John Henke has an interesting piece on the Paul Krugman talking point about “real wages” being stagnant under President Bush. While Krugman’s technically correct, it’s also technically correct to say the same thing about the Clinton Administration (and in fact Bob Dole did exactly the same in 1996 as Henke notes).
The problem with that measurement is that Krugman’s using an antiquated view of the world. Wages, even for blue collar jobs, are not the only form of compensation. Health insurance, 401(k) plans, stock options, etc., are all commonly used as other forms of compensation for employees. And as Henke finds:
But when additional compensations were included, Median Household income jumped. Counting “Money Income plus realized capital gains (losses), less income and payroll taxes, plus value of employer provided health benefits and all non-cash transfers except Medicare and Medicaid†— essentially adding in non-wage compensation — Median Household income actually jumped 1.2 percent.
Finally, it’s also worth noting that Real Disposable Personal Income — the inflation-adjusted portion of compensation that we the proletariat get to pocket (i.e., spend or save) — has risen by 3.1 percent, 2.4 percent and 3.4 percent over the past three years.
Furthermore, the size of the American family has been steadily decreasing over the years – smaller families generally mean smaller incomes, especially when the ratio of single-parent families has increased dramatically. The more single-parent families there are, the more that will alter the aggregate growth in real wages. It’s already been shown that marriage rates have a direct effect on poverty, but the left doesn’t particularly care for such an inconvenient analysis for their ideology.
Of course, Krugman’s not trying to make a dispassionate analysis – he long ago traded the title of serious economist for partisan hack who occasionally dabbles in the dismal science. A real economist would look beyond the surface and try to determine what was really going in terms of the American economy. Krugman just wants to cling to anything that he can use to bash Bush. It’s sad to see someone who was once a promising and insightful economist succumb to such an advanced case of Bush Derangement Syndrome, but in the past few years Krugman has traded his expertise for more hackery.
So let me get this straight, your plan of comforting workers about their decline in real wages is insignificant is to also remind them that they are also paying soaring premiums to their HMO’s for consistently weaker health care coverage, and that their defined-benefit pension plan is being replaced with a worthless 401(k). By switching to the ruinous 401(k) plans, employers have cut their retirement benefit costs to the bone, so it’s more than a little strange that you’re bringing that up a cost that’s oppressive to business.
And while the cost of health care is undeniably onerous and getting worse, it’s your party holding a gun to the back of the business community and forcing them to steer straight into the iceberg of employer-financed health insurance ruin. If America shifted to the kind of national health care plan that every other livable country in the world already has, health care costs would decline dramatically, particularly the cost burden on business.
Seriously though, I BEG YOU to continue preaching these wildly out-of-touch diatribes about the economy….specifically gems like this where you respond to workers’ anxiety over stagnant real wages with a reminder that their health care coverage and self-financed pension plans also stand to seriously erode their quality-of-life in the near future. And inferring that single mothers are child-neglecting whores is icing on the cake!
Mark:
While I agree with some of what you say there, Jay didn’t suggest that single-mothers are “child-neglecting whores”. I think it’s more likely that he’s suggesting that young MEN having children out of wedlock aren’t doing their job… and far too many aren’t. Feminism isn’t the problem (I hate conservative attacks on middle and upper-middle class professional women; they aren’t the problem, in general their kids seem to be fine…), the problem is with lower middle class deadbeat dads. Gee, you’d think that with ubiquitous access to birth control, we could hold down illegitimacy rates, just as western europe has…
Yeah, because defined benefit plans are so wonderful. Just as the workers at GM or United Airlines!
Ruinous? C’mon, if you’re going to go for hysterical hyperbole, go for it! How about “apocalyptic” or “capable of bring down flaming hail from the skies while the rivers run as blood?” And in what way are 401(k) plans “oppressive” to business? They’re certainly not as oppressive as the defined benefit plans that are costing tens of thousands of American workers their jobs.
Out of curiosity, does hyperbole cause sexual excitement with you or something?
And if American shifted to the kind of national health care plan that is breaking down in every country that’s tried it, we’d have an economic growth rate as pitiful of them, double-digit unemployment, and thousands of people dropping dead from treatable conditions. Socialized medicine doesn’t scale, and a system that’s barely keeping up with a state with 60 million residents would collapse even harder and even faster in a state with 300+ million.
It’s SUPERLIBERAL! Able to leap to ineffably ridiculous conclusions in a single bound of illogic! Exactly where do you derive such a conclusion as that from the very obvious observation that single-parent families have lower incomes?
Oh yeah, right out of your ass…
“Yeah, because defined benefit plans are so wonderful. Just as the workers at GM or United Airlines!”
The dirty little secret is that 401(k) plans are succumbing to bankruptcy at a rate of about 10,000 per year. And the same globalization pressures pricing the more costly defined-benefit plans out of existence will continue catching up to 401(k)’s in the years to come.
The only thing that will save 401(k)’s is diminishing participation due to continued lackluster results….not exactly a ringing endorsement of their future.
“And in what way are 401(k) plans “oppressive†to business? They’re certainly not as oppressive as the defined benefit plans that are costing tens of thousands of American workers their jobs.”
I never said 401(k)’s were inherently oppressive to business, at least compared to defined-benefit plans. But they are oppressive to employees, most of whom will yield a considerably smaller dividend ON THEIR OWN MONEY that is doubtful to be sufficient for their retirements. I’ve never heard a 401(k) story with a happy ending. I’m sure they exist, but the more horror stories that come out (and they will come out), the more people will do like I do and put all my savings in IRA’s. For most people, personal savings minus any employer contribution will be insufficient, but that’s the trendline. And as I said, the race-to-the-bottom of globalization will eventually take their toll on employer-financed 401(k)’s as well.
“And if American shifted to the kind of national health care plan that is breaking down in every country that’s tried it, we’d have an economic growth rate as pitiful of them, double-digit unemployment, and thousands of people dropping dead from treatable conditions. Socialized medicine doesn’t scale, and a system that’s barely keeping up with a state with 60 million residents would collapse even harder and even faster in a state with 300+ million.”
The mind-blowing cluelessness of the Republican Party on the disastrous course of employer-funded health care could easily turn America into a Third World country a generation from now. Your needle appears to forever be stuck on 1993, regurgitating the same tired talking points of the pre-HMO HillaryCare debacle. Whatever limitations that national health care places on the rest of the civilized world in terms of economic growth will pale in comparison to the perils that the devastating health care policy status quo has in store for us.
“It’s SUPERLIBERAL!”
A true superhero deserves a uniform, and I’m putting you in charge of delivering me that uniform. However, as a superhero committed to using his powers for good, I’m gonna insist my uniforms be made by union labor here in America (and by “America”, I don’t mean Saipan where all you “pro-lifers” subject the enslaved young women at your sweatshops to forced abortions).
“Exactly where do you derive such a conclusion as that from the very obvious observation that single-parent families have lower incomes?
Oh yeah, right out of your ass…”
It was an admitted strawman, but the interpretation that will be arrived at if you intend to blame poverty on single mothers. In many ways, it’s true, but ask Dan Quayle how good of politics it is….especially at a time when single motherhood is on the rise. Nicq makes a good point about deadbeat dads, but the solution is monogamous relationships, which is like Communism in that it’s nice in principle but runs counter to human nature in practice. A free society portends high divorce rates. Unless we revert to a social strata where women are second-class citizens subservient to the will of their husbands, I have a hard time believing that divorce rates and single motherhood will see any sort of reversal in the near future.
And do you have a source for this? And furthermore, globalization has precisely nothing to do with 401(k)s or other retirement plans. An aging workforce does. Your statement is economically illiterate.
I don’t think you’ve ever heard of an economics textbook either… and if you don’t like a 401(k), roll it over into an IRA then. Chosing a 401(k) or an IRA is a personal choice – and either tend to be more stable than defined-benefit plans. However, defined benefit plans are dropping like flies across the country because they simply don’t work.
Gee, notice something. Retirement plans where you have no choice don’t work, while ones that give you choices tend to do better? Might there be a lesson in there about Social Security?
That’s why you do the smart thing and make health care work in a market system. A government plan that isn’t mandatory will fall victim to adverse selection – see Medicare/Medicaid. A government program that is mandatory would dramatically reduce the quality of healthcare, reduce patient choices, and cost people’s lives.
That’s why Healthcare Savings Accounts have seen significantly fewer cost increases than traditional programs because consumers, rather than HMOs or government bureaucrats are empowered to make choices for themselves.
Of course, Democrats are scared to death of that – when people make choices for themselves that takes power away from the government bureaucracy that’s the black heart of the Democratic machine…
Here’s a blue spandex suit with a giant horses’ ass across the chest…
You forgot blending puppies. And again, you seem to have a thing about hyperbole. Next you’ll be insinuating that Tom DeLay jerks off to 8×10 glossies of Benito Mussolini… does it ever occur to you that making looney accusations like that makes you look like a raving nut?
And the Atlantic ocean is a puddle…
Which is the interpretation one would come up with provided one were an idiot incapable of understanding a very simple argument.
So, now you’re blaming poverty on single mothers?
Wow. Just wow. Given that monogamous relationships have been around since the dawn of time, I really have to wonder if you even live on the same planet as the rest of us.
Except there’s no causual relationship between the two. Some of the most unfree societies have the highest divorce rates. Given that the family structure is and always has ben one of the primary methods for democratic values to propagate themselves, a society without strong families won’t remain free for long – witness the continued decline of Western Europe for living proof of that…
“And do you have a source for this?”
It was on NBC News a few months back. I can’t find a source online though.
“globalization has precisely nothing to do with 401(k)s or other retirement plans.”
Sure it does. Foreign competitors in the global economy don’t have employee retirement plans, forcing American companies to cut these costs in order to compete. Unless China, India and Mexico pass laws mandating employer-financed retirement plans within their borders, 401(k)’s will be priced out of existence the same way as defined-benefit pensions currently are.
“Chosing a 401(k) or an IRA is a personal choice – and either tend to be more stable than defined-benefit plans.”
They also tend to be YOUR OWN MONEY as opposed to your employers. In the past, it wasn’t an either/or scenario. One could still invest their personal savings in stocks or IRA’s even if their employer was providing defined-benefit pensions. Now, your employer contribution is either gone or severely diminished, leaving personal savings your only source of retirement investment.
“Gee, notice something. Retirement plans where you have no choice don’t work, while ones that give you choices tend to do better? Might there be a lesson in there about Social Security?”
There is. The Brits envy our Social Security system because Thatcher’s privatization scheme has yielded disastrous results for them. Apparently you didn’t get the memo you guys have been defeated on the Social Security privatization issue. Other Republicans were wise enough to put the subject quietly out of its misery. I can only hope you keep reminding Americans of the overreach under the premise that losing defined-benefit Social Security check will be as liberating for masses as losing their defined-benefit pensions has been!
“That’s why Healthcare Savings Accounts have seen significantly fewer cost increases than traditional programs because consumers, rather than HMOs or government bureaucrats are empowered to make choices for themselves.”
No, the reason why Healthcare Savings Accounts are seeing fewer cost increases is because they’re being offered to younger workers who rarely get sick. As I understand them, HSA’s pretty much amount to a mirage of health insurance that lasts right up until the moment you get sick, at which point the money runs out and you’re on your own. Sounds like the GOP boilerplate to me.
“Of course, Democrats are scared to death of that”
Who in their right mind wouldn’t be afraid of a “health care plan” with a primary purpose of providing yet another venue for the wealthy to shield their assets from Uncle Sam?
“does it ever occur to you that making looney accusations like that makes you look like a raving nut?”
What accusations? The Saipan sweatshop industry and history of forced abortions is a matter of public record. Of course, I can’t expect you to have a full understanding of “news” since you consider ideology-friendly blogs to be the most reliable source of information that exists.
“Given that monogamous relationships have been around since the dawn of time, I really have to wonder if you even live on the same planet as the rest of us.”
And for all but the last few decades, this long history of monogamous relationships has been held together because one or both member was not free. How many hundreds of millions of women have been trapped in abusive relationship over the span of history? Marriage can only be labelled a successful institution so long as we ignore that females’ personal freedoms and human rights have been grossly violated in the process. With gender freedom and legal equality has come higher divorce rates. Not likely a coincidence.
“Some of the most unfree societies have the highest divorce rates.”
Such as?
Probably because it’s BS.
Except defined benefit systems weren’t “priced out of the market” by globalization. It has nothing to do with globalization and everything to do with the fact that people tend to live into their 70s-80s rather than their 60s as they did when these plans were first created.
Um, no, most employers just switched from a defined benefits plan to a 401(k)/IRA/ESOP/etc. model. Furthermore, thsoe people who had plans like GM’s and United’s are finding themselves with drastic cutbacks in retirement income because the auto manufacturers and the airlines are unable to pay for their extravagant promises – thanks in large part to greedy unions and feckless executives who gave into their unsustainable demands when times were good.
Except the British system’s biggest loser happened to be the state pension system, not the optional private one. And privatized systems have been tried, successfully, right here in America.
If a privatized system is good enough for federal employees and members of Congress, it is certainly good enough for the population at large – especially when Social Security is crumbling. And as you yourself mentioned, defined benefit systems are crumbing – and Social Security will do exactly the same if reform isn’t made.
Except under current law, HSA owners must also purchase supplemental insurance (after-tax, no less, a fact that should be rectified). A combination of expanding tax credits for HSA and ensuring that the tax system is altered to no longer favor employer sponsored plans above all other better alternatives would do far more to fix health care in this country that emulating the failed models of socialized medicine.
Except that’s the opposite of what it would do. The current system favors the wealthy by forcing people who don’t have the option of having employer-sponsored health insurance to buy insurance with after-tax dollars – or go without. Changing the tax code to allow for pre-tax purchases of HSAs or insurance would be much easier than more socialism and would dramtically reduce the inequality in the system.
But as usual, the Democrats don’t really care about inequality, just more power to government.
And Stalin killed 30 million kulaks. Neither is particularly relevant to a discussion of health care. And this coming from someone who undoubtedly gathered that non sequitor from the lefty echo chamber.
Yup, this is why being married is one of the strongest factors in voting Republican these days. The Democrat’s hostile attitude to the American family speaks for itself – and a high divorce rate and especially a high rate of illigitimacy destroys economic freedom – look at the inner cities of America where the rates of illegitimacy and the breakdown of the family structure go hand and in hand with economic devastation. The same is true across racial and geographic lines as well – places with high rates of illigitimate births tend to have weaker economies than places with stable families. And thankfully in the US the divorce rate is rate – sadly, so is the marriage rate.
“Um, no, most employers just switched from a defined benefits plan to a 401(k)/IRA/ESOP/etc. model”
Um, yeah…because it shifts the cost burden of retirement programs from the employer to the employee….just as I said in the previous two posts.
“thanks in large part to greedy unions and feckless executives who gave into their unsustainable demands when times were good.”
It was the companies that tried to defer their financial liabilities through retirement benefits. Hell, it was the companies who took it upon themselves to finance employee benefit packages in the first place during the post-World War II labor shortage. “Greedy unions” had very little to do with employers’ extravagant promises of yesteryear. Twenty years from now, when employers declare 401(k) contributions unsustainable, maggots like you can still be counted upon to somehow rewrite history and blame it on the unions. Every time corporate America plunges its servants’ quality-of-life a rung lower, you guys always figure out a way to make it the servants’ fault.
“especially when Social Security is crumbling.”
Social Security is the most solvent government program that has ever existed. You had your chance to demagogue the American people into giving up their last semblance of a safety net in the race-to-the-bottom global economy…and you failed to seal the deal. Time to move on.
“And Stalin killed 30 million kulaks. Neither is particularly relevant to a discussion of health care.”
I wasn’t discussing it in the context of a health care debate. I used it when discussing where I didn’t want you to design my superhero costume.
“The Democrat’s hostile attitude to the American family speaks for itself ”
Uh, yeah….you’re gonna have to spell that strawman out. In what ways is the Democratic Party attitudes towards families hostile?
Oh that’s right. They want more families to live above the poverty line with the retirement and health care benefits imperative to the continuity of a civilized society….and are obstructing the “pro-family” agenda of the GOP and their Chamber of Commerce peeps who would have them working until the day they died with the voodoo health care benefits of HSA’s. Those bastards!!!!
Hey, by the way, I’m still waiting for that list of “unfree” societies on the globe that have higher divorce rates than America….
About the marriage issue…
In 17th century, a strange thing began occurring in Western cultures: the linking of marriage and sex. Prior to that, marriage was primarily a means to secure some kind of material safety: queens married kings to form coalitions of countries, farmers married next door’s farmers’ daughters to get bigger estates, townspeople (in the developing towns) married each other hoping to get their spouses’ families’ riches. With whomever people had sex with was a totally different matter.
Which is not to say that there were no stable relationships. You would be married to your wife (and her family’s estate), and you could lie in bed with your next door neighbor. Your wife did the same.
So, back in the day, breaking up a sexual relationship simply meant you had to sleep alone for a while, or with someone else. Your household affairs (and thus your material safety) was not threatened. It is indeed only a fairly recent development that ties together love & sex on the one hand and material marriage, on the other.
Where does this come in with the debate above? Simple: “Monogamy” in terms of who you have sex with is a fragile thing. (Some biologists would claim, a counter-intuitive and destructive thing, too.) Sexual relationships may easily break apart. That is all too human. But what with the link of marriage and sex, any such break-up threatens your material well-being. In our traditionally male-dominated culture this means that women are in much greater danger of poverty due to such a break-up/divorce than men are.
Sorry for going off-topic, but alas, this had to be said.
J.