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Thread: The US Recovery

  1. #676
    Senior Contributor DOR's Avatar
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    Labor

    Over the past 10 years, nonfarm unit labor costs have increased 1.20% p.a. That’s a 2.44% rise in hourly costs and a 1.23% rise in productivity. In manufacturing, it was 0.38% annual rise, based on a 2.35% increase in hourly costs and a 1.97% rise in productivity.
    https://www.bls.gov/opub/ted/2017/un...uring-2016.htm

    If you’re playing along at home, that’s a +0.9% p.a. increase in real nonfarm wages, and a 0.8% rise in those for manufacturing (I’ve used the PCE deflator for inflation). On a CPI basis, it’s +0.7% p.a. and +0.6%, respectively.

    Over the last two years, real nonfarm wages rose 2.2% p.a. and those for manufacturing 2.3% p.a.

    . . .

    Mr Trump thinks he inherited a mess from Obama?

    In the first 41 weeks of President Obama’s tenure, weekly unemployment claims averaged 51.2% higher than a year earlier. In the subsequent 377 weeks, 10.2% lower. If having a lower claims rate than a year earlier was a job approval rating, during those 377 weeks – when a mere 18 weeks were higher than a year ago, Mr Obama would have had a 95% approval rating.

  2. #677
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    The unemployment rate in March 2017 fell below 4.5% for the first time in nearly 10 years. If you don’t think the unemployment rate fairly reflects what it says it does (i.e., if you like a bit of “alt” to pepper around your statistics,) the U-6 rate is at its lowest point in 9 years. Not quite as long as the standard rate’s record, but showing exactly the same trend, only faster.

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    Тhat's the good thing about the consistency. It was Bush's fault for the first 8 years, now it is Barry's turn.

    Well played.
    No such thing as a good tax - Churchill

    To make mistakes is human. To blame someone else for your mistake, is strategic.

  4. #679
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    Huh?

  5. #680
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    Here's an eye-opening little exercies

    Given what many people think happens when the US signs trade deals with countries that have lower wages -- our workers lose out -- this little exercise in comparative wages should prove enlightening.

    The blue line is earnings by manufacturing workers for every dollar their construction counterparts … who would not be affected by a trade deal … receive each hour.

    In the 1960s, manufacturing (nonsupervisory production) workers earned $0.75 for every dollar paid to similar workers in the construction industry.
    It fell to $0.70 in the 1970s,
    Then rose to $0.78 in the 1980s,
    Then rose to $0.83 in the 1990s,
    It stayed at $0.83 in the 2000s,
    But fell to $0.77 in 2011-16.

    If NAFTA, or China’s joining the WTO has been so devastating for American manufacturing workers, why have wages improved vis-à-vis construction workers, where those trade deals have only a tiny impact?

    Then there’s the IT vs utilities workers … maybe someone else can figure that one out.
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  6. #681
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    Quote Originally Posted by DOR View Post
    Given what many people think happens when the US signs trade deals with countries that have lower wages -- our workers lose out -- this little exercise in comparative wages should prove enlightening.

    The blue line is earnings by manufacturing workers for every dollar their construction counterparts … who would not be affected by a trade deal … receive each hour.

    In the 1960s, manufacturing (nonsupervisory production) workers earned $0.75 for every dollar paid to similar workers in the construction industry.
    It fell to $0.70 in the 1970s,
    Then rose to $0.78 in the 1980s,
    Then rose to $0.83 in the 1990s,
    It stayed at $0.83 in the 2000s,
    But fell to $0.77 in 2011-16.

    If NAFTA, or China’s joining the WTO has been so devastating for American manufacturing workers, why have wages improved vis-à-vis construction workers, where those trade deals have only a tiny impact?

    Then there’s the IT vs utilities workers … maybe someone else can figure that one out.
    Because the first to go are the low paid/low skilled jobs which just so happen to artificially prop up the blue line on the graph?

    The whole point of free trade agreements working for the west was that the low skilled jobs would move to developing nations and the west's low skilled would retrain for higher skilled jobs. Good in theory but it turns out most people doing low skilled work are themselves low skilled and as the old saying goes 'you can't fix stupid'.

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    Quote Originally Posted by Gun Boat View Post
    Because the first to go are the low paid/low skilled jobs which just so happen to artificially prop up the blue line on the graph?

    The whole point of free trade agreements working for the west was that the low skilled jobs would move to developing nations and the west's low skilled would retrain for higher skilled jobs. Good in theory but it turns out most people doing low skilled work are themselves low skilled and as the old saying goes 'you can't fix stupid'.
    That's a 40-year trend you're looking at in the graph.
    It's now 23 years since NAFTA kicked in, and 16 since China joined the WTO.

    How long do those "first to go" excuses last?

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    Hello,
    I am French so not familiar with how the labour market works in the US. In the graph we can see that there was a first important shift in the early 1980s, so before the trade deals. Could you explain what happened? is it because of the rise of the technology workers? Policies? A crisis? We can see that in the late 2000s there is another shift but i guess it is because of the economic crisis of 2008.

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    The main shift in the 80s is that pay levels in the utilities sector rose 30% between 1982 and 1988 due to unions fighting for higher salaries and a very high degree of unionization at that time (nearly 75% of workers). IT employees did not share the same raises.

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    Quote Originally Posted by DOR View Post
    That's a 40-year trend you're looking at in the graph.
    It's now 23 years since NAFTA kicked in, and 16 since China joined the WTO.

    How long do those "first to go" excuses last?
    Hasn't the number of manufacturing jobs in the US gone down? People who no longer work in manufacturing get paid zero. If you added those zeroes to your graph, because I doubt they're included, what would happen?

  11. #686
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    Quote Originally Posted by Gun Boat View Post
    Hasn't the number of manufacturing jobs in the US gone down? People who no longer work in manufacturing get paid zero. If you added those zeroes to your graph, because I doubt they're included, what would happen?
    You get U-6 figure
    No such thing as a good tax - Churchill

    To make mistakes is human. To blame someone else for your mistake, is strategic.

  12. #687
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    Quote Originally Posted by Gun Boat View Post
    Hasn't the number of manufacturing jobs in the US gone down? People who no longer work in manufacturing get paid zero. If you added those zeroes to your graph, because I doubt they're included, what would happen?
    Gun Boat,

    You see that blue line where it runs from 1975 to 1985? That's manufacturing pay shooting up vis-a-vis construction pay.
    What happened to manufacturing jobs during that time? The same thing that happened in the 1950s and 1960s: they fell, from 22% of nonfarm employment to 18%.

    So, it is possible – across a nation-wide statistic – to see that even better pay for manufacturing jobs (as compared to construction jobs) won’t necessarily shift significantly more people into that industry. There were about 17.8 million people employed in manufacturing in 1985 (including management, not the numbers I used in my graph above). In order for the ratio to be 22% instead of 18%, that figure would have had to have been higher, by a million jobs.

    As for those no longer working in manufacturing, I simply don't know how to find data on dead or retired manufacturing workers.

  13. #688
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    Quote Originally Posted by Doktor View Post
    You get U-6 figure
    No, you don't. That's not the definition of U-6 unemployment data.

    More important, you don't get the U-6 figures for that graph for the very simple reason that they don't exist.
    There is no U-6 data prior to January 1994.

  14. #689
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    Unemployment and U-6

    Note the identical trends.
    Note that since 2011 the trends -- both of them -- have been sharper and longer than previously recorded.

    Note the awesome advantage of knowing WTF you're talking about.
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  15. #690
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    Quote Originally Posted by DOR View Post
    No, you don't. That's not the definition of U-6 unemployment data.

    More important, you don't get the U-6 figures for that graph for the very simple reason that they don't exist.
    There is no U-6 data prior to January 1994.
    The zeroes are not U-6 (or any other unemployment number)?
    No such thing as a good tax - Churchill

    To make mistakes is human. To blame someone else for your mistake, is strategic.

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