9/04/2006

Bush Pledges to Help American Workers Be Competitive

- By Lowering Their Wages











Fastest Decline in Real Wages On Record

Inflation Up; Wages Down

By JARED BERNSTEIN

Employers' wage costs grew 2.3% over the past year, the slowest growth rate on record, according to today's report from the Bureau of Labor Statistics. Factoring in the recent energy-driven increase in inflation, the real wage is down 2.3%, also the largest real loss on record for this series that began in 1981.

With hourly wages falling in real terms, the only way working families can raise their incomes is by working more hours-certainly not the path to improving living standards that we would expect in an economy posting strong productivity gains.



















44 comments:

Cato said...

Does anyone honestly believe the President has any power over your hourly wage?

People in this country are such sheep.

not an idiot! said...

No, but his policies determine how corporations push wages down.

Cato said...

{o,o}
|)__)
-"-"-
O RLY?

Please do tell how.

jpn said...

The President has the power of leadership. He could hammer away on his bully pulpit and till the corporations that poeple come before profits. He preach to the people of this nation to "buy American" -- as the Wal-mart slogan use to be. He could point out that "profits don't know patriotism" and inspire the people of this nation to think before they buy. This would be a shift from the free-market focus and instill more politics into the mixed economy.

Cato said...

Buying American does not help the American consumer necessarily. It may help the American worker but the American worker is also the American consumer.

"People before profits" well, what about the consumer jpn? You seemto forget that workers have to spend the money they make too and spending higher and higher prices for worse products is not a smart thing to do at all.

So, how exactly does the President affect your minimum wage?

AndyRand said...

Gee, you're right CATO,
So you should have no fear of a minimum wage bill driving up the cost of labor. I guess if it ever got to Bush's desk he wouldn't have the power to veto it would he! (facetiousness light on!)

What does this mean?
{o,o}
|)__)
-"-"-
O RLY? oh Really? Yeah I get that.

??????

Cato said...

Andy, there has not been a minimum wage increase by this President. You are right that the (illegal) Federal minimum wage does cause me to incur increased costs so perhaps I should have asked how has this president caused "real wages" to "go down" (and costs for goods and services to be artifically raised). There are very few people that actually make minimum wage, btw, which is why the minimum wage as it is does not cause me to incur much increase in cost (although it is still immoral to tell workers they cannot ask for whatever wage they are willing to work for). I am sure anyone could demand 7-8 an hour to start at McDonald's and they would get it.

It's the O RLY owl. Welcome to 2003.

AndyRand said...

CATO:
Walk into an McDonalds and give this a try!

I am sure anyone could demand 7-8 an hour to start at McDonald's and they would get it.

You live in a dream world!!!!

Sorry, I'm not up on my teenage IMing
hyroglyphics! circa 2003

AndyRand said...

Here's one explanation of how the Bush
Admin is driving wages down. Statistical manipulation by Labor Dept.
http://tinyurl.com/g7na3

Better than the "free market" explanion of "It's a mystery".

Cato said...

Ha; it was in a newspaper.

When I worked for McDonalds years ago, I made over 3 dollars over the minimum wage. It was my first job outside of a few entrepreneurial activities I had done in my youth and I never recieved a raise there; I quit after a little while for another job where I made more money at where I recieved several wage increases, and it was the same type of place making fast food for customers.

7 dollars is 2 dollars over the minimum wage. McDonald's is an easy job that requires little to no higher brain function. If you show any brain function during the interview you can get two dollars more than minimum wage.

jpn said...

Most -- probably all -- McDonald's pay starting salaries greater than the minimum wage.

AndyRand said...

Go to Culver's and apply.
Also I wish I could point to an internet video of the Wendy's CEO in England who was incapable of performing the daily routine duties of the starting wage staff. I guess that proves his lack of brain function, yet somehow he's ran the company?

Besides, the anti-Min. wage argument goes, If the min wage is increased all wages have to increase.

Cato said...

I wish you could too. It's monkey see monkey do at McDonalds.

Yes, if the minimum wage was to be raised, some wages would rise with it (but not all). What is the most important thing to remember here though is that cheap goods and services that all of us rely upon (by saving money on X by shopping with some frugality (toliet paper, strawberries, cereal, etc.) you can afford to buy something new like a Ford car) will increase in price and with it will in turn both increase price of other products as well as knock them out of the affordability range for many even though your wages have gone up they went to pay for that increased cost of cereal that went to pay for increased wages for someone else.... it's a viscous cycle.

AndyRand said...

CATO:
The increased price of cereal is more likely to be the result of a bloated advertising campaign aimed at kids to pester their parents to buy a certain brand, rather than increased labor cost in the production of the cereal.
I agree impart with your explaination above, but there are many down sides to low, low prices also. The first is actually to the retailer who has to operate on the slimest of margins to make any profit whatsoever. That intern drives his desire to cut costs even further in the way of even lower wages. At least with a reasonable minimim wage the competition has a bottom in terms of labor cost.
Thus it truely is Bush's aim to make workers more competitive by creating an environment that encourages lower wages.

Cato said...

Bush has created no such enviornment; I might like him if he did.

AndyRand said...

Oh, then you subscribe to the theory that it's a "Mystery" that real wages are dropping?

Cato said...

Real wages are dropping because the price of goods are up. The price of goods are up due in large part because of the price of oil, which effects all parts of the economy. The price of oil is up in large part because of speculators buying oil futures. But that bubble's bursting. I'm not too worried about it.

When you attribute "real wages being down" to the president than an opponet can attribute "wages are up" to the President as well. Both are correct -- wages are up, though "real" wages are down. Unfourtently for you, people hear "ya, but" when you start sputtering with addition adjectives to describe something. Wages being up, even though "real wages" are down, only helps the people in power if the masses believe those in power in government have any real effect on their wages.

AndyRand said...

CATO:
I can buy much of your argument here.
The Future's argument is little known but true. I've heard that many investment bankers are turning something like an instant 9% profit because of the current situation. I heard an explanation of how it was done but frankly forgot and I'm not well enought versed in futures trading to completely undestand it.
On my side of the arguement.
The current admin. has created a vary favorable environment for mergers and acquisitions, I believe to the extent than many anti-trust regulations are being ignored and unenforced as is much questionalbe insider trading that occurs during these transactions. In general the first result of a merger is the loss of jobs. I believe this is one way in which the current admin. is creating a favorable environment for lower wages but increasing the supply of unemployed workers.
I cannot prove this, but I also believe that there is collution between Big Oil and the Bush administration. The contacts between
Big Oil and ranking Bush officials is very tight. With the two being very close I do believe that market manipulation is possible and have heard that British Petroleum could be on the verge of an investigation into this.


BTW, your explaination is much better than the "mystery" one.

Cato said...

"Big Oil" =/= oil speculators. Since artifically inflated prices of oil are actually bad for "Big Oil" as they do have some negative effect on demand, I don't see why they would want to have higher prices. But I don't see them getting upset about since regardless of the speculators inflating the price for some amount of time (as you can see now it is drastically coming down) and neither do you. Why? because demand is still up. Until it effects their profits, which it hasn't seemed to, I doubt they will complai ntoo much. But even then, what can they do? Futures of commodites have been traded on the market for generations.

The only link to Bush is the constant state of fear this government wants us all to be in. The "terror alert" will never be lower than "elevated." This is one part of the reason for speculators buying up the oil futures, fear that some part of the supply will be cutoff.

AndyRand said...

I'd think "Big Oil" would want higher prices. Why not? Look at their profits lately.
Do you know how investment bankers are making the instant profits?
Can you explain it? Is it dependent on a constantly increasing price of oil?

The last I heard Crude was still about $72/barrel. Yet the price at the pump is dropping. Demand is certainly not down over the Labor Day weekend. What's the explaination. I had not heard that crude had dropped in price, if it has I was not aware of it.

Cato said...

Futures are dropping, as is the price of crude.

The money "Big Oil" makes is somewhere around a dime a gallon. It's not a dime off of each dollar, it's off a gallon. The more oil they sell, the more money they make. "Big Oil" is still in competetion with each other, not collusion.

Oh, btw, do you own any energy stocks in your portfolio? You should. That way when "Big Oil" gets "rich", so do you.

Cato said...

To make a profit, buy low sell high. If it keeps going up, you can buy and then turn around and "instantly" sell and make an "instant" profit. However this is a house of cards and will fall, as it is starting to now.

AndyRand said...

So they sell the oil or the future?

Can you give me a more concrete example. I have to admit I'm not good at understanding this sort of thing.

Cato said...

Oil futures are dropping.

http://money.cnn.com/data/commodities/

Futures came about from farmers saying "well I can give you 1000 bushels of wheat in July. What will you pay me?" The farmer then knows how much he will get and the buyer knows how much product he will get and at what price. Oil futures is the price of oil in X month. Speculators buy and sell these contracts on the price of whatever commidity for a profit themselves. The problem for speculators is that nothing in the world can continue on forever and the price will fall, leaving some with the short end.

AndyRand said...

OK, call me dense.

I buy a futures contract for Oct oil at $82/barrel. How do I make the instant profit?

AndyRand said...

I think this is tied in with the current interest rate as well. Using other peoples money to make your profit.

Cato said...

South Park fan?

Underpants gnomes offer key insights:

http://tinyurl.com/8jn7

What it means by "instant profits" is they really don't do anything for phase 2.

Phase 1: Buy oil futures.
Phase 2: Nothing.
Phase 3: Profit.

Phase 2 you just sit on it. Buy at 82, sell at 85.

AndyRand said...

Thanks for the explanation.
OK, it's too simple. I was expecting a least a smattering of financial genius from speculators.


Not really a South Park fan. Never followed it. Will check out.

What do you think about the News being the News with the big Katie Couric rollout. I'll let you guess what I think.

Cato said...

I do not watch the evening news; it hasn't been worth my time for quite some time. Sad as it is, BBC (state run!) television is better, since they are news reporters, not "news journalists." I find it far more objective and interesting, and I don't have to pay the BBC a dime. Of course, I find plenty of news items on the internet from a variety of sources, and typically just recieve my news that way, along with magazines and whatnot.

AndyRand said...

CATO:
"I do not watch the evening news; it hasn't been worth my time for quite some time. Sad as it is, BBC (state run!) television is better, since they are news reporters, not "news journalists."

I agree. But isn't it ironic. Why are they better even thought they are State run. Could it be that they are not ruled by the profit motive?
Rationally one would think that government owned media would be the best propaganda machines available, yet they turn out to be reasonably "objective" news sources.
Thanks for the business lesson. I think I should go into business if it's that easy:-) I'm really good at phase 2:.
Seriously, The 2 issues we've discussed here are why I'm so dimayed with the "free market". It creates crap.
You have unscrupulous and unregulated speculators tampering with commodities that most of us really need. And broadcasters who are marketing Katie Couric as their news product when the real new gets untold, (unlike the BBC). Can you see a little of where I'm coming from?

Cato said...

Clearly most people want journalistic "news." Its just a prefrence I have for actual news than tabloid "journalism". It doesn't mean it is "rap" created by the so-called "free market" (news industry is anything BUT).

And I do believe speculators are regulated. And they will get theirs one day soon.

Cato said...

rap = crap.

both above and in general.

AndyRand said...

Won't you agree to the irony of BBC producing more "actual" news? I guess that's what I'd prefer also and I watch the BBC on PBS, another government supported entity.
This is one instance were the government pretty much works. Come on
admit it. Or you'll be forced to watch Maury Povich reruns for all eternity:-)

Cato said...

Governments do not necessarily produce a product that is bad, I will admit that. I will go as so far as to say that people that work for the beaurcracy -- public news included -- genuinely want to do "the right thing" and "care". But I will not say that just because this is the case that government "works" in this case.

All this shows is that government is capable of producing something that most people don't even want even if some people, such as myself, do. I can find other mediums -- I merely said I'd perfer to watch BBC over ABC, CBS or NBC nightly news.

AndyRand said...

CATO:
I'm not sure what you mean here?
"But I will not say that just because this is the case that government "works" in this case. "

In my humble opinion, you, as an intelligent consumer of news, go to the BBC because it is better. It is better because their focus is to report the news well, not sell deodorant!
The networks are no longer in the news business, they are in the entertainment business. Eventually, they will sink to the lowest common denomonator and become like the porn industry, as a matter of fact they are not far from it. They report on the porn industry feining to expose it while they know the tittilation will raise their ratings. It wouldn't be so bad if they were more forthright and quit the masquerade of being "news". It's just plain dishonest.

Cato said...

But Andy, my point is that most people don't want what the BBC has to offer most people want what the big three networks have to offer. Its why the networks offer it.

All I have to admit here is government is good at providing something that most people don't want and chage everyone for it (PBS, NPR, etc), while private industry is good at providing something that most people want.

AndyRand said...

CATO:

I replied earlier and my post seems to have gotten lost in cyberspace. I will try to reconstruct what I said.

You are right. The networks provide the lowest common denominator.Don't you want an informed electorate? I know I do. Don't you appreciate what the BBC has to offer? If it weren't for the subsidies it would vanish.
There are many things gov. pays for that I don't want. Takes stadiums that belong to billionaires for example. I'm sure we agree there.
But there are things that benefit the society as a whole, like education and police protection that I think are essential, whether I "like" paying for them or not. I may not even need them personally but community or country does.
I'd much rather have people that vote be informed even if they vote differently than I would. I think network news is the biggest "ignorantizing" (bad word I just made up) element in today's American non-culture. At least you are informed.
We cannot have a democracy with a society filled with ignoramuses.

Cato said...

No, we cannot. Nor should we have a democracy at all. I am glad so few people vote since most people don't even care to educate themselves on the issue. We are a Republic, not a democracy, for rule of the majority is a terrible thing always.

Like I said I get my news from a vareity of sources. Rarely do I even watch the BBC nor any news for that matter on TV as most my news is gathered from internet sites, newspapers, and magazines. I was merely stating I'd perfer it to the big three's "news" which usually has a few key things:

1. story that you "need to know" because you may, and probabbly will for that matter, die if you don't know it now. this takes up over half the show and can be one story or many.

2. some propogandizing message about "your money"

3. feel good story to wrap it up, about panda bears or something else asisine that no one should care about

4. ads for hemroidal creme

Cato said...

Bah; asinine pandas.

Editing posts would be nice, as I make asinine mistakes in splling adn grammer.

AndyRand said...

CATO:

You forgot #5 which I think is usually #1 or 2.
What's Tom Cruise doing, Why was Paris Drunk? I think that was #2 after the current Terror mongering. It may have beat it out?

You are right editing would be nice!
I think you can always copy delete and post again.

JPN said...

I getting in here late, but Cato and Andy, aren't you guys excited the Katy Curic is going to be on the news?

Replacing Dan Rather...gee I might have watch his news casts 10 times.

I love it when the reich-wingers quack about the agenda of the MSN like ABC, NBC and CBS. Let see, they start at 5:32 PM and get done at 5:58 PM. Subtract 8 minutes for commercials from 26 and you get 18 minutes of news. Split this in thrids for 6 minutes of hardcore news, 6 mintues of fluff stuff and 6 minutes of stuff that may or may not be news.

Boy that's really a power propaganda machine. Actually, it's a joke and anybody thinkings there credible influence over our society coming from the network nightly news shows are listening to Hannity and Lintball way too much.

AndyRand said...

JPN,
Welcome!

your said:
"Actually, it's a joke and anybody thinkings there credible influence over our society coming from the network nightly news shows are listening to Hannity and Lintball way too much."
Credible, NO --- Influence Yes, I think they are. As CATO says, that's what the most people want so that what we get. I think they do infuence people if for no other reason to watch Katie.

You time analysis is great, but you forgot that some of that news time is cross promotional news, movies or other TV shows they are promoting.
So the time of "news" is less than your analysis.

jpn said...

Andy:

One of my co-workers told Rush is all entertainment. He's a member of the reich-wing unintelligista and he said everyone knows that Rush is only about having fun.

This sort reminds of the guys that used to pour gas on cats' tails and lite them with a match. They were just doing it for fun.

AndyRand said...

JPN,
I have a friend who's a ramp rat at the aiport. His fellow ramp rat/ditto heads have this kind of fun too.
Thanks to people like Rush they'll soon be unemployed ramprats and will
become full time dittoheads. It's real "good" fun. What idiots. P.S. My friend is not a Ditto head.
Friends don't let friends be Dittoheads.