Strike 5 is a Blow Out
Roger Dapson
From: Steve Kangas <kang...@scruznet.com>
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Subject: Kottman: STRIKE FIVE!
Date: Fri, 14 Jun 1996 03:09:16 -0700
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Kottman struck out on all six challenges to supply-siders.
I'll address each one in its own thread:
>> CHALLENGE FIVE: What are your objections to the following
>> chart, which shows that individual income for non-supervisory
>> workers -- the vast majority of the workforce -- has been falling
>> in real terms since 1973?
Talk about light weight analysis, you both struck out. For
someone that spends as much time posting as you do, you
could spend a little more time on research.
Average weekly earnings of nonsupervisory workers, total private
industry, 1982 dollars
1965 $290
1970 297
1973 315 (Peak)
1975 292
1976 297
1977 299
1978 301
1979 291
1980 274
1981 271
1982 267
1983 272
1984 274
1985 271
1986 271
1987 269
1988 266
1989 263
1990 259
1991 255
1992 255 (Nadir)
(snip)
For the average age of the Mexican population to fall means that
there are more births than deaths.
While this supposition supports your position, it ignores
age distributions and the effects of averaging. An equal
number of deaths and births will also cause the AVERAGE
age to decrease, as long as the individual dying is 2 years
old or older. Therefore, this aspect of your argument is
just faulty mental exercise.
In order to provide a meaningful analysis of these numbers,
you must expand your analysis to include the effect of other
economic events. The majority of the change that these
numbers reflect is not due to fiscal or monetary policy,
Keynesian, supply side or any other. They reflect a real
change in the basic economic conditions of this country.
In 1973, Paul Volcker stated that the standard of living of
the American people had to be reduced. This statement
was in line with the communists of the New World Order
who needed to prepare the United States for assimilation.
Fiscal and monetary policy were used to created economic
distractions, along with other conditions such as; pricing
distortions caused by the oil crisis and related wage and
price controls, and rapidly rising health care costs (a
residual effect of government intervention during the the
1960's).
The precipitious decline occurring during the late seventies
and early eighties, was, in part, caused by labors inability, in
the short run, to obtain wage increases which compensated
for double digit inflation fueled by inflationary conditions. All
else being equal, labor would have recovered most of its
losses in the long run. (Note that the numbers do not reflect
the additional compensation labor derived through greatly
expanded benefit packages during this time period. This
would tend to straighten the decline of compensation.)
However, the destruction of the wage base was truely caused
by the deportation of the high value jobs of this country.
The Federal government induced it with the support and
cooperation of large corporations. The loss of the high value
jobs forced the impacted labor to accept jobs producing
goods and services of lower value at relatively low wages.
This defeats long term recovery of lost wages.
Struggling to maintain their standard of living, American
families committed more resources to production. This
occurred in the form of working longer hours, working two
jobs and significant increases in both spouses working. At
this point, your analysis kicks as a minor consequence to
the decline of average wages.
Your statistics of declining savings rates in STRIKE6
reflects the drive of American to maintain their standard of
living in opposition to government and corporate objectives.
This analysis also explains the income inequality. The
increases realized by the high income brackets reflect that
the corporate executives are rewarded for their international
successes and not penalized for subverting the standard of
living within this country.
To say that the decline in weekly wages can be fully
attributed to fiscal and monetary policy or growth in the work
force is bogus.
For the average wage of the
nonsupervisory workforce to fall (assuming a graduated pay scale
that doesn't change in real dollars) means that more workers are
entering it than leaving it. However, your analogy doesn't hold
because of the constant ratio of supervisory jobs to nonsupervisory
jobs.
(Well, not *entirely* constant - the percentage of supervisory jobs
actually grew a few points in the 80s). For every four nonsupervisory
jobs that are created, a fifth, managerial job is created also. Any
new managers ultimately must come from the ranks of the
nonsupervisors, which means that promotions within the
nonsupervisory workforce would cancel out the average wage
reduction caused by its growth.
Another way you can look at it is that the job market grows by
"cells of five" - four entry level jobs and one managerial job.
You can add as many cells as you want, but it still won't affect
the average wage *within* those cells.
So my challenge stands to you as before: what objections do you
have to the above chart showing that roughly four-fifths of the
civilian workforce have seen constantly falling wages?
> What is your objection that every measure of median and average
> household and median income for individuals goes up across the board
> during the Reagan expansion?
Several objections. I've made them before, and they've never been answered.
First, the workforce as a percentage of the population has been
growing for decades now:
Year (millions) Percent of Population
1970 82.8 60.4%
1980 106.9 63.8
1990 124.8 66.4
This means that there are a greater percentage of workers in those
households, which would raise household income, even if their
individual incomes were dropping.
Second, those income figures do not reflect how much longer
individuals are working, or how much overtime they are putting in,
to compensate for falling wages. A Congressional study of the 80s
found that "For most families, increases in net income have come
from more hours of work, not increases in hourly pay." (Congressional
Study: Families on a Treadmill: Work and Income in the 80's, January, 17, 1992.)
Third, median income is a crude measure of income disparity. Out
of 99 incomes, it only shows how guy #50 is doing. It does not reveal
how guy #1 or #99 are doing. It is disingenuous for you to meet liberal
claims that income inequality has grown by quoting median income figures.
What else can we say, YOU BOTH STRUCK OUT.
Steve Kangas
Roger Dapson wrote:
Obviously, there is more than one way that the average age of Mexicans
can change. I was responding to the way that Kottman was arguing that they
change.
On the other hand, your next arguments do not directly address the
statistical method or the legitimacy of the above chart; you simply
launch into a rant of the "communistic New World Order" as evidence
that my interpretation of the chart is wrong. The following
comments are sufficiently ludicrous as to merit no rebuttal.