The middle class and "Screwflation"....

[Engineer]

Along those same lines...worker's share of national income drops to all time record low.

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.

Nor surprising....trickle up economics at it's finest.

 

[tgferg67]

Chart of food expenses over time. Or use the raw data by year from 1929 to 2008.

Are you honestly paying 24% of your entire income on food? If so, time to get off the computer you can't afford and find better paying work (or at least more work). Maybe you choose to spend that much on fancy meals out every day, but that is your choice. The average American is now spending 6.9% of income on food (2011 data). And that includes all the more-expensive restaurant eating that we do now that we didn't do in most of history.

Even if food prices triple right now, we'd still be spending less on food as a percent of income than we did less than a century ago. Food is a small expense that is very, very cheap. When small things move around in price, it looks like a big percent gain/loss but the overall impact is still small.

Energy is equally small at under 6% of income.

My comments were related to US spending since this thread is regarding US screwing its middle class. But many of them also apply to much of the world. Third world countries that spend nearly all of their money on food are exceptions, but that is clearly outside the scope of my comments in this thread.

Wouldn't these stats be misleading since disposable income is related to "household income". Women/married women have entered the workplace with higher percentages and better pay over the years adding to the "household income". What about young adults living at home longer, would they also count towards "household income". Years past there was just the man working that counted towards "household income".

 

[Icepick]

Real equity gains including dividend reinvestment was 3% between 2000 and 2010. But yeah, wages were absolutely flat, maybe even a little negative, which is just sad. However, that's not without precedent in the last 50 years (happened once). Of course, the greatest periods of wage growth were typically during global wars so some happy medium should be attained, say 1%-2% wage growth above inflation. There needs to be more hostility toward the wealthy who leech off the system by distorting laws/regs/facts for their own gain (usually tax cuts/credits/subsidies) and especially those wealthy who don't create jobs who take leech-like stances.

Wow. You get it. Good job.

 

[WhipperSnapper]

Along those same lines...worker's share of national income drops to all time record low.

Nor surprising....trickle up economics at it's finest.

It makes perfect sense. Global Labor Arbitrage dictates that the American standard of living will average out with that of the third world. Business owners will end up being able to keep increasingly larger percentages of a worker's contribution to the act of wealth production.

You have to wonder. If it weren't for the wealth that people and families piled up in the past, would poverty be much more widespread and would this nation in it's current state be a third world country?

 

[Doppel]

People wouldn't be writing these kinds of hit pieces about him if he didn't hit a nerve. Truth hurts.

Sorry, that's not how logic works.

 

[fleshconsumed]

Chart of food expenses over time. Or use the raw data by year from 1929 to 2008.

Are you honestly paying 24% of your entire income on food? If so, time to get off the computer you can't afford and find better paying work (or at least more work). Maybe you choose to spend that much on fancy meals out every day, but that is your choice. The average American is now spending 6.9% of income on food (2011 data). And that includes all the more-expensive restaurant eating that we do now that we didn't do in most of history.

Even if food prices triple right now, we'd still be spending less on food as a percent of income than we did less than a century ago. Food is a small expense that is very, very cheap. When small things move around in price, it looks like a big percent gain/loss but the overall impact is still small.

Energy is equally small at under 6% of income.

My comments were related to US spending since this thread is regarding US screwing its middle class. But many of them also apply to much of the world. Third world countries that spend nearly all of their money on food are exceptions, but that is clearly outside the scope of my comments in this thread.

I spend anywhere from $50 to $70 a week on food on myself alone. That includes a healthy diet of meats, vegetables, fruits, dairy products (cheese/yogurt/kefir) with as little junk food as I can manage. With 52 weeks in a year that works out to about $2600-3600 a year. This number does not include eating out.

On the other hand at the very end of last year I purchased Acer 1830t ULV laptop for $450 shipped. $450 vs $2600+. Normally I agree with what you have to say, but you can't be seriously suggesting he should get off computer he cannot afford when said computer costs a fraction of the food expenditures. Computers are cheap now, food isn't, never was.

I think you grossly underestimate how hard high food prices hit people, especially those on the lower end of income scale. While $200-300 monthly grocery bill for a single person is usually dwarfed by mortgage/property taxes/rent, I can't think of anything else that costs as much. The only thing that comes close is owning a car, and that's only if I roll every single car related expense into a single monthly sum such as: gas/car insurance/car payments(or saving money over 10 years if you prefer to buy with cash)/regular maintenance/license sticker. Plus keep in mind that 1) while you can bring down rent/mortgage amount by splitting it with a roommate/spouse/SO, you can't do it with food, and 2) the poorer the person the harder they get hit by food prices.

 

[soccerballtux]

Wow. You get it. Good job.

kneejerk TAX THEM MORE rage from the liberals doesn't get us anywhere though, because it causes reactions among everyone who disagrees with taking money away from people on simple ethical grounds.

If they really wanted something done, they would campaign for change instead of ranting about the right, which just gets the confused conservatives fired up against the liberals.

 

[blackangst1]

It makes perfect sense. Global Labor Arbitrage dictates that the American standard of living will average out with that of the third world. Business owners will end up being able to keep increasingly larger percentages of a worker's contribution to the act of wealth production.

You have to wonder. If it weren't for the wealth that people and families piled up in the past, would poverty be much more widespread and would this nation in it's current state be a third world country?

The lower up to the higher middle class havent been piling up anything. The last 20 years have the worst in our history for saving.

And for people thinking we're heading towards a third world country, all I can say is you've never been to one. Try spending time in a few and you'll change your mind. I have, and people who have will tell you our poor have pretty good lives compared to the middle classes in true 3rd world countries. We're no where close. That doesnt mean things arent bad right now, and there certainly is room for improvement, but to even mention "third world country" is very, very naive.

 

[Doppel]

The lower up to the higher middle class havent been piling up anything. The last 20 years have the worst in our history for saving.

And for people thinking we're heading towards a third world country, all I can say is you've never been to one. Try spending time in a few and you'll change your mind. I have, and people who have will tell you our poor have pretty good lives compared to the middle classes in true 3rd world countries. We're no where close. That doesnt mean things arent bad right now, and there certainly is room for improvement, but to even mention "third world country" is very, very naive.

I know, people really need to stop with the third world country analogies. Even completely collapsed governments of previously half-assed countries don't go through that (e.g. Russia). Third world is mixing rice in your clay pot to feed your kids. The US could evaporate its currency overnight and the government dissolve and we still have access to infrastructure, houses, skilled workers, arable land, etc.

 

[wuliheron]

And for people thinking we're heading towards a third world country, all I can say is you've never been to one. Try spending time in a few and you'll change your mind. I have, and people who have will tell you our poor have pretty good lives compared to the middle classes in true 3rd world countries. We're no where close. That doesnt mean things arent bad right now, and there certainly is room for improvement, but to even mention "third world country" is very, very naive.

I have to agree. Most people who talk about the US becoming a third world country are clueless about what that means. There are places in the US like West Virginia that certainly resemble the better parts of the third world, but that's about as far as the comparison goes. At this point the US simply has too many assets to become a third world country unless it stagnates and the third world catches up or some unimaginable disaster like WW III strikes.

 

[theeedude]

Sorry, that's not how logic works.

Don't be sorry, noone cares how your "logic" works. Just enjoy life.

 

[Engineer]

I have to agree. Most people who talk about the US becoming a third world country are clueless about what that means. There are places in the US like West Virginia that certainly resemble the better parts of the third world, but that's about as far as the comparison goes. At this point the US simply has too many assets to become a third world country unless it stagnates and the third world catches up or some unimaginable disaster like WW III strikes.

By saying that, you're no better than those that think the US is really going toward true third world status, lol.

I think the US is headed down in the standard of living and we'll meet the third world and and other low wage countries somewhere between where we are now and where they are now. We're going down and they are going up.

 

[Infohawk]

And for people thinking we're heading towards a third world country, all I can say is you've never been to one.

I haven't posted in this thread but I do think the US is evening out with the third world. That doesn't mean that the US will be as bad as the third world is NOW, the point is the two are racing towards each other and that's not a good prospect for the US. In other words, the US may look like the third world of 2050 in 2050. There will still be fancy cell phones but we'll have high income disparity and poor social services. This has already been the trend lately. It won't be the middle-class American dream of the 20th century.

Third world is mixing rice in your clay pot to feed your kids. The US could evaporate its currency overnight and the government dissolve and we still have access to infrastructure, houses, skilled workers, arable land, etc.

Give me a break. The one thing the US still produces a lot of is food. Thirdworlders aren't feeding anyone's kids. They're barely feeding their own. Right now we're still doing okay. The point is in the future we may not have access to the things you mentioned. Skilled labor is a good example. Going the way we're going now, there's less and less reason to hire skilled labor here. It can be bought cheaper in other countries.

 

[dmcowen674]

Just Zebo? I'm crushed

 

[WhipperSnapper]

I have to agree. Most people who talk about the US becoming a third world country are clueless about what that means. There are places in the US like West Virginia that certainly resemble the better parts of the third world, but that's about as far as the comparison goes.

What about inner city ghettos like Detroit? If 95% of Americans ended up living like the urban poor, would you say that they lived like people do in a third world country? Maybe the U.S. wouldn't be third world to the extent that Africa is, but as far as I'm concerned the U.S. would still have widespread poverty.

 

[blackangst1]

What about inner city ghettos like Detroit? If 95% of Americans ended up living like the urban poor, would you say that they lived like people do in a third world country? Maybe the U.S. wouldn't be third world to the extent that Africa is, but as far as I'm concerned the U.S. would still have widespread poverty.

Sorry, but poverty =! third word country status. Thats certainly part of it, but only part. EVERY country has poverty of some sort. Even Qatar.

 

[fskimospy]

lol, Krugman is actually the most accurate pundit.
http://www.infotainmentnews.net/wp-content/uploads/2011/06/pundit_accuracy.png

Know what's even better? The guy who is going after Krugman is named Donald Luskin. Lets see what he has to say about our good friend Paul Krugman's analysis of the housing market in June 2008! (skip to 1:40, clip titled Peter Schiff & Don Luskin)

http://wn.com/Donald_Luskin

After that world class estimate, he went on to write this top notch column titled: "Quit doling out that bad economic line".
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/12/AR2008091202415.html

But yeah, in this guy's expert analysis Paul Krugman is wrong. Hahahahahahaha.

 

[Infohawk]

lol, Krugman is actually the most accurate pundit.
http://www.infotainmentnews.net/wp-content/uploads/2011/06/pundit_accuracy.png

I'm not saying one pundit is better than the other but that link seems a bit ridiculous. Pelosi is a pundit? What kind of statements are they analyzing from the 2008 elections? That Obama would win? I mean of course all the Democrats are going to predict Obama would win and the Republicans opposite.

I'm open to persuasion but that image seems extremely partisan and questionable.

 

[fskimospy]

I'm not saying one pundit is better than the other but that link seems a bit ridiculous. Pelosi is a pundit? What kind of statements are they analyzing from the 2008 elections? That Obama would win? I mean of course all the Democrats are going to predict Obama would win and the Republicans opposite.

I'm open to persuasion but that image seems extremely partisan and questionable.

Actually that image is part of a larger study, and they looked at it both including and excluding political predictions. There are some problems with the study in terms of what exactly would make a prediction 'true' or not, that they only looked at binary predictions (like 'x will happen') etc, but they did in fact specifically account for what you're talking about, and under all scenarios Krugman was a rock star.

http://www.hamilton.edu/documents/A...uracy-of-Forecasts-in-the-Political-Media.pdf

 

[Infohawk]

Actually that image is part of a larger study, and they looked at it both including and excluding political predictions. There are some problems with the study in terms of what exactly would make a prediction 'true' or not, that they only looked at binary predictions (like 'x will happen') etc, but they did in fact specifically account for what you're talking about, and under all scenarios Krugman was a rock star.

http://www.hamilton.edu/documents/A...uracy-of-Forecasts-in-the-Political-Media.pdf

I'm looking at this and I'm not impressed. They didn't count his long-term predictions which is the ones were interested in given he's an economist. (I don't even see what his predictions were.) They also had a small sample size of his predictions. And for the rest of the people it really does seem to boil down to Republicans being penalized for predicting their side would win. If it was 2004 they would have looked like fortune tellers?

 

[fskimospy]

I'm looking at this and I'm not impressed. They didn't count his long-term predictions which is the ones were interested in given he's an economist. (I don't even see what his predictions were.) They also had a small sample size of his predictions. And for the rest of the people it really does seem to boil down to Republicans being penalized for predicting their side would win. If it was 2004 they would have looked like fortune tellers?

So what you're saying is that you didn't read the study? Come on man, I specifically mentioned this in my previous post.

To give you the relevant quote:

However, this large statistically significant coefficient signaled a red flag for us - it seems unlikely that Democrats would beat out Republicans by such a large margin. Our first instinct was that the election outcome (with Democrats and Barack Obama winning by large margins) could have had a confounding effect on the partisanship results. Democrats predicted optimistically that their candidates would win election, and the election swung in their favor, thus making their rhetorically-driven predictions correct. In order to decipher whether or not the election had skewed our results, we decided to run the regression again, this time excluding all the predictions having to do with the November election. Partisanship was once again statistically significant, showing that the liberal prognosticators had actually predicted more accurately than their Republican counterparts during our time period.

As for his long term predictions, they weren't specifically assessing Paul Krugman, they were assessing a large group of people with varying presences across a bunch of different media. Regardless of what you think of their sample size, his results were statistically significant. (their smaller sample sizes were probably why a bunch of the results weren't statistically significant, but Krugman's was.)

EDIT: To be clear, this sort of study is pretty tough to do, and any measurement it makes is almost by definition going to be imprecise. Regardless of that, Krugman's result is still pretty impressive, which is sort of funny considering how hard the ultra right wing people on here work to discredit him.

 

[Infohawk]

So what you're saying is that you didn't read the study? Come on man, I specifically mentioned this in my previous post.

To give you the relevant quote:



As for his long term predictions, they weren't specifically assessing Paul Krugman, they were assessing a large group of people with varying presences across a bunch of different media. Regardless of what you think of their sample size, his results were statistically significant. (their smaller sample sizes were probably why a bunch of the results weren't statistically significant, but Krugman's was.)

I read it. Them saying they took it into account doesn't prove prove they especially since they don't share what the predictions were and considering this excerpt from Schumer: "A significant portion of his accuracy was aided by the fact that he was on the "right side" of the election." P21. LOL. "Come on dude", yourself.

Read the part about Krugman. They blow him for being a nobel-prize winning economist who makes predictions about the economy within a few month window. How would other major economists would have done in comparison? They say his predictions were mostly about the economy but they compare him to pundits who were mainly talking about political issues. They're comparing apples and oranges!

I'm sorry I don't agree with your partisan bullshit (edit: or maybe just really poor analysis) that isn't even backed up with the predictions they analyzed. At best it says Krugman is good compared to pundits. Great. We should be more interested in how he compares to other economists. This is a thread about economics right?

Edit to your edit: What were his 17 predictions? He might have very well predicted the economy would still be shitty in the coming months. Does that mean he's good at predicting the future?!

 

[nonlnear]

So what you're saying is that you didn't read the study? Come on man, I specifically mentioned this in my previous post.

I read the whole thing. It reads like an mediocre middle school social studies project by an overeager student who think that boosting word count is a surefire way to get a good grade. The way they talk about their scoring system, and how they developed a scale that goes from -10 to 10 is particularly laughable.

 

[fskimospy]

I read it. Them saying they took it into account doesn't prove prove they especially since they don't share what the predictions were and considering this excerpt from Schumer: "A significant portion of his accuracy was aided by the fact that he was on the "right side" of the election." P21. LOL. "Come on dude", yourself.

Read the part about Krugman. They blow him for being a nobel-prize winning economist who makes predictions about the economy within a few month window. How would other major economists would have done in comparison? They say his predictions were mostly about the economy but they compare him to pundits who were mainly talking about political issues. They're comparing apples and oranges!

I'm sorry I don't agree with your partisan bullshit that isn't even backed up with the predictions they analyzed. At best it says Krugman is good compared to pundits. Great. We should be more interested in how he compares to other economists. This is a thread about economics right?

Edit to your edit: What were his 17 predictions? He might have very well predicted the economy would still be shitty in the coming months. Does that mean he's good at predicting the future?!

You definitely didn't read the study then. You appear to have glanced over their main section on their findings (that did include political predictions), and completely missed the section where they talked about possible confounds and the methods they took to control them, which is where I quoted from. You will notice they ran the regressions both with, and without political predictions, and still found a statistically significant effect. Before you start LOLing, you should probably know what you're talking about.

What do you mean it doesn't prove it? I don't even know what you're trying to argue. In your previous post you said it appeared that Republicans were being penalized for predicting their side would win. The authors of the study say that even when political predictions are removed, the statistical significance remained. Are you claiming they are lying? Are you seriously looking to personally go through every prediction they analyzed to see if they meet your personal standard for what constitutes a political prediction? Also for your 'apples to oranges' comparison, are you attempting to argue that people are more likely to be correct on economic issues than political ones? What are you basing this idea on?

This is a measure of pundits in general, not of political ones or of economic ones. Oddly enough, you read the part where they specifically mentioned his economic credentials probably helped him, and then drew somehow a negative conclusion about the study from that. (this is baffling) As to how he compares to other economists, he outperformed the Chairman of the Federal Reserve.

Even moreso, who cares? People said Krugman was wrong a lot. Some people looked at his predictions over a year period and found during this time he was right a whole lot more than he was wrong. Since we don't seem to have any other actual studies, just people hand waving, it seems relevant.

 

[fskimospy]

I read the whole thing. It reads like an mediocre middle school social studies project by an overeager student who think that boosting word count is a surefire way to get a good grade. The way they talk about their scoring system, and how they developed a scale that goes from -10 to 10 is particularly laughable.

Nobody's trying to gain some sort of huge universal truth from that thing, and their scoring system was fine. They gave one point for every correct prediction, subtracted a point for every wrong prediction, and gave no points either way for wishy-washy hedged ones. How would you have improved upon it?

Either way, who gives a shit? The only reason it was mentioned was to specifically rebut that people said Paul Krugman is often wrong. In at least this year period that was analyzed, he was often right. That's the beginning and end of why this was even brought up.