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Line graph showing productivity and hourly compensation, 1948-2011. Until the 1970s, the lines rise together. Starting in 1973 and accelerating in 1978, they diverge sharply as productivity keeps rising and compensation flattens out.
Talk about a picture being worth a thousand words. The facts are these: From 1948 until 1973, American workers' earnings grew with productivity. Workers made more goods and provided more services per hour, and they earned more along with that. From 1973 to 2011, though, productivity rose by 80.4 percent and median hourly compensation rose by just 10.7 percent. Bluntly:
"A bigger share of what businesses in the U.S. are producing is going to the owners of the firms and the people who lent money to the firm, and a smaller share is going to workers," said Gary Burtless, senior fellow in economic studies at The Brookings Institution.
Also, don't forget we're talking about median earnings here, and during these same years, income inequality skyrocketed. You simply don't get results like these without an organized, sustained attack on workers—exactly what we've seen since 1973.

Originally posted to Daily Kos Labor on Thu Mar 07, 2013 at 10:00 AM PST.

Also republished by Income Inequality Kos, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, Dream Menders, Daily Kos Economics, Social Security Defenders, In Support of Labor and Unions, and Daily Kos.

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Comment Preferences

  •  The Equestrian Necrosadist in me keeps having to (12+ / 0-)

    point out that this coincides with the declaration of war against inflation........

    I want 1 less Tiny Coffin, Why Don't You? Support The President's Gun Violence Plan.

    by JML9999 on Thu Mar 07, 2013 at 10:27:01 AM PST

  •  Rec'd for the class warfare reference! Let's start (19+ / 0-)

    fighting back.

    After all, there are more of us than there are of them!

  •  The roots of inequality in (17+ / 0-)

    a single graph.  Well done, Laura.

    Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

    by TomP on Thu Mar 07, 2013 at 10:44:55 AM PST

  •  In other words... (24+ / 0-)

    ...it is the 99% who are the Makers and the Top 1% who are the Takers.  They are the parasites, we are the hosts...

  •  So what caused the break? (11+ / 0-)

    It should be pretty obvious that there was a drastic change in the close coupling in the mid/late 70s.

    What caused it?

    My theory about most of this is that global trade sharply increased the expected productivity/wage ratio.

    If you build 100 widgets a year for a salary of $50K, and suddenly you are competing with foreign labor that can make 100 widgets on a salary of $10K, you need to find a way to make 500 widgets a year if you are going to justify your continued $50K salary.

    For people that have the opportunity/tools/skills to dramatically increase their productivity, there are still a lot of opportunities to make a great living with rising wages.

    If your productivity is flat, you're going to either going to stagnate or lose ground.

    Whether this is intentional class warfare or a natural by-product of a globally connected world economy remains to be proven.

    •  global trade is part of problem, then finance (12+ / 0-)

      kicks in and becomes the power broker

      Regean doubled the national debt in his first term.He doubled it again in his second.

      Not only was the budget in deficit, so was trade. ...First term alone trade deficit multiplied 8 fold.

      ...The budget deficits were so large that they caused the trade deficit. In the past, Americans loaned the government to pay for the trade deficit. With record budget deficits, the amount that needed to be borrowed was greater than the domestic economy could fund. Turned to foreigners ..."

      From the excellent book "Worse Than You Think" by Keith Quincy

      Now 20% of the country is owned by foreigners.

      This is related to

      How Wall Street Devoured Corporate America
      http://www.theatlantic.com/...

    •  The Powell Memo (11+ / 0-)

      Was written in 197i:

      http://reclaimdemocracy.org/...

      Though Powell’s memo was not the sole influence, the Chamber and corporate activists took his advice to heart and began building a powerful array of institutions designed to shift public attitudes and beliefs over the course of years and decades. The memo influenced or inspired the creation of the Heritage Foundation, the Manhattan Institute, the Cato Institute, Citizens for a Sound Economy, Accuracy in Academe, and other powerful organizations. Their long-term focus began paying off handsomely in the 1980s, in coordination with the Reagan Administration’s “hands-off business” philosophy.
    •  1973 was the first OPEC oil embargo (7+ / 0-)

      That and the following oil-price increases drove up the price of gasoline and at the time there were constant reminders that that meant everything else cost more: Food was more expensive as the truckers had to pay more, and the same thing with anything else that was shipped like office supplies or furniture. And everything was shipped. Plastics, fertilizers, etc, all more expensive, with the expense being pushed to the average person.

      So a general inflation took hold. It was following this absorption of people's wealth that people started to snap to the fact that the "American consumer lifestyle" was no longer tenable.

      Instead of changing the basic orientation of people, the traditional shame of holding debt (outside of big-ticket items like cars and homes) was entirely banished by an intensive effort in media, and everybody but everybody got credit cards. Where before it was rare that an person of ordinary means could get one.

      Debt with interest, of course, amounting to just another way impoverish people.

      So start from there, add in the breaking of the traditional bond of loyalty between worker and employer, and the rest more or less fills itself in.


      We live in a nation where doctors destroy health; lawyers, justice; universities, knowledge; governments, freedom; the press, information; religion, morals; and our banks destroy the economy. -- Chris Hedges

      by Jim P on Thu Mar 07, 2013 at 12:03:20 PM PST

      [ Parent ]

      •  That would explain 1978 ... (2+ / 0-)
        Recommended by:
        Jim P, walkshills

        The year those lines begin to diverge. I was trying to figure out what happened that year, and then you said "credit." Then the bell rung.

        1978 was the year the Supreme Court handed down the Marquette Bank decision, which, while it didn't change things right away, opened the doors for the near-universal extension of unsecured consumer credit that makes those two lines get wider and wider. After all, why should you, the businessperson, have to pay your employees more when you make more money if they can just charge it on their multiple credit cards to make up the difference.

        Of course, that can only work for so long.

        •  Thanks. I forgot that ruling. (1+ / 0-)
          Recommended by:
          walkshills

          But it was soon after that you'd get a dozen credit card offers a day in the mail. Your cat got offers. (True story!)

          I remember being shocked and appalled that we were being officially encouraged to go into debt. There were a spate of articles on how you'd be stupid to not play one or another game with interest rates and borrowing on one card to pay another.


          We live in a nation where doctors destroy health; lawyers, justice; universities, knowledge; governments, freedom; the press, information; religion, morals; and our banks destroy the economy. -- Chris Hedges

          by Jim P on Thu Mar 07, 2013 at 09:36:25 PM PST

          [ Parent ]

    •  Deskilling and automation (3+ / 0-)
      Recommended by:
      Utahrd, FarWestGirl, walkshills

      A cobbler is a high skill expensive position.

      The guy who pushes a button on a plastic injection machine to make 10000 pairs of crocs is not.

      The second guy is far more productive than the first.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Thu Mar 07, 2013 at 12:39:42 PM PST

      [ Parent ]

      •  But there remains a market for both products (3+ / 0-)
        Recommended by:
        zaka1, elwior, walkshills

        even if the market for more expensive (but material and labor standards) products is smaller, it still exists.

        Why is more productivity relative to end product not in the equation?


        "I like paying taxes...with them, I buy Civilization" -- me

        by Angie in WA State on Thu Mar 07, 2013 at 02:33:29 PM PST

        [ Parent ]

        •  I think because as (2+ / 0-)
          Recommended by:
          elwior, walkshills

          people's incomes shrank they needed cheaper goods to compensate for their money not going as far as it once did.  I can honestly say that the quality of many goods today is much more inferior than it was thirty years ago.  I still have things that are old, but work better than goods made today.

          It all began with the outlet stores and now we are all shopping at the dollar store just twenty years later.

          "During times of universal deceit, telling the truth becomes a revolution­ary act. " George Orwell

          by zaka1 on Thu Mar 07, 2013 at 03:10:27 PM PST

          [ Parent ]

        •  Here's the difference though (2+ / 0-)
          Recommended by:
          WillR, walkshills

          Machines are starting to make shoes of superior quality than even the cobbler, cheaper, more uniform, and with fewer defects.

          Nicer stuff isn't usually handmade anymore. It's just made with better materials and machines.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Thu Mar 07, 2013 at 03:56:48 PM PST

          [ Parent ]

    •  In 1970 we pretty (5+ / 0-)

      much saw the end of the Viet Nam war, and while people weren't making large sums of money, their money went further.  My husband and I had a small one bedroom apartment in 1975 we paid $165.00 a month which included our utilities.  In the 1970's there were highs and lows in production, we both went through lay-offs and down time, but were always called back to work once production picked up again.  January was always the month where lay-offs started, but by March almost everyone found employment again.  It was a cycle that had been happening for a while.  Then, by the late 1970s labor started to leave for overseas production, especially in steel mill towns where generations has supported families on mill work.

      By the early 1980s labor jobs were getting harder and harder to find and sustain a family on.  College education was the way to get out of the labor boom and bust cycles.  But, cost of living was still within most people's means without credit.  Then credit cards were introduced and when people could put things on credit for delayed payment cost of living started to rise, but not pay.  Even the hospitals would make workers take low census days without pay, so your salary was cut by 10% due take cuts in pay and the hospitals saved that money.  Rents increased, everything keep rising up in price and people began to rely more and more on their credit cards.  

      By the 1990s the living wage didn't really increase except for those who were executives or CEOs, (many of these people being male helped, but also they came from families that could give them a college education starting at 18 years old, but most average families couldn't afford that even in the 1980s), but credit increased and grew and grew.  By the end of the 1990s people were paying more for things, rents had doubled, you were now paying for perscriptions that use to be covered, you were paying for healthcare which use to be covered, and people were using their credit cards more and more because your 3% cost of living no longer covered your cost of living.

      At least that is how I remember it.

      "During times of universal deceit, telling the truth becomes a revolution­ary act. " George Orwell

      by zaka1 on Thu Mar 07, 2013 at 01:38:58 PM PST

      [ Parent ]

      •  I just thought I would (2+ / 0-)
        Recommended by:
        elwior, walkshills

        like to add to my comment:

        In the 1960's up until the mid or late 1980s you could work your way up through a company.  For instance, my Mother began as clerk for a company and fifteen years later through training and classes provided by the company she eventually rose to management and head of a department.  However, by the early 1990's those with college education that were under her supervision and not as experienced as she was were being brought in at a higher salary level than her.  She was kept at a lower salary even though she out sold all the newcomers and had years of experience.  And pretty much that story was universal across the country by the late 1990s.

        Even earlier around 1990 companies stopped training and allowing employees to work their way up, even though experience and hard work provided better quality in a worker.  You were expected to have a college education whether or not you could afford it.  Without a college education you pretty much starved and were being kicked out of the job market by those with college.  Still anyone with college was promoted with no experience above all others and at better pay.

        "During times of universal deceit, telling the truth becomes a revolution­ary act. " George Orwell

        by zaka1 on Thu Mar 07, 2013 at 03:05:23 PM PST

        [ Parent ]

    •  Trickle down. A total change in philosophy in (7+ / 0-)

      valuing workers' contributions and understanding that the workers' pay keeping pace has a vital part in the overall economy.

      In a word: Greed.  Reagan made Greed popular.  Reagan's pronouncements were seized upon by business leaders who bought into trickle down (voodoo economics) and haven't changed since.

      Look at Executive Compensation graphs and you can see roughly the same departure point.  Look at Tax Cuts/Rates and you see coinciding departure points.

      "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

      by YucatanMan on Thu Mar 07, 2013 at 01:43:28 PM PST

      [ Parent ]

      •  I think you hit the nail (4+ / 0-)
        Recommended by:
        YucatanMan, elwior, TomFromNJ, walkshills

        on the head, trickle down mixed with executive compensation rising to levels unheard of wealth while worker's wages were stagnant for decades.  Today, the problem is CEOs and executives making million dollar plus salaries which have to come from taking from the worker's salaries, plus taking from profits which also increase costs on the workers as well.  

        CEOs and executives salaries and the constant need to create higher and higher profits is what is causing such imbalances because worker's are either cut from jobs, or their salaries stagnant, and then workers are paying higher costs of living because profits have to exceed beyond a healthy level in order to pay CEOs millions plus compensation.

        "During times of universal deceit, telling the truth becomes a revolution­ary act. " George Orwell

        by zaka1 on Thu Mar 07, 2013 at 02:23:54 PM PST

        [ Parent ]

      •  not that this really kicks off in 1978-1980 (3+ / 0-)
        Recommended by:
        zaka1, elwior, YucatanMan

        In otherwords, during the fight against inflation and then from Reagan on.

        Hay hombres que luchan un dia, y son buenos Hay otros que luchan un año, y son mejores Hay quienes luchan muchos años, y son muy buenos. Pero hay los que luchan toda la vida. Esos son los imprescendibles.

        by Mindful Nature on Thu Mar 07, 2013 at 02:32:49 PM PST

        [ Parent ]

      •  The Seventies/early Eighties were the (2+ / 0-)
        Recommended by:
        YucatanMan, walkshills

        beginnings for multiple factors: foreign trade, Reagan's war on unions (which has become ingrained even amongst many Dems), the slashing of tax rates for the top tier (from %78 to %28 under Reagan), turning the word "Liberal" into a dirty word, trade deficits (under Reagan for the first time America became a debtor Nation)...it may have started in the Seventies but it became an institution under Reagan.

        •  While the tax rates decreased by 1986 Tax Act (0+ / 0-)

          many deductions were eliminated or greatly limited (mortgage interest, passive losses)  as well.  IE. the effective tax rate didn't decrease nearly that much.

          the slashing of tax rates for the top tier (from %78 to %28 under Reagan)

          My Karma just ran over your Dogma

          by FoundingFatherDAR on Thu Mar 07, 2013 at 05:19:07 PM PST

          [ Parent ]

          •  Mortgage interest deductions continued unchanged (1+ / 0-)
            Recommended by:
            walkshills

            after the Dole tax reform package. What was removed was the interest rate deduction for all other types of debt: credit cards, auto loans, personal loans, etc.

            This interactive tool clearly shows how much even the effective tax rate declined for the most wealthy taxpayers.  Under Reagan, the richest people received the most benefits, just like under "W."

            It also shows how Clinton balanced the budget by increasing the effective tax rate on the richest taxpayers.

            "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

            by YucatanMan on Thu Mar 07, 2013 at 05:25:53 PM PST

            [ Parent ]

          •  It is also important to note that Corporate (0+ / 0-)

            Tax receipts were slashed under Reagan.  They went from approx 15% of Federal government tax receipts to just over 5%.  That's a pretty huge cut and spurred a good portion of the massive deficits during his presidency.

            "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

            by YucatanMan on Thu Mar 07, 2013 at 05:30:40 PM PST

            [ Parent ]

        •  The 1970s had economic disruptions including (0+ / 0-)

          peak oil being reached in the USA, thus requiring us to be dependent on imports and vulnerable to their manipulation.

          But the organized change on attitudes, on institutions, on programs and economic policies truly began under Reagan.

          I agree completely with your comment.

          "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

          by YucatanMan on Thu Mar 07, 2013 at 05:19:20 PM PST

          [ Parent ]

    •  I think it’s a combination of several things (0+ / 0-)

      In the 28 years between 1980 and 2008, we had 20 years of Republican presidents (Reagan, Bush 1, and eight years later Bush 2). They pushed for numerous policies that favor the rich and hurt the poor -- lower taxes, deregulation, anti-union laws, tax breaks, and so on.

      Another factor: People at the bottom suffered because, in real terms (adjusted for inflation), the minimum wage hit a peak in 1968 and has been going down ever since. And I’d guess in some cases, like at McDonald’s, it’s likely that productivity has gone up because they use much more machinery to automatically cook the food.

      Also, certain high-wage union jobs have disappeared. Some jobs went overseas. Some jobs moved to right-to-work states. And sometimes unions were forced to renegotiate contracts.

      Health care costs have increased. So if health insurances rates went up, employers that provided health insurance were paying more for that, leaving less money to give raises to employees. (Benefits such as health insurance are not included in the wage chart.)

      And there’s the effect of machinery – computers, robots/automation, GPS devices, and so on. Back in the 1970s I worked in an office job where it took four full-time people to send out the invoices for a small business (we were still using carbon paper and IBM Selectrics). Nowadays, with a good computer, you could probably do it with one or two people. So the productivity has doubled or tripled, thanks to computers, but I doubt the workers got their pay doubled. Another example – around Fargo, the sugar beet farmers used to hire migrant workers to come in and pull up the weeds in the fields. Now they just plant GMO Round Up Ready beets and spray Round Up to kill the weeds. So the productivity of the farmers has gone up as the number of jobs went down.

      There are probably lots of other reasons why productivity keeps going up but wages are stagnant, but that's just a few.

      "Stupid just can't keep its mouth shut." -- SweetAuntFanny's grandmother.

      by Dbug on Thu Mar 07, 2013 at 07:05:44 PM PST

      [ Parent ]

  •  Campaign Poster (7+ / 0-)

    For Democrats who want to be Democrats.  

    Is very bad to steal jobu's rum...is very bad

    by jobu on Thu Mar 07, 2013 at 10:53:26 AM PST

  •  how did the 1% pull it off? (6+ / 0-)

    took the politicians and government to aid in what Chris Hedges calls a corporate coup d'etat

    •  On the broad backs of moderates. (3+ / 0-)
      Recommended by:
      zaka1, YucatanMan, elwior

      Republicans aren't enough.

      It takes people who believe in the notion of one person and his money individually earning and deserving so much more than others that they embrace unlimited income and wealth disparity.

      It takes who believe that the richer the rich are the better we all will be.

      It takes people who believe that more money to the rich will incent them to invest, while more money to the poor will discourage them from doing anything.

      Basically it takes a Republican. And a Corporate Democrat is pretty much interchangeable for the 1%.

      When 1% take 121% of the gains from "recovery", people actually recovering from lost employment are trading down on wages and benefits. Current strategies by moderates don't even consider winning the Class War.

      by Words In Action on Thu Mar 07, 2013 at 12:51:38 PM PST

      [ Parent ]

    •  They organized as a class. (5+ / 0-)
      By 1971, future Supreme Court justice Lewis Powell felt compelled to assert, in a memo that was to help galvanize business circles, that the “American economic system is under broad attack.” This attack, Powell maintained, required mobilization for political combat: “Business must learn the lesson . . . that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination—without embarrassment and without the reluctance which has been so characteristic of American business.” Moreover, Powell stressed, the critical ingredient for success would be organization: “Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.”[3]

      Powell was just one of many who pushed to reinvigorate the political clout of employers. Before the policy winds shifted in the ’60s, business had seen little need to mobilize anything more than a network of trade associations. It relied mostly on personal contacts, and the main role of lobbyists in Washington was to troll for government contracts and tax breaks. The explosion of policy activism, and rise of public interest groups like those affiliated with Ralph Nader, created a fundamental challenge. And as the 1970s progressed, the problems seemed to be getting worse. Powell wrote in 1971, but even after Nixon swept to a landslide reelection the following year, the legislative tide continued to come in. With Watergate leading to Nixon’s humiliating resignation and a spectacular Democratic victory in 1974, the situation grew even more dire. “The danger had suddenly escalated,” Bryce Harlow, senior Washington representative for Procter & Gamble and one of the engineers of the corporate political revival was to say later. “We had to prevent business from being rolled up and put in the trash can by that Congress.”[4]

      Powell, Harlow, and others sought to replace the old boys’ club with a more modern, sophisticated, and diversified apparatus — one capable of advancing employers’ interests even under the most difficult political circumstances. They recognized that business had hardly begun to tap its potential for wielding political power. Not only were the financial resources at the disposal of business leaders unrivaled. The hierarchical structures of corporations made it possible for a handful of decision-makers to deploy those resources and combine them with the massive but underutilized capacities of their far-flung organizations. These were the preconditions for an organizational revolution that was to remake Washington in less than a decade — and, in the process, lay the critical groundwork for winner-take-all politics.

      Businessmen of the World, Unite!

      The organizational counterattack of business in the 1970s was swift and sweeping — a domestic version of Shock and Awe. The number of corporations with public affairs offices in Washington grew from 100 in 1968 to over 500 in 1978. In 1971, only 175 firms had registered lobbyists in Washington, but by 1982, nearly 2,500 did. The number of corporate PACs increased from under 300 in 1976 to over 1,200 by the middle of 1980.[5] On every dimension of corporate political activity, the numbers reveal a dramatic, rapid mobilization of business resources in the mid-1970s.

      "The attack on the truth by war begins long before war starts and continues long after a war ends." -Julian Assange

      by Pierro Sraffa on Thu Mar 07, 2013 at 01:05:13 PM PST

      [ Parent ]

  •  So...What happened in 1973 that started this? (5+ / 0-)
    Recommended by:
    Wendys Wink, zaka1, YucatanMan, stevej, elwior

    I was just a little kid then, and if Kos members don't know, I'm sure I may not be able to find that explanation in a direct manner.

    When we remember we are all mad, the mysteries disappear and life stands explained.-Mark Twain

    by Havoth on Thu Mar 07, 2013 at 11:04:05 AM PST

    •  just reviewed some comments above (4+ / 0-)

      so thanks to anyone who answers.

      When we remember we are all mad, the mysteries disappear and life stands explained.-Mark Twain

      by Havoth on Thu Mar 07, 2013 at 11:05:16 AM PST

      [ Parent ]

    •  I'm getting old and wise (4+ / 0-)
      Recommended by:
      Utahrd, elwior, Hoya90, Dbug

      and full of the anecdotal love.  What we see in that chart is probably the net result of a few +/- factors:  

      1.  Advancements in industrial automation.   True story:  There was a time, back when we were a nation that made things, when people feared losing their jobs to Japanese robotic arms.  Which was before we actually did start losing our jobs to Chinese human arms.   What can I say?  It was a simpler time.

      2.  The computer revolution.  For the record, I took a typing class in high school.  On a typewriter with moving mechanical parts.  In my first job I used to type inter-office memos in triplicate, place them in re-usable manilla envelopes, and hand them to a guy who pushed a cart.  That guy sorted all the mail and delivered it to the recipients, who then typed a response in triplicate, placed them in...  etc.

      3.  Womenfolk began joining the workforce for reals.  As an aside, ever see the moving "Working Girl" with Melanie Griffith?  That was 1988.  1988!!  That's right...  career women were considered highly exotic, castrating creatures just 25 years ago.  Pass me a Virgina Slim, baby.

      4.  The tyrannical rule of our corporate overlords.   Hamsters, meet your new wheel.  Also, say goodbye to your unions, your pensions, and any expectation you might have had about a retirement party with a gold watch.   Or retirement.

      I'm not sayin'... I'm just sayin'.

      by AriesMoon on Thu Mar 07, 2013 at 01:49:00 PM PST

      [ Parent ]

    •  1973 was the all-time high (2+ / 0-)
      Recommended by:
      Angie in WA State, elwior

      For the standard of living for the median person in the United States.  There has been a determined effort since then to roll that back.  Noam Chomsky, for example, has written several books about it.  I would recommend "Necessary Illusions" as one of his books that discusses the subject.

  •  The Reason For Unemployment Is Because Of (1+ / 0-)
    Recommended by:
    elwior

    too many older workers won't retire.  There are too many people for the labor force.  When us boomers retire or die there will be more jobs.  I retired a year ago at 59.  My husband plans on retiring in five years when he will be 64.  The bad economy kept older workers out in the workforce.  I say in ten years there will be more jobs than workers.

    "Don't Let Them Catch You With Your Eyes Closed"

    by rssrai on Thu Mar 07, 2013 at 11:28:03 AM PST

  •  Reagan's gift that keeps on giving. (10+ / 0-)

    Moron wasn't even a good actor.

    I don't blame Christians. I blame Stupid. Which sadly is a much more popular religion these days.

    by detroitmechworks on Thu Mar 07, 2013 at 11:59:07 AM PST

  •  We can mention H1B visas. Maybe. (0+ / 0-)

    There's one other thing that has put downward pressure on wages.  But we aren't allowed to talk about it.

  •  Tipped/Recc'd & Tweeted. "Let's Roll !" n/t (2+ / 0-)
    Recommended by:
    sponson, elwior

    Worldwide, greed, corruption, inequality, unsustainability, poverty and the lack of empathy are creating a class of people who have “nothing to lose”. ~ GWR

    by MuskokaGord on Thu Mar 07, 2013 at 02:10:50 PM PST

  •  But the CNBC talking-heads (3+ / 0-)
    Recommended by:
    zaka1, NoMoreLies, elwior

    ..are convinced that globalism is the best thing ever. Unregulated capitalism and competition are just the only way anything can work.

    Just look at the all-important Dow. Record territory already..

    Input is one thing, stupid is another

    by Anthony Page aka SecondComing on Thu Mar 07, 2013 at 02:11:38 PM PST

    •  If that is true (1+ / 0-)
      Recommended by:
      elwior

      how did things work well prior to globalism and since globalism every country is just about in the crapper.

      "During times of universal deceit, telling the truth becomes a revolution­ary act. " George Orwell

      by zaka1 on Thu Mar 07, 2013 at 02:25:07 PM PST

      [ Parent ]

      •  You'd have to ask them (1+ / 0-)
        Recommended by:
        zaka1

        I think it's one of the worst "developments" in the last 50 years.

        Input is one thing, stupid is another

        by Anthony Page aka SecondComing on Thu Mar 07, 2013 at 04:27:14 PM PST

        [ Parent ]

        •  LOL, (1+ / 0-)

          I would if I knew who "them," were.  I think what probably happened is that those with the resources and power have misused them.  It probably began as a good idea to open up capitalism in oppressed countries, but some saw it as an opportunity to take advantage and thus we have the big mess we have today.  Regulation and controlling the amount of loss jobs from one country to another probably would have made it more successful, but when greed and deregulation get involved it screws things up.

          "During times of universal deceit, telling the truth becomes a revolution­ary act. " George Orwell

          by zaka1 on Thu Mar 07, 2013 at 07:03:39 PM PST

          [ Parent ]

  •  The "Crisis of Democracy" (4+ / 0-)
    Recommended by:
    NoMoreLies, FrankRose, elwior, Shockwave

    As Noam Chomsky pointed out, there was a book issued for elites in the 1970s called "the Crisis of Democracy."  The crisis was, there was too much democracy.  Thus the rollback began in the mid-70s

  •  How is Productivity as shown in this graph (1+ / 0-)
    Recommended by:
    WillR

    calculated? I'm wondering to what extent labor contributed to this measure as compared to investment in capital equipment. Is it even possible to isolate the contribution made by labor in these kinds of calculations.

    The only trouble with retirement is...I never get a day off!

    by Mr Robert on Thu Mar 07, 2013 at 03:56:34 PM PST

    •  It's basically output per worker per hour (1+ / 0-)
      Recommended by:
      Mr Robert

      So... a simple example. Let's say you have a factory that makes automobiles. In June, 500 workers made 500 cars. In July, the same 500 workers made 550 cars (July is one day longer, but let's say they got the 4th of July off). Productivity per worker went up 10%.

      There are all sorts of reasons why productivity might have gone up. Maybe it's a new air conditioning system, so workers are more comfortable. Maybe a new welding machine. Maybe you fired some middle managers and hired more line workers. Maybe you solved problems with getting suppliers to deliver materials on time. Sometimes workers just get more work done because they're experienced. Or they figure out a way to do something more efficiently.

      "Stupid just can't keep its mouth shut." -- SweetAuntFanny's grandmother.

      by Dbug on Thu Mar 07, 2013 at 07:41:36 PM PST

      [ Parent ]

  •  1973 is the year I went into the work force (3+ / 0-)
    Recommended by:
    sunny skies, Hoya90, Ray Pensador

    I should take it personally.  We all should.

    I am a serial entrepreneur of sorts (starting my 6th company as we speak) and I always believed in making sure all my employees are happy and can focus on their work.  

    What IS wrong with corporate America?  I worked there until 1981, since then I've worked in startups or started companies or worked as a consultant.  I cannot handle working in companies with more than 1000 employees because I hate corporate politics.

    Today I support a raise in the minimum wage, a complete review of the H-1 visa policy, workers in boards of directors like in Germany and worker participation in the growth of the value of a company.  Happy workers is such a no brainer to me.

    But corporate America is quickly becoming slave plantations where human beings are just machines to be used.  I think it is sociopathic.

    Class warfare?  We need to fight back much more aggressively, it's too one sided.

    Daily Kos an oasis of truth. Truth that leads to action.

    by Shockwave on Thu Mar 07, 2013 at 04:02:10 PM PST

  •  It all started with Reagan... (0+ / 0-)

    Whenever you read an article about a worsening long-term trend in the USA, take note of when that trend began.

    More often than not, you will find that it started in the early 1980's.

    Counting stars by candlelight...

    by frasca on Thu Mar 07, 2013 at 04:20:54 PM PST

  •  The mind numbingly stupid thing about this (1+ / 0-)
    Recommended by:
    The Geogre

    is that we have a consumer driven economy.  One man's intolerable labor costs are another man's customers!  In corporate America's single minded obsession to hold down wages they have killed the goose that laid the golden egg.  The consumer.  And with him, demand.  Now they wonder where the demand went.  Fucking brain dead idiots.  They are like parasites who are too stupid to quit draining the blood of the host until the host is dead.  At which point of course the parasite finds his home is decaying.

  •  Haven't you heard? (0+ / 0-)

    The American worker is obsolete - really mere surplusage. Despite being a $14 trillion dollar economy, supporting a robust middle-class is an impossibility in the US.

    Don't fret though - once we have walled communities with glass shards embedded in the top, I am sure that all of the middle- and working-class wingnuts who have created the situation depicted in the graph above will be residing within the safety of those walls. Riiiight.

    Middle-class right-wingers have done their damnedest to destroy the American middle-class. The question of "why?" has been answered repeatedly, but that they have left such ghastly wreckage with their voting habits is beyond question.

  •  No coincidence that the Heritage Foundation (1+ / 0-)
    Recommended by:
    Ray Pensador

    was founded in 1973.  
    https://en.wikipedia.org/...

     Didn't look up any of the other so-called corporate "think tanks" but just this alone?   The corporate take over was obviously already on the move then..  

    "I think it is much more interesting to live not knowing than to have answers that might be wrong." Richard Feynman

    by leema on Thu Mar 07, 2013 at 04:46:00 PM PST

  •  You know, I don't like this graph much. (1+ / 0-)
    Recommended by:
    Hoya90

    I think it would be much more informative to view the same graph, using global rather than just US data. Anyone know where to find such a thing?

    The problem, of course, is that relative to 1973, it's much easier to manufacture products or provide services using foreign labor and then sell the resulting products and services in the United States. That has resulted in a worldwide reduction in inequality, as well as sharp increases in inequality within many individual countries. So the question is whether, globally speaking, worker wages are increasing in line with productivity. If globally speaking they are, then that would provide further evidence that the pattern in the US is a result of policies specific to the US. If globally speaking they are not, then that would indicate that the US is a prisoner of forces stretching far beyond its borders.

    •  I think you're closest to the mark (1+ / 0-)
      Recommended by:
      smartalex

      As I posted below, I believe the final end of the Bretton Woods system contributed to the full convertability of capital and labor worldwide.  I, too, would like to see a graph based on global data.  You might be able to glean the shift in labor overseas.

      In talking to friends on Wall Street, there is an interesting trend in resourcing labor into the US.  Wages have fallen low enough that, combined with reduced energy costs for inputs like natural gas, it is cost competitive to bring production back to the US for certain types of goods.  

      You are on the right track in understanding productivity from a global perspective.  I do think that some of the other factors identified in this thread are relevant and important to consider.  However, I always start with where the rules allow the easy money to flow.

      - "You're Hells Angels, then? What chapter are you from?"
      - REVELATIONS, CHAPTER SIX.

      by Hoya90 on Thu Mar 07, 2013 at 06:49:52 PM PST

      [ Parent ]

  •  Yahoo CEO just got $1.1 mil bonus for 5 mos (0+ / 0-)

    "work."  Probably based on the productivity of employees before she ever stepped foot in the place.

    My Karma just ran over your Dogma

    by FoundingFatherDAR on Thu Mar 07, 2013 at 05:01:57 PM PST

  •  My favorite subject! (0+ / 0-)

    I would argue that everything that happened to cause this shift prior to Reagan could have easily been avoided, and once Reagan got started on union busting, and other various supply side tricklings, the whole thing was cast in Wall Street Pavement.

    Here's my latest attempt to make the largest theft in the history of the world funny:

    https://twitter.com/...

    Golden Oldie: We'll Be Taking Your Productivity Now - By #Reagan and the #TrickleDownOnauts (1981) http://t.co/...

  •  Coincides with the "lazy American (union) worker" (0+ / 0-)

    The first fetish of the Japanese, and now Chinese (yes), was that American workers are lazy. Now over there,, they really know how to work. The workers think our workers are lazy, wanting breaks during the day and safety regulations.

    The truth, of course, is that Americans relied upon Japanese managers to report what Japanese workers thought, and Japanese workers had a Shinto world view tinged with Confucianism, whereby everyone was bound by duty to everyone else. In the USA, the industrialists were happy to blame the workers and demand more productivity because "German workers are increasing productivity more than American workers are" or because "Japanese workers work more hours than American workers do over a lifetime" or because Chinese workers work "without breaks or other luxuries."

    All of these things were pieces of false consciousness that played into American inferiority complexes and our own suspicions about pleasure or leisure. Fortunately, our leisure class members share neither our scruples nor detectible morality.

    Everyone is innocent of some crime.

    by The Geogre on Thu Mar 07, 2013 at 05:12:53 PM PST

  •  it's amazing how many of these... (0+ / 0-)

    charts show the toilet spiral originating precisely when Reagan was inaugurated...

    "It's almost as if we're watching Mitt Romney on Safari in his own country." -- Jonathan Capeheart

    by JackND on Thu Mar 07, 2013 at 05:48:02 PM PST

  •  So what happened in 1973 (0+ / 0-)

    To make this happen? Did employers just decide to stop passing productivity gains on to employees en masse?

    Living is easy with eyes closed...

    by skybluewater on Thu Mar 07, 2013 at 06:12:21 PM PST

  •  What about Bretton Woods? (0+ / 0-)

    In the 87 comments thus far, no one has mentioned the end of the Bretton Woods system and the move to a floating exchange rate for the U.S. dollar.  It was in February 1973 that the Bretton Woods system, built around a fixed exchange rate for the U.S. dollar on a gold standard was finally and completely abandoned.

    That event opened up the U.S. economy to a very direct competition for wages from overseas labor and made capital truly fluid worldwide.  While I agree with the other factors identified by other posters in this thread, it is the move to fully floating and convertible exchange rates that enabled much of the downward pressure on wages in the U.S. economy.    Follow the money.

    - "You're Hells Angels, then? What chapter are you from?"
    - REVELATIONS, CHAPTER SIX.

    by Hoya90 on Thu Mar 07, 2013 at 06:42:35 PM PST

  •  I think I've got to call bullshit (0+ / 0-)

    on at least part of this.

    A good chunk of the productivity increases that are shown in this graph are in the clerical area.  A study from 1986 http://research.upjohn.org/...
    shows how the clerical sector "The most numerous occupational group in the economy" was responding to new technology at that time.

    I think it began with the introduction of the Xerox machine.  And the IBM Selectric.  And the IBM PC.  And WordStar and Lotus 1-2-3, each of which was a really great addition to the workplace.  And computer networking, the internet and T-1 lines, and... (yeah, I was a geek back then)

    Each of them was a boon to your average office worker, and an even greater boon to the companies they worked for.  Each one of them made it possible for more work to be done by fewer people.  Productivity goes up, average salary goes down, and more jobs are routinized in order to build a more flexible workforce.  

    I don't buy the 40 year conspiracy theory.  I think we took one seemingly positive step after another until there was a paradigm shift in how the workplace was defined.  Companies are taking advantage of this, and will until there's a corresponding shift in the social paradigm that they are compelled to deal with.  I don't know what it will be, and I have no idea how soon it might come - I wish I did.  But I don't think there's some dark force lurking behind the scenes that plotted the curve out in advance.

    At least half the future I've been expecting hasn't gotten here yet. Sigh....

    by serendipityisabitch on Thu Mar 07, 2013 at 07:26:25 PM PST

  •  Then why is Obama pushing chained CPI (0+ / 0-)

    Against this backdrop it's clear that future retires will not be able to afford social security cuts. Chained CPI is an unjust stupid idea.  The president is falling in approval not because of not compromising with republicans but because he is once again caving in.

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Thu Mar 07, 2013 at 07:29:35 PM PST

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