7 ms·

How the Recession Reshaped the Economy, in 255 Charts (2014)

29 points by Kortaggio 11y ago

smackay 11y ago
A very interesting set of graphs but it takes quite a bit of time to digest the information presented. The most interesting part, which is not immediately obvious until you start checking the graphs individually is how little wages have grown over the past 10 years. Even in booming sectors such as pet grooming, etc. today will will be earning essentially the same wage as you were 9 years ago. The growth in (mostly) all-things related to software is not much of a surprise, though that old gas related activity was the only other bright spot in the economy (more jobs, higher wages) was. However, even in software, average wages are increasing, but not by a lot. Obviously the average wage is probably not that informative but perhaps it does point to a fundamental limit in human productivity that will only be overcome with better tools and techniques.
- larzang 11y ago
  Wage stagnation isn't just the last decade, it stretches back 40 years, and it has nothing to do with limits in productivity. In inflation adjusted terms, worker productivity has increased almost 75% between 1973 and 2013, while compensation for production workers has increased less than 10%. Wages at the top 1% have grown 138% since 1979 compared to 15% for the bottom 90%, and it gets direr if you start looking at the bottom 50% (stagnant) or bottom 10% (5% decrease) instead. Our economy is producing more and more, we are far from hitting any kind of limits on productivity, but it's only enriching a select few while the vast majority deal with flat income and ever-rising cost of living. http://www.epi.org/publication/charting-wage-stagnation/ http://www.epi.org/publication/charting-wage-stagnation/
  - twoodfin 11y ago
    Do you think today's median worker would take a 20% (adjusted dollars) pay hike in exchange for having to live in 1973's economy? I don't think so (I wouldn't do it for 100%!), which suggests your statistics are painting an incomplete picture. Cost of living goes up when there's more desirable stuff to live on, not just bare monetary inflation. And wages aren't equal to income. Also, demographics! Many more workers, including more per household and more newer to these shores.
    - larzang 11y ago
      Cost of living is essentials: food, housing, healthcare. It has nothing to do with what electronics you can buy.
      - tzakrajs 11y ago
        1970s healthcare vs 2010s healthcare isn't an important difference? edit: grammar
    - yardie 11y ago
      My single mother raised 4 kids and bought a house on 1980s money, like $2-3 above minimum wage then. I'd take that bet. Pay off my 15-year mortgage in 5 years and dump the rest of my money into savings. Then when the kids got old enough for college I'd write a check for the hundreds of dollars it would cost for a 4-year education. Do you know anything of the 70s economy?
  - rory096 11y ago
    Just gonna rip this straight from an /r/Economics comment yesterday: >Using wages as a picture welfare is unproductively restrictive. Using total compensation yields a very different picture.(http://i.imgur.com/nCCCuSC.png http://i.imgur.com/nCCCuSC.png) Real compensation accounts for all forms of income paid to employees, including health care costs and defined contribution plans. Additionally, the CPI overstates inflation, and changing household dynamics/other forms of income (https://www.minneapolisfed.org/publications/the-region/where-has-all-the-income-gone https://www.minneapolisfed.org/publications/the-region/where...) have substantive implications for any picture of overall income growth. Context matters for how we should view these trends.(http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_dbvXvc4ED41vtv7 http://www.igmchicago.org/igm-economic-experts-panel/poll-re...) https://www.reddit.com/r/Economics/comments/3by8tb/elizabeth_warren_the_average_family_in_the_bottom/csqnpop https://www.reddit.com/r/Economics/comments/3by8tb/elizabeth...
    - TheOtherHobbes 11y ago
      Unfortunately that's clearly sophistry. The money is being spent involuntarily, for benefits the recipients has no control over, with little or no market leverage, priced in ways that aren't genuinely open to competition. It shouldn't take much thought to realise that's exactly how taxation works. So effectively that argument simply treats benefits that would be funded from taxation in more rationally managed countries as somehow magically equivalent to private income. Clearly, that's not even good sophistry - although it's about par for the course for a modern orthodox economic argument, so I suppose no one is going to be surprised by the low quality.
      - refurb 11y ago
        Those benefits aren't funded from taxation, they are funded by your employer. And they most certainly count as compensation. If your employer promised you a full pension, wouldn't you consider that a part of compensation?
        nmrm2 11y ago
        Parent's argument was that it's disingenuous to count e.g. health insurance as part of compensation when it's required by the State. That's not private compensation, it's a tax on corporations. Post-ACA, a company calling health insurance part of your compensation package is like them calling payroll tax part of your compensation. Which almost no one does historically, because that's stupid. It's not reasonable to argue that "real compensation" has increased between year X and year Y by counting tax burdens in year Y but not in year X. The reason that such a comparison is stupid and wrong should be obvious. It's slightly more reasonable to argue that additional taxes have eaten up projected wage increases. (But that argument is wrong.) > If your employer promised you a full pension, wouldn't you consider that a part of compensation? The difference here is that the Government more or less never requires a private company to provide a full pension.
  - deleted 11y ago
    [deleted]
tormeh 11y ago
Very interesting. It seems recessions always accelerate economic shifts. Any similar articles about Europe?
- danbruc 11y ago
  I can not see much economic shift - in the majority of the cases the trends pre and post crisis are pretty much the same, they just experienced a dent. A few show trend changes but this is of course expected when you look at that many time series.
danteembermage 11y ago
What happened to HR professionals? That was a devastating decline in an otherwise stable sector.
- nmrm2 11y ago
  If you're looking to shed weight ASAP without undercutting the future of the organization, HR is an easy target. Maybe not wise, but you can understand how executives could come to the decision to cut HR before Engineering, for example. Also, I'd imagine at least some of the decline is for the same reason we've seen decline in lots of other sectors -- HR processes are some of the easier ones to automate (no robotics, often tasks are fairly well defined)

29 points by Kortaggio 11y ago

A very interesting set of graphs but it takes quite a bit of time to digest the information presented. The most interesting part, which is not immediately obvious until you start checking the graphs individually is how little wages have grown over the past 10 years. Even in booming sectors such as pet grooming, etc. today will will be earning essentially the same wage as you were 9 years ago. The growth in (mostly) all-things related to software is not much of a surprise, though that old gas related activity was the only other bright spot in the economy (more jobs, higher wages) was. However, even in software, average wages are increasing, but not by a lot. Obviously the average wage is probably not that informative but perhaps it does point to a fundamental limit in human productivity that will only be overcome with better tools and techniques.

larzang 11y ago
Wage stagnation isn't just the last decade, it stretches back 40 years, and it has nothing to do with limits in productivity. In inflation adjusted terms, worker productivity has increased almost 75% between 1973 and 2013, while compensation for production workers has increased less than 10%. Wages at the top 1% have grown 138% since 1979 compared to 15% for the bottom 90%, and it gets direr if you start looking at the bottom 50% (stagnant) or bottom 10% (5% decrease) instead. Our economy is producing more and more, we are far from hitting any kind of limits on productivity, but it's only enriching a select few while the vast majority deal with flat income and ever-rising cost of living. http://www.epi.org/publication/charting-wage-stagnation/ http://www.epi.org/publication/charting-wage-stagnation/
- twoodfin 11y ago
  Do you think today's median worker would take a 20% (adjusted dollars) pay hike in exchange for having to live in 1973's economy? I don't think so (I wouldn't do it for 100%!), which suggests your statistics are painting an incomplete picture. Cost of living goes up when there's more desirable stuff to live on, not just bare monetary inflation. And wages aren't equal to income. Also, demographics! Many more workers, including more per household and more newer to these shores.
  - larzang 11y ago
    Cost of living is essentials: food, housing, healthcare. It has nothing to do with what electronics you can buy.
    - tzakrajs 11y ago
      1970s healthcare vs 2010s healthcare isn't an important difference? edit: grammar
  - yardie 11y ago
    My single mother raised 4 kids and bought a house on 1980s money, like $2-3 above minimum wage then. I'd take that bet. Pay off my 15-year mortgage in 5 years and dump the rest of my money into savings. Then when the kids got old enough for college I'd write a check for the hundreds of dollars it would cost for a 4-year education. Do you know anything of the 70s economy?
- rory096 11y ago
  Just gonna rip this straight from an /r/Economics comment yesterday: >Using wages as a picture welfare is unproductively restrictive. Using total compensation yields a very different picture.(http://i.imgur.com/nCCCuSC.png http://i.imgur.com/nCCCuSC.png) Real compensation accounts for all forms of income paid to employees, including health care costs and defined contribution plans. Additionally, the CPI overstates inflation, and changing household dynamics/other forms of income (https://www.minneapolisfed.org/publications/the-region/where-has-all-the-income-gone https://www.minneapolisfed.org/publications/the-region/where...) have substantive implications for any picture of overall income growth. Context matters for how we should view these trends.(http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_dbvXvc4ED41vtv7 http://www.igmchicago.org/igm-economic-experts-panel/poll-re...) https://www.reddit.com/r/Economics/comments/3by8tb/elizabeth_warren_the_average_family_in_the_bottom/csqnpop https://www.reddit.com/r/Economics/comments/3by8tb/elizabeth...
  - TheOtherHobbes 11y ago
    Unfortunately that's clearly sophistry. The money is being spent involuntarily, for benefits the recipients has no control over, with little or no market leverage, priced in ways that aren't genuinely open to competition. It shouldn't take much thought to realise that's exactly how taxation works. So effectively that argument simply treats benefits that would be funded from taxation in more rationally managed countries as somehow magically equivalent to private income. Clearly, that's not even good sophistry - although it's about par for the course for a modern orthodox economic argument, so I suppose no one is going to be surprised by the low quality.
    - refurb 11y ago
      Those benefits aren't funded from taxation, they are funded by your employer. And they most certainly count as compensation. If your employer promised you a full pension, wouldn't you consider that a part of compensation?
      - nmrm2 11y ago
        Parent's argument was that it's disingenuous to count e.g. health insurance as part of compensation when it's required by the State. That's not private compensation, it's a tax on corporations. Post-ACA, a company calling health insurance part of your compensation package is like them calling payroll tax part of your compensation. Which almost no one does historically, because that's stupid. It's not reasonable to argue that "real compensation" has increased between year X and year Y by counting tax burdens in year Y but not in year X. The reason that such a comparison is stupid and wrong should be obvious. It's slightly more reasonable to argue that additional taxes have eaten up projected wage increases. (But that argument is wrong.) > If your employer promised you a full pension, wouldn't you consider that a part of compensation? The difference here is that the Government more or less never requires a private company to provide a full pension.
- deleted 11y ago
  [deleted]

tormeh 11y ago

Very interesting. It seems recessions always accelerate economic shifts. Any similar articles about Europe?

danbruc 11y ago
I can not see much economic shift - in the majority of the cases the trends pre and post crisis are pretty much the same, they just experienced a dent. A few show trend changes but this is of course expected when you look at that many time series.

danteembermage 11y ago

What happened to HR professionals? That was a devastating decline in an otherwise stable sector.

nmrm2 11y ago
If you're looking to shed weight ASAP without undercutting the future of the organization, HR is an easy target. Maybe not wise, but you can understand how executives could come to the decision to cut HR before Engineering, for example. Also, I'd imagine at least some of the decline is for the same reason we've seen decline in lots of other sectors -- HR processes are some of the easier ones to automate (no robotics, often tasks are fairly well defined)