income means

All those dollar amounts are adjusted for inflation/cost of living (those are essentially the same thing).

To avoid having the 1% skew things I used the median, which doesn't get skewed by a few people making a whole lot of money (the median would be the same if all the 1% made $55,000 a year).

[Thinkingabout]

152. A lot of posts says jobs was lost and moved to other countries, the truth is in some cases

technology has advanced and the need for employees has gone away, will never come back, even if NAFTA is repealed and there was not jobs created in other countries as a result of technology advancements. I was working with a group of 498 people, they now have three people doing the work which needs to be done because of technology. It is a fact even unions do not recognize.

[Faryn Balyncd]

158. Your assertion ignores the rigging of the CPI to understate inflation in the 1990s by the Boskin

Commission. Without this fraudulent rigging of CPI since the 1990's, it would be clear that median household income has not risen in constant dollars, but has declined, using the CPI calculation procedures before Boskin.


And by using median household income rather than median personal income, your assertion ignores the reality of more household members working more total combined hours in order to generate a total household income to survive.

[Joe Chi Minh]

176. Very telling points, indeed!

If outsourcing were such a boon to a nation, why do we know instinctively that, despite the historic misrule of the US and UK, these past 30years, we would never be permitted to outsource the government of our respective countries to non-resident foreign nationals, who have outstanding records, such as the politicians of the Nordic countries.

[Elwood P Dowd]

195. [phone]. The term "adjusted for inflation" is now a laughable joke.

They've added so many tricks to the CPI calculation that its almost meaningless.

[marle35]

163. People reading this OP

should also read this thread:

http://www.democraticunderground.com/10026751038

The linked article explains very clearly that "American incomes rose during the Reagan and Clinton administrations but have flattened or declined since 2002."

It takes time for the full effects of trade agreements to have an impact, so it's reasonable to look at what's happened since 2002. NAFTA may have went into effect in 1994, but in that time we experienced a tech bubble, while NAFTA's effects were only beginning. The above post which refers to a study written by a former Clinton economic advisor provides a better picture of what is happening than the OP.

[lumberjack_jeff]

165. "Without the financial collapse, NAFTA woulda been great!"

If it weren't for that rock, the crew of the Cost Concordia would have been praised for giving the passengers a great view of the Italian coast!



NAFTA contributed to a trend of rewarding capital by suppressing wages.

http://www.epi.org/publication/briefingpapers_bp147/

[Caspian Morgan]

166. Tell that one to all the homeless people

and people living in poverty across the country. I'm sure they would love to hear it!

[Android3.14]

168. I vote Recursion as the most patient poster on DU

My head would have burst into flame if I had to explain mean, median and "adjusted for inflation" as many times as Recursion has had to do it.

As a person who expressed great opposition to the TPP, I have to say that this data absolutely exposes a canard that TPP opponents are pushing.

I will question the opposition and the proponents more carefully moving forward.

[zentrum]

171. 2618 change in 20 years

……is pathetic, given the rising cost of housing, education, health care, cars.

Meantime, income disparity which is hugely damaging to democracy became greater than ever. TalK about NAFTA'S effect on income disparity and how excessively richer the top 1% and .5% got compared to the medium income.

Also, what happened to the minimum wage worker? Their buying capacity went lower ever.

This is your argument for NAFTA? Guess we should be grateful that we didn't become the 3rd world overnight—is that it?

[progree]

177. "given the rising cost of housing, education, health care, cars. "

The OP's figures are in inflation-adjusted dollars.

[Midwestern Democrat]

178. In-state tuition at my state university today is over 3X higher than it was in 1994; salaries are

nowhere close to three times higher today than they were in '94.

[progree]

179. The cost of higher education is included in the CPI

Some costs have exceeded the inflation average, some costs have risen below the inflation average.

[zentrum]

202. What about the rest of what I said.

…….Income disparity, lack of rise in lowest wages. Add int he slow collapse of the middle class.

It's not all NAFTA's doing but NAFTA is part of the neoliberal corporate take-over.

I trust Robert Reich on this over your very partial analysis.

Here's what he said this year:
"I used to believe in "free trade" agreements, until I took a hard look at the numbers. NAFTA cost U.S. workers almost 700,000 jobs. Since the Korea–U.S. Free Trade Agreement, America's trade deficit with Korea has grown more than 80 percent, the equivalent of a loss of more than 70,000 additional U.S. jobs. Since China’s admission to the World Trade Organization, the U.S. goods trade deficit with China increased $23.9 billion (7.5 percent) to $342.6 billion.

Trade deals that fail to address currency manipulation or to effectively address labor standards -- while protecting the intellectual property of global corporate investors and the financial asset of Wall Street -- aren't even about trade, since tariffs are already very low. They're really about enhancing corporate and financial profits at the expense of American workers."

[progree]

233. "NAFTA cost U.S. workers almost 700,000 jobs."

How would Robert Reich or anyone else know? Some jobs were lost. Some were gained. 22.9 million NET jobs were gained during the Clinton presidency (which ended 7 years to the month after NAFTA took effect), so I don't know where he teased out the 700,000 job loss from NAFTA out of all of that. Lots of playing with the numbers, and innumerable assumptions probably.

After I caught him in a polemicist's lie, I've always taken him with a grain of salt. Yes, I know he's a progressive super-hero to all of us, and I'm for what he's for, but as for truthiness, he's suspect.
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=5191637

I was not and am not for NAFTA and definitely not for the TPP where we let foreign corporations dictate our environmental and labor standards, among many horrors (well you've got some more of that in your last paragraph).

Looking at the OP's figures on real (i.e. inflation-adjusted) median income, it doesn't appear that the middle class lost ground in terms of purchasing power because of NAFTA, or the 20 years before NAFTA for that matter.

But it hasn't gained ground either, despite, cumulatively large increases in productivity. I agree with everyone who says that pretty much all of the economic gain due to increases in productivity went to the top few percent. And that's not fair, and that's not right.

[Recursion]

241. It is neither fair nor right and the answer is higher taxes and more social spending

Which is what western Europe does, and it seems to mostly work rather well for them, even as they engage in trade at a much higher rate than we do.

[zentrum]

273. Then we agree on some of the important things n/t

[Romulox]

194. The OP *approves* of income disparity. nt

[progree]

198. Can you tell me how "the OP *approves* of income disparity"?

or from anything else that Recursion has posted in this thread?

[Romulox]

199. I've read his posts, over the years. He is a classic "neoliberal". nt

[progree]

200. Thank you. nt

[Recursion]

247. What bullshit. I support a $23/hr minimum wage and a 70% top marginal tax rate

As well as a 100% inheritance tax on bequests over $100K and a National Health Service.

And I've said so here multiple times.

[Romulox]

261. "The bottom three quintiles are treading water. That's not good, but it's also not harm"

That's from this thread.

[Recursion]

262. It's not harm

It's just not.

If you say it is, argue so.

No given person today is making what he made 40 years ago; they're making more.

People today are making what their analogues made 40 years ago. That's not harm, but it is lack of benefit.

[Romulox]

263. Yes it is. Inequality is itself harm. But you were arguing that you *don't* approve of growing

inequality, remember?

[Recursion]

264. I don't. Never said I did

So we agree there.

[Romulox]

265. You just said growing inequality is "not harm"--a claim you are unwilling to defend. nt

[Recursion]

266. I still claim it is not "harm", and I still oppose it

Not everything I oppose is harm.

[Recursion]

249. That is a lie, and a lazy one at that (nt)

[immoderate]

180. Observe the differential between median and mean income during this period.

Median income languished while mean income soared. NAFTA coincides with a huge benefit to the ruling class.



--imm

[progree]

183. Sorry, but it looks like the continuation of a long-running trend beginning in the beginning

Last edited Sat May 30, 2015, 02:26 PM - Edit history (1)

I don't see any kind of turning point beginning in or after 1994.

Maybe a small increase on a dollar basis, but not on percentage increase basis -- actually on a percentage increase basis the income of the top 5% has slowed down precipitously:

1975 $48,000
1994 $180,000
2013 $320,000

So it increased 275% in the 19 years from 1975 to 1994, and increased 78% in the 19 years from 1994 to 2013

On a raw dollar basis, it increased by $131,000 from 1975 to 1994, and by $140,000 from 1994 to 2013.

Not that I'm pro-TPP -- it sounds a lot worse than NAFTA (letting foreign corporations dictate our environmental laws to take one example). And for all we know, while there hasn't been a real (inflation-adjusted) income drop since NAFTA, still NAFTA and other trade agreements since may be largely responsible for the fact that real (inflation-adjusted) incomes for the bottom 4 quintiles has way lagged productivity growth.

[immoderate]

188. Slowed down, compared to what?

Compared to the top 0.1%?

--imm

[progree]

190. No, the top 5%'s income increased at a much slower rate after NAFTA than before NAFTA

The top 5%'s income increased 275% in the 19 years from 1975 to 1994, and increased 78% in the 19 years from 1994 to 2013

I'm still not seeing any turning point after NAFTA began in 1994 in your graph in #180. The growing inequality has been a trend from the beginning of your graph in 1967.

[immoderate]

213. NAFTA concentrated wealth from the 5% to the 0.1%.

There are other factors at work here. You might describe the mechanism by which NAFTA redistributes wealth. It's not apparent to me.

--imm

[progree]

235. "NAFTA concentrated wealth from the 5% to the 0.1%."

Another trend that's been occurring since the early 70's -- decades before NAFTA. Not sure how you know that NAFTA has been the cause of that. Well, as you say "There are other factors at work here." -- something I certainly agree with. Perhaps including NAFTA or despite NAFTA.

[Donald Ian Rankin]

221. So what?

If you're trying to make the case for NAFTA, that's a very weak argument indeed, because the rich are already rich.

If you're trying to make the case against NAFTA, that's not an argument at all, unless you don't believe in pareto-optimality.

[Rex]

189. So much CYA for the Owners...it is as if they are worried their TPP won't pass!

NAFTA and the TPP have and will benefit the Owners and only the Owners. Trade agreements don't benefit the labor force, they only seem to hurt it with outsourcing and cheap labor brought in from other countries.

TELL that to all the people that had to train their replacement...just fresh from another country and making nothing compared to the soon to be unemployed.

Scams abound and people are pathetic when they pretend 'free trade' is a good thing for all involved. NOT TRUE, it helps the non-ruling elite. The numbers don't lie.

The labor force has been waiting on a 'raise' for decades...meanwhile all that money is going to the elite and their 'compensation package'.

Pimp NAFTA, CRAFTA, TPP whatever you want to folks...it is still free trade bullshit that causes hyperinflation in undeveloped countries and stagnant wages in developed ones.

[Romulox]

193. What a dishonest OP. Here's the real story.

[Android3.14]

206. How are you interpreting this graph?

Sure, I see that the upperclass gained enormously, but it does not indicate the median income went down.

So how does this graph refute the data, or the conclusion that NAFTA did not bring down wages, that Recursion provided?

[Romulox]

207. Workers' incomes flat for 40 years, while Oligarchs' skyrocket. You know, reality. nt

[Android3.14]

215. No argument there

It does, however, look as if the assumption that NAFTA pushed income downwards for the middle class was incorrect.

[Ikonoklast]

268. Hours worked to produce that income skyrocketed.

If I am working 15% more hours each week over a comparable time period in 1974, 1984, or 1994 to make that same amount (inflation adjusted) today, I have taken a pay cut.

More work for the same flat pay means I am indeed earning less. It is a back-door pay cut.

[Android3.14]

269. Data please

Since other data indicates that the wages have remained largely unaffected, rising with inflation, could you provide some proof there has there been a general increase in the number of hours a person works since NAFTA came to be?

A link would be helpful.

Thanks.

[Android3.14]

271. At least since 1990, hours worked has decreased according to this article from The Economist

http://www.economist.com/blogs/freeexchange/2013/09/working-hours

According to OECD, since 1974, hours have dropped from 1856 hours to 1975 hours in 2013
https://stats.oecd.org/Index.aspx?DataSetCode=ANHRS#

While you might be working 15% more, (as a business owner, I'm working 60 plus hours per week for the past five years), it appears others are working 5% less on average. Lucky them.

It looks like the argument with data backing it up is that the growth in incomes is going enormously to the 1%, but the argument that we are all working harder for less money is an apparent fallacy.

[Recursion]

252. Yup. Both before NAFTA and after it

The problem is the workers' flat incomes for 40 years, not the particular set of trade rules with have with Mexico and Canada.

[BillZBubb]

223. It does show the decrease of mean real income by quintile.

That is very important since it demonstrates much more clearly what has happened than does the generic real median income. We would expect trade agreements like NAFTA and TPP to negatively effect mainly the lower quintiles. The upper quintiles should show positive results.

Assuming it took several years for the effects of NAFTA to be reflected in the economy, we would expect to see mean real income in the lower quintiles to begin to decline. The tech bubble hid the effects briefly as it was a dominant economic driver.

NAFTA has been a negative for the US, particularly for those in the lower income quintiles. It hasn't been a disaster, since the level of trade involved isn't proportionally large. As we get more and more trade covered by these misguided treaties, we will see the effects more prominently.

[Recursion]

250. Where do you see a decrease in any quintile there? (nt)

[DirkGently]

196. "Median" chosen because it's not "average."

Median is the number exactly in the middle, so it goes up even if the gains are -- ahem -- all on one side.

[progree]

197. Yes, median income goes up when there are gains on the lower side, but not on the higher side

If the incomes of the 49.9999...% who are over the median increase into the stratosphere and beyond, that doesn't change the median one scintilla.

Whereas increases in the incomes of the 49.9999...% who are below the median generally increase the median, although it is possible to come up with made-up examples where it doesn't.

[Android3.14]

205. As long as

The latter is true only if the increases from the ones below the previous median are higher than that previous median.

[progree]

237. What I'm trying to say is that in a virtually continuous distribution of over 100 million incomes

ranked lowest to highest, in the real world, economic changes in the lower half will almost certainly affect the median. But changes in the upper half have no effect whatsoever on the median.

Recursion says in #108 that "Incomes are up in all quintiles in real dollars since 1994". Based on the graph in #193, I don't disagree, though its hard as heck to be sure about the bottom quintile. But I blew it up as big as I could (400 X on a 24" monitor), and did some tick-mark comparisons and it's clearly true for the other quintiles (if just barely for the 2nd and 3rd). Somewhere I'm sure there's the data behind the graph, I haven't looked.

Like I said in #197, "it is possible to come up with made-up examples where it doesn't."

Obviously, to take a contrived example, if nothing changes except that the bottom 2 quintiles' incomes nosedives, for example, the median will be unaffected.

[Recursion]

240. Wolfram has more zoomable charts but I can't do a non-subscriber link

Maybe I can export a png from Mathematica. Though the bottom quintile's "gains" are I think about a cent.

[Android3.14]

204. Um...no

Given the data set {10, 20, 30, 40 ,50} the median is 30. If we increase or decrease the values below the current median with higher numbers {15, 25, 30, 40, 50}, the median is still 30. If we increase the values above, {10,20,30, 500,000, 1,000,000} the median is still 30.

For household income and salaries, the median is the statistical value to choose for relative comparison rather than the mean (average) exactly because extremely high or low values do not skew the "typical" number.

[DirkGently]

224. Well okay then.

I had that wrong. Thanks for pointing it out.

Interesting then that the median hasn't actually moved as suggested.

[Donald Ian Rankin]

220. NO! That's completely and utterly 100% wrong.

The median doesn't change in the slightest if the rich get richer, or if the poor get poorer.

It also doesn't change if the poor get a bit richer or the rich a bit poorer, but not enough to take them across the half way mark.

The reason the median rather than the mean is used is precisely because it *isn't* affected by the rich getting richer - you have this completely backwards.

[CentralMass]

201. Median income has not budged since 2000

http://www.usdebtclock.org/index.html

Median income was $ 28,417 in 2000

and is presently $ $28,774

[Recursion]

230. Yup. Bush wrecked the economy for workers (nt)

[progree]

234. Just for clarity, those are real (i.e. inflation adjusted) incomes.

I know you know that, but for others reading that who might not know.

It isn't inconsistent with anything that the OP has said -- that real household income has been virtually flat in terms of purchasing power for 40 years.

Yes, sad given the cumulatively large productivity increases we've had in those 40 years, and given the rocketing upward and away of the top few percent's income -- the best picture of that is perhaps post#193:

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=6753102

[krispos42]

209. except not we're carrying far more debt per household, yes?

4-year state university was far cheaper, in constant dollars, than today. Credit card debt, student loan debt, mortgages... Does the post-NAFTA increase pay for all of that?

Not to mention the exploitation of the federal debt that's been pumped into the economy as the Reaganomics devotees slashed revenues and deficit-spent like we were in World War 3.

[DiverDave]

217. How about another anecdote?

In 1994 I was driving a flatbed truck. We went into factories across the 'rust belt'.
We took every piece of equipment and delivered it to the border in
Laredo Tx. You think those guys that lost their jobs got RAISES?
They moved or took lower paying jobs.
nafta hurt real people, and to say different is a lie.

[Donald Ian Rankin]

222. Anecdotal evidence is worse than useless.

In that period of time a lot of people will have lost jobs, and a lot will have gotten new jobs.

The only way to evaluate anything on this scale is with statistics. Anecdotal evidence is worse than useless, because it encourages people to neglect the statistics.

[DiverDave]

256. Sure, and the guys from

those towns, small towns, just got a job paying the same...useless??? they are out of good paying jobs.
You think they care about your statistics?

nafta hurt people, regular people. But you can deny all you want.
It's a lie and you are carrying the rich mans water.
You feel proud? They paying you?
despicable

[Donald Ian Rankin]

259. And the ones who benefited?

Yes, some people almost certainly lost out because of NAFTA. Equally, some people almost certainly gained because of it. If the losses outweighed the gains it was a bad thing, if the gains outweighed the losses it was a good thing.

Despite your accusation of carrying water, I don't know which of those is true. My horse in this race is trying to stamp out the toxic practice of using anecdotal "evidence" rather than actual evidence, and encouraging you and other to make decisions rationally and based on evidence.

Your argument is "here are a few of the people who lost out, and whose losses I attribute to NAFTA; rather than analysing the totality of the evidence, listen to your heart, feel these people's suffering and *completely ignore all the other people who were effected in either direction*". When you attach undue weight to a tiny fraction of the evidence, you implicitly dismiss all the rest of it.

Your conclusion that NAFTA was a bat thing may, for all I know to the contrary, be correct. But if so, that's purely a coincidence, because you've arrived at it through a process that leads to incorrect conclusions as often as to correct conclusions.

[aikoaiko]

219. Thank you for you some good data.

[MrMickeysMom]

244. Your strange edit 2

Edit 2, because I'm still not being clear apparently: wages have been roughly static the whole period. That's the problem, and it has nothing to do with trade agreements.

Perhaps your claim that stagnant wages have nothing to do with trade agreements is a pile of crap…

When wages on the side of trade agreements to manufacture goods set low bars for competing wages (see NAFTA and workers in Mexico) and the "race to the bottom" continues via CAFTA, etc., American wages flatten. That's exactly what has happened and you've seen plenty of data on that.

So, what exactly can be assumed by talking about median household income? Not as much as you might think. How many workers does a household constitute? And, with that data, what is the productivity of each company employing those workers?

I think if you sampled a valid population of workers who have households, you would find that what they have to do to run that household goes in one direction, and what they earn to continue to make it happen remains flat.

This doesn't look like a great forecast of how those living in households are doing, Recursion. It looks more like -

[Recursion]

245. The wages were stagnant before and after our trade agreements

Perhaps your claim that stagnant wages have nothing to do with trade agreements is a pile of crap

Which trade agreements caused the stagnation between 1974 and 1994?

[MrMickeysMom]

246. You really don't want to get it, do you?

I think you must live outside the realm of Americans and their households by this OP. Do yourself a favor and get out more.

[Recursion]

248. What do you think caused the income stagnation between 1974 and 1994?

We weren't in any free trade blocs then. We had GATT during that time, but that was the trade regime that the WTO and NAFTA were designed to replace.

What caused the income stagnation (this post is about income, not wages; wages actually fell before NAFTA and rose after them) between 1974 and 1994? How was that stagnation essentially identical to the stagnation between 1994 and 2014? Was the putative negative effect of NAFTA coincidentally cancelled out by something else? If so, what?

[MrMickeysMom]

254. The same thing that led to the trade agreements in the first place...

… consolidation of corporations, a weakening labor force, war industries and intrusion of the WTO into countries to set up our competing slave labor.

This post is about how everything you seem to find benign really is not where the nations of the world's working class have been headed and where we have all arrived. It is… world wide.

Everything else would have a hard time making a point without looking at a complete picture. Get your head out of the soil.

[Major Hogwash]

272. "These are not the droids you're looking for."

Nevertheless, I think you are right.

Congratulations, I read upthread that you've been labeled a "neoliberal".
That's not an easy label to earn here.

Usually they just call people like you trolls.

Of course, you're right.
But, some of these peeps are like the ghosts in Ghostbusters, they will slime you really bad if you talk about issues like trade.