Harold Meyerson in today's Washington Post has a column that bemoans todays "devaluation" of labor. While Meyerson does present some numbers that appear to present a problem, part of the reason they do is because he only presents one side of the issue. We'll come back to that.
Labor Day is almost upon us, and like some of my fellow graybeards, I can, if I concentrate, actually remember what it was that this holiday once celebrated. Something about America being the land of broadly shared prosperity. Something about America being the first nation in human history that had a middle-class majority, where parents had every reason to think their children would fare even better than they had.
The young may be understandably incredulous, but the Great Compression, as economists call it, was the single most important social fact in our country in the decades after World War II. From 1947 through 1973, American productivity rose by a whopping 104 percent, and median family income rose by the very same 104 percent. More Americans bought homes and new cars and sent their kids to college than ever before. In ways more difficult to quantify, the mass prosperity fostered a generosity of spirit: The civil rights revolution and the Marshall Plan both emanated from an America in which most people were imbued with a sense of economic security.
That America is as dead as the dodo. Ours is the age of the Great Upward Redistribution. The median hourly wage for Americans has declined by 2 percent since 2003, though productivity has been rising handsomely. Last year, according to figures released just yesterday by the Census Bureau, wages for men declined by 1.8 percent and for women by 1.3 percent.
Meyerson makes much of the fact that labor is getting less of a share of national income while profit margins for some companies are on the rise. Fair enough, and apparently somewhat troubling. But there is a flip side (isn't there always?) While he is looking back longingly at the past, let's just dig a couple of facts out of the Statistical Handbook of the United States and see how clear his rose colored vision is. (Some of the years vary a little based on how data is tabulated).
Let's take a snapshot look at few things from the mid-1960's then from around 2005, a forty year span.
In 1965 the population of the US was around 192 million. In 2005 it was around 294 million.
In 1965 63% of Americans owned homes. In 2005 it was 69%.
In 1965 there were 27 college degrees awarded per 100 high school graduates. In 2001 it was 47 per 100.
In 1965 people spent about 15% of their disposable income on food. In 2005 it was 10%.
Just looking at the number of workers added in a forty year span and consider that we have managed to keep unemployment low despite soaring population. Europe, with generally declining native populations have growing unemployment. There is also the issue that many more people today own stocks (by way of 401k's if nothing else) and so are beneficiaries of those maligned corporate profits.
Is that a rigorous study? No it is not. But these facts do show there is a little more at work than Meyerson's simplistic rant against corporate greed. Are things perfect? No. Are they as bleak at Meyerson would have you believe? No. Was the US better off in the mid-sixties? There is data to suggest that it most definitely was not. But with rose-colored glasses, anything is possible.
And when you only present one side of an issue it is easy to skew the issue quite firmly in that one direction. Devaluing objectivity is its own reward.
UPDATE: Bullwinkle Blog delivers a smackdown.
