Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Pennsylvania > Pittsburgh
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 08-11-2011, 11:53 AM
 
8 posts, read 15,704 times
Reputation: 12

Advertisements

5 Myths About the Poor Middle Class

3.5 years old, so a bit dated, but interesting none-the-less...

"2. The middle class is shrinking.

True, fewer people today live in households with incomes between $30,000 and $100,000 (a reasonable definition of "middle class") than in 1979. But the number of people in households that bring in more than $100,000 also rose from 12 percent to 24 percent. There was no increase in the percentage of people in households making less than $30,000. So the entire "decline" of the middle class came from people moving up the income ladder. For married couples, median incomes have grown in inflation-adjusted dollars by 25 percent since 1979. "
Reply With Quote Quick reply to this message

 
Old 08-11-2011, 12:53 PM
 
20,273 posts, read 32,871,363 times
Reputation: 2910
That's a very strangely structured argument. But it is true that what has happened is that household incomes in the middle have "only" grown very slowly, whereas household incomes at the top have increased much more rapidly.

The thing is, though, that real per capita GDP has also been increasing rapidly--it is just that most of those productivity gains have gone to the benefit of the highest-income people. And the fact that real per capita GDP gains are primarily benefiting only a few people at the top should not be an acceptable result--those gains can and should be more widespread, and the fact they aren't more widespread has been contributing to our recent economic crises.

Incidentally, I've posted this before recently, but it is really helpful to visualize what has been happening:

The State of the USA | Measuring Economic Well-being: GDP vs. Median Income

The middle has gained a bit over the last 40 years, but not nearly as much as they should have given the rise in economic productivity.
Reply With Quote Quick reply to this message
 
Old 08-11-2011, 01:47 PM
 
7,112 posts, read 10,086,463 times
Reputation: 1781
Quote:
Originally Posted by Treima View Post
I don't remember the last time a strawman argument was effective...but hey it's worth the old college try.
Well...the "unionized public employee, a Tea Partier, and a CEO are sitting at a table" joke was a strawman argument too.
Reply With Quote Quick reply to this message
 
Old 08-11-2011, 02:25 PM
 
7,112 posts, read 10,086,463 times
Reputation: 1781
Quote:
Originally Posted by ditchdigger View Post
Because business figured out that they could ship the jobs to the non-union world. It's not because unions, and the ability of workers to bargain collectively, became irrelevant.
They are in a sense irrelevant if they lose their worker base. Work can be outsourced around the world as everyone here knows. The unions' last bastion of hope is the public sector as those jobs tend to be monopolies and the jobs can be held hostage at the ballot box. The problem with public sector unions is that they breed mediocrity as it becomes almost impossible to remove bad employees and the workplace itself gets tied up in union rules as to who can do what. I mean, in a union environment, you couldn't move a desk. Only a union worker that is authorized to do it can move it. The workplace loses flexibility and has too much staff. Plus the union has to justify itself by always demanding more from the employer until it's unsustainable what with great vacation, sick leave, and health benefits and finally, the crushing retirement benefits complete with full health coverage. That's what brought down Detroit. Many guys working on the assembly lines were wealthy and retired making much more than the average worker today.


Quote:
I don't think anybody in their right mind would argue that the CEO doesn't deserve some cookies, maybe even a lot of cookies. The problem today is that the CEOs of the world are taking eleven cookies, and leaving only one to be divided among everybody else. That's the place of unions, both then and now--to bargain for something more along the lines of five cookies for the CEO and five for everybody else to share.
That's why I think we should ensure we have a free market. So workers can seek other employment that pays better. And an open market that encourages new businesses to expand the employment base.
Reply With Quote Quick reply to this message
 
Old 08-11-2011, 02:48 PM
 
9,855 posts, read 15,158,116 times
Reputation: 5481
Quote:
Originally Posted by BrianTH View Post
But they didn't mix the ingredients or bake the cookies.
So what? The CEO controls the resources. No one forced the worker to bake the cookies for that particular CEO. If the worker doesn't like the deal, he is more than welcome to quit and find a different job. Or better yet, use his own resources to make something for himself.

Quote:
There is very little evidence to suggest unions typically have that effect. In fact, several studies have found that unions help increase productivity.
Really? Can you please post links? Unions create an economic wage floor that results in net market deadweight loss. How is that beneficial to the society as a whole?

EDIT:
Here is a commentary written by Christopher Pissarides, a Nobel Laureates in Economics. It is written specifically about Britain, but union effects in Britain and The United States are one and the same.

Quote:
Unemployment in Britain has fallen from high European-style levels to US levels. I argue that the key reasons are first the reform of monetary policy, in 1993 with the adoption of inflation targeting and in 1997 with the establishment of the independent Monetary Policy Committee, and second the decline of trade union power. I interpret the reform of monetary policy as an institutional change that reduced inflationary expectations in the face of falling unemployment. The decline of trade union power contributed to the control of wage inflation. The major continental economies failed to match UK performance because of institutional rigidities, despite low inflation expectations.
Translation: fewer unions means less unemployment. Just something else to think about.

Last edited by hnsq; 08-11-2011 at 03:03 PM..
Reply With Quote Quick reply to this message
 
Old 08-11-2011, 03:02 PM
 
Location: Wilkinsburg
1,657 posts, read 2,678,061 times
Reputation: 994
Quote:
Originally Posted by ditchdigger View Post
The problem today is that the CEOs of the world are taking eleven cookies, and leaving only one to be divided among everybody else. That's the place of unions, both then and now--to bargain for something more along the lines of five cookies for the CEO and five for everybody else to share.

In 2008 S&P500 aggregate earnings were about $587 Billion. The aggregate CEO compensation for S&P500 companies in 2008 was approximately $4.5 Billion. Let's say that by "CEOs" we're actually referring to executive management, so to take this into account we'll multiply the CEO pay by a factor of ten, or $45 Billion. The ratio of aggregate executive management compensation to aggregate S&P500 earnings is 7.45%. So the CEOs are actually taking 7.45% of the cookies, or 0.89 cookies.

Admittedly the cookie per person ratio would be WAY off (approximately 284 times by my estimate).

Regardless, I'd say that your argument, in general, is still fine.
Reply With Quote Quick reply to this message
 
Old 08-11-2011, 03:17 PM
 
20,273 posts, read 32,871,363 times
Reputation: 2910
Quote:
Originally Posted by hnsq View Post
So what? The CEO controls the resources.
Labor is a resource.

By the way, I should have noted sooner that the CEO as such is actually just another employee. Presumably you mean "CEO" to stand in for the people who actually supplied capital to the business.

Quote:
No one forced the worker to bake the cookies for that particular CEO. If the worker doesn't like the deal, he is more than welcome to quit and find a different job. Or better yet, use his own resources to make something for himself.
I'm actually not sure what point you are trying to make. If the person who supplied the ingredients/oven and the baker don't agree to collaborate, then no cookies get baked. Presumably they agreed to collaborate because they each thought they would benefit. None of that tells you anything about how many cookies each should get.

So I'm just objecting to the notion that somehow the person who supplies the oven and the ingredients is inherently in a different position from the person who supplies the labor. Those are all necessary factors in the productive process.

Quote:
Really? Can you please post links?
Already done.

Quote:
Unions create an economic wage floor that results in net market deadweight loss. How is that beneficial to the society as a whole?
It actually isn't much of mystery why this would be true. Lower-wage workers may well be less productive workers. Unions also negotiate for things like better training, better health care, safer and more pleasant workplace environments, and other things that could contribute to productivity.

But maximizing productivity isn't necessarily in the interests of upper management--maximizing their own compensation is presumably their goal, and they may make more money for themselves even if their firm is less productive provided that they can get for themselves a larger share of the firm's income. In other words, even if fewer cookies are baked, if they can keep more of the cookies out of the hands of the other workers, they may personally end up with more cookies that way. Unions are thus likely serving the function of helping to cut off practices that would be bad for firm productivity, but good for upper management.

I'd have to see the details of your deadweight loss argument to understand where you are going wrong. But at a guess, you are modeling this as a transaction between the prospective employees and the firm as an abstract concept, with the firm's interest being in maximizing productivity. In the real world, it is a transaction between the prospective employee and upper management, with the implications I just noted.

Edit: By the way, it is a little strange to talk about collective bargaining creating "deadweight loss" in this context, because it presumes certain alternatives. To flip the point around, most firms "collectively bargain" automatically--individual units typically don't have the discretion to negotiate compensation and hire as they see fit. So by restricting individual units from freely transacting for labor, are firms thereby creating a "deadweight loss"?

So I also suspect this argument depends on assuming the existence of the union is a variable, but the existence of the firm is not. But you'd have to explain why we should approach the problem in that way, as opposed to either assuming they are both variables, or in fact neither is.

Last edited by BrianTH; 08-11-2011 at 03:37 PM..
Reply With Quote Quick reply to this message
 
Old 08-11-2011, 03:34 PM
 
20,273 posts, read 32,871,363 times
Reputation: 2910
Quote:
Originally Posted by hnsq View Post
It is written specifically about Britain, but union effects in Britain and The United States are one and the same.
As an aside, actually, no--some studies have found notably different productivity effects in the U.K. and United States.

Quote:
Translation: fewer unions means less unemployment. Just something else to think about.
That's actually a much, much better argument than the unions hampering economic growth argument.

From a worker's perspective, you'd have to trade getting a higher share of higher productivity gains against higher unemployment risk. With the right sort of measures to deal with unemployment in place (and a generally flexible labor market), that might not be a bad deal. But it is a serious issue worth considering.
Reply With Quote Quick reply to this message
 
Old 08-11-2011, 04:42 PM
 
Location: Perry South, Pittsburgh, PA
1,437 posts, read 2,859,863 times
Reputation: 989
Quote:
Originally Posted by MathmanMathman View Post
Well...the "unionized public employee, a Tea Partier, and a CEO are sitting at a table" joke was a strawman argument too.
Of course, but it's a strawman THEY agree with!
Reply With Quote Quick reply to this message
 
Old 08-11-2011, 05:41 PM
 
20,273 posts, read 32,871,363 times
Reputation: 2910
Just for the record, a satirical joke is not a logical argument, and while one might argue that joke embodied an unfair caricature, it is a category error to compare such a caricature to a strawman argument.

I'd also note some of the subsequent discussion in this thread undermines the claim that the relevant caricature was terribly unfair.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Settings
X
Data:
Loading data...
Based on 2000-2020 data
Loading data...

123
Hide US histogram


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Pennsylvania > Pittsburgh

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top