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Thursday, October 19, 2006

"Shocked that Their Leaders Are so Out of Touch"

A "bachelor's degree is no longer a guarantee of raises big enough to beat inflation" even in the presence of strong productivity growth:

Why It Takes a Doctorate To Beat Inflation, by By David Wessel, WSJ: The typical American worker with a four-year college degree earns a lot more money than a similar worker who didn't go beyond high school -- 45% more. Education does pay. But in today's economy, getting a bachelor's degree is no longer a guarantee of raises big enough to beat inflation.

Although the best-paid college grads are doing well, wages of college grads have fallen on average, after adjusting for inflation, in the past five years. The only group that enjoyed rising wages between 2000 ... and 2005 ... were the small slice with graduate degrees.

Think about that: Even though the economy and productivity have been growing smartly, lots of workers who played by the rules and went the distance to get a four-year college degree aren't getting ahead. ... The very best-paid workers are getting the bulk of the raises. ...


Before nitpicking emails arrive: No single set of numbers gives a complete picture. The data in this chart cover only cash wages -- not health benefits or pensions. If they were included, ... inequality wouldn't disappear. The best-paid 20% of workers on private payrolls are three times as likely to have health insurance as those in the bottom 20%, and this tally doesn't count stock options and the like -- and you know who gets the bulk of those.

The question isn't whether the gap between winners and losers in the labor market is widening; it's why. And it's no longer as simple as saying: The more education one gets, the more one earns. Something more complicated is driving up pay at the top. ...

[I]n the middle -- where many four-year college graduates work -- ... imports, overseas outsourcing and technology seem ... to be reducing U.S. employer demand ... significantly, and thus restraining wages. That is the kind of shift in the tectonic plates of the economy that produces political earthquakes.

And it's an earthquake the GOP has largely ignored or denied as it has tried to convince middle class America that the economy has been good for them. Here's Robert Reich:

The People Are Rising, by Robert Reich: A Republican operative told me the other day that if Republicans could only get Americans to focus on the economy instead of Iraq, the GOP could hold on to the House. He's got it completely wrong. A big reason Republican poll numbers are sinking around the country is Americans are focusing on the economy.

The great sucking sound you hear every time Bush or any other Republican says the economy is doing fine is the collective inhalation of tens of millions of Americans, shocked that their leaders are so out of touch. Republican candidates are dropping like dead fruit flies ... everywhere wages and jobs are under sharpest assault -- because Republicans won’t admit what their constituents know: that wages are stuck in the mud, that job security is gone, that pensions are drying up, that health insurance costs are out of control, that housing prices (the only nest eggs left) are leveling out or falling. The only people who are getting much out of this economy are in the top one percent ...

Bush’s father was sent packing in 1992 when he insisted the economy was in fine shape. He sounded looney – as if he lived on another planet. It’s too late to uproot the current Bush but Americans are ready to uproot congressional Republicans who have shown not a jot of what most people are going through.

Worse yet, over the last few years Congressional Republicans gave away the store to big corporations and the rich, and robbed average working people. At the behest of the credit-card industry, they made personal bankruptcy almost impossible, while allowing big companies to declare bankruptcy and rid themselves of pension and health obligations to their workers. At the behest of the oil and gas industry, they gave away billions in subsidies, while oil companies got record profits and most people paid through their noses for gas and home heating oil. At the behest of the drug companies, they created a Medicare drug benefit that prevented Medicare from using its huge bargaining leverage to get lower drug prices for the elderly. At the behest of chain stores and the fast-food industry, they blocked the minimum wage from catching up with inflation. At the behest of corporate America, they got rid of overtime pay for millions of hard-working Americans. At the behest of the richest, they created tax cuts that made the rich even richer, while cutting housing assistance and health care for poor kids.

Here's what Americans are deciding: It’s time to throw the rascals out. The people are rising because they’ve had enough. And when the Democrats take over the House, and perhaps the Senate as well, Democrats must remember they were put there to get the nation back on track – to end this reverse Robin-Hood scourge and to give everyone once again a fair shot at decent work so the economy once again works for everyone.

    Posted by on Thursday, October 19, 2006 at 02:47 AM in Economics, Unemployment, Universities | Permalink  TrackBack (0)  Comments (46)


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