Anonymous asked:
sadoeconomist answered:
I don’t remember exactly where I picked up that fact, we debated the Great Stagnation quite a bit when I was in my PhD program and I’m pretty sure I discovered it then, but I googled it and the Heritage Foundation seems to have addressed it directly.
The relevant graphs are this one, variants of which circulate that purport to show that workers have been robbed of their productivity gains since the 1970s because, I don’t know, capitalists got more greedy somehow?:
Looks real bad, right? But then if you look at total compensation like you should have been doing in the first place, it look like this:
They are tightly correlated and only really start to separate from each other in the middle of the Bush era, and I think that can be accounted for by employers beginning to drop health coverage due to increases in health care costs as well, so really the one story here is: health care costs increased massively, and it has hurt working people.
Wait what. Is… I’m not 100% sure I’m reading the graph correctly, but does this mean that the average employer spends almost as much (~¾ths) on heathcare per employee as on employee wages? And almost nobody notices this except when debunking graphs? Wow.
BTW I’m pretty sure the “employers beginning to drop health coverage” during the Bush era still needs explanation as there’s still a gap, but it’s incredibly tiny compared to the larger gulf.
Well, remember that health care isn’t the only thing that goes into total compensation but not wages - retirement benefits, paid leave, and supplemental pay like bonuses and commissions are in that category as well. All those benefits together are now nearing a third of total compensation, which is historically very high I think? Anyway if you want to see numbers look at this.
I suppose I missed the story I should have also been telling about how retirement benefit funding has changed since the ‘70s, but IIRC paid leave has been going down and supplemental pay is a small number.
Holy shit
This is insane and I can’t believe I’ve never heard about it before
Can someone show me how this is wrong, or should I actually update to “the idea that no productivity gains have gone to the working class was entirely made up from the start”?
Because hot damn would that be a jump
I’d heard this wasn’t true. See eg http://www.epi.org/blog/professor-hubbards-claim-about-wage-and-compensation-stagnation-is-not-true/ . Key chart:
EDIT: Compare also this report and this post.