Workers' Share of National Income Plummets to Record Low

[amborin]

Over the last decade, the share of U.S. national income taken home by workers has plummeted to a record low.

snip

Why are workers taking home such a reduced share of the pie? Opinions differ, but many experts think that the trend has to do with a number of factors, including a decline in the bargaining power of labor, and increased competition from foreign workers. Similarly, over the last year or so, U.S. companies have made record profits, while unemployment has stayed high and wages have barely risen.



The chart jibes with other data, which show that since the 1980s, income for the richest 1 percent of Americans has exploded, while hardly budging at all for everyone else.

Still, there's little sense that either Obama administration or Congress plan to do much about this growing inequality. Indeed, any serious action to boost the economy and cut unemployment now seems to be off the table.

http://news.yahoo.com/s/yblog_thelookout/20110614/bs_yblog_thelookout/workers-share-of-national-income-plummets-to-record-low

***********************************************************************

Economic Policy Institute:

U.S. Wage Growth Slows to A Crawl



http://www.epi.org/

************************************************************************


Unemployed Who Are Jobless More than 40 Months


The share of the unemployed who were jobless for more than six months in 2010 was over 40% for the entire year,
far above the statistic's prior peak of 26% in 1983.

The Great Recession has broken all records related to duration of unemployment. The chart below shows the share of the unemployed who have been jobless for more than six months. This share has been over 40% for all of 2010, far above its prior peak of 26% in the summer of 1983.

Once workers gets laid off from a job in this labor market, the odds are stacked strongly against them finding another one anytime soon





http://www.stateofworkingamerica.org/articles/view/17

[BulletproofLandshark]

1. "Why are workers taking home such a reduced share of the pie?"

Because of the same thing that's behind most of our society's ills.

Greed.

[nichomachus]

2. The answer is really simple -- we're being scammed

The use of the word "job" in any story about the economy is totally misleading -- and is intended to be so.

"The economy added 157,000 jobs last month"

Really? How much did they pay? Did they have benefits? How many hours a week?

If I lose a "job" that pays $50,000 with full benefits and finally settle for a job that pays $20,000 with no benefits, the government -- and the media -- and a lot of really unaware people -- consider that a wash.

The word "job" in this context is meaningless. It's like if you brought your 2010 Lexus into the shop one morning and in the afternoon I gave you back a 1991 Corolla. I would argue that you brought in a "car" and I returned a "car." You probably would not agree.

What the corporations are doing is shedding jobs that pay well and have benefits and replacing them with jobs that pay crap and have no benefits. Merely looking at the gross figures, without defining "job" is nuts.

We need a standard definition of a job -- say, $30,000 with benefits. Then, we can weight the statistics. If we lose one job that pays $90,000, we can say the economy lost three "jobs." If we replace it with a job that pays $15,000 with no benefits, we can say the economy gained .45 "jobs." So, we still have a deficit of 2.55 jobs. Right now, the government and media would say we broke even.

[amborin]

5. agree that, w/o some standardized definition of "a job," job charts are meaningless,

as you said

in so many cases, good unionized jobs are replaced with either a two-tier lousy wage and benefit package, or with non-unionized sub-subsistence-wage jobs, with no benefits; or with sub-standard service sector jobs w/ lousy pay and no benefits

the hegemony of capital is intensifying

[mistertrickster]

22. "Slaves had jobs." Jim Hightower nt

[hfojvt]

3. I wish they would define their terms

What do they mean by "workers"? Does it include middle management? Also, it would be nice if they included an actual percentage, rather than setting 2005 = 100.

[amborin]

7. iit's difficult

people have been arguing over who is a "worker" forever;

lots of classic arguments over this, such as in Wright's Contradictory Class Position

some argue that anyone who works for wages is a worker, so this would include mid management; others argue that
the added authority that goes w/ management positions means managers are not really workers, classcally understood

[hfojvt]

12. not just about authority though

For example, is Lebron James a 'worker'? Aside from being a superstar, he has very little authority, but he makes more money in a year than I will in 10 lifetimes. The same is true of Bill Self, who coaches the KU basketball team for $10 million or so a year, and there are probably many more examples. Even somebody making $250,000 a year does not feel like a 'worker' to me. Not when they make 20 times what I do.

[amborin]

13. don't know

but those are the kind of questions that are argued about forever

another one is:

if a corporation pays its workers well enough that it has almost no profits, are they still exploited in the classic sense?

[TheKentuckian]

14. Self is the CEO of Kansas Basketball. He has budgets, staff, and lots of autonomy

James is an employee despite the high income.

[hfojvt]

15. so he's an employee, does that make him a 'worker' by the definition of the OP?

If so, that kinda skews things. There's James making $18 million a year for the next six years. And there's 1,0000 workers making $10 an hour at a full time job. So the 1,001 'workers' have a total imcome of about $38 million. But James gets half of that. In some sense, worker income should be up then too, because back in the day Magic Johnson only made $1,000,000 a year (although he had a 25 year contract).

But do you see how workers, as a group, are not any better off if one ridiculously well paid member of the group gets a huge bump in pay? You cannot include people like James in the group and expect the total to have any meaning.

But then where is the line? If an 18 million dollar man is not in the group, what about a 1 million dollar man? What about a 600,000 dollar man? A 200,000 dollar man? Kinda hard to find an absolute demarcation.

[amborin]

16. see your point

but are you referring to the income chart? they should use median income, not average, to give a less skewed picture

[hfojvt]

23. the chart just uses a total

so if they define 'worker' in such a way that it includes Lebron James, Bill Self, Keno Davis, etc. and also well paid middle management, then I think there are problems with it.

In some sense, it shows that an increasing share of national income is going to things like capital gains, rental income, dividends and interest, but considering that even a low income worker like me made $1,300 in interest last year and $500 in capital gains, and I made about $15,000 in capital gains three years ago (from some land that I bought in 1987 so that gain ignores the $3,000 or so I paid in property taxes over the preceding 20 years.)

I think it is more relevant to talk about who is getting the money, rather than is the money coming from wages or from capital gains. As the IRS stats I graphed here.

http://www.koch2congress.com/5.html

[TheKentuckian]

19. Income doesn't mean control, authority, or ownership

James makes a ton, maybe more than his "manager" (aka Coach) but I never lose track of the fact that somebody writes those checks and owns his rights.

Other than the ability to walk away and never worry about working again (which is huge, of course) James is like about any other employee. The pay scale is very different in the NBA but the relationship between worker and ownership is pretty similar. The difference is accounted for in rarity and marketability of skills. Almost no one on Earth has the abilities and size James does so he makes a considerable amount of money but makes his ownership and his league much more than he is paid.

I don't see this a purely or even mostly a monetary issue. I'm not saying the man isn't a millionaire or that his gigantic salary shouldn't be taxed like a CEO's, though James can only play for 10-15 years and lower talents, often much, much less or more clearly the NFL with an average career of three years should be looked at a little differently than Jamie Dimon who can pull it down decade after ruinous decade.

If James is at odds with his boss, he is in the same spot as we are. He just ca$he'd in, little different than comparing an employee that makes 150k and a minimum wage worker. The scale is greater but the point is similar.

[hfojvt]

21. but James also has a contract, similar to my man Keno Davis

Keno got fired from Providence and walked away with something like $600,000. Uhm, that is more than double my own earnings for the last 25 years. That gives a person a fair amount of control that most of us workers do not have.

But I don't consider a $150,000 a year person to be working class either. That's management money, not worker money. I don't think people in the top 20% generally sympathize with or understand people in the bottom 60%.

[nichomachus]

10. If you cannot live off of your investments, you are in the working class

No matter what you think you are.

[hfojvt]

17. then how do you define that?

I live on $14,000 a year. If Lebron James invested just $700,000 at 2% interest, he too could live on $14,000 a year indefinitely. Or, if he spent some of his principle, he could live on $20,000 a year for about 50 years, by which time he would be 76. Certainly, he could easily save $700,000 from his current yearly salary.

Whether a person can "live off of their investments" obviously depends on the lifestyle they CHOOSE to live at.

If Lebron CAN live off his investments but CHOOSES not to, because he wants to live "better" then I submit that he is no longer working class, no matter what class you think he is.

The other part is the "investing". Suppose somebody makes $200,000 after taxes. I would say that they could live very well on $50,000 a year and save the other $150,000. After five years of doing that, they would have $750,000 and thus be able to live off their investments.

However, the average family is not going to choose to go down that path. It would be a rare family that even saved $50,000 of a $200,000 after-tax income. The fact that they could leave the working class, but choose instead to live high on the hog, makes them unlike the rest of the working class who don't have those kind of options.

To me, working class is a matter of status and income as much as it is about the source of income. I don't believe that Troy Aikman is a worker just like me just because he is still 'working' for Rent-a-Center.

[amborin]

18. defining

the "working class" has always generated lots of disagreement

Weber also wanted to introduce notions of status, because he thought Marx's defintion was too narrow

one way to define it is to just focus on the social relations involved, between owners of capital and those who work for a wage

you mention how the working class is heterogeneous and potentially fragmented; there are different fractions or segments (just as there are dfferent fractions of the capitalist class), and that's a problem that undermines soldarity

[Romulox]

4. "Should I buy a Prius?" / "Solidarity!!!!1!!!!!" nt

[Motown_Johnny]

6. and the decline started just about the time W took office. What were the odds?

[gkhouston]

8. Look again. We've been on a downward trend since Reagan, with

an uptick during the second Clinton Administration.

[socialist_n_TN]

9. Yep. It started a long time before W..............

although he did intensify the trend.

[nichomachus]

11. Started long before Reagan.

[midnight]

20. Keep this in mind the next time someone winds up the we all got to have skin in the game....

Share the pain schtick....