102
So, here we are. It’s Thursday, and after spending nearly a week feeling sort of yuck, I now have a fever good and proper and everything looks like glass.
I’m not necessarily complaining about this. It was more or less inevitable when the electricity–and the heat–stayed out for eight days and four hours.
And I have nearly a week coming up, after tomorrow, when I have virtually nothing to do at all but collect a kid from the train station.
But in the meantime, I’m not very coherent.
That said–
I think the problem is defining “a family could live on one standard.”
Many years ago I came across a book called The Way Home by a woman named Mary Pride.
She was then–and may be now–a big noise in the Christian homeschooling movement, but her book was about how women could choose to stay home full time. And her big caveat thing was this–it’s always possible to do this if you’re willing to live on your husband’s income.
And her point, of course, is that most families are not willing to live on one income. When they say it’s “impossible,” what they usually mean is that they’re not willing to go without the things that would make it feasible.
My guess is that most families could live on one income if they were willing to live the way our families did when they only had one income–houses in the 900 to 1200 sf range, no air conditioning, no cable, one family car, new clothes bought at the start of the school year and restricted to what was absolutely necessary (shoes, for instance, consisting of one pair of school shoes, one pair of dress shoes, and one pair of sneakers of the cheap variety).
I think we vastly underestimate the difference in the definition of “a middle class standard of living” between the 50s and late 60s and now. I came from a very well-off family, and I got a new coat, new dress and new dress shoes for Easter, plus maybe five skirts and sweaters for “school clothes” and a pair of school shoes, plus a winter coast if I’d outgrown the last one, plus those inevitable Keds for gym. When I got to high school, my father let me have a purse.
One.
And that was pretty much the shot for all of us, including those of us from families who were undeniably rich. My mother was the full time wife of a “prominent” and very well paid attorney, and she cleaned her own house.
So my guess is, most of us, even in the Great Recession, could live on a single salary IF we were willing to live on it. Mostly, we aren’t.
As to ab’s suggestion that there might be a link between restrictions on the workforce–no children allowed, women at home–and higher salaries for working class and middle class men: a couple of things.
First, working class wives always worked, even back then. They were just restricted as to what they could work at. Aside from nursing and teaching, they were largely barred from the better paying working class jobs. Men worked the shop floor, and only men in the best paid places. Men were the firemen, the policemen, even the garbagemen, and a lot of unions worked very hard to keep women out.
Which makes me think that there should be some connection between higher wages and the restriction of the workforce (keeping children and women out), because limiting the supply vis a vis the demand drives wages up. That is, after all, what unions do. They restrict the workforce at a company to a subset of all possible workers in the economy and then use that restricted supply to force up wages and benefits.
As to whether women went out to work because men were no longer making a living wage, or women went out to work to raise their family’s standard of living–
If I remember rightly, being of the generation when women first went out to work, my guess is that the answer is: neither.
Women of my kind and class weren’t interested in raising the family’s standard of living, because we weren’t interested in getting married and having families.
What we were resisting was largely the idea that what we were supposed to do with our very extensive educations was to settle down somewhere and housewife, or–more and more common for the “girls” who came just before us–work for a few years as a secretary or assistant and then chuck it as soon as we got a wedding ring.
I can say with some confidence that, for myself, I wouldn’t have been interested in that narrative. And it got less and less interesting as public pressure brought an end to the more obvious forms of discrimination–the policy at Time, for instance, to hire men right out of college as writers, but women right out of college as researchers, at half the money.
Or the policies at most of the top law and medical schools of restricting the women admitted to any class to single digits.
But after all of this, I still think that the real reason wages have been stagnating is this: the period at the end of WWII represents an historical anomaly that won’t come again.
We’re just not the only industrial country in the world any more.
There’s actually competition out there.
And, unfortunately, we got to a place where it looked so natural to us to be the only man standing that we have convinced ourselves that:
a) we should just live like that without having to work very hard for it or to practice self-control or deferred gratification and
b) that if we don’t get it, there must be some vast conspiracy somewhere that’s denying it to us.
And now I really feel awful, and I’m going to go off and find some tea.
Today, unfortunately, I do have things to do.
21 Responses to '102'
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Yes, we’re compteting on a more level playing field.
However one thing – one dramatically important thing, you’re overlooking is the graph of overall productivity.
I’ll fudge the math for illustrative purposes; The worker who has a job today is producing twice as much money for her employer as she was in 1970. However, her wages have stayed the same or DECLINED, while almost all the money goes to — not her boss, who’s in the same boat, or even her bosses boss, but all the up to highest 1% of earners at her company.
And THAT distortion has nothing to do with little Budhhist, or Hindu, or Muslim (in Malaysia) women willing to work for 1/10 the wages of Americans.
michaelwfisher@cox.net
17 Nov 11 at 11:04 am
Twice when adjusted for inflation?
Cheryl
17 Nov 11 at 11:41 am
I’m exagerrating both for effect and because I don’t want to do the math, however simple that might be.
And yes, the graphs were in constant dollars if you wish to do the actual arithmetic.
michaelwfisher@cox.net
17 Nov 11 at 11:44 am
I suppose they’d argue that the skills needed to run a modern multinational aren’t common and naturally competition for the few available candidates means salaries go way up. It does look like greed, but that’s an innate human characterisitc and I don’t know how you control it without adopting a suitable moral code, or (in this case) possibly derailing the ‘terrible but better than any other’ capitalist system. The classic response, of course, would be unions demanding a bigger share of the pie (greed vs greed, like setting a thief to catch a thief), but I don’t see that taking off again in the US any time soon. Or someone could organize a stockholder’s revolt – which they won’t because they profit, too, and in many cases are organizations with similar structures.
This isn’t quite the same issue as another one that contributed mightily to the present disaster – the dishonest making and selling of ‘innovative’ financial products to everyone from the poor person wanting a mortgage to the fund manager wanting a good investment. That can and should be dealt with by legislation and criminal prosecution where appropriate. I don’t see how you can change companys’ pay scales in a similar manner without moving so far towards a centrally-planned and managed economy that we’d all be suffering from their well-known faults. That would be a case of the cure being worse than the disease.
Cheryl
17 Nov 11 at 12:33 pm
Jane is correct about the changing expectations of what consistutes a middle class life. The New York Times did a comparison about 10 years ago looking back to the 1970s and some of the main differences were smaller homes, only 1 automobile, 1 television, etc.
longacretoo
17 Nov 11 at 4:19 pm
In fairness to socio-economic historians, it’s terribly hard to sort out lines of causality with so many individual decisions involved. Some of those women are responding to opportunities not available in 1956–and some of those opportunities are the result of a large cohort of qualified women not prepared to stay home.
(Never does to underestimate peer pressure, by the way. It’s not easy to spend your vacation in a rented lake cottage when everyone else in the office is headed to Europe or the Caribbean. It’s even worse that they’ve taken their bright well-disciplined children to another school district, and left your kids in class with the children of the welfare mothers.)
We might be a little better equipped to look at the mothers of the Baby Boomers who started re-entering the workforce in the late 60’s and early 70’s. I had a window on this, since my parents moved into a new suburb of tract houses in 1960–and are still there. When JFK was shot, they called to make sure Mike Fisher’s mother was home before dismissing Sixth Grade, because she was the only working mother of about 60 of us. (And the houses were exactly as Jane described: no AC, no garage and the 26 X 44 single story was the biggest size on offer. I think the smallest was 22 X 36.) None of the ones I knew needed the money to survive. Their husbands hadn’t been layed off, and they went back to work as the children were raised.
Mom always said it was the carpet. The houses came with tile or wood floors, and when the women went back to work–because almost everyone worked until the first child was on the way–to afford the wall to wall carpet, they kept working through a second car and a move to the slightly ritzier “woods”–maybe half again to twice as large a house as the one they raised their families in. That’s about as far as the money went.
For myself, I chalked it up to boredom. Even in elementary school, you could see that the housewives with only one or two children were going a little nuts–schedules of which room to clean each day, for instance. I had playmates who were allowed to change clothes after school, but were not allowed inside the house afterward until dinner because it upset the cleaning program. You couldn’t get that sort of regiment in a hospital today. I don’t think it was the culture, Friedan or Steinem, working women on TV or any changes in the law. I think by the time those women got Junior off to college, they’d have worked for free to get out of those houses.
In fact, when you do the deductions–higher taxes, transportation, prepared foods and such–I think some of them did. Economics isn’t everything.
robert_piepenbrink
17 Nov 11 at 6:43 pm
Senior executive salaries are what they are because that’s what it takes to attract and retain qualified people. If they could get competent people for the price of a process worker, that’s what senior executive salaries would be.
It’s also a nonsense to argue that all the money goes to the highest 1% of earners in any company as if that were the whole story. So does most of the risk given that,for them, most of that money comes in the form of future performance incentives in the form of stock options. The stock tanks, and it’s 5/8ths of 3/5ths of Sweet Fanny Adams and the door, unless the senior execs own the company. The shares rise, and the senior execs’ remunerations rise.
On the other hand, a process worker performs a task that has a certain value. That value will include the nature of the work and the availability of competing labour to perform that same task. That worker has no more right to be paid above the value of that work than anyone else has to expect an uncompetitive price for any product. Someone, somewhere will be buying the same labour for a certain price. That price will reflect not only the value of the work, but also the availability of competing labour. There’s no relationship between the value of work of the senior managers and the work of those actually making the widgets.
We’re conflating separate and distinct issues, methinks.
Mique
17 Nov 11 at 7:30 pm
So let me get this straight. Productivity for ALL workers continues to rise — but it’s only the highest earners who deserve any raises?
Why doesn’t the “process worker” whose productivity has increased deserve any piece of that increased productivity, at least since the 70’s? What changed in the 70’s to make them not deserve any piece of the increased wealth that THEY are helping generate?
What am I missing here?
michaelwfisher@cox.net
17 Nov 11 at 8:17 pm
You’re missing the realities of life, Mike. Without the increased productivity, the “process worker” will be SOOL and out of a job. It doesn’t mean that his/her work has any commensurate increase in “value” relative to competing industries at home or abroad. It just means that everyone is forced to run harder and faster just to stand still.
It’s nasty, but centuries of long and bitter experience show that it’s the only system that works and is likely to work in either the short or longer term.
Also, are you saying that the fact that individual workers’ wages have not risen (presumably in real terms, ie constant dollars) since the 70s means that the overall cost to companies of employing such labour must similarly not have risen (in other than real terms), and that these businesses are therefore making greater “windfall profits” which are then going unfairly to senior management and, presumably, shareholders? Where’s the evidence for that even as a generality, let alone in specific individual business instances?
Mique
17 Nov 11 at 8:41 pm
“…overall cost to companies of employing such labour must similarly not have risen . . .”
“Increased productivity” *means* that relative to the each dollar in profit made, the cost of the labor to produce the same profit has gone down.
That’s why that line in the graph keeps going up.
Now, why is it only the highest levels of the company get any raises out of that increased productivity?
michaelwfisher@cox.net
17 Nov 11 at 9:07 pm
Michael, your fortune is made! Found a company, pay your workers 25% more than the competition, live yourself on the pay of a Sixties executive, and undercut everyone else in the business.
I’ll look to hear from you next in the financial news.
robert_piepenbrink
17 Nov 11 at 10:44 pm
So what Rober, you’re claiming it is fair that workers are not sharing in the increases in their own productivity?
The corporations are in fact making the money. Lots of money. For decades everyone shared in the steadily increasing producitivity of workers, including the workers themselves. It shows quite clearly in the charts.
Now suddenly everyone here is defending stealing “process workers” blind so that CEO’s can drive (or be driven in) a different Bently each day of the week, and drive a Ferrari on the weekends.
You honestly think this is either fair or sustainable?
michaelwfisher@cox.net
17 Nov 11 at 10:52 pm
I don’t know in each individual case, but are you talking about specific individual cases or across the board?
But I would guess that there is no conspiracy involved. Short of cartels, and no doubt they exist in some industries, the labour market governs labour costs as with everything else. How do governments mess with that without doing more harm than good?
There’s a good example of the problem here in Oz. The mining industry, particularly in Western Australia and Queensland, is booming. In and near my home town in western NSW, copper and gold mines which have been out of production and derelict for 100 years or more have been and are continuing to be reopened and/or expanded.
Demand for labour in the mining industry is huge and growing. The wool industry, the economic backbone of the area around my home town since it was first settled, cannot compete with the mines for the best quality personnel. An average shearer can make $70-80K at piecework rates, and the average shed hand, whose duties include such much less skilled activities as keeping a supply of sheep up to the shearers, sweeping the board, and other odd jobs earns considerably less than that in the sheds, say $25-30K and exceptionally up to $40K with some higher skills. It doesn’t take a genius to figure that keeping people in the wool industry will be nigh on impossible when even the least skilled shearers and shed hands can make a _minimum_ of well in excess of $100K in the local mines. Even the local government is struggling to retain its labour force because the local mines are attracting their staff.
The Australian military is being forced to pay even the lower skilled submariners incredible sums to attract and retain them. An senior cook on an Australian sub earns about $200K a year, only 50K or so less than the Chief of Navy. They earn more than an SAS trooper of equivalent rank in combat.
So, in that sort of market, with Asian and other nations with lower paid workers producing the same widgets, Australian industry has no chance of competing if wages alone were the determining factor, productivity increases notwithstanding.
You can bet your last cent that if it were an easy fix amenable to a political solution, the politicians would have been falling all over each other to fix it.
Of course, if you want politicians who react with knee-jerk emotionalism to complex problems, move to Australia where the idiots in charge of this place have just imposed a “Carbon Pollution Tax”, and their usual idiotic supporters really do seriously believe that it will help stop Climate Change”.
Hah!
Mique
17 Nov 11 at 11:01 pm
Robert can and no doubt will speak for himself, Mike, but I don’t interpret his remarks, or anyone else’s, as defending anything. We’re really just describing the undeniable reality of the world we live in. Experience proves that socialism doesn’t work. It also proves that Capitalism, and the market system, when left alone, does. It’s really that simple.
Either way, people on the lower end of the economic ladder suffer but, as Sowell says, those people are not the same individuals from survey to survey, which is why “the Charts”, like “The Science” are misleading.
Mique
17 Nov 11 at 11:57 pm
“You honestly think this is either fair or sustainable?”
Sustainable, probably. Lots of situations are sustainable, at least for a period long enough to cover any individual human’s lifetime.
‘Fair’ is more difficult. In a sense, no, it’s not fair that some people have more than others. But if you look at it more deeply – is it fair that I get paid a lot less for office work than a surgeon does for performing something really easy – say, an appendectomy? It matters that a LOT of people have skills similar to mine, and not nearly so many have a surgeon’s skills. It also matters that lack of a surgeon can kill the unfortunate with appendicitis, but the lack of someone sitting at my computer would cause nothing more that a decrease in the amount of organization and paperwork produced.
Unfairness in that sense seems like an unalterable fact of life. I think a lot of people are grossly overpaid for what they do, from some musicians (although not the ones I especially like, which is especially unfair!) to the managers of giant companies. But until or unless the employers of said managers – their boards, their stockholders – decide that they aren’t getting their money’s worth from them, I don’t see how that can be fixed. The closest I can come, as I mentioned before, is for workers who think that they are underpaid to organize and strike. But as Mique pointed out, the definition of ‘underpaid’ depends on just how many other people are out there willing to do the same job, and the amount of money they will ask for it.
I don’t always like the way our societies function, but I don’t always have a reasonable alternative either.
Cheryl
18 Nov 11 at 8:06 am
Michael, I was not addressing either fair or sustainable. I was addressing real. If the situation is as you describe it, my proposal will work fine, your workers will be substantially better off, and you’ll make a ton of money. If it can’t be done, than there’s something wrong with your numbers.
Statistics can be used to “prove” an amazing number of things. If you think yours mean something, show us.
robert_piepenbrink
18 Nov 11 at 4:27 pm
Seems to be a lot of all-or-none thinking here. Complain about one aspect of unfettered capitalism and suddenly the defense is that socialism doesn’t work? Haven’t you heard of a mixed economy?
CAFiorello
18 Nov 11 at 6:15 pm
CA, I’ve not only heard of one, I’m living in it. But it depends on what you’re mixing. Politicians and bureaucrats always seem to love “public-private partnerships” but they don’t work consistently for the rest of us.
As for “fair” and “sustainable” I hardly count “sustainable” as a word these days. It’s just a leftist term of abuse, like a conservative’s “unamerican” in an earlier era. If something really can’t go on, I often don’t worry a great deal. As has been said before, if a thing can’t continue, it will stop.
It’s conditions that are unfair and won’t stop on their own that worry me–but like “justice,” “fair” seems to have a wide range of meaning.
To me, a “fair” income is what I can produce for myself or what I can sell my labor for in a free market. And yes, that means that the EITC and various disability payments, both of which I support, are unfair by my definition. I’ve also been known to support mercy over strict justice.
To me, a monopoly is unfair–and usually doesn’t work very well in the bargain. That’s true of a single cable company or a single auto workers’ union. It’s also true of a single regulatory agency. I realize the impracticality of competing governments, but their cheerleaders seem blind to the defects which make me wish for things to be regulated at the lowest practical level, with the clearest and simplest regulation and the greatest transparency. For counter-examples, see ObamaCare, Dodd-Frank and the late unlamented cap and trade bill.
To force children to spend years in school while not teaching them basic skills is brutally unfair–and seems to be the fixed policy of some schools and both teachers’ unions.
To have one’s ability to practice a trade of run a business impeded by a horde of corrupt and inefficient government bureaucrats seems to me not only unfair but a major source of poverty in the world. But most of the people grousing about “fairness” and “sustainability” seem to feel we have a regulator shortage.
To have some bureaucrat or “activist” a thousand miles away who will never hold my job, and has no stake in my company decide what pay and working conditions are “fair” and use armed force to sustain his decision again strikes me as totally UNfair. I’ve had a lot of bosses. Some of them I didn’t much care for. But I’ve also known a lot of fuzzy science majors who wanted to dictate laws without risk to themselves, so I’ll take my chances on the bosses.
At least I can quit them.
robert_piepenbrink
18 Nov 11 at 6:50 pm
Socialism DOES work. It has worked very well in some forms, especially in mixed economies: NEP Russia, pre-war Nazi Germany, modern China, Scandinavia, the U.S. from about 1933 to 1973.
There is no such thing as Capitalism in the classical sense. All more-or-less pure Capitalist economies were wiped out by the first Great Depression and replaced with “mixed” (i.e., Socialist) economies. These days the giant corporations are as much enemies of real Capitalism as any futile “occupiers”. They just happen to favor a different form of Socialism, that descended from the philosophy of Comte, lately incarnated as the “corporate state” in certain central European dictatorships. Naturally so, because this form of socialism is based on collaboration between government and “private” enterprise, ensuring success for the latter. This is the so-called “Capitalism” of Little Bush and Barack Hussein.
The U.S. doesn’t need to convert to Socialism, because we (like every other nation) already are. What we need is to manage our planned economy with the future of the nation and the needs of the people in mind, instead of managing it solely for the benefit of a handful of looters who have no stake in our future.
abgrund
18 Nov 11 at 8:06 pm
You know, AB, I actually agree with about half of that. But by “handful of looters” are you discussing people like Jobs and Walton, or Pelosi, Reid, Gingrich and Summers? There is a serious difference between Netflix providing a new serivce to people who want it and Comcast securing government monopolies.
But “planned” economies plan for the present and not the future. Growth and progress comes from the unexpected–and the unregulated. Japanese car companies defied their trade ministry to become exporters, and American economic growth comes from out least regulated sectors. If by “planned” you mean “managed” it becomes worse.
I say again: a government can do a great deal of good by preventing theft and fraud, by building roads and schools and–very cautiously–dealing with monopolies and poverty. I’m rather partial to the old US crop price stabilization efforts–some of them, anyway. But the more you let a government say “you can’t sell under this price or above that one” or “you can’t practice this trade without a permit we (might) provide” or “we will decide what risks and hardships it is appropriate for you to undertake” the more the benefits will accrue to the governing and not to the governed. Micromanaging government will ALWAYS favor the wealthy powerful and connected. That’s why it’s so loved by the graduates of the right colleges, and by fuzzy science majors generally.
We’re actually seeing two competing groups of looters–and if the choice narrows to a bunch of corporate heads who want to rig the game in their own favor and a bunch of poly sci and sociology grads who want to run every aspect of my life, I’m with Bechtel and Standard Oil every time. At least there are aspects of my life they don’t care about. It’s more than I can say for the Obamas and Clintons.
[Vocabulary problem, by the way: AB, you’re obviously using “socialism” to mean what CA is calling “mixed economy.” and not what she’s calling socialism. Why not, just this once, opt for clarity over confusion?]
robert_piepenbrink
19 Nov 11 at 9:29 am
And to be more clear myself: even though both have been called “mixed” or “socialist” there is a great difference between government policies which on a personal level help losers and penalize winners–both in moderation: let’s call it a “cushioned” economy–and one which on a macro-economic level attempts to pick winners and losers–AB’s “planned” “managed” economy, I think. The New Deal–if one excepts the ICC–was largely cushioning. Food stamps, unemployment and EITC are cushioning, as are public schools. Obama’s “green energy” policy is managing. So is the light bulb ban, and restrictions on the size of a toilet tank.
Modern Sweden is largely cushioned rather than managed. Notice the Swedish government had no interest in owning Volvo or Saab, or in deciding whether there should or should not be an auto industry in Sweden, but in providing unemployment compensation and retraining. Post-WWII Labour Britain was managed AND cushioned–which is why the (pre-Thatcher) government wound up owning every fourth pub. Blair’s and Brown’s “New Labour” cushioned, but by and large did not manage.
I support cushioning with two hedges. As Jane has been pointing out, there is a danger that the Nurse Ratcheds will be given free reign to individually manage. There is also a danger that you’ll be making a sucker out of the poor stiff who goes off to wash dishes instead of staying home and mooching off the taxpayers. Both dangers can be avoided, but I get a little tired of earnest liberals telling me neither danger exists.
Planning and managing I’m opposed to on principle. If the central state were better than individual investors at seeing economic opportunity, then the Nurse Ratcheds would probably be right as well. (Notice how they usually run in the same pack?) And the history of managed states supports my case, I think.
But even if the central state could honestly and effficiently pick winners in theory, it wouldn’t in practice. What you’re doing is giving a big hunk of power and influence to Reich, Krugman, Chu, Gingrich & Co. If we’re lucky, they’ll convert power and influence into cash by way of book deals, speaker’s fees, lobbyist fees, consultant fees and stock offerings. The winners will be the people who can pay these things. A managed economy is a GREAT deal for the managers. I say if we’re lucky they’ll be corrupt. If we’re unlucky, they’ll be ideologically pure and unbribeable and that will be much worse. Notice how happy the French were to ditch the honest Jacobins like Robespierre and Marat for the nice corrupt Directory? The beheadings stopped and the government price controls went away.
Either Michael or AB–I have trouble telling them apart–was complaining that the last President of GM before the management state intervened had less stake in the success of the company than the janitorial staff. News for them: if Chu raises energy costs to where I can’t heat my house, HE won’t be out in the cold–nor did Obama lose any of his own money on Solyndra.
There is a lot of corrupt capitalism around–most of it in the guise of planning and managing the econmomy. (Ayn Rand wrote a novel on the subject you might find interesting, titled ATLAS SHRUGGED.) The virtue of real capitalism is that you have to play with your own money. I like that version better.
robert_piepenbrink
19 Nov 11 at 12:06 pm