Graph showing how pay has not kept up with productivity since 1980

[Quixote1818]

This was posted by American's against the Tea Party on Facebook

[tabatha]

1. Thanks.

DO you have an external link for this. Thanks.

[napoleon_in_rags]

2. The illusion of "competition" at work.

Widget company A says to widget company B:
"Hey, I make $20 an hour of value off my employees but only pay them $10!" to which company B replies
"Me too...But I'm going to steal your employees by offering them jobs at $11!" To which company A responds
"Well then I will offer them $12 to get them back!" To which company B responds
"Wait, this is stupid. If we keep up this game, we will end up paying our employees the full $20 each to compete, which means we will be making $0 profit an hour when we are both currently making $10 in profit an hour!"
"Oh, you're right, so what do we do?"
"Well, what you say if I told you times were tough, and I was going to have to start paying my employees $9 an hour?"
"Well, I would have to agree that times are tough and I'm going to have to do the same! (wink wink, nudge nudge) "

[Sherman A1]

3. Precisely

You hit the nail on the head.

[NNN0LHI]

4. Had someone trying to explain that under Reagan were the "good", years for the US recently

I was around back then and knew better.

Don

[Starry Messenger]

5. k&r

[tomp]

6. I see the major divergence in those graph lines starting in the early 70's. nt

[strategery blunder]

7. Link to original source?

I've been looking for this graph for a while, but would like to source it before using it. Thanks.

[Quixote1818]

8. Hopefully this will work

http://www.facebook.com/NoTeaParty#!/photo.php?fbid=318376724854512&set=a.116898608335659.16274.108038612554992&type=1&theater

[strategery blunder]

14. It's not sourced from facebook that I can tell.

I need to know the original source of that graph before I feel comfortable using it. Citing "facebook" won't have a whole lot of credibility in debate.

I don't have a facebook account (and refuse to get one because of facebook's rampant privacy abuses and issues), so it's possible I'm missing something.

[Quixote1818]

16. Think it's from the NY Times

http://www.nytimes.com/imagepages/2011/09/04/opinion/04reich-graphic.html?ref=sunday

[strategery blunder]

17. Ah, good, the Times cites what I need

Thanks! :)

[dawg]

9. Somewhat unfair to Reagan ...

Like an earlier poster noted, the divergence began in the early 1970's - about the time those nifty Japanese cars started appearing on our highways.

Globalization is the main culprit of this. Republicans exacerbate the problem, but they aren't the root cause.

[Quixote1818]

11. You do make a good point. After WWII we were the only game in town

since everyone's infrastructure was blown to bits.

[dawg]

13. I think the American blue-collar worker peaked around 1973 ...

white-collar workers probably peaked sometime in the 1980's. We've been using more women in the workforce, increased hours, and increased debt to compensate ever since then. Around 2007 or so, we finally reached our credit limit. All but the 1% now face the prospect of stagnant or declining incomes for many years to come.

There are things the government could do to help, but apparently our masters aren't having any of that. (And most of us are too dumb to even question them.)

[JHB]

18. That was one of Reagan's selling points for his tax cuts...

...that the money freed up would be invested in modernizing our industrial plant.

What happened instead was moving factories to Mexico and elsewhere, and the money mostly went to fuel Wall Street games: Mergermania, leveraged buy-outs, corporate raiding, golden parachutes, etc.

Let's also not forget that under Reagan union-busting was pretty much given a green light. Companies would spend more on union-busting law firms than an actual settlement would cost them, but it gave them more freedom to act both in regard to the workers and to playing the corporate games mentioned above.

The system that came into being after WW2 had gotten creaky by the 70s due to technological changes and stronger overseas competition. It needed some changes, a "course correction", so to speak. Instead Reagan ushered in a complete scrapping of it, a systematic cutting of the strands that ensured all parties benefited, that "trickling down" actually happened.

[dawg]

19. Reagan did a lot to make things worse.

But the trend began in 1973, so the underlying cause is something other than Reaganomics.

[JHB]

20. I agree, but don't minimize the Reaganites either

I did mention that things weren't exactly swimming along when Reagan was elected. By the late 70s there had been a number of shocks: technological developments, stronger foreign competition, oil shortages, inflation, etc. All of them took a toll, and they were the excuse that let the Reaganites push through radical changes.

Look at the shapes of the curves. Yes, they start diverging significantly through the 70s, but they still had roughly the same shapes, with rises and dips in generally the same places, though compensation and wages had progressively longer dips and shallower rises. But it's after Reagan where that increasingly-loose similarity completely disappears.

[xchrom]

10. Recommend

[PETRUS]

12. Thanks!

I saw that a while back and was trying to find it again the other day.

[eppur_se_muova]

15. Actually, the big deflection downward began around 1972 ...

anyone with good spreadsheet software want to post differential and double differential curves?