Working Men: Not Doing as Well

I read a troubling report about the decline of mobility in the U.S. According to the report, men in their 30s today are doing worse than their fathers at a similar point in their lives. This study is the first in what will be a series of studies that will certainly have policy implications.

The study has a very prestigious pedigree. It is honchoed by Pew and includes input from Brookings, Heritage, AEI & the Urban Institute, so it runs the gamut of respectable opinion. Please read the link before commenting, since I will not provide explanation of terms etc. and you will want to know when I am using the report and when I am extrapolating. The report is very short and won't take much time to read.

Something happened in the middle 1970s that put some speed bumps in the way of the American dream at least in respect to men’s wages. Some of this might be societal changes. There were big changes in the 1970s. As women entered and remained the workforce in greater numbers, men’s wages may have suffered downward pressure. They certainly lost some of the responsibility as the dominant bread winner. Immigration could also be an explanation. Our immigration laws changed significantly in 1965 and the middle of the 1970s was when the big immigration wave we are still feeling began to wash up on our shores. There was also the baby boom, which especially coupled with large numbers of new female and immigrant workers depressed wages. Labor was plentiful for 30 years. Plentiful things tend to become inexpensive. (We may have recently hit another inflection point re wages, however, as I explained in "A New Labor Regime".)

We can also look to economic factors. The things I recall most vividly about the 1970s was the oil embargo, subsequent higher energy prices and stagflation. Less well known, we had the breakdown of Bretton Woods leading to the U.S. dollar declining against major currencies. The general rate of economic growth also slowed in the 1970s. 1972-3 seems to have been an inflection point.

Another set of factors was a shift to non-wage goods. Until the 1970s, for example, we paid little attention to environmental protection. Protecting the environment has many benefits, but it is clearly cheaper if you do not pay such close attention to it (think China today). Most of us are willing to accept lower wages in return for cleaner air and water, but we must recognize it. We also saw a growth of non-cash factors in labor costs, such as insurance, accessibility requirements, affirmative action and labor protection.

The report talks about absolute and relative mobility. These are explanation why absolute mobility may have been reduced. This, however, is the lesser problem. Relative mobility is what makes people satisfied with conditions – or not. What I found more troubling is that intergenerational mobility has slowed and the U.S. may even be doing less well than Norway, Denmark, Germany and even France. Most Americans do not object to inequality and many actually believe it is a good thing, but they do demand fairness.

In any case, this initial report is just the introduction. It makes some assumptions and asks some questions, but we will have to look forward to future reports (see page 7) to get data on many of the questions we want answered.

I have a line of inquiry that I do not believe the study plans to address. The question is, to what extend will a true meritocracy eventually lead to a MORE stratified society? The study mentions that 50% of a person’s success is explained by family, but seems to assume that this means the family money or position. We know that around 60% of a person’s intelligence is inherited, as are many talents and even temperaments. In a true meritocracy, natural intelligence and talent would displace privilege and family background. But since people tend to meet and marry others around them, after a couple generations of doing this, intelligence and talent would be more highly concentrated than ever leading to a greater stratification. Based on merit instead of money, cognitive ability instead of connections, it would be even harder to break into or out of. I have met people who are just smarter, stronger, faster and better looking than I am. They are even nicer and more pleasant to be around. There is no way I can compete in any kind of fair contest. Now imagine that on a societal level.

We may want to introduce some element of the “fortune cookie” society and even keep some aspects of class, recalling that an ant hills and bee hives are true meritocracies where each does what she does best to the best of her ability all day, every day until the day she dies.

Posted by Jack at May 25, 2007 9:17 PM
Comments
Comment #221319

jack
Thanks. It is interesting to note that productivity gains have not translated into matching economic gains for workers while the top of the economic ladder has prospered far more. This is not a coincidence.

Posted by: bills at May 25, 2007 10:05 PM
Comment #221320

And working women have not moved a step closer toward pay parity with men since Bush took office. Still around 74% of what men make doing the same job on average.

A simple lesson in statistics.

Joe makes $7 per hour. John makes $9 per hour, Jerry makes $11 per hour, and Goerge makes $13 per hour in 2000. Their median wage is $10 per hour.

Let’s move this analogy to 2007. Joe makes $7.50 per hour, John makes $11.50 per hour, Jerry makes 13.50 per hour, and George became a CEO making $500 per hour. In 2007 the median wage increased from $10 to $244.75 per hour. Which is to say half of this population makes less than $244.75 per hour and half make more.

Republicans love to tout the median wage improvement. But, note, that only one person of the four substantially improved their situation from 2000 to 2007.

This is an excellent analogy because from 2000 to 2007, executive salaries, sports salaries, star power salaries, lobbyist salaries, and managerial salaries skyrocketed. But, they represent a very, very small number in the work force.

The vast majority of workers improved their situation only slightly during those same years, and many did not improve at all, but, actually lost wages through job losses and rehire at lower wages, or improved by bringing another wage earner into the market from their family.

This precisely explains how it is that the median income rose so dramatically while working men lost ground. And given the parity having not changed much between men and women, it is likely women workers did not improve their lot much either, beyond what is accounted for by more women college graduates entering the professional white collar work force.

Posted by: David R. Remer at May 25, 2007 10:06 PM
Comment #221323

David

Women make 74% of what men make, but NOT for the same work. When women are doing the same work and have similar education and experience, the difference largely disappears.

You are also confusing median with average in your example. You do not have a true median in your example, because you have an even number, but it would be around $12.50 an hour.

The median is the point where half the group is higher and half is lower. That is why we use median instead of average, a couple of really high or low people cannot affect it.

If you got three guys making $10 an hour and one of them gets a raise to $10 million, if the other two stay the same, the median is still $10.

Posted by: Jack at May 25, 2007 10:45 PM
Comment #221324

>>If you got three guys making $10 an hour and one of them gets a raise to $10 million, if the other two stay the same, the median is still $10.

Posted by: Jack at May 25, 2007 10:45 PM

Jack,

And this reflects a truer picture of…what!?!

Posted by: Marysdude at May 25, 2007 11:07 PM
Comment #221325

>>If you got three guys making $10 an hour and one of them gets a raise to $10 million, if the other two stay the same, the median is still $10.

Posted by: Jack at May 25, 2007 10:45 PM

Jack,

And this reflects a truer picture of…what!?!


That half the people make less than $10 and half make more. In David’s example he uses the mean, an average, which is substantially different from a median. Note his example where the mean is $244 vs. Jack’s true interpretation which is $10.

Posted by: Silima at May 25, 2007 11:26 PM
Comment #221326

Marysdude

The median indicates that half the are higher and half are lower. So if the the median rises, you cannot say that MOST people are not doing better, since at least half are above the median. If the top 10% or even the top 40% are the only ones doing better, the median does NOT move up. Therefore, the idea that only the rich got richer is incorrect. If the median rises, at least half the people got richer and it is very likely the others did too.

I was just pointing out how the statistic works.

We need to get an accurate picture of what is happening in society. Looking only at the best is not valid, but looking at the worst is equally invalid. What we have today is a very good situation with some challenges. It may be fun to find fault with everything, but it is a bit silly and not useful.

When people insist on finding only fault, it probably means they will not do anything to make any real improvements. They are enjoying the pessimism too much. We all work with people like that. We call them managment challenges when we are being charitable; losers when we tell the truth.

Posted by: Jack at May 25, 2007 11:29 PM
Comment #221327

Silima

Thanks. I was writing when you were, so I just repeated what you were saying.

Posted by: Jack at May 25, 2007 11:31 PM
Comment #221329

jack

Giving more women entering the workforce as a cause of immobility is backwards. Women entering the workforce was a response,especially from the nuclear family,to immobility.I would also submit that there are consequences to not having a parent at home to care for our children.
Giving regard to enviornmental concerns as another cause is less than accurate.Many enviornmental considerations are cheaper and in the long run they are all cheaper. Using China as an example will be an interesting one to follow. At some point the health problems etc. will come back to haunt them. Another example is Russia and the former Soviet Union. Past enviormental disasters there have dramatically slowed economic growth.China will sooner or later get the bill.

Posted by: bills at May 25, 2007 11:55 PM
Comment #221337

Another trend, possibly related, is that not as many men are entering and completing college as are women. That’s been true for at least a couple of decades. Nowadays, men account for about 42 percent of college students. They also don’t do as well academically. It seems that women, in general, are much more aware of how important an education is to economic independence and well being; they don’t take it for granted that they can live well without continuing their educations.

Posted by: Gerrold at May 26, 2007 4:55 AM
Comment #221339

Jack, I am embarrassed for you. Look up the definition of Median in any Statistics 101 course. It is the average between the two instances that mark the center of the distribution.

Sheesh! No wonder all those articles in the past you wrote about touting the median, you thought were some kind of Republican bragging rights. Never mind, don’t trust my statistics and probability education required to get my degree in social science, I will quote you the definition which you can confirm for your own education.

Here’s the quote:

median
Definition

One type of average, found by arranging the values in order and then selecting the one in the middle. If the total number of values in the sample is even, then the median is the mean of the two middle numbers. The median is a useful number in cases where the distribution has very large extreme values which would otherwise skew the data.

Now, note the word ‘mean’ in the definition. That word is defined as the average. Note the first sentence of the definition: “One type of average”. The Median in the examples I provided is the mean (average) between 2nd and 3rd instances, (add them both and divide by 2) since the population size was 4. My examples precisely followed the definition of a median, and were dead on accurate.

A lot of Congress persons can’t tell the difference between a mean and median either. A lot of Republican Congress persons of late. So, you are in good company.

The Median too can produce false impressions just as averages can skew results, as when either the top or bottom halves of the median see a dramatic shift in value, but not both. Also, when the sample size is small and even and the values of the middle instances are wide apart in favor of the upper or lower distribution (the examples I gave). My demonstration which is statistically accurate, provided examples of how statistics can easily hide or distort reality measured in human terms instead of numbers.

The Bush administration and OMB are fond of reporting also how the average income has increased, as if that demonstrates a rising tide lifts all boats. But, that too was a partial lie of statistics. Not all boats rose by a long shot. Ask any of 10’s of thousands of Katrina victims, for example, still waiting to be made whole after assurances to that effect or the millions who have been layed off during that period and rehired at lower incomes.

The Median income rose, but, the ones whose income rose dramatically above the rate of inflation are at the top end of the income distribution, while those at the lower fell into 3 groups, those whose income dropped in real dollars, those whose income kept pace with real inflation (meaning including energy and health care inflation), and those whose income gains outpaced inflation but, not dramatically as occurred at the top half of the income distribution.

The largest tax cuts went to the wealthier via capital gains cuts, while everyone including the wealthiest enjoyed income tax rate cuts to counter the recession. Those who trade directly in the markets or through brokerages saw large gains via the capital gains tax cuts, while those who invested in 401K’s, the majority of them being the middle class, did not enjoy those capital gains cuts, as capital gains are not paid until one sells, and 401K’s are largely retirement long term investments.

This partly explains why the top half of the Median got substantially wealthier than the lower half of the median.

Posted by: David R. Remer at May 26, 2007 6:03 AM
Comment #221341

Jack, Perhaps another area of investigation should be the laws passed since the early 80’s that have had a negative impact on the labor unions and the economic theories that became popular at around the same time frame such as the trickle on theory. Certaingly Globalilzaton as called out by the WTO and the transnationals should be another focus of the think tanks you mentioned.
It doesnt make sense to me to think that on the one hand millions of womens entered the market place and on the other hand there was an overabundance of labor in this country yet we cannot live with out those in this country illegally working the lower wage jobs. Seems that as the working class realized that population growth decreased the wages of labor and took action (ZPG) the industrialist opened the borders to cause millions of good paying jobs to leave and millions more laborers to enter the country to up the population.

Posted by: j2t2 at May 26, 2007 9:24 AM
Comment #221342

BillS

I am and always have been a strong environmentalist. But unlike the environmentalist lite – I recognize that there is no such thing as a free lunch. Many environmental programs do pay off economically in the long run. More do not. They pay off in other - better – ways, but they cost money. Protecting an endangered species, for example, has lots of costs and usually no economic benefit. Please do not get the impression that I think we should not do these things, but understand that they have costs.

BTW - Not all my suggestions are right and none of them is the only cause. What we find is an inflection point around 1972. I am just asking myself what happened then that changed.

Gerrold

Education is a female friendly environment. I have a daughter and two sons. I think all three are similar in intelligence. My daughter has always gotten excellent grades. She does what she is supposed to do. The boys do not. But they figure things out in more practical ways.

Maybe we need an affirmative action program for boys.

But that is not what I am talking about re wages. It is simply that when you bring in large numbers of new workers (female, immigrant, baby boom) you lower the price off labor.

David

Do not cry for me. I know how to use statistics and used it properly. Read your own definition a couple of times. Take this simple test.

2, 4, 6, 8, 1,000,000. Which of these numbers is the median? If I make that last number 1 billion, does that change the median?

The definition you provide is what I constantly try to explain re the median - “The median is a useful number in cases where the distribution has very large extreme values which would otherwise skew the data.”

In your example, since you had no middle number, a logical course would be to extrapolate to the place between the two middle numbers, which I did. That number is $12.50. What you did was use the average and skew the data. Anyway, four is not enough to have a real distribution. It would be very unlikely in a real world distribution not to have some numbers that fell on the real median or that the difference between the two middle points would be very great.

The reason I use average less often in my won writings is BECUAUSE it overstates gains. I am not making things look too goo. Income averages are almost always higher than income means. I know my numbers would sound better if I used average. I do not want to mislead on this point, even if most people would not notice, and take the lower figures. That is why I have to constantly explain that the median means that at least half the population is ABOVE that point and so not everyone could be suffering so much.

It is also why it is so frustrating when people keep on trying to criticize my formualtion based on their understanding of average when I use median.

I do not have a degree is social science. I only have an MBA. We study statistics too. The only difference is that if we make mistakes, we lose money, which gives us incentive to use the numbers in a practical way that makes a real difference.

I like to look at data and ask, “So what do we do with what we really face?” Most people prefer to look at the data and blames somebody and wallow in the misery and pretend that some theoretical system would produce optimal results.

When I say median, I mean the useful measure. I am not stretching the definition to include or exclude lots of theoretical possibilities. When the median income rises, a least half of the people counted have improved their incomes. I really do not believe the lower half all got worse. That is possible statistically, but unlikely. Other measures indicate that is not the case.

re the tax cuts, you are left with the incovenient truth that this income problem started around 30 years ago. It has also been an international factor. In other words, it has continued through many sorts of tax regimes. Income inequality actually DECREASED from 2001-2004, even with the tax cuts, because of economic slowdowns. Unfortunately, one of the drivers of inequality is economic growth.


Posted by: Jack at May 26, 2007 9:40 AM
Comment #221344

j2t2

You have to recognize with the facts of chronology. The slowdown started around 1972. You have to deal with changes that took place at that time or before in order to have causality. Things that happened in 1982 cannot have changed conditions in 1972.

Posted by: Jack at May 26, 2007 9:44 AM
Comment #221346

The study doesn’t seem to include benefits along with wages, which makes it entirely useless. Of course real money incomes are decreasing, because employers are paying for health care, social security, etc.

Every real economic study taking into account both wages and benefits shows that median real incomes are rising for basically every group investigated! Not as fast as they used to rise, but that’s because the industrial revolution is over. Much wealth is now spent on services, which do not allow the same kind of productivity increases that manufactured goods do. It costs as much or more to train a doctor now as ever, but our factories are far more efficient than they were even 20 years ago. GDP growth will continue to decline until all goods are basically free and we only spend on services; unless robots replace humans in service jobs.

Posted by: Human at May 26, 2007 10:02 AM
Comment #221350

Jack, I thought I was. The report spoke of the last 30 years as being the period of the largest decline in mobility. The seventies brought us the end of the vietnem war, the application of the great society laws and the first rumblings of the energy problem. The agressive thought process regarding the destabilization of the unions and the rise in corporate welfare (such as the Chrysler bailout were in play as well.
Or maybe the end of the WWII boom and the start of more significent global competetion started the trend.
My belief however is that a change in the attitudes of those better off in our society towards the new deal laws is the root cause of the problem. We just cant stand those we perceive to be less intelligent or those that dont work as hard as us to reap rewards that we think may come at our expense. Hence the Reagan revolution. Us boomers have always been self centered, probably due to the affluence of the times and the swelling of the population. Just my thoughts though on your excellent post.

Posted by: j2t2 at May 26, 2007 11:19 AM
Comment #221369

Jack said: “When I say median, I mean the useful measure.”

Well, there we have it folks. Jack rejects the definition of Median, and uses his own to make his arguments.

Also, note where Jack says: “2, 4, 6, 8, 1,000,000. Which of these numbers is the median? If I make that last number 1 billion, does that change the median?” By definition it doesn’t. But, in the real world if the top half of the distribution numbers increase significantly more than the bottom half, then YES, the media does change, upward. Which is precisely what has been happening in America. As in this example, 2,4,16,20,1,000,000. The median went up, significantly, but, the lower half of the distribution values did not grow at all.

You can’t make up your own mathematical definitions and expect to be credible. My number set and Median conformed to the Universally accepted definition of what a Median is, where there is an even number of samples or population, in which case the median becomes the AVERAGE or MEAN of the two middle instances of the distribution. Which I did to illustrate the point that the Median rising doesn’t lift all boats.

Posted by: David R. Remer at May 26, 2007 2:48 PM
Comment #221370

And yes, Jack, I agree with you that there has been a decline in real single wage earner incomes for decades, requiring the current 2 wage earner family in 10’s of millions of cases to remain in the middle class, as opposed to the 1950’s and 1960’s when a single factory wage job was sufficient.

I also agree, that poverty is not as dire today as it was in the 1950’s and 1960’s thanks to safety net programs.

But, the issue at hand is not whether this year is better or worse than last year. The real political issue at hand is how do we address the entitlement deficits to come with a national debt well over 10 trillion dollars? The means and medians of the present and past don’t even begin to address that monster coming at us.

End the entitlements and you radically depress consumption in the American economy, causing at the very least a deep and prolonged recession in industries like health care, housing, agriculture, and consumer durable goods. Fulfill the entitlements for the baby boomers under current policy, and the U.S. becomes a Brazilian debtor nation of the 1980’s with runaway inflation.

Posted by: David R. Remer at May 26, 2007 3:09 PM
Comment #221374

David

The median is the instance that falls at the center. If the entire top half PLUS 1 moves up, the median moves up. Otherwise it does not. I am not making up any definition. I am using it properly. My point is that I am using it INSTEAD of average because it better states real changes. The median is the lower number. If we use the average, everything looks even better.

I am not making up any definitions. You are trying to read more into the statistic than there is to find.

Here is the ground truths about the statistic I use.

Growth of the top 1%, the top 10% or in fact anything less than the top half of the distribution does not create any changes. Therefore, if the median income rises, we know that at least half of the group plus 1 has improved. You may believe the lower half did poorly, but you have to say that the majority of people improved.

So if the median rise, we do not know whether or not the rising tide has lifted all ships. We DO know that the rising tide has lifted a majority of ships, at least the top half plus one.

We do not disagree about the need to address the entitlements monster. That is a problem that has been building for generations. The problems with wages for males is also a problem that has been growing for many years. The inflection point was around 1972, so the idea that we can solve the problem by addressing something that happened five or even 25 years ago misses the point.

We obviously have some sort of structural situation. Maybe we are measuring the wrong things. Household composition and sources of income have changed a lot since 1972. My father worked 12 hours a day in a factory. My mother didn’t work ourside the home, but she had a lot of work at home and I bet she put in at least ten hours a day. We had virtually no investment income. I work 9 hours most days. My wife works 8. We get around 25% of our income from investments. My wife and I put in fewer total hours of work than my parents did and significant amounts of our income come from non-wage sources. My contribution to household income is less than my father’s, but my family is better off and because of changes in family structure and labor saving devices, we work less. My mother actually used a wringer washer and ironed clothes. I do the laundry on Sat morning. All my clothes are wrinkle free because of new fabrics. As long as I take them out of the dryer when they are still warm, they look better than my mother’s ironing.

Posted by: Jack at May 26, 2007 4:49 PM
Comment #221375

Folks imply jealousy. It’s not.

Thanks to Jim Garland, the author (as sung by The Almanac Singers, 1941):

I don’t want your millions, Mister,
I don’t want your diamond ring.
All I want is the right to live, Mister,
Give me back my job again.

Now, I don’t want your Rolls-Royce, Mister,
I don’t want your pleasure yacht.
All I want’s just food for my babies,
Give to me my old job back.

We worked to build this country, Mister,
While you enjoyed a life of ease.
You’ve stolen all that we built, Mister,
Now our children starve and freeze.

So, I don’t want your millions, Mister,
I don’t want your diamond ring.
All I want is the right to live, Mister,
Give me back my job again.

Think me dumb if you wish, Mister,
Call me green, or blue, or red.
This one thing I sure know, Mister,
My hungry babies must be fed.

Take the two old parties, Mister,
No difference in them I can see.
But with a Farmer-Labor Party
We could set the people free.

So, I don’t want your millions, Mister,
I don’t want your diamond ring.
All I want is the right to live, Mister,
Give me back my job again.

Posted by: womanmarine at May 26, 2007 5:20 PM
Comment #221376

Jack, your personal story dramatically exemplifies the complexities of economic variables that a statistic like the Mean or Median cannot possibly capture.

That is the point. To say some in the upper half improved or some in the lower half worsened is not a very useful statistic when discussing worker incomes. Hell, there incomes could have risen 10% but, their cost of living could have increased 20%. Hence the statement that incomes rose gives nothing of the real picture of what is going on.

And before you come back with the word “real” wages, check the definition and history. It changes with administrations and political policy goals. Currently producer and consumer price indexes, used to measure core inflation, in the computation of real wages conveniently leaves out “volatile” components like ‘seasonal’ energy and food increases. But, reality dictates that energy and food should be included because they have become a fairly stable upward pressure on the price indexes year over year. Hence, this administration is lying about real wages growth because they have subtracted energy and food inflationary pressures from the computation of real income growth.

That lie MISrepresents the real income increases for the lower half of the Median income distribution. It does not speak to near record highs in long-term unemployment in 2004 with only a small diminution since that time, conveniently left out of the unemployment report indexes.

The games political economists play with voters using statistics reminds me of the big kid who traded with a little kid, a large jumbalicios bubble gum weighing 1/8 oz. for the little kid’s bag of small bubble gums weighing 1/2 oz. The little kid actually thought he made out like a bandit and voted for the big kid to be the leader in the neighborhood. Hilarious if it weren’t backed by real anguish, struggle, and suffering by millions of voters who just don’t know a median from a grassy highway divider.

Posted by: David R. Remer at May 26, 2007 5:36 PM
Comment #221377

David

The incomes are adjusted for inflation, so the increase of costs are factored in. There has undoubtedly been a rise in inequality since the early 1970s, but big tax cuts, Ronald Reagan or George Bush does not explain it, since it started before them and is happening worldwide.

Some inequality is good and fair. What we have seen since 1972 is not that the poor have become poorer. They have not. But the better off (not necessarily the rich only) have become richer.

One important factor is that the value of a college education and/or learning special skills has risen. This is not something we want to change very much. Another more subtle change is the devaluation of tangible goods and the increasing value for ideas, software etc. A person can only shovel so much coal or hew so much lumber. The difference between the most productive and least productive is limited. When we talk of ideas or patents, one person can have an idea that created billions. Think of those Google guys.

I agree that we have a problem when inequality gets so great that it stops people from striving to do better. I am not sure how to fix this, however. The super rich are not much affected anyway. Warren Buffet and Bill Gates are giving much of theirs away. Kennedy and Kerry have learned to avoid taxes. How do you get at them? Do you want to?

Womanmarine

The words of the song imply that the singer lost his job because somebody got rich. This is less and less the case. We do not live in a zero sum society. New wealth is being created w/o anybody losing any at all. In fact, the rich guy is likely to have created jobs.

We have to get rid of these old fashioned ways of looking at society. They will not help us solve today’s problems. We need to change the incentives in society. An average person with a college education and reaonable math skills stands almost no chance of being poor. The same goes for a skilled worker. A HS drop out w/o skills stands almost no chance of NOT being poor. We need to figure out how to get the dropout to behave more like the graduate or the skilled worker.

In 1941, the problem was too few opportunities. Today it is that too many people do not have the skills to take opportunities available.

The solution to the first problem is easier. It is a matter of physical captial: open a factory, build a new shop. The solution to the second involves building human capital, which is much more complicated.

So the guy in the song cannot have his old job back. It is now done by machines or has been reengineered not to require unskilled labor. The factory can offer lots of jobs, but they require special skills. It is a mismatch. Singing that song is less interesting.

Posted by: Jack at May 26, 2007 6:11 PM
Comment #221381

Jack, when you are dying because you had no insurance and could not afford preventative measures, you are as poor as any person in America has ever been poor.

It is not just numbers of dollars for liberal minded folks, but, it sure seems to be for a lot of conservatives and libertarians.

Posted by: David R. Remer at May 26, 2007 9:04 PM
Comment #221389

David

Yes. We are all trying to make the fewest number of people miserable and the most prosperous.

Many government policies have unintended results. As we saw with many welfare programs of the 1960s and 1970s that created more poverty, misery and crime. We are now tearing down the giant public housing mistakes. It may take a generation to repair the human cost.

It seems very easy to just have government step in and correct what we percieve as terrible things. But we must be very careful when we use the tools of the state, since they all involve coercion, regulation and exclusivity.

The most important thing we do every day is eat. Yet we do not rely on government to provide each of us with our daily bread. When government is responsible for bread, there soon are shortages and lines.

There are some things government must do. There are some things government can do and there are many things government cannot do.

Posted by: Jack at May 26, 2007 11:08 PM
Comment #221399

David, Jack,

The Federal Government’s statistics on median wage are broken down into percentiles of 20%. Thus, median wage of the first or poorest 20% is based upon their income, unaffected by the top 20%, or George’s income in the analogy above.

The next percentile is based on the next 20% of wage earners, and so on up to the top 20%.

Every percentile has seen remarkable increases in median wages throughout the 90’s and into this millenium. Note I said every!!!

The bottom and top percentiles have seen the most growth in their median wage, and the middle three have seen only slightly less. No group has seen an increase in median wage of less than fifty percent of the median wage beginning in 1990. This has been a phenomenal two decades. Yet, we still have deficits out the wahoo. There is no excuse for this in the 90’s, or in this decade except to blame Congressional spending, much of which was controlled by the Republicans, except in the early 90’s. Although, I will say that Newt’s new Congress in the 90’s tried to freeze a lot of spending only to be beaten with a stick by Clinton.

With all of this new wealth, and record revenues pouring into the government, until we can get some control on spending, (as I paraphrase one Republican Presidential candidate who stated, “Congress has been spending money like John Edwards in a beauty shop”), it will not matter if we have high taxes, low taxes, or somewhere in between. There is just no excuse. But, let’s be clear, the tax cuts have in no way hurt the economy and most experts agree that they have helped tremendously, especially after the WTC fell in 2001, and considering the corporate scandals of the same period. To think we cruised through those with hardly a glitch is pretty astounding.

JD

Posted by: JD at May 27, 2007 1:29 AM
Comment #221400

Jack said: “But we must be very careful when we use the tools of the state, since they all involve coercion, regulation and exclusivity.”

This is what gets me about Republicans and to a lesser degree Democrats. The fact that you all begin with the assumption that government by nature is corrupt, overly intrusive, and too exclusive. That assumption NEVER leads to action to make politicians ethical, responsible, and inclusive in their decision making, policy and action.

That was the danger of allowing Republicans to control government, it was a self-fulfilling prophecy chomping at the bit to occur.

America was founded on the beliefs, policies, and assumptions that government could be effective and responsible if the voters with a vested interest in their holdings and children’s futures insisted on overseeing what government does, and removing those who fail the voters vested interests and their children’s futures.

Yes, the assumption even then, was that power corrupts. But, that is why the vote and division of branches of government, and oversight were designed to compensate. We as a nation need to return to the assumption that we the people can and will exercise our authority and power to insure that politicians succeed for the people and nation or be removed from office with dispatch.

I respect the down payment that a slight majority of Democrats are making in legislating against some of the the kinds of legal bribery and blackmail that now controls our government. I immensely respect Republican Presidential candidate Dr. Ron Paul for speaking forthrightly to this issue of holding government accountable again. If just 1/3 of Republicans in the Congress would reach out with Democrats toward better government, some of the changes needed would become reality.

But, I see no reason yet, to hold vital breath on that happening.

Posted by: David R. Remer at May 27, 2007 1:30 AM
Comment #221403

While I agree that a number of factors have depressed middle class wage growth, I believe the current generations’ inability to live within their means is largely to blame for the current and/or future hardship of many individuals. Since 1992, the personal savings rate in the U.S. has fallen from an average of >8% from 1952-1990 to -1.0% as of 2006 (approx. average of NIPA and FFA rates - see link below).

Based on my own conjecture, I partially attribute this phenomena to shift in historical perspective. The current generation suffers from their historical perspective because the economic conditions during their lifetime (post-WW II) have been largely positive. In contrast, our grandparents and/or great-grandparents suffered through the Great Depression and two World Wars. To a large degree, this impressed upon those generations the value of fiscal responsibility. They refused to be caught by economic hardship EVER again and worked hard and saved money to guard against it.

Clearly, fiscal responsibility and fiscal skills have a large impact on personal success and security, and the degree to which these values/skills are passed on aids the success of subsequent generations. Now 3 and 4 generations removed from those with a Depression era , the fiscal responsibly of the population as a whole has degraded because experience has not necessitated it (most people don’t comprehend economic disaster when they have not lived through it). Thus, they need not prepare their children for it.

So while income growth is depressed among the middle class, this hole is dug deeper by the lack of fiscal responsibility by an increasing number of individuals. To me, the argument that middle class Americans are worse off than their father is moot. People are can afford more cars, more house, etc. than their parent’s generation even on the same real income but they expect it sooner and amass mountains of debt in order to do so. Thus, more and more people bite off more than they can chew and suffer under debt. This debt weights against improving their class standing throughout their life (due to their inability to take risks).

Generally speaking, the rich will get richer because their parents will ensure they learn how to amass wealth. The average American will suffer the consequences unless they quit enslaving themselves to the rich through massive debts, start living within their means and, therefore, give themselves the opportunity to move up in life.

http://www.bea.gov/national/nipaweb/Nipa-Frb.asp

Posted by: Mr. Haney at May 27, 2007 2:03 AM
Comment #221414

David

I do not believe the U.S. government is significantly corrupt. The problems are matters of size and organizational behavior. Government by nature spends someone else’s money and it get that money not by voluntary contributions, but by compulsory taxes. Government is also executed by bureaucrats, who are often hard working and honest, but lack the day-to-day connection with the things they regulate. Then we have the layer of politics. All this means that there are many things government cannot do well.

Add to that the complexity of size. A local government can be close to the people and their needs. As size grows, it becomes more isolated. That is why when you look at various ratings of countries, small, homogeneous countries in Scandinavia or places like New Zealand always are the best run.

America was not founded on the belief that government would solve all or even most of the problems of the people. Exactly the opposite is true. It was founded with the wisdom that government should stay out of most business. They understood that government was a threat to liberty. They developed a government with checks and balances to create inefficiencies in the exercise of power. It worked.

You are much into the triumph of hope over experience. You distrust Bush and his administration. Bush was elected by a majority of the American voters. This is what you get. At least half the time, the government will be controlled by people you do not like. You are advocating more power for Bush (or people like him). You cannot assume that future presidents will all be good and competent in all or even most things. That is why we try to keep the things they do limited.

Mr Haney

I think you have a point. Nobody under the age of 30 can remember a bad economy and nobody under that age of 80 can remember a really bad economy. We have come to see consumption as our right.

Americans have be so rich for so long that some of us forget that we need to produce wealth before we can consume it.

Posted by: Jack at May 27, 2007 1:53 PM
Comment #221418

Jack said: “You are advocating more power for Bush (or people like him).”

Man, you are right up there with Stalin or Hitler when taking liberties. Care to quote where I have EVER made such a recommendation? :-)

Posted by: David R. Remer at May 27, 2007 5:53 PM
Comment #221429

David

You want to expand federal power. History indictates that people like Bush are often in power. In fact, the nature of our system is that nearly half of the voters voted against whoever is in power.

If you expand federal power, you are trusting whomever the people vote into office. Your recommendation is implied.

That is a fundamental flaw in the reasoning of those who want to expand government power. They make the unreasonable assumption that if they expand the government it will be used for good by good men and women, who will also be wise enough to know how to use it. Our experience does not support such assumptions.

Posted by: Jack at May 27, 2007 10:57 PM
Comment #221436

Jack, what I want are permanent and effective solutions to our problems as a nation and people. In some ways that would require an increase in federal government and others a significant decrease.

The Government should be whatever size is necessary to protect and defend the Constitution and this nation’s future. I am not tethered to any ideological ethereal idealism about the size of government. Government is a tool of the people to accomplish goals they cannot accomplish as individuals or small groups.

Jack said: “If you expand federal power, you are trusting whomever the people vote into office.”

That statement makes no logical sense, Jack. If you decrease federal power, you are still in the position of trusting whomever the people vote into office. My appeal is for VOTERS to start exercising their vote with some due diligence and toward the end of solving problems and insuring our nation’s future, instead of playing this abjectly STUPID game of my side is better than your side.

Both sides have ample numbers of incumbents the party loyalists with a lick of sense and responsibility to America should be kicking out of office in 2008. Domenici, Jefferson, Kyl, Lieberman, and many dozens of others who have aided and abetted our country marching to the precipice should be voted out of office NOT by the opposition party, but, by the party loyalists who truly believe their party SHOULD be the guardian of the nation’s future and defender of the U.S. Constitution.

Your wrong about our experience, Jack. Most of the Freshman politicians in this Congress are the ones from both sides of the aisle seeking reform and bi-partisan resolutions to move us as a whole nation forward. It is the majority of seasoned and veteran incumbents who have suckled at the lobbyist teets so long as to have become addicted to their green milk, that creates the climate of distrust and lack of confidence.

It is people, Jack, who make government a positive or negative institution, not the other way around. There is nothing inherently bad about government. If there were, the human species would have adopted anarchy long ago. It is the people who make government a force for good or ill, and in America, those people are the voters and the politicians who have lost sight of good governance due to the fog of team membership competition amongst the political parties. The fog is so thick they can’t even see the lousy party they belong to for what it is. And that goes for both the big parties.

Nothing in our Constitution nor Declaration of Independence supports even the idea of political parties, let alone the concept of making politics a team sport to divide the nation and render it impotent and ineffective in resolving major difficulties.

Fortunately, more and more Democrats and Republicans are leaving their respective parties with each passing election, and waking up to the reality that the evil in government is the political parties and the incumbents who have become the parties’ champions and protectors over and above the nation or the people’s future.

Big government vs. small government is just political party bullshit designed to keep the people divided and political party’s lock on a segment of that population’s support. Government needs to be as big or small as necessary to get the problems solved and to bring a better future forward.

If salvation of the human species rests in establishing off-world colonies, then government needs to get bigger. If legal and illegal bribery of government officials and government are to be gotten rid of, then government must get smaller by ridding its halls of 10’s of thousands of lobbyists, and going back to having people with input to government write a letter or an email.

If we are to experience global climate change that causes far wider devastation then government needs to grow if the people want to relieve the suffering. If spending must be curtailed to bring our national debt down, then many government programs must be eliminated or pared down.

It is meaningless banter to argue for bigger or smaller government. It is bullshit. What is meaningful is to remove the incumbents who stand as obstacles to the solutions of the major problems facing our nation like debt, entitlement resolution, independence from fossil fuels, and a national security plan that makes DEFENSE a deterrent, not OFFENSE. Offense just makes new and more enemies. Ask any imprisoned mob boss or convicted child molester.

Posted by: David R. Remer at May 28, 2007 1:41 AM
Comment #221451

David

Just as a matter of THE truth, there are no permanent and effect solutions to any problems. Even the best and most elegant solutions decay over time and most do not even work well when they are new.

Re size of government, you may not be tethered to a size, but reality is. At some sizes, organizations become incapable of carrying out some tasks. Think of a very tall gymnast that weights 300 pounds trying to do the uneven bars.

Re trusting whomever we elect. Yes we must trust them no matter what the size or strength of government. But if you give them more power, you have more to worry about. I have to trust my son to be careful whether he takes the bus or takes our car, but the consequences might be different.

We really disagree about an organizational principle. I believe there are limits. When an organization gets very large and/or has a great diversity of tasks, it becomes difficult to mange. When it has access to taxing power, it can grow beyond its normal limits, but it cannot repeal the rules of management and organization.

All that assumes most of us can even agree on what the government SHOULD do, which is not a valid assumption.

Posted by: Jack at May 28, 2007 10:06 AM
Comment #221471

Jack, permanents solutions are achievable. Doesn’t mean they don’t need adjustment or maintenance. National Security by definition can never be 100%, but, it can exist permanently and effectively against easy assault upon our nation. It’s why effective and permanent border barriers are needed. Doesn’t mean they won’t need maintenance or adjustment over time.

Jack, your arguments regarding size of government, are grasping at extremes to save your argument. If you want to believe that a specific size of government is optimal regardless of the will of the people and circumstances, go right ahead. That is a right and preference of Republican supporters. But, it is also part of why their party is losing control of government. Their absolutism has no vast public appeal, and government in America is all about public appeal.

Your party created the appeal, then you governed, and lost it. Your party should stick to what it is good at, commercial false advertising. Smaller government indeed. The party of smaller government is the Democratic Party: your party proved that over the last 6 years.

Posted by: David R. Remer at May 28, 2007 6:05 PM
Comment #221491

David

I have traveled a lot and seen a lot of those permanent solutions. Some of the ruins seem to be almost permanent. Sometimes I cannot find out what problem they were supposed to solve.

You may recall the poem:

I met a traveller from an antique land
Who said: “Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shattered visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
‘My name is Ozymandias, King of Kings:
Look on my works, ye mighty, and despair!’
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.

Re Systems thinking - There is a maximum size for effectively carrying out some tasks. Beyond some sizes, the complexity and communication problems overcome the system. I have learned to think systemically and look for places of high leverage and the understand that some things cannot be accomplished with the systems we have. Some things cannot be accomplished at all

Posted by: Jack at May 28, 2007 7:38 PM
Comment #221498

Posted by: David R. Remer

Jack, when you are dying because you had no insurance and could not afford preventative measures, you are as poor as any person in America has ever been poor.

It is not just numbers of dollars for liberal minded folks, but, it sure seems to be for a lot of conservatives and libertarians.

I could KISS you !!!!

Linda

Posted by: Linda H. at May 28, 2007 8:50 PM
Comment #221499

David,
Just in case there’s any confusion - I meant I could KISS you for your response to Jack!!!

Posted by: Linda H. at May 28, 2007 8:52 PM
Comment #221505

Linda

You and David and many others make a big mistake compounded by a unjustified assumption. You point to suffering and then assume that conservatives do not care. We just understand that some things cannot be done and some things cannot be done with the tools involved. I notice that there is a lot more appeal to misery than solution to it.

I always have a good time with environmental issues. Leftists often try to pull the same thing. But when I suggest an actual solution, like a carbon tax, they think up excuses.

If you will the goal you have to will the means and means you propose do not work the lack of achievement is your fault too. The road to hell is paved with good intentions.

In my experience, I DO more to help poor people, keep the environment clean etc. My liberal friends talk more about it and feel guilty. The poor cannot eat words and the environment doesn’t get clean because people feel guilty.

Posted by: Jack at May 28, 2007 9:41 PM
Comment #221515

Jack,
I agree that all talk and no action doesn’t accomplish a thing. I volunteer a tremendous amount - GAL, Red Cross Disaster Agency, local Soup Kitchen, Rape\Crisis line, and several others I do not feel guilty. I have nothing to feel guilty about. Oddly enough, most of the volunteers I’ve met are NOT on the Right side of the Spectrum. (Just an observation I’ve made)

However - this is also a case of where there’s smoke there’s fire.

The fire is simple, do nothing and our world as we know it disappears. It doesn’t matter whether it’s because the poor overwhelm everything else and die (kind of like during the Plague)and pass it onward (or upward) or our earth dies from lack of care.

One way or the other the entire population will be killed off, (hopefully the earth might support new, interesting smarter life) and the Right Wing will be able to sink with the rest of the world and say as they were “right all along - it’s always the leftist fault”.

One thing - I’m not really sure what your comment to me has to do with the topic you picked. I, too, thought the article was interesting. And looking back over my life, I find it makes a lot of sense.

Posted by: Linda H. at May 28, 2007 11:31 PM
Comment #221519

Linda H

The topic shifted when I was talking to David.

Actually, it is interesting how it shifted right from the first post. I was trying to figure out why the shift had occured, so that we might address the problem. But we quickly got into the Bush bash and/or trying to make it look worse.

The current problems began in the early 1970s, before Reagan, Clinton or Bush. Blaming one of them is just not valid.

A realistic assessment also indicates lots of success to build on as well as problems to address. Proper solutions must begin with the proper identification of the problem.

Posted by: Jack at May 29, 2007 12:04 AM
Comment #221584

David,

Going back to your example on the median:

2000
Joe — $7 per hour
John — $9 per hour
Jerry —$11 per hour
Goerge — $13 per hour

Their median wage is $10 per hour. Correctly computed as the average of $9/hr and $11/hr.

2007
Joe — $7.50 per hour
John — $11.50
Jerry — 13.50 per hour
George — $500 per hour.
You reported their median wage as $244.75 per hour. I’ve tried several different permuations to come up with this figure, but I haven’t found any yet. Let me know what worked for you.

However, the math suggested by your supplied definition (repeated emphasis mine):

“One type of average, found by arranging the values in order and then selecting the one in the middle. If the total number of values in the sample is even, then the median is the mean of the two middle numbers. The median is a useful number in cases where the distribution has very large extreme values which would otherwise skew the data.”

is the mean of
John — $11.50
Jerry —$13.50
which is $12.5.

In a latter post, you said, “…My number set and Median conformed to the Universally accepted definition of what a Median is, where there is an even number of samples or population, in which case the median becomes the AVERAGE or MEAN of the two middle instances of the distribution.”

I still can’t reconcile your math with the Universally accepted definition. Can you please explain? I have a couple of far-gone years of stats from my social science major, and I’d like to understand the error of my ways.

Posted by: Rob at May 29, 2007 6:30 PM
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