What exactly is the employment situation in the US?

[SOS2008]

The airline industry has always fluctuated, and has never completely recovered from 9-11. Manufacturing in general has been going oversees for a long time now, and automotive manufacturing in particular has taken a hit ever since Japanese imports flooded the U.S. market. We can't compete in cheap yet quality manufactured products, but should worry that we are losing jobs in high-end products/services.

I don’t agree with McCain on much, but I do agree with him that we should have been working on alternative energy technology, not just for our purposes but also to export.

 

[edward]

Northwest airlines is no saying that it is going to outsource flight attendant jobs.

 

[Astronuc]

. . . but I do agree with him that we should have been working on alternative energy technology, not just for our purposes but also to export.

Funny you should say that. I was talking with a former class mate whose company has developed solar power technology, and there is interest overseas in Spain, Australia, Sout America, Asia and the Middle East. There is also one project in the US.

http://www.nrel.gov/docs/fy01osti/28751.pdf

The technology is ready to go - they just need some buyers.

 

[SOS2008]

Northwest airlines is no saying that it is going to outsource flight attendant jobs.

We can't even hold on to the service industry--though I'll assume Americans will continue to be employed for domestic flights?

Funny you should say that. I was talking with a former class mate whose company has developed solar power technology, and there is interest overseas in Spain, Australia, Sout America, Asia and the Middle East. There is also one project in the US.
http://www.nrel.gov/docs/fy01osti/28751.pdf
The technology is ready to go - they just need some buyers.

The key is cost of new energy in comparison to existing energy. I don't know if economy of scale (mass production) can be used to achieve this with various forms of alternative energy - ?

Regarding solar, it's been my understanding it takes about 10 years to recoup upfront investment, and then there is still significant maintenance costs. Our society is so mobile; it seems more realistic for commercial versus residential structures. Other technology seems to be geared to new construction only, and/or there's not enough ways for people to switch to alternatives easily and cost effectively.

At the minimum, builders should have incentives for installing this kind of technology going forward, and producers to export to places that have been booming, like the Hong Kongs of the world.

Fuel-efficient automobiles are the main area we should invest in. As I stated in another thread, I wish there had been an Apollo type program for this years ago. The first thing we need to do is get rid of self-serving oilmen in our government and replace them with leaders who believe in scientific advancement.

 

[SOS2008]

From CNN broadcast news (11/21/05):

Well, as GM workers face massive layoffs, a disturbing new report illustrates the war on the middle class. A new study says the living standards of middle class workers in Illinois fell by such a dramatic rate that their financial condition is no better today than it was in 1989.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): Joe Bresnahan and his family are learning how to stretch a dollar. He worked for Maytag in Galesburg, Illinois, for 16 years, but the plant closed. His job shipped to Mexico, where the workers are paid in cents, not dollars.

JOE BRESNAHAN, FMR. MAYTAG WORKER: I'm not going to work for 58 cents an hour. There's no way that we can compete. It's got to stop. The gap -- there is no more middle class in my mind. You're either rich or you're poor. …I bring home every two weeks what I used to bring home in a week, and used to have good health insurance, dental, vision. And none of that now.

SYLVESTER: His story is being repeated all over Illinois. The state has lost more than 200,000 manufacturing jobs since 1990. Middle class families haven't just stalled on the economic ladder, they're being kicked further down.

A new study by the Center for Tax and Budget Accountability shows the state's median income of $46,000 is at the same level as it was in 1989. During the '90s, when the economy was booming, the job growth was in the lower paid service industry, and many high-paying jobs were shipped overseas.

RALPH MARTIRE, CTR. FOR TAX & BUDGET ACCOUNTABILITY: We are truly feeling the impact of globalization, and it's not like the old days where maybe one high-paying wage sector would go away in the economy and another high-paying wage sector would jump up to replace it. That's not what's really happening now.

SYLVESTER: What's happening in Illinois is also occurring in the rest of the country.

LEE PRICE, ECONOMIC POLICY INSTITUTE: Illinois a little bit more than the rest of the country. But the country as a whole, the typical family in the middle of the income spectrum is doing worse than they were five years ago.

SYLVESTER: That's because middle class families like Joe's Bresnahan's have not only seen their paycheck shrink, they're also coping with rising costs of gas, housing and food.

http://transcripts.cnn.com/TRANSCRIPTS/0511/21/ldt.01.html

 

[Astronuc]

Regarding solar, it's been my understanding it takes about 10 years to recoup upfront investment, and then there is still significant maintenance costs. Our society is so mobile; it seems more realistic for commercial versus residential structures. Other technology seems to be geared to new construction only, and/or there's not enough ways for people to switch to alternatives easily and cost effectively.
At the minimum, builders should have incentives for installing this kind of technology going forward, and producers to export to places that have been booming, like the Hong Kongs of the world.
Fuel-efficient automobiles are the main area we should invest in. As I stated in another thread, I wish there had been an Apollo type program for this years ago. The first thing we need to do is get rid of self-serving oilmen in our government and replace them with leaders who believe in scientific advancement.

Any new technology comes with cost in order to cover the R&D investment and possibly new investment in equipment and facilities used to construct the components.

I just talked with my former classmate, and he mentioned a study by the A&E firm, Sargent & Lundy which indicates economically competitive solar power systems are possible. According to my friend, initial costs might be $0.18/kWh, while after several plants, it might be more like $0.05-0.06 kWh - and there is no fuel volatility. S. California and Arizona are viable markets.

Initial plants might come in at $3000 /MWe installed, but with technological improvements and economies of scale both in manufacture and operational, the price should come down. If one considers the levelized cost, then the prices are competitive with fossil energy.

 

[Skyhunter]

Any new technology comes with cost in order to cover the R&D investment and possibly new investment in equipment and facilities used to construct the components.
I just talked with my former classmate, and he mentioned a study by the A&E firm, Sargent & Lundy which indicates economically competitive solar power systems are possible. According to my friend, initial costs might be $0.18/kWh, while after several plants, it might be more like $0.05-0.06 kWh - and there is no fuel volatility. S. California and Arizona are viable markets.
Initial plants might come in at $3000 /MWe installed, but with technological improvements and economies of scale both in manufacture and operational, the price should come down. If one considers the levelized cost, then the prices are competitive with fossil energy.

Unfortunately when doing cost analysis, the environmental cost of pollution is not factored in. If Energy producers had to pay for just the health problems caused by air pollution, solar would become more competitive.

 

[Astronuc]

Now for an interesting twist -

It's a tough job...

http://marketplace.publicradio.org/shows/2005/11/22/PM200511227.html

... and there's no one to do it. Wanted: Skilled workers. According to a study released today, the US economy has serious labor shortages in some fields. Sarah Gardner reports.

From the National Association of Manufacturers.

Developing ‘Human Capital’ Must Be Priority

WASHINGTON, D.C., Nov. 22, 2005 – The serious shortage of qualified employees that a vast majority of U.S. manufacturers are now experiencing is taking an increasingly negative toll on America’s ability to compete in the global economy, according to a survey report released today by the National Association of Manufacturers, the Manufacturing Institute and Deloitte Consulting LLP.

“The survey exposes a widening gap between the dwindling supply of skilled workers in America and the growing technical demands of the modern manufacturing workplace,” explained NAM President John Engler. “It is essential that America close this skills gap if we are to maintain our edge in the global marketplace and remain the world’s leader in innovation.

“Clearly, the broadening skills gap in America calls for urgent action by both public and private stakeholders,” Engler said. “A highly skilled, innovative ‘high performance’ workforce is essential for our manufacturing sector to remain vibrant and to compete successfully in a global economy. If manufacturers are to remain competitive, the issues of education and training reform must be given at least as much attention as other top business concerns like trade, taxes, energy and regulatory reform.”

http://www.nam.org/s_nam/doc1.asp?CID=67&DID=235732

But earlier this month - "Natural Gas Prices Causing Layoffs and Shutdowns in U.S. Manufacturing Sector"

Outer Continental Shelf Oil & Gas Development is Priority for Manufacturers, Economy

WASHINGTON, November 17, 2005—High natural gas prices are beginning to cause significant job losses, salary freezes and lost market share for U.S. manufacturers, according to the results of a national survey released today by the National Association of Manufacturers (NAM).

Nearly 45 percent of those surveyed said they will be forced to lay off workers or impose wage freezes or reductions. About 22 percent of respondents said their companies would cut health care or benefits in an attempt to keep up with energy costs.

“This is a crisis. It’s the worst I’ve seen since we started this company 45 years ago,” said Virginia Ferrell, President of Capital Engineering and Manufacturing Co., with 85 employees in Chicago. “I don’t think people recognize that this shortage of energy is new to the United States. It’s a seismic market disruption. Meanwhile, our competitors are increasing their energy supplies.”

Ferrell said her company would impose job cuts, wage freezes, benefit cuts, and move to a four-day work week to survive energy costs that have doubled. “This is serious enough to put us out of business,” she said.

About two-thirds of respondents said natural gas is their primary energy source. About 15 percent cited oil, and three percent cited coal.

http://www.nam.org/s_nam/doc1.asp?CID=67&DID=235711

 

[pattylou]

Merck will cut 7000 jobs.
http://www.nytimes.com/2005/11/28/b...&en=189c7163839ea019&ei=5094&partner=homepage

 

[edward]

The pharaceutical industry is also heavily involved in outsourcing.

http://www.bionity.com/articles/e/49803/

Even biotec and R&D are being outsourced primarily to India and China.

http://www.canbiotech.com/

 

[Astronuc]

Actually, an appropriate title for the this thread would be "what is the state of the US economy".

In another thread, I pointed out that the number for non-farm employment in the first quarter of 2006 were barely above the number when GW first took office in 2000. And in most cases, the wages/salaries of those millions of jobs are considerably less than the jobs replaced. In addition, there are many people who hold more than one job, and there are many more temporary or contract workers, who receive minimal benefits, e.g. health insurance and pension/retirement.

Now look at - FYI: An Update on Emerging Issues in Banking
http://www.fdic.gov/bank/analytical/fyi/2006/032306fyi.html

More people are living on the edge - one lost job or one major illness from falling into poverty or bankruptcy.

And what about bankruptcy reform. Well, it doesn't really apply to those who earn less than the median income in a particular area - and those are the people most likely to file bankruptcy.

Energy prices have increased and probably will not decrease for some time.

The Bush administration has committed the US to a costly war in Iraq and Afghanistan (~ $100 billion/yr), Federal deficits/debt have grown, the trade deficit has contined to increase, and interest rates have increased and the Fed (Bank) will likely continue to raise interest rates to suppress inflation.

On the last point, I think there comes a time when rising interest rates actually exacerbates (contributes) to inflation.

Hmmm - get ready for the 'perfect storm' economically speaking.

Have a nice day.

 

[russ_watters]

Actually, an appropriate title for the this thread would be "what is the state of the US economy".

No, when I started this thread, there were a lot of side-conversations going on about the economy and people injected little insinuations into them about the job market being bad. So I wanted to concentrate the thread on that issue alone.

Similar to the liberal mantra of 'the rich get richer while the poor get poorer' (debunked in other threads), a lot of people hold beliefs about the economy that are factually wrong because they support their political positions. I was just pointing this one out. And though this thread has gotten little injections of context-less negative news, claims of a poor job market seem to have decreased in P&WA.

 

[russ_watters]

On topic...

In another thread, I pointed out that the number for non-farm employment in the first quarter of 2006 were barely above the number when GW first took office in 2000.

I missed it, so if you could indulge me with the data and what you conclude from it (or just link the other thread)?

 

[Art]

No, when I started this thread, there were a lot of side-conversations going on about the economy and people injected little insinuations into them about the job market being bad. So I wanted to concentrate the thread on that issue alone.

Similar to the liberal mantra of 'the rich get richer while the poor get poorer' (debunked in other threads), a lot of people hold beliefs about the economy that are factually wrong because they support their political positions. I was just pointing this one out. And though this thread has gotten little injections of context-less negative news, claims of a poor job market seem to have decreased in P&WA.

Debunked in your opinion only. Perhaps you should correct the CIA on their error then or is this an example of the the Bush doctrine, that if you state a mistruth often enough it becomes true.

The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. Since 1975, practically all the gains in household income have gone to the top 20% of households.

http://www.cia.gov/cia/publications/factbook/geos/us.html#Econ

 

[Gokul43201]

Similar to the liberal mantra of 'the rich get richer while the poor get poorer' (debunked in other threads),

I find one thread where you claim to have debunked it. But I can't say I agree with your reasoning. As often is the case, I think we're using different definitions of rich and poor.

https://www.physicsforums.com/showthread.php?p=315942&highlight=income#post315942

The poorest 20% of the households had a greater fraction of the total US household income in the 70's than they do now. I'm not arguing that the bottom 20% of households represents the bottom 20% of the population. Let it represent the bottom 10%. So long as the average size of these households hasn't changed significantly, it doesn't change the argument.

Then there is the definition of richness or poorness. Should poverty be based on a percentage of the average US salary or on prices of commodities ? If it is the former, then the above statistic shows that the poor now earn a smaller fraction of the median income, and have hence, gotten poorer. If you go by the latter, the relevant data is the poverty rate, which has been rising since it hit a minimum in 2000, but the trend over the last 25 years is pretty flat.

http://en.wikipedia.org/wiki/Poverty_in_the_United_States

PS : Don't img tags work in P&WA ?

 

[russ_watters]

Art, "virtually all" is rather non-specific, but in any case, it does not say that the poor are not getting richer. All it says is that the rich are getting richer faster. It doesn't disagree with what I said, it agrees with what I said. For the rich to get "virtually all" of the gains, the poor must also be gaining.

I may as well post the link again... http://www.census.gov/hhes/www/income/histinc/h03ar.html

Since that quote is rather unspecific, the numbers are that the bottom 20% has increased its average household income (inflation adjusted) by 9% in the past 20 years. The top 20% - up 41%. If that's "virtually all", fine, but it is still a fact that the bottom 20%'s average household income has gone up.

Gokul, the size of households has gotten smaller, but even without that, household incomes for all brackets has risen in the last 20-40 years (inflation adjusted).

We've also discussed the definition of "poor". Only in "rich" countries do people attempt to peg the definition to the income distribution because it is politically useful to ensure that you can always define a large fraction of the populous as "poor". But that isn't all that useful of a definition for solving problems because the entire reason why poverty is a problem is how it affects the human condition. Ie, if you didn't used to be able to feed your family and now you can, you are less poor than you were before. How much richer someone else got in the meantime doesn't have anything to do with that and to try to define that first person as "poor" because of the disparity is to render the concept of poverty useless.

The only useful way to define poverty is via standard of living and by that definition, poverty in the US has been dropping in recent history.

 

[Gokul43201]

The only useful way to define poverty is via standard of living and by that definition, poverty in the US has been dropping in recent history.

Is that not directly contradicting :

If you go by the latter, the relevant data is the poverty rate, which has been rising since it hit a minimum in 2000, but the trend over the last 25 years is pretty flat.

?

 

[russ_watters]

Mid-cycle rate changes aside (a timeframe of less than 20 years is utterly useless for trend-reading), the official way of measuring poverty in the US does not do a good job of reflecting changes in the human condition because, among other things, it does not include all government handouts. It also does reflect changing standards of what is acceptable, and an absolute measure shouldn't. The article you posted provides a good critique.

Here is another one: http://en.wikipedia.org/wiki/Poverty_line_in_the_United_States

The basic point is that someone on the edge of the poverty line lives better today someone on the edge 40 years ago did. That's the reason I like to use income alone to measure progress.

I'm not saying that we shouldn't have higher standards today than we did 50 or 100 years ago. We certainly should. But if we're going to use a sliding scale to reflect changing standards, we can't call it an absolute measure of poverty.

Here is some history on how the line is drawn: http://www.census.gov/hhes/poverty/povmeas/papers/orshansky.html

Key quote:

...a rough social consensus about the level of a socially acceptable minimum standard of living at a particular time.

By its very nature, then, the poverty line rises to match what we consider "a socialaly acceptable minimum standard of living". So no, the poverty rate statistics cannot be called an absolute standard of poverty. In fact, as the statistics have remained relatively consitent for the past 20 years (notwithstanding cyclical fluctuations), as you pointed out, combining that fact with the fact that the scale is not constant gives us a decreasing poverty level on an absolute scale.

 

[loseyourname]

The phrase "the rich get richer while the poor get poorer" is useless rhetoric for a variety of reasons. First, what is meant by "poor?" If we're going to confirm the statement by showing that the bottom 20% of the population earns a smaller fraction of the GDP than they did 20 years ago, then "poor" simply means being in the bottom 20%? What if the poverty rate is less than 20%? Are people that aren't even living in poverty to be considered poor? If it just means that the poverty rate has risen, then shouldn't we say "the rich get richer while more people get poor?" The only way I can see that the actual phrase "the poor get poorer" could be true is if those living in poverty today are poorer than those living in poverty in the past. Is that true? Is it worse to live in poverty today than in the mid-nineties? Mid-eighties? Mid-seventies? Heck, maybe it is, but when the phrase gets people talking about the percentage of GDP earned by the bottom 20% instead, it's being used as misdirectional rhetoric that serves nothing but to confuse. It makes a great soundbite because it sounds so damn clever and catchy, but do we really want to treat the average voter like someone with ADD that can't understand an issue in depth but rather only be brought in by a soundbite that only confuses people when they try to think about what it really means?

This is the kind of crap I really hate about politics.

 

[Art]

The phrase "the rich get richer while the poor get poorer" is useless rhetoric for a variety of reasons. First, what is meant by "poor?" If we're going to confirm the statement by showing that the bottom 20% of the population earns a smaller fraction of the GDP than they did 20 years ago, then "poor" simply means being in the bottom 20%? What if the poverty rate is less than 20%? Are people that aren't even living in poverty to be considered poor? If it just means that the poverty rate has risen, then shouldn't we say "the rich get richer while more people get poor?" The only way I can see that the actual phrase "the poor get poorer" could be true is if those living in poverty today are poorer than those living in poverty in the past. Is that true? Is it worse to live in poverty today than in the mid-nineties? Mid-eighties? Mid-seventies? Heck, maybe it is, but when the phrase gets people talking about the percentage of GDP earned by the bottom 20% instead, it's being used as misdirectional rhetoric that serves nothing but to confuse. It makes a great soundbite because it sounds so damn clever and catchy, but do we really want to treat the average voter like someone with ADD that can't understand an issue in depth but rather only be brought in by a soundbite that only confuses people when they try to think about what it really means?

This is the kind of crap I really hate about politics.

The problem with using an absolute term of reference to determine poverty levels is that you end up with the ridiculous proposition that there has never been anybody living in poverty ever as every generation from our neolithic ancestors onwards has had more than their predecessors.

A couple of generations ago only the wealthy could afford televisions but IMO it is fair to say that if a family could not afford a television today then they are poor. If you cannot afford decent health care then you are poor, if you cannot afford decent clothing you are poor, if you cannot afford nutritious food you are poor.

As for the phrase "the poor are getting poorer",this is in relation to their share of the pie that is personal income as the rich keep taking a larger proportion of the pie leaving a smaller proportion for the poor. Poor and poorer are relative terms and as they are getting relatively less of the pie and so the differential between the haves and the have nots is growing it is fair to say the poor are getting poorer.

It seems to me that people are looking to equate a definition of poverty with being destitute.

 

[Astronuc]

On topic... I missed it, so if you could indulge me with the data and what you conclude from it (or just link the other thread)?

https://www.physicsforums.com/showthread.php?t=87840&page=9 - post #129

I found more data, which indicates that non-farm employment was about 132.5 million in 1Q 2001, and is now about 134.5 million in 1Q 2006, so about 2 million jobs have been created in 5 years.

On the other hand, the US population was 285,102,000 as of July 1, 2001 and is projected to be 297,821,000 by July 1, 2006 (but maybe closer to 300 million) - an increase of about 12 million (not including illegal aliens who are not counted in the Census (but I wonder if the number is estimated?))
Source: http://www.census.gov/prod/2005pubs/06statab/pop.pdf
http://www.census.gov/Press-Release/www/releases/archives/population/006222.html

The employment picture is more complicated because of who is included and who is not, and how the categories are defined. I need to do more research on this because the data are not easy to find from one source.

There was a drop between 2001 and 2003, however that follows the burst of the internet bubble.

Meanwhile, the median household income has dropped between 2001 - 2004. The numbers for 2005 are not out yet apparently.

 

[turbo]

There are regions in which unemployment and poverty are rising, and I just happen to live in one of them. Several large paper mills have shut down in the past few years - losing some of the best-paying jobs in the state. The loss of these jobs has a ripple effect on the surrounding towns, as discretionary spending dries up, housing drops in value, property taxes increase to make up the taxes no longer paid by the defunct mills, etc. The effects are keenly felt by mom and pop businesses that specialize in stuff that is fun, but not essential. People still have to eat, but they don't have to buy a new ATV, boat, motorcycle, snowmobile, camping trailer, etc. They also cut back or eliminate spending on things like lawn care, manicures, home-improvement projects, evenings out at the local tavern or restaurant, etc, depressing the incomes of people who work in these fields. On top of this, our state has been inundated with big-box stores that have already hurt a lot of local businesses and contribute lots of low-paying part-time jobs with few benefits, if any.

Many in Maine rely on seasonal tourism for much of their income - the lodging industry, guide services, restaurants, convenience stores, tackle shops, etc. We had very little snow this year, so the skiers and snowmobilers stayed home and kept their money in their own home states. Now, with the price of gas almost certain to top $4 for the summer months, we can look for a slower summer season as well. Certainly, the RV crowd will be feeling the pinch - if your rolling house gets 4 mpg and gas is $4/gal, that's a dollar a mile for fuel. I don't think we'll see a lot of Florida plates on RVs this summer.

 

[Astronuc]

There was (maybe still is) a big push to promote tourism in the local area. The local politicians jumped on it and promised to put money (our taxes, which are third or 4th highest in the nation).

The average income from tourism -- $16,000 /yr.

This area lost more than 20,000 jobs which paid more like $40,000+ /yr.

Tax dollars were spent on retraining. Many people left the area for less expensive living conditions, and lower wages/salaries.

 

[Gokul43201]

a timeframe of less than 20 years is utterly useless for trend-reading

I thought we were talking about short term trends. The OP, for instance, talks only about one, or five-year trends.

And if it's long-term trends that you are looking at, an absolute 25 year difference is quite useless. (eg : 1993/94 saw lower inflation adjusted incomes for the bottom two brackets compared to 15 years before; but 5 years later, or in 1998/99, there was a 30% increase compared to 15 years before) Instead, a long term trend should be fit to say, a 25-year moving average.

The basic point is that someone on the edge of the poverty line lives better today someone on the edge 40 years ago did.

Because (for instance) they own a microwave oven now, when they couldn't afford one 40 years ago ? So, the crux of the matter comes down to, if that is one's aim, determining what it takes to live better.

This, I believe, comes down to choosing the right price index that is representative of the income group in question.

That's the reason I like to use income alone to measure progress.

But you are allowing for inflation, right ? This isn't really an absolute number in that the inflation rate is calculated off of a consumer price index which changes with vary trends in purchasing. The weights applied to different goods that make the index are chosen from the ratios of total consumption in an urban location. And the total consumption reflects the consumption by all income groups, and tends to be weighted towards the higher incomes. So, do you consider the distribution in the CPI (or the CPI-U, which is used to calculate inflation) a fair reflection of the needs (ie : food, shelter, clothing, healthcare, education) of the poorest people ?

Or do you think some other index would be better suited to judging poverty ? For instance, the CPI index for people 62 years and older (the CPI-E) has been growing faster than the CPI-U. The inflation rate calculated based on their consumption would be higher than the value you use.

So, short of seeing proof that the CPI-U is a pretty good representation of the consumption of the poor, I can't say I agree that the inflation adjusted income is the relevant indicator or poverty.

 

[russ_watters]

https://www.physicsforums.com/showthread.php?t=87840&page=9 - post #129

I guess I'll respond here to that...

I live in an America where there are fewer jobs now than when this President took office - the first time that has happened since the great depression.

That was true when he wrote it , but it isn't true anymore (the data you provided next shows that). It mentions Bush being in office 3.5 years, so it is around 2 years old.

I found more data, which indicates that non-farm employment was about 132.5 million in 1Q 2001, and is now about 134.5 million in 1Q 2006, so about 2 million jobs have been created in 5 years.

As your data in that thread shows, all of that has bee in the past one year. We all know bush inherited an unemployment rate as low as it has ever been and it went up for a few years before coming back down. But it is back down now.

The employment picture is more complicated because of who is included and who is not, and how the categories are defined.

Meanwhile, the median household income has dropped between 2001 - 2004. The numbers for 2005 are not out yet apparently.

As you pointed out, the first few years Bush was in office were during the downturn and bottom of the cycle. Wouldn't you agree that it is a good bet that when the numbers come out we will find that incomes were up in 2005?

 

[russ_watters]

The problem with using an absolute term of reference to determine poverty levels is that you end up with the ridiculous proposition that there has never been anybody living in poverty ever as every generation from our neolithic ancestors onwards has had more than their predecessors.

So we are in agreement that tremendous progress has been and is being made, even for those at the very bottom. That's a good start. Like I said, the fact that standards change with progress is a good thing, but still, it isn't consistent with the dictionary definition of the word. So all poverty statistics must include the caveat that the standards are changing, so even if you choose to define certain people as poor, you must still say they are getting richer because as you pointed out, if you stretch the timeframe enough, "poor" is richer than "rich" used to be. Ironic.

As for the phrase "the poor are getting poorer",this is in relation to their share of the pie that is personal income as the rich keep taking a larger proportion of the pie leaving a smaller proportion for the poor. Poor and poorer are relative terms and as they are getting relatively less of the pie and so the differential between the haves and the have nots is growing it is fair to say the poor are getting poorer.

Yes, I know that's how liberals like to say it, but that doesn't make it a useful thing to say.

It seems to me that people are looking to equate a definition of poverty with being destitute.

No, Art, I'm just saying that the definition liberals like to use is highly misleading, that's all. And word "destitute" is an absolute term just like the word "poverty" is - the line is just in a different place.

 

[russ_watters]

I thought we were talking about short term trends. The OP, for instance, talks only about one, or five-year trends.

The OP was about the short term unemployment trend because I wanted to concentrate on what the employment situation is like now. But that isn't what we're talking about now. You were correct in your first recent post, in looking at long-term trends for income and poverty rates. The economic cycle is a reality, and it is something people liked to ignore when lambasting Bush for the economic situation a year or two ago. People actually were claiming that the two to four year downturn was the start of a long-term trend. As long as you can separate the two issues, we'll be clear...

And if it's long-term trends that you are looking at, an absolute 25 year difference is quite useless. (eg : 1993/94 saw lower inflation adjusted incomes for the bottom two brackets compared to 15 years before; but 5 years later, or in 1998/99, there was a 30% increase compared to 15 years before) Instead, a long term trend should be fit to say, a 25-year moving average.

Picking and chosing to compare the top of a cycle to the bottomis not a valid way to analyze long-term trends, and I wouldn't do that and wasn't doing that. Heck, that isn't what a "trend" is.

But you are allowing for inflation, right ? This isn't really an absolute number in that the inflation rate is calculated off of a consumer price index which changes with vary trends in purchasing.

Not really. The CPI is the value of the dollar, and that's the point: creating an absolute scale in order to make absolute comparisons. What people buy with their money isn't the point, the point is how much it costs.

Now, the products in the CPI are adjusted to match changes in what people spend their money on, but that is just so, well, it can measure the change in the price of what people spend their money on. It isn't a social commentary, its a measure of the absolute value of the dollar.

The weights applied to different goods that make the index are chosen from the ratios of total consumption in an urban location. And the total consumption reflects the consumption by all income groups, and tends to be weighted towards the higher incomes. So, do you consider the distribution in the CPI (or the CPI-U, which is used to calculate inflation) a fair reflection of the needs (ie : food, shelter, clothing, healthcare, education) of the poorest people ?

The CPI isn't a social commentary. It isn't supposed to reflect the needs of anyone.

Or do you think some other index would be better suited to judging poverty ?

The CPI isn't used to judge poverty.

For instance, the CPI index for people 62 years and older (the CPI-E) has been growing faster than the CPI-U. The inflation rate calculated based on their consumption would be higher than the value you use.

It would be interesting to use the CPI-E to index incomes for older Americans and see how they have changed, but the Census Bureau is a little thin on age-based numbers.

In any case, I'm more concerned with the overall picture.

So, short of seeing proof that the CPI-U is a pretty good representation of the consumption of the poor, I can't say I agree that the inflation adjusted income is the relevant indicator or poverty.

You don't have any good reason to assume that it isn't a good index either, but you are going to because you don't want to accept what the data shows? No statistics are perfect - that's kinda inherrent to what statistics are - so using your logic, you could toss out any statistics you choose to just because they lack utter perfection.

No, the CPI isn't perfect, but it is the best statistic available for determining the real value of the dollar.

Anyway, not that I think it'll matter, but across those different CPIs, the changes are relatively consistent. The reason the CPI for older people is different is almost entirely due to the increase in medical costs. See table 2: http://www.aarp.org/research/socialsecurity/reform/aresearch-import-327-DD52.html

The point is, when food gets more expensive for rich people, it gets more expensive for poor people by roughly the same amount. When gas gets more expensive for rich people, it gets more expensive for poor people by roughly the same amount. Etc, etc., etc.

What gets me here is that you seem to accept that the living conditions for people we call "poor" are improving, but you still are looking for ways to avoid accepting statistics that say it.

 

[Art]

So we are in agreement that tremendous progress has been and is being made, even for those at the very bottom. That's a good start. Like I said, the fact that standards change with progress is a good thing, but still, it isn't consistent with the dictionary definition of the word. So all poverty statistics must include the caveat that the standards are changing, so even if you choose to define certain people as poor, you must still say they are getting richer because as you pointed out, if you stretch the timeframe enough, "poor" is richer than "rich" used to be. Ironic.

So now that you have denied the existence of poverty through measuring income against our ancestors what word would you suggest should be used to describe the living conditions of those who cannot afford decent food, healthcare, clothes or education? Any definition of poverty must be related to one's current environment to have any meaning at all.

Yes, I know that's how liberals like to say it, but that doesn't make it a useful thing to say.

Perhaps not in your opinion but then again you would think that as it undermines your argument. Most reasonable people would probably think that it is more germane to adjudge one's economic standing against the mean of today rather than against the mean of the mid 1800s (or whenever) when life expectancy was 39.

No, Art, I'm just saying that the definition liberals like to use is highly misleading, that's all.

Obviously not that misleading as I and I imagine most other people understand what they mean. The distribution of resources is leaning more and more in favour of the rich. More of the pie for those at the top of the ladder and less of the pie for those at the bottom. I really do not see what is misleading about that.

And word "destitute" is an absolute term just like the word "poverty" is - the line is just in a different place

If the terms poverty and destitute are absolutes with lines in different places would you please tell us precisely where you believe the lines for each are drawn and when the baseline for these absolute references were laid down?

 

[Gokul43201]

Russ, I think you've missed the point I'm trying to make. But I'll give it another quick shot :

The point is, when food gets more expensive for rich people, it gets more expensive for poor people by roughly the same amount. When gas gets more expensive for rich people, it gets more expensive for poor people by roughly the same amount. Etc, etc., etc.

When BMWs get more expensive (for rich people) it makes no difference to the poor people. And the really poor people spend a larger fraction of their income on food than the really rich people. Also, the elderly, who live on pensions, make up more of the lower income groups and spend a lot more on healthcare, which as you stated, is going up faster than other stuff.

If you determine a CPI based on income level, and calculated an inflation rate accordingly, you will get different adjustments to the dollar (adjustments that are more elevant to the person spending that dollar). That will give you a better representation of the purchasing power of a particular income group.

What gets me here is that you seem to accept that the living conditions for people we call "poor" are improving, but you still are looking for ways to avoid accepting statistics that say it.

No, I did not accept that (living conditions are improving). For instance, in the major cities, homelessness has gone up by over 25% (up by 40% in New York) in the last 5 years. So, among the poorest folk (those that could just barely afford shelter 5 years ago and can't now), living conditions have worsened. These people are way below the 20 percentile mark and are skipped by your statistics.

And I'm not looking for ways to avoid accepting statistics.

You were the one avoiding the statistics published by the US Census Bureau regarding poverty rates. You think that is not a resonable judge of poverty. You provided an alternative. I accepted your argument but pointed out that your alternative is also not a good representation of poverty, and I suggested a correction that would reduce the error. Yet, somehow, I'm the one that's unwilling to accept the statistics ?

Even accepting your numbers for the approximation that they are, I wonder what the trends are for the lowest 5% and 10%.

 

[Astronuc]

Employment Opportunities for College Graduates Less Abundant

http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=1627413

by Christian E. Weller
May 5, 2006

College graduates can take some solace from today’s release of employment figures by the Bureau of Labor Statistics (BLS), although the employment options for those without a college education are not as abundant as they once were.

College graduates do better than others when overall job creation is lagging. According to today’s release by the BLS, the economy created 138,000 new jobs in April, well below expectations and below long-term average job creation from 1947 to 2001. Moreover, the previous two months’ employment figures were revised downward by a combined 36,000 jobs.

As a result, the current business cycle that started in March 2001 has had the lowest average job growth, at 0.03%, of any business cycle since World War II. Even average job growth during the period since August 2003, when job creation finally became positive again, has only been 0.12% — or 32% below the long-term average job growth before this business cycle. Not surprisingly then, there have only been six months — out of 61 — in this business cycle that had job growth that was above the long-term average.

With weak job growth, it is not hard for college graduates to do better than others. In April, the number of employed college graduates rose by 156,000, while the number of employed high school graduates declined by 201,000, and the number of those employed with some college education dropped by 75,000. Yet, the number of those employed without a high school degree also rose 138,000.

Employment growth in April, then, was fastest among those with the highest educational attainment, but opportunities also grew for those with the lowest educational attainment. Those in the middle educational rungs saw job chances decline. To some degree, these trends are mirrored in the job growth by industries.

Specifically, the largest increases came in: education and health care, particularly doctors’ offices and nursing jobs, with 35,000 jobs; in professional and technical services such as computer consultants, with 28,000 new jobs; in financial services, with 26,000 new jobs; and in restaurants, with 18,800 new jobs in April.

http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=1579981

Executive Summary

This report discusses two aspects of economic mobility in the United States. The first is the question of intergenerational mobility, or the degree to which the economic success of children is independent of the economic status of their parents. A higher level of intergenerational mobility is often interpreted as a sign of greater fairness, or equality of opportunity, in a society.

The second aspect is the short-term question of the amount by which family incomes change from year to year. By studying short-term mobility we can determine whether incomes are rising or falling for families at different points in the income distribution. We can also determine whether the size of these income variations, or the level of annual income volatility, is changing over time. Increased volatility is undesirable to the extent that it represents an increase in economic insecurity.

Foreclosures Up 72 Percent From Last Year (1Q2006)
Georgia, Colorado and Indiana Post Nation’s Highest First-Quarter Foreclosure Rates

National foreclosure filings continued to climb in the first three months of 2006, evidence that more U.S. homeowners are struggling to stay current on their monthly mortgage payments.

A total of 323,102 properties nationwide entered some stage of foreclosure in the first quarter of 2006, a 72 percent year-over-year increase from the first quarter of 2005 and a 38 percent increase from the previous quarter, according to the RealtyTrac™ U.S. Foreclosure Market Report. The nation’s quarterly foreclosure rate of one new foreclosure for every 358 U.S. households was higher than in any quarter of last year.

“The sharp increase in foreclosures in Q1 continues a steady upward trend that we’ve observed since the beginning of last year,” said James J. Saccacio, chief executive officer of RealtyTrac. “Foreclosures have now increased in four consecutive quarters and are on track to go above 1.2 million in 2006, which would push the nation’s annual foreclosure rate to more than 1 percent of U.S. households.”

“With the current market conditions, it’s unlikely that foreclosures will return to the historically low levels they were at in recent years when interest rates hit rock bottom and home price appreciation skyrocketed in many areas of the country,” he said. “But it’s possible that foreclosures will flatten out or even move a bit lower this Spring if more buyers and investors enter the market, giving homeowners in distress a better chance of selling their properties to avoid going into default or foreclosure.”

http://www.realtytrac.com/pub/articles/aol/foreclosure_trends_2006Q1.asp?m=1 Some people are just not earning enough to keep up. Possibly some/many of those who lose their home were not careful with debt, but unemployment maybe a factor.

 

[Astronuc]

Iowa Town Prepares for Maytag Closures
http://www.npr.org/templates/story/story.php?storyId=5403713
by Joyce Russell

Weekend Edition Sunday, May 14, 2006 · Maytag's new owner, Whirlpool, says it will make huge cuts to the white- and blue-collar work force in Newton, Iowa, laying off thousands of workers. Slated to close are Maytag's corporate headquarters and research center in Newton, a town synonymous with Maytag that has seen generations of family members work in the state's most visible Fortune 500 company.

Iowa Town Hit Hard by Whirlpool Job Cuts
http://www.npr.org/templates/story/story.php?storyId=5397930

May 11, 2006 · Whirlpool Corporation says it is eliminating more than 4,000 jobs following the recent purchase of its rival, Maytag Corporation. Many of the cuts will come from the closing of plants in Newton, Iowa. Robert talks with Pete Slings, who has worked at Maytag for 20 years and owns a town sports bar.

 

[Astronuc]

In one recent period, low-wage employers in companies like Wal-Mart (the nation's largest corporate employer) and McDonald's produced 44 percent of the country's new jobs, while high-wage employers generated just 29 percent. Unless we turn things around, we will soon see a steep downward slide in our standard of living.

http://www.usnews.com/usnews/news/articles/060529/29gergen_3.htm

Those kind of statistics suggest a rather dim prospect for the US employment situation.

 

[selfAdjoint]

http://www.usnews.com/usnews/news/articles/060529/29gergen_3.htm

Those kind of statistics suggest a rather dim prospect for the US employment situation.

Not to mention salaries. Was Perot right?

 

[russ_watters]

In one recent period, low-wage employers in companies like Wal-Mart (the nation's largest corporate employer) and McDonald's produced 44 percent of the country's new jobs, while high-wage employers generated just 29 percent. Unless we turn things around, we will soon see a steep downward slide in our standard of living.

Those kind of statistics suggest a rather dim prospect for the US employment situation.

That depends on where the jobs were lost. I don't really know, but it would make sense to me that the low-wage jobs would be the first to get cut in an economic downturn. So it may just be that they're getting back what was lost.

Also, "In one recent period" makes me suspicious. How long was this period? Some job figures come out monthly, & short term fluctuations can provide misleading statistics for random pundits to exploit. The source isn't cited.

We're still awaiting the 2005 income stats, of course...

 

[Astronuc]

The period could have been a recent quarter, but your right, reference isn't cited. On the other hand, Gergen is usually careful.

Yeah, we're still waiting for 2005, which I think will be out soon, or perhaps June time frame.

From what I've seen, the low wage jobs have replaced high wage jobs, and some people who took 'early' retirement (with benefits) have come back into the job market.