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There's a good bit of tortured logic to rationalize the stagnation of real middle-class wage growth in the U.S. And, while there may be some relevance to those

There's a good bit of tortured logic to rationalize the stagnation of real middle-class wage growth in the U.S. And, while there may be some relevance to those articles, they go a long way to avoid the globalization elephant in the room. On the other hand, economists are now finally acknowledging the negative domestic wage effects of globalization and outsourcing on the U.S. I referenced these elsewhere, but it's also relevant here: [1] http://economix.blogs.nytimes.com/2012/08/29/changing-views-of-globalizations-impact/ http://economix.blogs.nytimes.com/2012/08/29/changing-views-... [2] http://www.cfr.org/industrial-policy/evolving-structure-american-economy-employment-challenge/p24366 http://www.cfr.org/industrial-policy/evolving-structure-amer... The idea that continuous outsourcing to low wage countries would bring negative pressure to domestic wages was a common sense notion decades before now. Seems like economists are finally catching up. EDIT: The other elephant in the room and perhaps the most salient point is that relatively speaking, the working/middle-class is bearing the brunt of stagnation, no matter which metrics you apply or how you rationalize it. That is, the wealthiest are realizing a massive acceleration in wealth accumulation, period.

yummyfajitas 13y ago
I do not dispute that outsourcing causes negative wage pressure on domestic compensation. I dispute that stagnation is anything other than a statistical artifact caused by measuring the wrong thing (e.g., wages rather than compensation).
- unclebucknasty 13y ago
  So, you agree that outsourcing causes negative wage pressure but don't think it leads to any stagnation in real compensation? How does this make sense? Are you saying that all negative wage effects are offset by an equal rise in other benefits? Because that's not what the article you referenced states. And even to the extent that it does implicate benefits, it attributes only a small difference to this cause. In any event, the far more salient point in this discussion is that the relative income (and wealth) growth of the working/middle class has dramatically paled in comparison to that of the wealthiest. That is, as the economy has expanded, the former group has not--by any measure--participated proportionally in the rewards it conveys.
  - yummyfajitas 13y ago
    I'm saying that so far, compensation has not stagnated. ...relative income (and wealth) growth of the working/middle class has dramatically paled in comparison to that of the wealthiest. Since I'm not the jealous sort, why should I care? Life has improved significantly for everyone. Why worry that it has improved for some more than others? That is, as the economy has expanded, the former group has not--by any measure--participated proportionally in the rewards it conveys. The former group has also not--by any measure--participated proportionally in expanding the economy. Here is a somewhat dated quote by a rather famous economist describing the 1980's (but it applies equally well to the 1990's and 2000's): "...growth in inequality is not a simple picture. Old-line leftists, if there are any left, would like to make it a single story--the rich becoming richer by exploiting the poor. But that's just not a reasonable picture of America in the 1980s. For one thing, most of our very poor don't work, which makes it hard to exploit them. For another, the poor had so little to start with that the dollar value of the gains of the rich dwarfs that of the losses of the poor..." Paul Krugman, The Age of Diminished Expectations, 1990, p. 22.
    - unclebucknasty 13y ago
      >Since I'm not the jealous sort, why should I care? Has nothing to do with jealousy. My income easily places me in the famed "One Percent". Of course, there are others in that cohort who are wildly richer than I am, however, that is to say that I've had more than my share of success. Doesn't mean I can't see the inequality or wish to benefit from it. Likewise with people like Warren Buffet who are certainly far wealthier than I, but who also agree that income equality, skewed tax codes, etc. are not good for America. Attempting to skew the argument to one of jealousy or "class-warfare" waged by the poor/middle-class (as if that were really possible) is small-minded, and a red herring. >Life has improved significantly for everyone. Why worry that it has improved for some more than others? It's not simply a matter of everyone's life improving, but some more than others. For many life is getting worse. Witness the increasing poverty rate in America to record highs in some categories. The system is not a meritocracy that has simply rewarded those who are more deserving more than those who are not. The system is rigged and does not deliver economic justice or opportunity. That's the problem. >The former group has also not--by any measure--participated proportionally in expanding the economy. That is a patently false right-wing generalization. Pretending that the middle class didn't bail out banks who profited wildly from their problematic activities and pretending that we don't subsidize one of the wealthiest industries on the planet (oil) is ridiculous. I could go on. The economy and our government have been completely rigged by wealthy interests who write the laws. The working/middle-class get utterly pimped, then people like you turn around and say, "hey, if you can't make it in America, it's your own fault". >...Paul Krugman, The Age of Diminished Expectations, 1990, p. 22. That quote is actually dated and helps to make my point. The last three decades have brought profound changes with regard to the very topic of this thread: globalization and outsourcing. As a result, we now have a rapidly growing class of so-called "working poor". So, there is very definitely a rapidly growing number of people who are being exploited. Working hard and still below the poverty line? In America? Further, there are also those poor who are unemployed due to these structural reasons. They have certainly been victimized (if you prefer that term to "exploited") by globalization.

yummyfajitas 13y ago

I do not dispute that outsourcing causes negative wage pressure on domestic compensation. I dispute that stagnation is anything other than a statistical artifact caused by measuring the wrong thing (e.g., wages rather than compensation).

unclebucknasty 13y ago
So, you agree that outsourcing causes negative wage pressure but don't think it leads to any stagnation in real compensation? How does this make sense? Are you saying that all negative wage effects are offset by an equal rise in other benefits? Because that's not what the article you referenced states. And even to the extent that it does implicate benefits, it attributes only a small difference to this cause. In any event, the far more salient point in this discussion is that the relative income (and wealth) growth of the working/middle class has dramatically paled in comparison to that of the wealthiest. That is, as the economy has expanded, the former group has not--by any measure--participated proportionally in the rewards it conveys.
- yummyfajitas 13y ago
  I'm saying that so far, compensation has not stagnated. ...relative income (and wealth) growth of the working/middle class has dramatically paled in comparison to that of the wealthiest. Since I'm not the jealous sort, why should I care? Life has improved significantly for everyone. Why worry that it has improved for some more than others? That is, as the economy has expanded, the former group has not--by any measure--participated proportionally in the rewards it conveys. The former group has also not--by any measure--participated proportionally in expanding the economy. Here is a somewhat dated quote by a rather famous economist describing the 1980's (but it applies equally well to the 1990's and 2000's): "...growth in inequality is not a simple picture. Old-line leftists, if there are any left, would like to make it a single story--the rich becoming richer by exploiting the poor. But that's just not a reasonable picture of America in the 1980s. For one thing, most of our very poor don't work, which makes it hard to exploit them. For another, the poor had so little to start with that the dollar value of the gains of the rich dwarfs that of the losses of the poor..." Paul Krugman, The Age of Diminished Expectations, 1990, p. 22.
  - unclebucknasty 13y ago
    >Since I'm not the jealous sort, why should I care? Has nothing to do with jealousy. My income easily places me in the famed "One Percent". Of course, there are others in that cohort who are wildly richer than I am, however, that is to say that I've had more than my share of success. Doesn't mean I can't see the inequality or wish to benefit from it. Likewise with people like Warren Buffet who are certainly far wealthier than I, but who also agree that income equality, skewed tax codes, etc. are not good for America. Attempting to skew the argument to one of jealousy or "class-warfare" waged by the poor/middle-class (as if that were really possible) is small-minded, and a red herring. >Life has improved significantly for everyone. Why worry that it has improved for some more than others? It's not simply a matter of everyone's life improving, but some more than others. For many life is getting worse. Witness the increasing poverty rate in America to record highs in some categories. The system is not a meritocracy that has simply rewarded those who are more deserving more than those who are not. The system is rigged and does not deliver economic justice or opportunity. That's the problem. >The former group has also not--by any measure--participated proportionally in expanding the economy. That is a patently false right-wing generalization. Pretending that the middle class didn't bail out banks who profited wildly from their problematic activities and pretending that we don't subsidize one of the wealthiest industries on the planet (oil) is ridiculous. I could go on. The economy and our government have been completely rigged by wealthy interests who write the laws. The working/middle-class get utterly pimped, then people like you turn around and say, "hey, if you can't make it in America, it's your own fault". >...Paul Krugman, The Age of Diminished Expectations, 1990, p. 22. That quote is actually dated and helps to make my point. The last three decades have brought profound changes with regard to the very topic of this thread: globalization and outsourcing. As a result, we now have a rapidly growing class of so-called "working poor". So, there is very definitely a rapidly growing number of people who are being exploited. Working hard and still below the poverty line? In America? Further, there are also those poor who are unemployed due to these structural reasons. They have certainly been victimized (if you prefer that term to "exploited") by globalization.