Karen,
An interesting set of economic articles of where America is now. There's
nothing surprising here -- decreasing average wages, housing slowdown
taking the steam out of consumer spending, and the changing job structure
in the Western world favouring women's jobs.
The big fallacy in the Reagan-Bush doctrine of decreasing the tax rate for
the better-off middle-class and the subsequent trickle-down effect is that
it assumes an increasing supply and purchase of a smooth succession of new
consumer goods out of income (rather than debt) as has occurred for about
200 years. There have been plenty of new goods in the shops, of course but
almost all of them are cheaper embellishments of previous ones. But, since
about the 1980/90s, there hasn't been the sort of generic progression that
we saw in the last century -- domestic ornaments, furniture, upholstery,
radio, TV, cars -- that motivated the whole population from the better-off
downwards. Instead there's a jump to the next class of consumer goods which
can only be afforded by the very well-heeled (e.g. private airplanes,
helicopters, luxury yachts, expensive watches, etc) and which, in any case,
suffer from other constraints (e.g. not enough airspace for everybody to
fly, not enough available berths for boats, not enough beautiful locations
for houses, not enough safety for ordinary people with expensive
possessions, etc) and also, just as importantly, not enough time in the
week for ordinary working people to enjoy them. Instead of a more orderly
and linear pattern of social classes and incomes -- which the early part of
the last century seemed to promise -- we are suddenly assailed with massive
discontinuities.
This is not just an American phenomenon, however. It's occurring in England
in spades and, to a lesser extent so far, also in most of the economies of
Western Europe. From what one reads about Japan and the more prosperous
parts of Korea and China, it's happening there, too, already. It's almost
the case that twin economies are taking shape in all developed countries.
Keith Hudson
At 08:25 04/12/2006 -0800, you wrote:
AP Cracks showing in 3 pillars of economy: consumer confidence, orders for
manufactured goods and home prices, flashing signals that growth may slow
more heading into the important holiday shopping season&Federal Reserve
Chairman Ben Bernanke said Tuesday that risks from inflation or a
worse-than-expected housing slump could further complicate matters for the
economy. In his first speech in months, he made it clear that he would
monitor the situation, particularly labor costs.
In prepared remarks to the National Italian American Foundation in New
York, the Fed chairman said substantial uncertaintiessurround the Feds outlook.
He noted that the slowdown in the housing market could turn out to be
deeper than expected, dragging down overall economic activity even more.
In contrast, economic growth could rebound more strongly than expected,
which could lead to rising inflation.
<http://www.msnbc.msn.com/id/15938901/>http://www.msnbc.msn.com/id/15938901/
IRS: Total 2004 Income less than 2000 Reported income totaled $7.044
trillion in 2004, the latest year for which data is available, down from
more than $7.143 trillion in 2000, new IRS data shows.
<http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=TOT>Total
reported income, in 2004 dollars, fell 1.4%, but because the population
grew during that period average real incomes declined more than twice as
much, falling $1,641, or 3%, to $53,974.
The overall income declines of that extended era came despite a series of
tax cuts that Pres. Bush and Congressional Republicans promoted as the
best way to stimulate both short- and long-term growth after the Internet
bubble burst on Wall Street in 2000 and the economy fell into a brief
recession in 2001. The tax cuts contributed to a big decline in individual
income tax receipts, which fell at a rate 14 times that of the drop in incomes.
In 2004 individual income tax receipts were 21.6% smaller than in 2000 -
and indeed smaller than they were in 1997, the new IRS report shows. The
government collected $831.8 billion in individual income taxes in 2004,
down from $980.4 billion in 2000 and $848.6 billion in 1997. Those figures
have risen since then, but rather than pay for themselves through economic
growth, the Bush tax cuts, at least through 2004, were financed with
borrowed
money.
<http://www.nytimes.com/2006/11/28/business/28tax.html>http://www.nytimes.com/2006/11/28/business/28tax.html
Gender Gap Narrows As Men's Pay Erodes
By Molly Hennessy-Fiske, Los Angeles Times, December 4, 2006
WASHINGTON Marie White is a health-care aide who looks after patients in
their homes in Sonoma County, Calif. There's a shortage of workers in her
female-dominated profession, which has helped workers unionize and command
better pay over the past five years, driving the pay ceiling from $6.75 to
$10.50 an hour. "By organizing, a good many of us have been able to get
out of the minimum-wage category," White said.
John Wilson of Los Angeles, meanwhile, is still trying to find a job that
pays as much as he earned 12 years ago. Laid off in 1994 from a
software-programming job that paid $50,000 a year with full health
benefits, Wilson went to work as a security officer earning minimum wage.
Now he works at the Lantana Media Campus in Santa Monica, providing
security for celebrities including Ben Affleck and Cameron Diaz. He has
worked his way up to $12.25 an hour but pays about $100 a month for health
insurance for his 15-year-old daughter. Even though he is making half of
what he did before, he feels lucky: Many security guards he knows, mostly
men, earn minimum wage without benefits.
White's and Wilson's experiences illustrate a noteworthy trend in the
21st-century economy: Women are closing in on men when it comes to wages,
but not for the reasons anticipated or hoped for when gender pay equity
became a rallying cry in the 1970s. Data show that the pay gap has been
narrowing not because women have made great strides, labor experts say,
but because men's wages are eroding.
The disparity in median hourly pay between men and women narrowed to 18.3%
in August from 21.5% five years earlier, according to recently released
census figures. In fact, the US Labor Department noted recently that the
wage differential in 2005 was the smallest since the department began
tracking it 33 years ago, when it was 36.9%.
Even when men's and women's work patterns are taken into account - men
tend to work more hours - the pay gap is narrowing. The difference between
men's and women's median annual earnings shrank from 26.3% to 23% between
2000 and 2005, with women earning an average $31,858 and men $41,386.
Over the past 5 years, however - as the economy expanded, profits rose and
unemployment fell - men's hourly wages declined a total of 2% while
women's rose 3%, census records show. Women's gains were barely enough to
keep up with inflation.
"Wages generally have been depressed, but men's have been more depressed,"
said Michele Leber, chairwoman of the Washington, D.C.-based National
Committee on Pay Equity, who called the trend "discouraging."
Different effects Economists say the forces behind these trends show that
men and women are experiencing the economy in different ways. In the
U.S., men have tended to dominate in blue-collar and manufacturing jobs,
which have been disappearing or seeing downward wage pressure for the past
few decades. Women have been more prevalent in service jobs such as health
care, which historically have been lower-paying but have seen wages rise
in recent years.
Indeed, economists note that among people with a high-school education or
less, men's wages have been falling while women's are rising because of
increased demand for service-sector jobs. Meanwhile, better-educated
women have seen their pay rise but not as much as their male counterparts.
So women's gains relative to men appear to be coming mostly in lower-wage jobs.
The gap started narrowing in the 1980s largely because of women's
increased access to education and better-paying jobs. In the 1990s their
gains leveled out while men's wages rose at all skill levels, thanks to
the economic expansion fueled by the dot-com boom, economists say.
Women lost some ground in the recession following 2001, said Heather
Boushey, an economist at the Washington, D.C.-based Center for Economic
and Policy Research, and have seen their wage gains resume only recently.
"This year [women's relative pay] reached a new peak, but I don't think it
was much to get excited about, especially since the only reason was
because men's wages fell faster," Boushey said.
Some say a vanishing pay gap should be celebrated, whatever the reason.
"All we care about is the ratio," said Claudia Goldin, a Harvard
University economics professor who has studied women in the work force.
"Wrong way" But other economists and pay-equity advocates say the whole
idea of narrowing the gap was to help women and their families earn
substantively more. "We're closing the wage gap in exactly the wrong way,"
said Rebecca Blank, dean of the University of Michigan's Gerald R. Ford
School of Public Policy. "The idea was that women's wages were supposed to
rise, not that men's wages would fall to women's level."
<http://seattletimes.nwsource.com/html/nationworld/2003460505_wagegap04.html>http://seattletimes.nwsource.com/html/nationworld/2003460505_wagegap04.html
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