Trade Has Expanded Living Standards

[Toro]

* Trade has had no discernible, negative effect on the number of jobs in the U.S. economy. Our economy today is at full employment, with 16.5 million more people working than a decade ago.
* Trade accounts for only about 3 percent of dislocated workers.Technology and other domestic factors displace far more workers than does trade.
* Average real compensation per hour paid to American workers, which includes benefits as well as wages, has increased by 22 percent in the past decade.
* Median household income in the United States is 6 percent higher in real dollars than it was a decade ago at a comparable point in the previous business cycle. Middle-class households have been moving up the income ladder, not down.
* The net loss of 3.3 million manufacturing jobs in the past decade has been overwhelmed by a net gain of 11.6 million jobs in sectors where the average wage is higher than in manufacturing. Two-thirds of the net new jobs created since 1997 are in sectors where workers earn more than in manufacturing.
* The median net worth of U.S. households jumped by almost one-third between 1995 and 2004, from $70,800 to $93,100.

http://www.freetrade.org/node/782

 

[Annie]

This is the part of econ I do understand. I keep seeing folks arguing about 'outsourcing' throwing around 'decline in "real wages", just not supportable to anyone that bothers to look.

 

[midcan5]

There is nothing wrong with 'trade' so long as it is fair. Notice though the figure for manufacturing and you see the impact of outsourcing. Read carefully the figure on median wages could mean anything give the qualifications noted.

outsourcing

http://www.foreignaffairs.org/20060...ffshoring-the-next-industrial-revolution.html

http://www.counterpunch.org/roberts10092007.html

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"There is no historical evidence that tax cuts spur economic growth. The highest period of growth in U.S. history (1933-1973) also saw its highest tax rates on the rich: 70 to 91 percent. During this period, the general tax rate climbed as well, but it reached a plateau in 1969, and growth slowed down five years later. Almost all rich nations have higher general taxes than the U.S., and they are growing faster as well."

http://www.huppi.com/kangaroo/L-taxgrowth.htm

 

[Toro]

Free trade is fair trade.

 

[midcan5]

Free trade is a myth as most slogans are.

 

[Toro]

"Fair trade" is the siren call of protectionists.

 

[Annie]

"Fair trade" is the siren call of protectionists.

Yep, along with 'close our borders' as opposed to defend or protect our borders. The far right and the very far left are trying to get the US to be isolationist.

 

[onedomino]

This is the part of econ I do understand. I keep seeing folks arguing about 'outsourcing' throwing around 'decline in "real wages", just not supportable to anyone that bothers to look.

I'm not so sure. Are the numbers in that table inflation adjusted? Comparative annual stats on "median income" are not particularly meaningful. The only numbers that mean anything in real life are indexed and report comparative "purchasing power," such as the numbers I used to debate the Aussie socialists last night in a different thread. If the above numbers are not adjusted for inflation, say 2 percent per year, then the growth in household worth reported above is not impressive, amounting to less than $1000 per year. Further, the above numbers do not take into account employee benefits such as health plans, which have historically been much higher in the manufacturing sector and virtually non-existant in some of the job categories above that show the greatest growth. Finally, in the table above it is easy to note that there has been zero new job formation in the three highest income categories and lots of growth in the middle and bottom. Considering the fact that we have added about 4 trillion in public debt during the above period, I am unimpressed with the results.

 

[Toro]

I'm not so sure. Are the numbers in that table inflation adjusted?

Yes.

* Average real compensation per hour paid to American workers, which includes benefits as well as wages, has increased by 22 percent in the past decade.
* Median household income in the United States is 6 percent higher in real dollars than it was a decade ago at a comparable point in the previous business cycle. Middle-class households have been moving up the income ladder, not down.

"Real" means inflation-adjusted.

 

[onedomino]

Yes.



"Real" means inflation-adjusted.

OK. but those mfg numbers are very hard to believe in that they contain health and disability benefits (much less life insurance and matching 401ks?). That would mean that the aver mfg job pays, what? $13/hr? What kind of mfg job is that? Meaning, furthermore, that there are millions of mfg jobs that pay less than $10/hr? What the hell kind of mfg job pays less than $10/hr? That's not even a living wage. There is something wrong with those numbers in that they claim to inclide benefits, unless there are no real benefits.

 

[Annie]

OK. but those mfg numbers are very hard to believe in that they contain health and disability benefits (much less life insurance and matching 401ks?). That would mean that the aver mfg job pays, what? $13/hr? What kind of mfg job is that? Meaning, furthermore, that there are millions of mfg jobs that pay less than $10/hr? What the hell kind of mfg job pays less than $10/hr? That's not even a living wage. There is something wrong with those numbers in that they claim to inclide benefits, unless there are no real benefits.

Excuse me if I'm way off here, but seems to me a lot of hs grads or non-grads might qualify for manufacturing jobs, beginning at say $8.50 an hour? Over time, they prove able to show up on time, etc., they move up to $15-20 per hour? As a starting wage, $8.50 beats the $7.25 at Mickey D's?

 

[onedomino]

Excuse me if I'm way off here, but seems to me a lot of hs grads or non-grads might qualify for manufacturing jobs, beginning at say $8.50 an hour? Over time, they prove able to show up on time, etc., they move up to $15-20 per hour? As a starting wage, $8.50 beats the $7.25 at Mickey D's?

Maybe you are right, but a mfg job for $340 per wk? What kind of job in mfg pays that? $15K per yr? That cannot be what I think of as a mfg job. If it is, no wonder we are over-run with illegals. Who would work a mfg job for that money? Gardners make more than that in CA. If you were making that kind of money in LA you could not afford to live on a bench at the bus station.

 

[Annie]

Maybe you are right, but a mfg job for $340 per wk? What kind of job in mfg pays that? $15K per yr? That cannot be what I think of as a mfg job. If it is, no wonder we are over-run with illegals. Who would work a mfg job for that money? Gardners make more than that in CA. If you were making that kind of money in LA you could not afford to live on a bench at the bus station.

I don't know all the ins and outs. I do know that when I started out at a bookstore in college, (prior to that I waitressed or worked in car wash, lots of off the book $$$, due to tips), I started out at like $6.25 per hour. A year later I made over $8. That doesn't sound like much, but at the time it was. (Mid 70's). That was within what year, the percentage?

 

[Toro]

Maybe you are right, but a mfg job for $340 per wk? What kind of job in mfg pays that? $15K per yr? That cannot be what I think of as a mfg job. If it is, no wonder we are over-run with illegals. Who would work a mfg job for that money? Gardners make more than that in CA. If you were making that kind of money in LA you could not afford to live on a bench at the bus station.

A manufacturing job that pays $17.12 per hour pays $35,600 a year (17.12*8*5*52=$35,610).

 

[Annie]

A manufacturing job that pays $17.12 per hour pays $35,600 a year (17.12*8*5*52=$35,610).

That doesn't include overtime or holidays.

 

[onedomino]

A manufacturing job that pays $17.12 per hour pays $35,600 a year (17.12*8*5*52=$35,610).

You said that included benefits. So $17 is more like a net of $14 if it includes health ins, disability, 401k, etc? Now which is it? If it includes benefits then the net is certainly lots less than $35K. That's why those numbers above do not make much sense, unless they include almost no real benefits. For example a PPO for a family of 4 might be at least $200 per month (probably quite a bit more) between both the employer and the employee. 200/160=1.20; 17-1.20=15.80. Then subtract disability ins., 5 percent for a viable 401K (employer contribution), and most benefit programs include some amt of life ins. Then you are easily below $30K/yr. for the aver mfg job, which means that millions of jobs would pay far less than that. So what benefits do those numbers above really include? What is construed as a mfg job? If these numbers are accurate, the average categories above are not mfg jobs such as making cars, airplanes, or steel. They are more like mfg jobs making burritos. For example, I have a friend who owns a heating and air conditioning company. He manufactures steet metal air ducts, which is a minimal kind of mfg job that requires almost zero skill. And by the time he pays all the benefits and wages, his low skill employees cost about $30/ hour. According to the stats above, such employees would be on the high end of the scale and that is hard to believe.

 

[Toro]

You said that included benefits. So $17 is more like a net of $14 if it includes health ins, disability, 401k, etc? Now which is it? If it includes benefits then the net is certainly lots less than $35K. That's why those numbers above do not make much sense, unless they include almost no real benefits. For example a PPO for a family of 4 might be at least $200 per month (probably quite a bit more) between both the employer and the employee. 200/160=1.20; 17-1.20=15.80. Then subtract disability ins., 5 percent for a viable 401K (employer contribution), and most benefit programs include some amt of life ins. Then you are easily below $30K/yr. for the aver mfg job, which means that millions of jobs would pay far less than that. So what benefits do those numbers above really include? What is construed as a mfg job? If these numbers are accurate, the average categories above are not mfg jobs such as making cars, airplanes, or steel. They are more like mfg jobs making burritos. For example, I have a friend who owns a heating and air conditioning company. He manufactures steet metal air ducts, which is a minimal kind of mfg job that requires almost zero skill. And by the time he pays all the benefits and wages, his low skill employees cost about $30/ hour. According to the stats above, such employees would be on the high end of the scale and that is hard to believe.

I don't think I did say it included benefits. I believe the Bureau of Labor Statistics defines "wage" as the money you receive in your paycheck. That wouldn't include anything other than what goes into your bank account. I believe they use the term "income" to include all benefits.

So, for example, wages in America have been stagnant this decade but income has been rising in part because health care premiums are included in income and have been rising about 8% a year.

At least, if I recall correctly, that's how the BLS defines the terms. You can go to their web site and read the definitions. I would, but frankly, I'm too lazy at the moment.