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Data show workers benefitting less from this "recovery"

by Dave Konkel [Moderator] / January 22, 2006 10:58 PM PST
U.S. Workers are left behind.

>> Smaller share of economic gains for labor threatens Bush agenda for world trade. American workers have rarely taken home a smaller share of the nation's prosperity, a condition that is undermining bipartisan support for free trade and creating friction between President Bush's administration and the Federal Reserve.

After 16 consecutive quarters of economic growth, pay is rising at a slower rate than in any similar expansion since the end of World War II. Companies are paying less of their cash gains in the form of wages and salaries than at any time since the Great Depression, according to government figures....

"There is no doubt that something is happening" to reduce labor's share of income, says Robert Solow, a Nobel Prize-winning economist and professor emeritus at Massachusetts Institute of Technology in Cambridge. An economy that doesn't distribute its gains widely is "poorly performing," he says.

"The good economic news is not connecting," says John Zogby, president of Zogby International, a Utica, N.Y.- based polling firm. "You've got fairly low unemployment, solid profits" and gains in stock and housing markets and yet "there is a considerable amount of economic anxiety." A December Zogby poll found 28 percent of Americans said they are better off than they were a year earlier, 52 percent said their finances were the same, and 20 percent said they were worse off, even as the economy grew by $787 billion.

Wal-Mart Stores Chief Executive Officer Lee Scott urged Congress last October to raise the minimum wage, which has remained at $5.15 an hour since 1997, saying the company's customers "are struggling to get by." The Senate that same month rejected a proposal by Massachusetts Democrat Edward Kennedy to increase the minimum to $6.25 over 18 months. The weaker returns to labor, and the Fed's concerns about resource utilization, are more perplexing when seen in the context of rising productivity. <<

Nothing perplexing about it -- its pandering to corporate greed. There is indeed class warfare in this country -- and its being waged by the wealthy on everyone else. And sadly, the wealthy are winning, hands down, largely because they now own the government.

-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com

The opinions expressed above are my own,
and do not necessarily reflect those of CNET!
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This is nothing new
by TONI H / January 22, 2006 11:12 PM PST

the wealthy have ALWAYS owned the government no matter what party or what President was in office.

YOU try living on minimum wage, with housing costs even for rental properties skyrocketing everywhere, energy costs, kids to raise, insurance premiums now out of control since companies don't normally give it to you anymore, and you make just 'enough' that you can't qualify for state assistance.....especially if you're single with no kids.

As long as the minimum wage stays as low as it is, more people with families will stay on state assistance as long as they can because they actually get MORE to live on that way.

And as long as 'free trade' allows for companies to take their business overseas where wages are even lower in order to make larger profits, there won't be any 'low paying' jobs in the USA anymore anyhow...and the educated who are qualified for better paying jobs have so much competition for one or two jobs advertised in the paper that the longer they are out of the work force, the lower the starting pay will be for them when they DO get a job offer because their resume will reflect how long it's been since they were in the work force, so their 'experience' level drops dramatically.

TONI

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(NT) (NT) That <b>is</b> ''phenomenal''!
by Dan McC / January 23, 2006 12:21 AM PST
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And government mandated 'minimum wage' panders...
by Edward ODaniel / January 23, 2006 2:56 AM PST

to Academic ignorance.

Come out of those hallowed halls into the real world of Capitalism where the Capitalist is responsible for his own well being and income and doesn't rely of living on the income of others taxed away from them.

In business Dave ANY upward change in the costing structure is almost immediately reflected in a corresponding price increase of the end item--it has to in order for the business to survive. Artificial supports and costs create artificial demand and prices.

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Funny...
by dirtyrich / January 23, 2006 3:16 AM PST

I thought the government was skimming off a larger portion of money than before to pay for entitlement programs.

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Well then,
by duckman / January 23, 2006 3:43 AM PST

the "poor" will just have to settle on buying a 40" tv from WalMart instaed of the 50" tv.

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Globalization
by Dragon / January 23, 2006 5:30 AM PST

I think this is kind of like gravity or rain. Not much we can do about it except to find a way to adapt. And, we had better adapt or else people in China will be buying things "Made in USA" instead of us seeing tags saying "Made in China".

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And the result -- US savings rate lowest since Depression
Americans' Savings Rate Declines in 2005.

>> Americans are spending everything they're making and more, pushing the national savings rate to the lowest point since the Great Depression. <<

One question, however -- what counts as "savings?" Does that include 401ks, stock market investments, and money market mutual funds? The interest rates in standard savings rates are so low that only a fool would use them as a major part of one's financial plan!

-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com

The opinions expressed above are my own,
and do not necessarily reflect those of CNET!
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The key word is "after tax saving"
by Evie / January 30, 2006 10:04 PM PST

... which is rainy day saving. While it would obviously be better if more Americans were saving for that as wel, looking at just that figure is misleading no matter if all forms of "saving" are considered.

We save 12% of the hubby's income in the 401K (before tax) and up to $5K/year in an MSA (granted that has to be spent, but we can hope they'll finally fix that to let it roll over) but HSA's are long term savings. Most IRA's are before tax income, so would be excluded from savings in this "study". Let's not forget all the before tax contributions that we might otherwise be saving for ourselves -- SS tax anyone? That's 12%!!!

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I think this may be one of those cases of old "standards"
by Dave Konkel [Moderator] / January 31, 2006 2:50 AM PST

(this is an annual report) that haven't been modified to keep up with new ways of doing things, Evie Of course, one problem (as the Great Depression showed) is the assumption that investments won't suffer catastrophic losses is properly diversified may not always be true, so one needs a rainy day fund that's truly in "rock-solid" vehicles not subject to loss, even if they don't appreciate all that much, either.

-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com

The opinions expressed above are my own,
and do not necessarily reflect those of CNET!

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Yeah ...
by Evie / January 31, 2006 3:11 AM PST

... the 12% going to SS is such a rock solid vehicle Wink

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Of course, this doesn't help saving much either...
by Dave Konkel [Moderator] / January 31, 2006 2:56 AM PST
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(NT) (NT) Apples and oranges comparisons
by Evie / January 31, 2006 3:09 AM PST
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(NT) (NT) Compensation <> compensation?
by Dan McC / January 31, 2006 3:23 AM PST
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You have 1 CEO
by Evie / January 31, 2006 3:32 AM PST

Even the really "overpaid" ones, are making a neglible amount in the overall scheme. I do wonder sometimes if they take the other perks into account for the "workers". They are getting compensated more if healthcare is costing the company more, or if they take advangage of stock options. Lots of companies offer those.

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So it's not apples to oranges, it's apple to
by Dan McC / January 31, 2006 3:46 AM PST
In reply to: You have 1 CEO

whole bunch of apples. Right? I'm not sure what your point is, I guess. The article has some indications on what is included in the calculations.

Dan Happy

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No it's apples to oranges
by Evie / January 31, 2006 4:34 AM PST

You cannot compare compensation trends for sports stars to utility players, movie stars or even character actors to "man in bar #1"'s any more than you can make any meaningful comparison between CEO compenation and that of the rank and file hourly or even salaried workforce.

Do you think that a Luis Sojo should have gotten a 100% raise from 1999-2000? It's just not fair waaaaaaaaah ... Derek Jeter got just that!. Poor Luis took an almost 50% paycut to go to a different team. Still, if you compare 98 to 99, Jeter's salary rose from 750K to 5 million, poor Sojo made 800K and got NO raise for 99.

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There is so much wrong with
by Dan McC / January 31, 2006 4:40 AM PST

that analogy it's hard to know where to begin.

You realize, of course, that Jeter is not the CEO of the Yankees. He has no control of Sojo's activities nor does he control Soho's compensation. The compensations profile of a professional sports franchise is completely different from that of a corporate enterprise.

Dan Happy

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Actually,
by Evie / January 31, 2006 4:44 AM PST

CEO's rarely are involved in the nitty gritty of determining compensation for the rank and file. They are the "stars" chosen by the shareholders/boards of directors to run the company much like Jeter is team captain.

The jealousy over CEO pay is just that. And it's petty ugliness. Makes a good strawman though.

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Do you realize that
by Dan McC / January 31, 2006 5:03 AM PST
In reply to: Actually,

Jeter's title of captain is purely honorary. It imparts no organizational role whatsoever. And any CEO that has no part in controlling his company's payroll and benefits should really offer to give a large chunk of his salary back for shirking his responsibilities by ignoring one of his larger cost areas.

Dan

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Whatever ...
by Evie / January 31, 2006 12:20 PM PST
In reply to: Do you realize that

... no analogy is perfect. But on the whole it is apt.

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The CEO is supposed to direct the company
by Diana Forum moderator / January 31, 2006 2:01 PM PST
In reply to: You have 1 CEO

If a CEO is making $40M/year and gets a 50% raise, he's getting $60M/year. If a lower worker is making $40,000/year and gets a 3% raise, he's now making $41,200/year. Should just about take care of the next tax bracket. I'm sure he would like to make $60,000/year instead.

I was watching this woman in Houston who got laid off from Enron. She was making $40,000 and now works three jobs and isn't making close to that and has no health insurance. I know how she feels. Ken Lay is still rich.

Diana

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(NT) (NT) Always with the class warfare
by duckman / January 31, 2006 4:03 AM PST
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Couldn't possibly be...
by Edward ODaniel / January 31, 2006 3:23 AM PST

because economists and everyone with the tiniest bit of common sense or intelligence is advising everyone to pay off high card debt instead of socking money away in safe but expensive savings accounts. No, of course not because such thinking is too complex for the "common man" who can't even be trusted by Daddy DNC to handle monitored personal SS accounts.

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I read that most people were banking on
by Dragon / January 31, 2006 4:04 AM PST

appreciation of their homes, so they are spending everything they make. They feel more wealthy and optimistic.

I've been for a forced savings program for the last 25 years, because I knew people were not saving for the future. This will be disastrous for many people and will mean an extra load on our government, especially for the Y and X generations.

Have our congressman and senators listened? Well, some have, but not enough to make a difference. Bush will be pushing his SS message tonight.

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