Income Growth

[Red Arrow]

I would like to see the mobility from 30 or 35 and up.  That would be interesting to see what happens after you get over the job entry raises.  Promotions at my job are heavily weighted toward the beginning of your career.

I agree.  I think my promotions/raises (when I get them) should far out strip the younger guys' promotions/raises, whose productivity is rapidly increasing over almost nothing, because I deserve it.  Everyone's promotion/raise should depend strictly on seniority, regardless of their contribution to the employer.  After I retire, I don't care what happens to raises because I won't be getting any (raises in salary).

[AquaMan]

My mom always told me I looked good in whatever color I was painting.

Mom's are good about that. Dad's not so much.

[heironymouspasparagus]

The rich are getting richer.  The poor are getting richer too.  Do you think these are the same groups of people over time?  

Use your noodle.  This discounts income mobility.  

Wow!!  The only guy I know (except maybe guido) who can say that a real DROP in income by 25% is also getting richer....the poor.  Maybe that would be "getting richer too" just a little bit slower??

That would be as if Mary Failin' claimed that the schools are getting more and more money by cutting their funding by 25%....

[Gaspar]

[nathanm]

Guess this guy didn't notice that people don't get pensions any more and their share of the employer sponsored health insurance has been increasing for most people. Or that the department of labor statistics count the value of fringe benefits as part of the pay package, and thus are already baked in to the numbers. But that's what happens when you start with the conclusion and work backwards from there.

Also, I'm wondering how a near minimum wage worker is supposed to be doing better when the 1981 minimum wage was a buck an hour higher than today's, after adjusting for inflation. But hey, what does reality matter when it gets in the way of ideology?

[heironymouspasparagus]

Are you kidding me?  What you putting in that barbeque sauce?

Big increases in income because you can buy a "better" tv than 30 years ago??  Just so happens, I bought a very top of the line Sony in 1979.  26" color Trinitron in a beautiful cabinet that was literally a fine piece of furniture.  Cost $ 650.  Very expensive but lasted about 17 years.  Today to get the same "quality" I would have to buy a Sony, probably 42" LCD display PLUS a piece of comparable quality furniture.  About $700 for TV and probably on the order of $ 2,000 or so for the furniture.  (I have priced the raw materials to build my own, and if I figure in minimum wage - will come back to that in a bit - the cost would be in the neighborhood of $ 1500.  $500 profit for the furniture distributor and store.)  Still couldn't buy that new tv on minimum wage, just like I couldn't have done that in 1979.  No real increase in "wealth" there....

As for "vastly superior" quality - Hah! - that's the biggest joke I have heard in months, if not years.  17 years on the Sony Trinitron, still with an excellent picture when it finally crapped out (capacitors drying out, power supply to horizontal circuit).  I would have fixed it, but it was still on last legs.  That was part of the dilemma - the furniture part of that was still very nice.  Do you or anyone else out there expect to get 17....or even 10 years out of today's LCD tv??  Wanna take bets on that - if you answered yes...  Not even comparing apples and oranges (both tree born fruit), but more like comparing apple pie and wombats.


And even if you take the fantasy nonsense this guy is spewing, the reality is still that the 1968 minimum wage is still - in real terms - is 25 to 30% higher than it is today.  Of course, that's over 40 years...which would make it even worse.

Plus, his totally bogus BS completely leaves out the whole concept of increased productivity - but that is another one of those hush-hush little secrets the 1% doesn't want the other 99 to understand.  Productivity has risen day in, day out, forever in this country since WWII at numbers in the order of 2 % for decades.

Productivity, which measures the goods and services generated per hour worked, rose by 80.4% between 1973 and 2011, compared to a 10.7% growth in median hourly compensation.  Where did that extra 40% worth of productivity go?  You know.

Here's a little something from the Hartford Business Journal...
http://www.hartfordbusiness.com/article/20130307/NEWS02/303079992/us-wage-productivity-gap-highest-since-wwii

And all that from a guy at a 3rd tier university - WAY down on the ratings.
Ranking -  US News and World Distort;

University of Tulsa  86
OU             101
George Mason  141

[nathanm]

Big increases in income because you can buy a "better" tv than 30 years ago??

CPI accounts for this already. Many people who were in their politically formative years during the Reagan era internalized the rhetoric and now assume that literally everything the government does is stupid and wrong. In their mind, it's not possible some government bureaucrat might actually understand how to account for changes in the available goods when determining the inflation rate, so the figure must be wrong.

The "oh my god, they have a color TV" in the 80s is today's "look at that flat screen!" Never mind that you can buy a bargain basement 37" TV new for a couple hundred bucks, or even less on craigslist at times and they've been around long enough that they're often given away in families. That's less than the cost of a month of health insurance. Or gas, for a lot of people these days. It's not luxury, it's standard. Like airbags on a car. The one benefit of outsourcing all the blue collar work to China is that electronics have been declining in price faster than low wage worker's pay. Never mind that the price of energy, food, health care, housing, and everything else has not seen price deflation.

You can see anything you want to see if you're willing to pick and choose which data points you are willing to acknowledge and, worse, refuse outright to gain any understanding of the material. First impressions are often wrong because most things are much more complex than they seem on the surface. It's very easy to know the answer when you have only a superficial understanding of the question. Knowing just enough to be dangerous, and all that.

Edited to add: Somehow I edited out some commentary about how his point about benefits is completely specious, as the BLS statistics take into account benefits as well as base wage.

[Red Arrow]

Guess this guy didn't notice that people don't get pensions any more

My employer doesn't provide a pension but it does contribute to my 401K.  I know that not all companies do though.

and their share of the employer sponsored health insurance has been increasing for most people.

The numbers I have seen have shown the employers cost to go up even when the employees' share has gone up.

[Red Arrow]

You can see anything you want to see if you're willing to pick and choose which data points you are willing to acknowledge and, worse, refuse outright to gain any understanding of the material. First impressions are often wrong because most things are much more complex than they seem on the surface. It's very easy to know the answer when you have only a superficial understanding of the question. Knowing just enough to be dangerous, and all that.

I think almost everyone here will agree with what you just wrote above.  We will probably all also disagree on who is doing that.

[Red Arrow]

Or gas, for a lot of people these days. It's not luxury, it's standard. Like airbags on a car.

Gas is more expensive but modern cars get better gas mileage.  I remember when 15 MPG was doing good. 

Of course, no one except Guido can afford a new car.  Even a basic econo car today is safer in a crash, better handling and more reliable than most cars used to be.  I occasionally wonder what the retail cost of a (just to pick one) Chevy Nova built to 1960s standards would be if built today.  Imagine (or in my case remember) radio and heater optional.  Power steering and power brakes optional.  Mostly the brakes were crappy by today's standards and without dual master cylinders until about 1967.  Steering columns that were sure to impale the driver in a frontal crash.  Skinny, bias ply tires. Seat belts optional on many cars until the mid 60s.  Crush zones might have been on Mercedes.  Cars cost a lot more today in adjusted $ but there is a lot more value too.

[Gaspar]

Gas is more expensive but modern cars get better gas mileage.  I remember when 15 MPG was doing good.  

Of course, no one except Guido can afford a new car.  Even a basic econo car today is safer in a crash, better handling and more reliable than most cars used to be.  I occasionally wonder what the retail cost of a (just to pick one) Chevy Nova built to 1960s standards would be if built today.  Imagine (or in my case remember) radio and heater optional.  Power steering and power brakes optional.  Mostly the brakes were crappy by today's standards and without dual master cylinders until about 1967.  Steering columns that were sure to impale the driver in a frontal crash.  Skinny, bias ply tires. Seat belts optional on many cars until the mid 60s.  Crush zones might have been on Mercedes.  Cars cost a lot more today in adjusted $ but there is a lot more value too.

People also have a lot more purchase power today than they did back then.  I'm not sure that's a good thing.  A 28 year old with a decent job can go out and buy a house and a car on credit that they would never be able to afford back in the 60s because the same credit mechanisms didn't exist.   They can finance the car out to 5-6 years and be completely upside down before ever having a chance to start their lives as adults. Just a couple of decades ago, banks expected people to prove their worth before loaning them money.  Now that is considered discriminatory for a plethora of reasons, and so the banks (who, like any business, need to make a profit) have found ways to be ethically predatory towards people to make more profit from those who can pay and makeup for the losses incurred from those who will never pay.

It would be very interesting to see how personal wealth V.S. purchasing power has changed over the years (Nate get on it!), and then debate on whether that is a good thing or not.  My stance is that the inflated purchasing power is a bad thing, because it is basically just another form of slavery.  Debt is servitude, indenturement to a bank for things you want, but cannot afford.

I used to do work for a company that had a policy to purchase all of their young employees a new BMW.  They would get young naive kids out of college as programmers and sales people and pay them 25K + bonus a year, but on their first day, the boss would take them out to BMW of Tulsa and let them pick out their new company car with all the options.  Every three years they have the option to get a new one of a higher series (typically as a counter to a raise).  Most barely ever make over 40K, but bust their hump every day to keep that damn car!  The owner of the company knows what he is doing.  The parking lot full of BMWs serves as advertising for the "success" of his company and works as a recruiting tool.  The employees typically sell their own cars, and their new ride serves as a rather useless status symbol, but is also their only mode of transportation.  The threat of losing their job is amplified by the possibility of losing status and transportation.  The job is salary and bonus, so they work unbelievable hours.  

[nathanm]

I already have been on it. The rise of personal credit started before our grandparents were born and was in full swing before the Depression. It was pretty much standard by the 20s to buy household goods on credit. That was largely what led the usury laws we decided were an evil imposition on the freedom of contract beginning in the 70s. Credit for home buying was also prevalent before the Depression, although typically done like it is in other countries with relatively short term notes that don't fully amortize, so you're on the hook for getting a new loan to pay off the balloon payment. That obviously led to a huge housing bust when credit dried up and people couldn't get a loan for the balloon.

In one big way, Battlestar Galactica was right: This has all happened before, this will all happen again.

[heironymouspasparagus]

Gas is more expensive but modern cars get better gas mileage.  I remember when 15 MPG was doing good.  

Gas has mostly been cheaper than in the 30's with a couple exceptions until about 2007 or so....a lot cheaper for most of that time!!

https://www1.eere.energy.gov/vehiclesandfuels/facts/2012_fotw741.html

And you can without doubt afford to buy a new car...you choose to put it into airplanes instead.  The biggest majority of the people here could afford to buy a new car.  Truly excellent new cars start at near $15,000 and go up to what guido spends...and beyond.  That is the big difference between now and 40 years ago - government regulations that require a certain level of safety and a very modest nod toward gas mileage...THAT is the ONLY reason you can buy a car today that goes 100,000 miles between tune ups.  7,500 miles between oil/filter changes.  Safety performance that gives you a reasonable chance of surviving a 60+ mph head on collision.  All kinds of exceptionally good things derive from that pesky "unwarranted government intrusion" into the lives of automakers.

Too bad we got rid of the 5 mph bumper, so repair costs would have stayed dramatically lower than they are today....proportionately.  But hey, I guess ya gotta have sellouts in Congress....