Stagnating middle class? Really? How does that jive with all of these facts?

[Canard DuJour]

Houses might be bigger (they're getting smaller here) but you need to look at debt to equity ratios. If people are less able than their parents to actually afford any square foot, it's debatable whether their lot has improved.

And yet whatever those debt ratios might tell you, every metric I found showed improvement. They are able to afford larger living areas _and_ more of just about everything else, based on the actual data.

What I said. If you must go into more debt to buy something, you're less able to afford it. Median household savings turned negative while houses got bigger. The living space metric is the only relevant one from your list showing any real improvement, but even that's debatable.

And, given 40 years of productivity gains, the IT revolution and millions of mothers joining the workforce part-time, half an hour off the work week averaged among all workers is truly shit. The median household now needing two breadwinners would also explain the median household now needing two cars.

Can you post the data on median hours worked per household? Household sizes have gone down substantially, there are far more single adult households these days. There are far more retired persons these days. Please demonstrate that hours worked per household has increased since 1980s, because right now you are just guessing without any data to back it up.

No because I wasn't making any claim requiring it.

The rest is either incidental or down to the forward motion of technology. Like saying nicer weather or faster trains means improved conditions for lesbians. Not strictly false but hardly relevant.

66% fewer car deaths and 70% fewer murders is in improved condition for lesbians, unless you have some bizarre notion that lesbians don't drive or it doesn't matter if they are killed in car crashes.

Trivially true and irrelevant, like most of your list. Countless things affecting everyone haven't improved since the 1970s (or any arbitrary time frame). If I made a huge list and claimed evidence of stagnating conditions for the middle class (or lesbians or whoever), all I'd have is a big daft list of random shit that wouldn't convince anyone of anything.

 

[Toni]

You are partially right: the gap between the top and the bottom is much, much larger. However, the US labor force is very much more productive coated with 30 or 50 years ago, thanks to a large extent to technological changes. I am not at all convinced that the upper level managerial class is at all more productive or efficient. There seem to be many more high level management positions relative to production workers.

Both upper and lower levels of the labor force are LESS VALUABLE, not more. The "more productive" is a misnomer. They are not "more productive" -- the popular cliche about "higher worker productivity" is just semantics to make workers feel good. The truth is that their value is lower and continues to decline in the competitive environment.

Really? Because the US Bureau of Labor Statistics really disagrees. Do you have any statistics to back up your claim that 'more productive' is a misnomer, a cliche or semantics?

Do you know the definition of productivity in economic terms? You seem to be confusing 'productive' with 'valuable' and 'valuable' with some personal definition you have invented for the term.

I'm pretty convinced that you don't and that you also don't know the definition of cliche, misnomer or semantics.

 

[Jayjay]

Both upper and lower levels of the labor force are LESS VALUABLE, not more. The "more productive" is a misnomer. They are not "more productive" -- the popular cliche about "higher worker productivity" is just semantics to make workers feel good. The truth is that their value is lower and continues to decline in the competitive environment.

Really? Because the US Bureau of Labor Statistics really disagrees. Do you have any statistics to back up your claim that 'more productive' is a misnomer, a cliche or semantics?

How has the median productivity workers improved? The statistics I've seen are all about total productivity, that doesn's tell much about whether the middle class is actually more productive or not.

 

[Toni]

Really? Because the US Bureau of Labor Statistics really disagrees. Do you have any statistics to back up your claim that 'more productive' is a misnomer, a cliche or semantics?

How has the median productivity workers improved? The statistics I've seen are all about total productivity, that doesn's tell much about whether the middle class is actually more productive or not.

Start with: what portion of the workforce is considered 'middle class?'

Do you really think that a nearly 4-fold increase in productivity is due to a small portion of the workforce?

 

[Jayjay]

How has the median productivity workers improved? The statistics I've seen are all about total productivity, that doesn's tell much about whether the middle class is actually more productive or not.

Start with: what portion of the workforce is considered 'middle class?'

Do you really think that a nearly 4-fold increase in productivity is due to a small portion of the workforce?

Why not? The productivity gain is not due to the workforcebeing stronger or smarter, but technological advacement, so it's entirely possible that the increase is due to improvements that benefit only small portion, or which concentrate productivity in fewer hands. All I'm saying is that comparing increase in average productivity to median income and drawing some conclusions from that is precisely the same kind of fallacy that you accused Axulus of making in the opening post.

 

[laughing dog]

Why not? The productivity gain is not due to the workforcebeing stronger or smarter, but technological advacement,...

Do you have any estimates that break down the change in productivity attributed to improvement in labor (stronger, healthier and/or smarter), improvement in the use of capital and improvement in the quality of capital and/or technology?

..so it's entirely possible that the increase is due to improvements that benefit only small portion, or which concentrate productivity in fewer hands. All I'm saying is that comparing increase in average productivity to median income and drawing some conclusions from that is precisely the same kind of fallacy that you accused Axulus of making in the opening post.

Unless you have some estimate as the likelihood of that possibility, it is just as a possible that your scenario is pretty remote.

Economic history and economic theory indicate that incomes tend to rise with productivity. It would be nice to see productivity data by income class, but I am unaware of any. But it seems unlikely that productivity gains would be concentrated to a few high earners or low earners.

 

[Toni]

Start with: what portion of the workforce is considered 'middle class?'

Do you really think that a nearly 4-fold increase in productivity is due to a small portion of the workforce?

Why not? The productivity gain is not due to the workforcebeing stronger or smarter, but technological advacement, so it's entirely possible that the increase is due to improvements that benefit only small portion, or which concentrate productivity in fewer hands. All I'm saying is that comparing increase in average productivity to median income and drawing some conclusions from that is precisely the same kind of fallacy that you accused Axulus of making in the opening post.

I guess my old boss was right: You can lead a (I'm substituting a term here) person to water but you cannot make him think.

Or read. Much less do their own Internet searches.

 

[Loren Pechtel]

Are houses bigger because people are beating on the doors of builders screaming for larger houses? Are vehicles larger for the same reason? Or are consumers led by the nose in a "keeping up with the Jonses" absurdity.
People do not know what they want. They are told what they want.

Keeping up with the Joneses is something they want, not something the manufacturers can make them do.

- - - Updated - - -

I don't think you are using the term 'productivity' very precisely. As defined by the US Bureau of Labor Statistics, US productivity has climbed since 1950:

No, the problem is that you are looking at the forest, I'm looking at the trees.

The productivity gains are unequal and the pay reflects this.

- - - Updated - - -

What are you smoking??

Wages for most have stagnated so long some think it is the norm. Except wealth and profits are rising.

Buying a more expensive home with 50 more square feet just isn't a consolation.

Wages have only stagnated since the crash.

Or are you lower class, not middle class, and thus seeing long-term stagnant wages?

Loren, you are wrong. The stagnation started in ernest as the outset of the '80's and the Reagan administration. The crash was the outcome of many years of wage stagnation and unsustainable debt due to people trying to maintain a lifestyle they thought they deserved (mostly a advertising sell job) with credit card debt. unsustainable housing mortgages, corporate abandonment of American workers, and government involvement in union busting.

Human beings are not so insane that they beat on the doors of builders screaming for larger houses. Only people obsessed with the capitalist dog and pony show act like that and it is sometimes questionable how human they are. Active people in our society are hammered with countless advertizing messages every day of their lives...only a few take ALL THE BAIT...HOOK LINE AND SINKER....AND they usually make asses out of themselves condemning all the inferior ones who are not so sold. A philosophy born of commerce is ill informed in the social graces.

So you're so weak-willed that you have to buy what you see advertised?

Builders build bigger houses because that's what people buy.

- - - Updated - - -

How has the median productivity workers improved? The statistics I've seen are all about total productivity, that doesn's tell much about whether the middle class is actually more productive or not.

Start with: what portion of the workforce is considered 'middle class?'

Do you really think that a nearly 4-fold increase in productivity is due to a small portion of the workforce?

A lot of it isn't due to the workers at all, but the machines.

That's capital costs, the productivity from the machines belongs mostly to the people who bought the machines.

 

[lpetrich]

The OP looks a lot like a document dump, a practice some lawyers engage in during the discovery portion of court proceedings. ...

Welcome to the club. That seems to be the best description I've seen so far of Axulus's mode of argument. He comes up with some numbers, and he then tries to imply "I have facts and figures, while you only have emotions."

 

[lpetrich]

However, the US labor force is very much more productive coated with 30 or 50 years ago, thanks to a large extent to technological changes. I am not at all convinced that the upper level managerial class is at all more productive or efficient. There seem to be many more high level management positions relative to production workers.

Part of the problem is the difficulty of automating much of it. You'll need some rather strong AI for that, and that's been much more difficult than it had first seemed half a century ago.

 

[Jayjay]

Do you have any estimates that break down the change in productivity attributed to improvement in labor (stronger, healthier and/or smarter), improvement in the use of capital and improvement in the quality of capital and/or technology?

..so it's entirely possible that the increase is due to improvements that benefit only small portion, or which concentrate productivity in fewer hands. All I'm saying is that comparing increase in average productivity to median income and drawing some conclusions from that is precisely the same kind of fallacy that you accused Axulus of making in the opening post.

Unless you have some estimate as the likelihood of that possibility, it is just as a possible that your scenario is pretty remote.

Economic history and economic theory indicate that incomes tend to rise with productivity. It would be nice to see productivity data by income class, but I am unaware of any. But it seems unlikely that productivity gains would be concentrated to a few high earners or low earners.

I doubt the kind of statistics that you are asking for exist. I wasn't making a positive claim, just pointing that comparing total productivity increase to median wage is an apples-to-oranges comparison and it doesn't necessarily mean that median productivity-per-wage has decreased (or stagnated).

Note taht there is also the flipside of automation that productivity of some tasks may have increased several orders of magnitude, but at the same time the jobs have become so simple that their value is nil. So the change is not just that productivity has increased for high earners, it's that there are less people required to do the same job, which would lower the median productivity.

 

[Toni]

Keeping up with the Joneses is something they want, not something the manufacturers can make them do.

- - - Updated - - -

I don't think you are using the term 'productivity' very precisely. As defined by the US Bureau of Labor Statistics, US productivity has climbed since 1950:

No, the problem is that you are looking at the forest, I'm looking at the trees.

The productivity gains are unequal and the pay reflects this.

- - - Updated - - -

What are you smoking??

Wages for most have stagnated so long some think it is the norm. Except wealth and profits are rising.

Buying a more expensive home with 50 more square feet just isn't a consolation.

Wages have only stagnated since the crash.

Or are you lower class, not middle class, and thus seeing long-term stagnant wages?

Loren, you are wrong. The stagnation started in ernest as the outset of the '80's and the Reagan administration. The crash was the outcome of many years of wage stagnation and unsustainable debt due to people trying to maintain a lifestyle they thought they deserved (mostly a advertising sell job) with credit card debt. unsustainable housing mortgages, corporate abandonment of American workers, and government involvement in union busting.

Human beings are not so insane that they beat on the doors of builders screaming for larger houses. Only people obsessed with the capitalist dog and pony show act like that and it is sometimes questionable how human they are. Active people in our society are hammered with countless advertizing messages every day of their lives...only a few take ALL THE BAIT...HOOK LINE AND SINKER....AND they usually make asses out of themselves condemning all the inferior ones who are not so sold. A philosophy born of commerce is ill informed in the social graces.

So you're so weak-willed that you have to buy what you see advertised?

Builders build bigger houses because that's what people buy.

- - - Updated - - -

How has the median productivity workers improved? The statistics I've seen are all about total productivity, that doesn's tell much about whether the middle class is actually more productive or not.

Start with: what portion of the workforce is considered 'middle class?'

Do you really think that a nearly 4-fold increase in productivity is due to a small portion of the workforce?

A lot of it isn't due to the workers at all, but the machines.

That's capital costs, the productivity from the machines belongs mostly to the people who bought the machines.

Do you have any idea how productivity is defined or measured?

Do you have any idea where machines come from? Or who makes them? Designs them? Operates them?

In my industry there has been a massive increase in mechanization. Also in business. There are not fewer people working at my employer or within my work unit. The job has changed but the number of people producing the work has increased.

 

[laughing dog]

Note taht there is also the flipside of automation that productivity of some tasks may have increased several orders of magnitude, but at the same time the jobs have become so simple that their value is nil. So the change is not just that productivity has increased for high earners, it's that there are less people required to do the same job, which would lower the median productivity.

That is not possible since productivity is usually measured as output per worker or output per hour, not output per capita.

 

[laughing dog]

A lot of it isn't due to the workers at all, but the machines.

Productivity is measured as output per worker or output per hour. The workers operate the machines, so the workers tend to get credited for the increased output. Statisticians and econometricians do try to tease out the influence of the amount of capital and the quality of the capital in measuring productivity growth.

That's capital costs, the productivity from the machines belongs mostly to the people who bought the machines.

The output belongs to the owners. Technically, all the productivity "belongs" to them.

But if you believe in relatively efficient markets, the producers of the capital should capture the present value of the increase in profitability in the current price of the machines.

 

[untermensche]

We don't have cleaner water or air or soil than we had 50 years ago.

What are you smoking??

These are facts. More land, more water, and more air is polluted than in 1965.

Not less, more.

But the good news is sales of water filters and asthma medication have skyrocket.

 

[bilby]

Keeping up with the Joneses is something they want, not something the manufacturers can make them do.

Horseshit.

Do you think that companies spend $560 billion a year on advertising because they enjoy wasting money, or because they are microcephalic morons who can't see half a trillion bucks of pure wasted expenditure?

Keeping up with the Joneses is very much something manufacturers make people want to do; and they are spending big bucks to ensure that they keep wanting to do it.

 

[untermensche]

Keeping up with the Joneses was a good thing for those few golden years from about 1950 to 1970 when wages for most were rising.

It only became a problem when wages stagnated beginning in about 1975 and more so with the beginning of the crushing of the unions under Reagan, to the present moment.

 

[Loren Pechtel]

Keeping up with the Joneses was a good thing for those few golden years from about 1950 to 1970 when wages for most were rising.

It only became a problem when wages stagnated beginning in about 1975 and more so with the beginning of the crushing of the unions under Reagan, to the present moment.

Keeping up with the Joneses has always been a suckers game--the Joneses are always overspending to maintain their status, you'll have to overspend to keep up with them.

 

[Achwienichtig]

Axulus, after reading through much of this thread, I think I understand where the confusion is.

When an economist talks about the stagnating middle class, they are not talking about their standards of living. It might be true that the middle class today has bigger houses, more gadgets, better cars, better education, etc. I concede that. But that is not what we are talking about when we talk about the stagnating middle class.

Wealth=assets-debts. That's the key equation. It is the wealth of the middle class that is stagnating. You are equating wealth with assets. Although that might tell us about how the middle class is living, that doesn't tell us how the middle class affects the economy, which is what the economist worries about.

Traditionally, when the middle class has more wealth, they stimulate the economy. They buy more, trade more, and invest more. Every transaction stimulates more transaction.

The middle class is still buying lots of stuff, so it looks like the economy should be stimulated. But this new purchasing is done on credit, i.e. debt. As debt accumulates, the risk of bankruptcy, foreclosure and default heightens. This ultimately has a negative feedback on the market. This is what economists worry about.

As far as the market is concerned, your house, your car, and your livelihood are weighed against your debts. You might enjoy your assets. But the market ultimately doesn't care if you enjoy them. They are just numbers on a sheet of paper. No more or less abstract than your debts.

Standard of living is not wealth.

 

[fromderinside]

Axulus, after reading through much of this thread, I think I understand where the confusion is.

When an economist talks about the stagnating middle class, they are not talking about their standards of living. It might be true that the middle class today has bigger houses, more gadgets, better cars, better education, etc. I concede that. But that is not what we are talking about when we talk about the stagnating middle class.

Wealth=assets-debts. That's the key equation. It is the wealth of the middle class that is stagnating. You are equating wealth with assets. Although that might tell us about how the middle class is living, that doesn't tell us how the middle class affects the economy, which is what the economist worries about.

Traditionally, when the middle class has more wealth, they stimulate the economy. They buy more, trade more, and invest more. Every transaction stimulates more transaction.

The middle class is still buying lots of stuff, so it looks like the economy should be stimulated. But this new purchasing is done on credit, i.e. debt. As debt accumulates, the risk of bankruptcy, foreclosure and default heightens. This ultimately has a negative feedback on the market. This is what economists worry about.

As far as the market is concerned, your house, your car, and your livelihood are weighed against your debts. You might enjoy your assets. But the market ultimately doesn't care if you enjoy them. They are just numbers on a sheet of paper. No more or less abstract than your debts.

Standard of living is not wealth.

Just want to add the middle class is smaller now than it was in 1980, is further from the upper class in income as a percentage of buying power, and its numbers keep dropping faster than do retirements. Other than that you are spot on.