Workers share of income at record low...

[RobsanX]

New statistics from the Dept. Of Labor are out. If you work for for a living you are getting ****ed...

Workers’ share of national income plummets to record low

By Zachary Roth
Tue*Jun*14, 12:37*pm*ET

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

Check out the chart below, compiled by the Labor Department, and posted this week by conservative writer David Frum. It shows that the decline began with the brief recession that followed 9/11 in 2001. But it continued even as the economy picked up again, and got even worse once the Great Recession hit. In the weak recovery since then, workers' share of income just kept on falling.



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.

[truthwolf1]

I had a pretty good run for about 5 years at the company I am working at but no raise this year which would of put me close to the salary I was making doing the same work back in 1999 before the crash. If you are in a stable position in creative/IT you are almost forced stay there these days because the alternative is all those $10-$13 dollar a hour temp/contract jobs on craigslist.

Really, WTF' has happened to this country?

[RobsanX]

It's a simple formula.

Economy takes a dive. Layoffs and no raises.
Economy comes back. Make existing employees work harder. Still no raises.
Rinse, repeat.

[texastorm]

When employers have to compete to get employees due to a reduced labor pool, pay rates go up. However there are more people looking for work, and therefore the pay goes down.

Simple supply and demand folks. Nothing new here.

[RobsanX]

When employers have to compete to get employees due to a reduced labor pool, pay rates go up. However there are more people looking for work, and therefore the pay goes down.

Simple supply and demand folks. Nothing new here.

I don't think it's that simple.

It's more like a positive feedback loop. Fewer people working, making less money means less spending, and less income for businesses. Throw in high food and fuel prices, and the problem gets worse.

War and massive public works projects got the US out of the Great Depression. What will get us out of this mess?

[devilock76]

I don't think it's that simple.

It's more like a positive feedback loop. Fewer people working, making less money means less spending, and less income for businesses. Throw in high food and fuel prices, and the problem gets worse.

War and massive public works projects got the US out of the Great Depression. What will get us out of this mess?

But there has not been less income for many businesses. As your original post indicates within the quotes, we are seeing record profits in some sectors.

Ken

[texastorm]

But there has not been less income for many businesses. As your original post indicates within the quotes, we are seeing record profits in some sectors.

Ken

This does not change my statement. If their are now 100 applicants for a 12-17 dollar an hour job, and there used to be 5 applicants in a typical situation. I can now hire at 12 dollars and hour instead of 17. I have a huge pool of qualified applicants and they are willing to work cheaper, I mean after all they cant find a damn job. As a business I am almost obligated to use this to my advantage.

So its simply supply and demand.
It isn't any evil conspiracy.

When the unemployment rate drops and HR depts are forced to hire the only qualified candidate from a smaller pool, that candidate will have more ability to ask for better pay. Right now people are just happy to be hired... period.

[truthwolf1]

Globalization. We are equaling out with the rest of the world but there will be many boomers retiring and Gen x/Y is going to need to fill the gap which might carry many of us through for awhile. THe wage issue however is going to look similar to Russia pretty soon where professionals will be making similar wages as gas station attendants.

[devilock76]

This does not change my statement. If their are now 100 applicants for a 12-17 dollar an hour job, and there used to be 5 applicants in a typical situation. I can now hire at 12 dollars and hour instead of 17. I have a huge pool of qualified applicants and they are willing to work cheaper, I mean after all they cant find a damn job. As a business I am almost obligated to use this to my advantage.

So its simply supply and demand.
It isn't any evil conspiracy.

When the unemployment rate drops and HR depts are forced to hire the only qualified candidate from a smaller pool, that candidate will have more ability to ask for better pay. Right now people are just happy to be hired... period.

1. my reply and quote was not directed to you, it was a reply an quote from a post by RobsanX. I mean of course all reply, but I was not addressing or more specifically attempting to refute anything you said.
2. His statement was businesses were making less money, and his first post that started this thread said the opposite. So more to the point I was addressing what appears to be an inconsistency between his posts, not a statement of what is fact or not.

Ken

[devilock76]

Globalization. We are equaling out with the rest of the world but there will be many boomers retiring and Gen x/Y is going to need to fill the gap which might carry many of us through for awhile. THe wage issue however is going to look similar to Russia pretty soon where professionals will be making similar wages as gas station attendants.

Well the boomers have to ACTUALLY retire. Right now their retirement accounts don't look like they did in the 90's, and well they gambled a bit too so now they aren't in a strong retirement position. Combine that with fear of what the fed may do to what they may be counting on from them for retirement and everything but later retirement looks bad.

Ken

[texastorm]

1. my reply and quote was not directed to you, it was a reply an quote from a post by RobsanX. I mean of course all reply, but I was not addressing or more specifically attempting to refute anything you said.
2. His statement was businesses were making less money, and his first post that started this thread said the opposite. So more to the point I was addressing what appears to be an inconsistency between his posts, not a statement of what is fact or not.

Ken

I see. I agree with that. Businesses tend to make out better as a whole when the unemployment rate is high. The labor is cheaper. Cheaper labor means more profits. Plus businesses generally tighten the purse strings when the economy looks bleak. Wanting to hire less people and spend less ad dollars.

When my personal economy looks bleak. I start eliminating things that I can do myself, like that lawn service, and that trip to Starbucks. Maybe a dry cleaning or two. So my net profits tend to go up. It stands to reason anyone running a business would try to do the same kinds of changes to make that bottom line look better in times of need.

As for boomers retiring. Some of my elder family members just cant retire, and I have an uncle who wont retire. You just cant count on old people to do the right thing and get out of the way of us youngsters.

[RobsanX]

2. His statement was businesses were making less money, and his first post that started this thread said the opposite. So more to the point I was addressing what appears to be an inconsistency between his posts, not a statement of what is fact or not.

Ken

To be specific, I said less income. They are compensating with overseas tax shelters, foreign labor, subsidies, etc. There's no getting around the fact that if people make less, they will spend less. Eventually it will catch up.

[devilock76]

To be specific, I said less income. They are compensating with overseas tax shelters, foreign labor, subsidies, etc. There's no getting around the fact that if people make less, they will spend less. Eventually it will catch up.

Original post excerpt: Similarly, over the last year or so, U.S. companies have made record profits

replied to post excerpt: Fewer people working, making less money means less spending, and less income for businesses.

I understand what you are trying to say, but you aren't saying it, not consistently. Income = profit, same thing really, I mean that is just basic accounting. I think you are missing the fact that people may be spending less on certain things, but when there are things they need and the wholesale price goes up a % the margin goes up a similar % if not more, like say gas. You ever notice the suppliers controlling the necessary commodities always seem to weather any economic slump just fine?

Ken

[sgreger1]

This does not change my statement. If their are now 100 applicants for a 12-17 dollar an hour job, and there used to be 5 applicants in a typical situation. I can now hire at 12 dollars and hour instead of 17. I have a huge pool of qualified applicants and they are willing to work cheaper, I mean after all they cant find a damn job. As a business I am almost obligated to use this to my advantage.

So its simply supply and demand.
It isn't any evil conspiracy.

When the unemployment rate drops and HR depts are forced to hire the only qualified candidate from a smaller pool, that candidate will have more ability to ask for better pay. Right now people are just happy to be hired... period.

This is absolutely true.

My company for example is having trouble hiring a certain type of employee in the department I work in. They don't have people lining up around the block, yet they have multiple open positions they need to fill, so they are forced to offer higher salaries even though we've lost money for the last 2 years. If there was a line of qualified individuals waiting to take the job, than the pay would go back down because as a company losing money how could they justify paying $90k for something which people are willing to do for $60k? But if there are no applicants when you post the job for $60k, than you have to keep going up until you can get someone. Like you said, supply and demand.


We have an excess of college graduates who were tricked into believing that if they just spent all those thousands on school that a job would be waiting for them when they got done. Little did they know that those jobs have largely been replaced by foriegn workers who have come here and are willing to do it cheaper and/or their jobs have been outsourced. It's all supply and demand, and right now there is no demand for workers, yet there is an increased supply of qualified workers, therefore the value of their labor goes down.




Robansx, I feel what your saying and I agree, but the thing is, if a company can lay off 10% of it's workers and continue to do business efficiently, than could it not be said that those 10% who were laid off were unecessary? They are trimming the fat, and why not? Their mandate is to operate in the most efficient manner to increase profits. There is no incentive for them to hire more people if they don't need more people. We simply have too many workers, which is why people are upset about our immegration policy. We don't have enough jobs to go around as it is, so how can we justify allowing others to come here and compete with us in the labor pool?

[sgreger1]

To be specific, I said less income. They are compensating with overseas tax shelters, foreign labor, subsidies, etc. There's no getting around the fact that if people make less, they will spend less. Eventually it will catch up.

The problem is that we work in a debt based economy wherein things are only good when people are out spending and borrowing, therefore increasing the money supply and making the economy larger. The problem is that it can never be sustained for any significant period, it will go up, but it must then come down at some point. While one side is advocating everyone spend and borrow more, the other side is saying "maybe we need to move away from the system that depends on everyone constantly spending and borrowing more". This is why I tend to side with the right-of-center way of thinking. While I don't agree with republican politicians or the GOP as a party, I can say that the basic ideas are right: we need to learn to spend less, save more, and not have so much debt. But the sad irony is that if americans do that, the economy fails.


You tell me who is the problem here, is it the worker/company who tightens their belt when things get tough, or is it the government and the feds who constantly advocate that we spend more and take on more debt?