Being a populist, I might surprise some of you libs with my view on corporate profits. But not so much that I would advocate a system that removes the incentives that capitalists have for improving productivity. It does not come from whips and tortured hours. With some exceptions (which libs will be sure to post) it comes from improved tools and infrastructure. And they bring along improved working conditions for the workers.
The real problem is the investors in residential properties…driving up the price of what was once considered the measure of success… one’s own home.
Do you think improvements in infrastructure and other tools only began in the 1980s, when the great divide between labor wages and productivity began to happen?
Yet somehow until that point, labor wages tracked reasonably well with productivity.
Unfortunately wages aren’t keeping pace with inflation.
In June, for a second month in a row, annual inflation fully offset average hourly wage growth over the previous year. That left workers’ real hourly earnings flat over the 12-month period despite falling unemployment and a strong economy even as workers made up for higher prices by clocking slightly more hours a week in June.
Production and nonsupervisory employees, a category which includes blue-collar workers, saw their real average hourly wages fall 0.2% in June from a year earlier after a similar slip in May.
There’s no question that’s part of it, as has the rise of automation been a part of it (the globalization pf the economy surprisingly has not factored as much, regardless of what Trump supporters believe).
But it’s a complex matter that isn’t easily dostilled down into a political sound byte…well, at least not by those who are actually trying to figure out real solutions.
Thank you for that in depth explanation of how economics work.
One would ask why can they? How does the average Joe get the funds to pay the prices that are asking? The answer is government guaranteed student loans. If those were not available, the institutions could ask for the high prices, but a lot fewer people would be able to pay it.
Exactly. You can see the decline in wages and buying power decreasing and disparity of wealth increasing starting in the 80s with the break up of the air traffic controllers union. As fewer and fewer Americans were/are unionized it has gotten steadily worse.
The improved tools and infrastructure have extended the work day and work week for many bees so yes they working more for the same money.
The fear is that they will lose their jobs if they don’t work as hard. Especially those pesky millennialis who on average work more hours and take fewer vacations for leas money than those prior generations.
First, the tax reform hasn’t yet resulted in appreciably higher wages for American workers. Real average hourly compensation actually fell in the first quarter after the tax reform was passed:
Official data for the second quarter isn’t available yet, but private data isn’t looking encouraging. PayScale’s index of real wages shows a dramatic deterioration in the period:
This tepid rate of growth means that the tax cut is unlikely to pay for itself. By this point, almost all economists recognize that income tax cuts no longer stimulate the economy enough to reduce deficits, as supply-siders thought they would back in the 1980s. But economists still held out some hope that lowering the corporate tax, which is believed to be more harmful than the personal income tax, would have a more salutary effect on the budget. Unfortunately, that hope appears to be fading, as fiscal deficits increase rapidly.
Tax cuts have NEVER “paid for themselves. Republicans know better as well. They pass them knowing very well that the money goes to the top few percent. It always has happened with tax cuts. History has proven this repeatedly.
Before you yap about Reagan, he was a tax raiser overall. They made the cuts, the rich got richer and it got worse for most of us. When the pressure came to bear, Reagan raised taxes and that is when the economic improvements came.
In the 60s and 70s the Federal government subsidized higher ed to the tune of 60%. It gradually got less and less to where we are now at around 12%. This is the reason for much of the increase in higher ed.
