A MIND FOREVER VOYAGING THROUGH STRANGE SEAS OF THOUGHT, ALONE


This is my second blog.

My first blog chronicled my experiences over three years caring for my dad as he lived through and finally died from Alzheimer's. That is the book that is for sale.

This second blog kind of chronicles of life, what it is like to start your life over in your late 50's. After caretaking, you are damaged, file bankruptcy, and the world doesn't care what you did. After 8 months of unemployment, you wake each day knowing the world doesn't want you. Finally you do find a job, 5 weeks before homelessness, but doing what you did 30 years ago and getting paid what you did 30 years ago. So this is starting over.



The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane.

Tuesday, January 12, 2016

WHAT AN ECONOMIC MESS WE ARE

Okay, Les Leopold recently published a book "Runaway Inequality" that I recommend everyone read.  All of the charts in this blog are pulled from his book, though he often provides original sourcing but in this case I want to plug his book so I am referencing it as the source.

Now, before you get to the first graph, no cheating, I want to ask you to think about this question:  How much more do CEO's make than the wage of the lowest paid full time employee in their company makes?  What is the factor?  In other words, if CEO makes 100,000/year and lowest paid full time employee makes 10,000/year, it is a factor of 10

So, come on you peaked, what is your guess for the top 200 corporations in America?









Were you close?  587 to 1.  For every dollar the lowest paid full time worker makes the CEO makes 587 dollars.  But wait, what about the top 100 companies?  Is the ratio the same?







Nope, even more embarrassing 829 to 1.  Now you are thinking "hey, that's fair, they run the ship, they make the decisions, when the company does well, they should get paid for all those jobs they create and keep, CEO's have always made lots more than the workers!"

Well, not really.























So back in 1970, the president of GE or Union Pacific Railroad, or IBM made 45x the lowest paid full time worker.  Today, 829x the lowest paid full time worker.

So we certainly see CEO wages have done well over the last 40 years, how about workers?




Well, not so well.    Two important items in this chart.  First, notice the relationship between productivity and wages.  From 1947 to 1972ish wages and productivity were tied at the alter, as productivity increases, wages increase.  But something happened in 1972 and the two variables became divorced.  And since 1972, productivity has continued to increase and wages have stagnated and actually decreased.

Adjusted for inflation, the average weekly wages have actually gone down since 1970 by about 100 bucks a week.  Now, understand what this is saying because it's already adjusted for inflation, you had more money in 1970 per week than you do today, 100 bucks more spending money AND in 1970, your company probably paid 100% of your health insurance, no cable bill, one landline phone bill, so you had much more disposable income to work with in 1970 than today.



Let's look at it another way.  Above is a graph from the book that shows the top 1% of earners in this country versus the other 99% of wage earners.

Now I'm not going to go into the depth Leopold does in his book explaining root causes to these numbers, some I agree with, some others I'm not as convinced by his arguments, but the data he lays out and pointing to the 1980's and how CEO pay is tied into stock performance and the focus of most companies becomes stock performance not other issues, so R&D gets reduced, employees in America get reduced, money is borrowed at 1% to buy back stock to raise the stock prices and CEO's get paid for that stock going up.

It is a very convincing argument.

"Oh, quit whining you pinko commie and listen to Limbaugh" you say.  "It's like this everywhere, we are no different!"

Wrong again, Robin!










Now I like these two graphs but bear in mind, the list of countries are not the same, not sure what that means, but you can pick out different European and Asian countries as well as Canada to do a comparison and it does not look good for the American worker.

Also bear in mind, the above two graphs and the one below are changing the subject from CEO's of top X companies to the 1% of income earners to the 99%





Golly, you almost feel sorry for the 1% of France, Denmark, or Sweden living in near poverty compared to their counterparts in the USA.  Don't feel too bad for the people of these countries, get a load of the following table:





These are the laws.  Leopold gives a wonderful example of a full time burger flipper at McDonalds in NYC and a full time burger flipper at McDonalds in Denmark.  Flipper makes more the twice the hourly wage in Denmark than in NYC AND the flipper in Denmark gets 25 paid vacation days.  The flipper in NYC, well, he gets zero paid vacation days.

By this time, you are realizing that the american worker is kind of being screwed and Leopold lays out a lot of the reasoning, laws, and taxation that occurred to create this mess.

Another series of graphs that are fascinating follow:

What you see here is a loss of 8 million manufacturing jobs in America since 1980.  But, remember, we have 100 million increase in population during this same time period.




So we see below what % of people are working, by sex.  Sorry, did not break down beyond male and female for my transwhatever imaginary readers.



























Amazing how women in the workforce increased by over 30% while men lost 20% of jobs.  Warren discusses this phenomena in several of her lectures and how two income families led to the housing increases since mortgages were paid by two incomes rather than one and why this was not a good thing for families.  In the old model, when husband lost job, wife could find work and while sacrifices would be made between her income and savings, homes were not lost.  When homes were bought on two incomes, and one person lost a job, mortgages were in danger of going under and losing the home.




And now here we go, in 1979 the median hourly income was 17/hour for men, meaning by median 50% above and 50% below.  200 million people in country, say 150,000 working age adults, 80% of men and 50% of women are working and making, well, if you are a guy 17/hour and woman about 11/hour in todays dollars.

Today?  320,000,000 people, about 225 million to 250 million working age adults, 68% of men are working, down 12% and  55% of women are working, up 5% - a net loss of 7% by the way, and men are earning14/hour and women 12.12/hour.  See a problem here?




Okay, just thought I would throw in the last graph to show what a bigoted, racist, xenophobe I am.  Draw your own conclusions on comparing the rate of immigration both legal and illegal from south of the border and compare it to loss of manufacturing, wages going down and everything else.

So in the end, you gotta read this book.  Some things I liked is his discussion of a transaction tax, state banks in each state like ND has, and his in depth analysis of what started in the 1980's in corporate america that changed the game so drastically.

You can call me Joe
Buy me a drink and shake my hand
You want courage
I'll show you courage you can understand
Pearl and silver
Restin' on my night table
It's just me Lord, pray I'm able

Darlin' with this kiss
Say you understand
I am the nothing man
I am the nothing man

Bruce Springsteen





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