Tuesday, July 18, 2017

[NJFAC] Are Real Wages Finally Taking Off? By Frank Stricker

Are Real Wages Finally Taking Off?                                            By Frank Stricker
            Journalists keep searching for an affirmative answer, and sometimes they find a little evidence and sometimes they cannot.           What are the facts, measuring real (after-inflation) pay from June to June in recent years?  Since 2008, when the Great Recession began, real hourly wages have gone this way: a little jump in 2009, stagnation or decline from 2010 through 2013, and then increases of almost 2% a year until this last year. From June 2016 to June 2017, real average hourly wages increased 0.9%. That's better than falling wages, but surely, at less than 1%, it is nothing to write home about.
            And there is so much catching up to do. When we look at the bigger picture, things are about as bad as many people feel they are. Despite recent increases, the average wage for average workers in June of 2017 was about $22 an hour. Not great, not terrible. But dozens of millions of people are below even that so-so level of pay. And the story is worse if we look at the historical evidence. In terms of an hour's worth of purchasing power, the average worker is earning almost exactly what he or she earned in 1972. It's true. No progress for workers in forty-five years. Despite brilliant successes for the minimum wage movement, despite the fact that we are beginning the ninth year of economic recovery, and in part because high income households have been doing very, very well for decades, average workers are right where they were in 1972.
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Based on data from the U.S. Bureau of Labor Statistics, including "Current and real (constant 1982-1984 dollars) earnings for production and nonsupervisory employees on private nonfarm payrolls, seasonally adjusted," and the annual Economic Report of the President, for historical tables including "Hours and Earnings in Private Nonagricultural Industries."
Frank Stricker is on the board of NJFAC and has just written What Ails the American Worker? Unemployment and Crummy Jobs: History, Explanations, and Remedies.
 
 
 

 

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Tuesday, July 4, 2017

[NJFAC] Economics of the populist backlash, Dani Rodrik

Rodrik uses some interesting economic theory to undercut the story that globalization benefits everyone, and those who object to it are misinformed. j
Economics of the populist backlash Dani Rodrik 03 July 2017
....The Stolper-Samuelson theorem assumes very specific conditions. But there is one Stolper-Samuelson-like result that is extremely general, and which can be stated as follows. Under competitive conditions, as long as the importable good(s) continue to be produced at home – that is, ruling out complete specialisation – there is always at least one factor of production that is rendered worse off by the liberalisation of trade. In other words, trade generically produces losers. Redistribution is the flip side of the gains from trade; no pain, no gain.
Economic theory has an additional implication, which is less well recognised. In relative terms, the redistributive effects of liberalisation get larger and tend to swamp the net gains as the trade barriers in question become smaller. The ratio of redistribution to net gains rises as trade liberalisation tackles progressively lower barriers.....


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June Zaccone
National Jobs for All Coalition
http://www.njfac.org

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