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The Myth That Is Falling Real Wages

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Re: Jackson LaRose,

 

I don't think I have the right to object to my murder.

 

You're objecting to my arguments right now, yet you don't think you have a right to object to your murder?

 

act.  For example, in your moral ideology, murderers don't have the right to murder.  Yet murders still occur.  Do you understand?

 

You're confusing rights with physics. Of course rights are not  PHYSICAL IMPEDIMENTS. Would you NEED to have some natural physical restraint to stop you from murdering someone? Are you a mere animal?

 

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I'll PM my response

"What Stirner says is a word, a thought, a concept; what he means is no word, no thought, no concept. What he says is not what is meant, and what he means is unsayable." - Max Stirner, Stirner's Critics
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Actually, just keep an eye on the What is a Right? thread

"What Stirner says is a word, a thought, a concept; what he means is no word, no thought, no concept. What he says is not what is meant, and what he means is unsayable." - Max Stirner, Stirner's Critics
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Is your belief in a person's "right to life" the only thing stopping you from murdering someone? Or is it possible that there exist more than two reasons to avoid murdering others?

I also think there's an important difference between believing you ought to be allowed to object and believing you have a "right" to object. (though Jackson's act of objecting, resulting from his preference for life over death, is distinct from whether he thinks others should be allowed to voice their objections)

"People kill each other for prophetic certainties, hardly for falsifiable hypotheses." - Peter Berger
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Re: Michael J Green,

Is your belief in a person's "right to life" the only thing stopping you from murdering someone?

Do I need another reason on top of that one? Can't I as a reasonable person determine that murder is wrong as people have a right to keep their lives?

Or is it possible that there exist more than two reasons to avoid murdering others?

 

You need MORE reasons? I don't.

 

I also think there's an important difference between believing you ought to be allowed to object and believing you have a "right" to object

 

I don't think in terms of "ought" (a reason why I buy insurance). I know I have a right to object as I am free to object. I have a right to my life as I am free to defend it. I have a right to my property as I am free to possess and act upon it. I do not have a right to someone else's life as I am not free to take it (oh, I COULD take it, but that does not mean I am FREE to do it, as taking something that's not mine involves COERCION, AGGRESSION, and RESISTANCE. If I have to COERCE, is because I am NOT free to have or take it; if I have to rely on AGGESSION, is because I am NOT free to take it or have it.)

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AJ replied on Wed, Aug 25 2010 7:22 PM

Old Mexican:
A right is the freedom to act UNCOERCED and NON AGGRESSIVELY

By this definition a right is just an ability to act in a certain way. Yet you claim it is more than just an ability.

Although the particular words are different each time, what you (and Hoppe, and Rothbard) do is to constantly equivocate between right=able to and right=should be able to, and when pressed on what "should" means you say it just means able (in this case you chose the word "free[dom]").

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it got deleted?   I did want to add this, which I know isn't exactly what anyone here wants to hear.....but it is worth considering, especially if you oppose it, I suppose.    [I don't intend trying to persuade anyone, nor to argue the point, and I don't mean to attempt to derail your Miseian musings.....I only called here to ask some questions......so I'll shutup.......] 

In responding to Bauer, Marx makes one of the most enduring arguments from his early writings, by means of introducing a distinction between political emancipation — essentially the grant of liberal rights and liberties — and human emancipation. Marx's reply to Bauer is that political emancipation is perfectly compatible with the continued existence of religion, as the contemporary example of the United States demonstrates. However, pushing matters deeper, in an argument reinvented by innumerable critics of liberalism, Marx argues that not only is political emancipation insufficient to bring about human emancipation, it is in some sense also a barrier. Liberal rights and ideas of justice are premised on the idea that each of us needs protection from other human beings. Therefore liberal rights are rights of separation, designed to protect us from such perceived threats. Freedom on such a view, is freedom from interference. What this view overlooks is the possibility — for Marx, the fact — that real freedom is to be found positively in our relations with other people. It is to be found in human community, not in isolation. So insisting on a regime of rights encourages us to view each other in ways which undermine the possibility of the real freedom we may find in human emancipation. Now we should be clear that Marx does not oppose political emancipation, for he sees that liberalism is a great improvement on the systems of prejudice and discrimination which existed in the Germany of his day. Nevertheless, such politically emancipated liberalism must be transcended on the route to genuine human emancipation. Unfortunately, Marx never tells us what human emancipation is, although it is clear that it is closely related to the idea of non-alienated labour, which we will explore below........

SOURCE

Intriguing, no?

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Stirner tore Bauer apart. And Marx, for that matter.

“Socialism is a fraud, a comedy, a phantom, a blackmail.” - Benito Mussolini
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What good is political freedom in a material world where I have to weigh my bills and pocketbook in general, versus my health. And decide between my rent and risking losing a falange (i currently have gangrene)... Real wages have fallen, and inefficiency has increased. The State is the cause as much as the corporations that seek its aid. Like everyone agrees, mostly every institution or organization of people, is intrinsically power-grabbing.

"If you want to lift yourself up, lift up somebody else." Booker T. Washington
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I doubt you have any data on these things but it really should come into account when analyzing products and housing.

Your charts show housing prices have fallen.  I think they remain almost constant as the quality in home building has really come way down.  I have bought and renovated two houses so far.  One from 1975 and one from 1929.  100% of the construction in my 1929 home far exceeds the quality in the 1975 home.  Now you cannot use technology in this example because my 1929 home was built with about equal to the 1975 homes wiring and plumbing technological advances of their reflected times.

Also your comparison between apple computers is ridiculous as the Imac is hardly state of the art of this time compared to the old Apple of it's time.  You would want to compare it to something like the "Origin"(brand), "The Big O Gaming Rig"(model) which starts at $8000 and can be decked out to the max to $16,000.  This shows that specialty items do not drop in value.  To me it appears to have remained a constant.

Also any data you have on the correlation between the household income and household hours worked would be splendid.  I only ask because 30 years ago most women were not as career minded as compared to today.

I ask this out of curiosity and truth seeking.  The apple comment was in fact a poke at your comparisons though.

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The Apple comparison is innacurate.  the 1984 Apple was a cutting edge machine of it's day.  the Imac of 2010 is not.  Please change your comparison so it shows two cutting edge machines.  perhaps the 1984 Apple and the Origin (brand) "The Big O Gaming Rig" as these would be a more accurate depiction of equivalancy.

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If I understand correctly he's saying :

Being free to stay away from those you dont like is nice, but being free to associate with those you do is even better.

But where and when has this second freedom been curtailed?

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Jeff replied on Tue, Oct 26 2010 6:13 PM

Can you exapnd on this more? If, "humanity is incapable of attaining "perfect" knowledge, therefore is incapable of developing "perfect" reason, therefore is incapable of  divining "perfect" laws of conduct." as you claim, then assuming you are a human how can you assert this as true using your own "imperfect" reason.

 

Also what is "perfect" knowledge? Something is either true or false right? So what is "perfect" truth mean in comparison?

 

In another post you mentioned how man is infallible but that in and of itself is not evidence of error so this idea that you can't know anything because your fallbile seems pointless and self defeating considering you would also have to apply it to your own claim.

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Jeff replied on Tue, Oct 26 2010 6:20 PM

As long as people have free will there will be disagreements no matter how innocent and honest they may be and for that reason alone you need rights protection.

 

Also the idea that rights create isolation is misguided. Human community can exist just fine within the context of individual rights. It just means interactions are voluntary and people can't be coerced.

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I used the rising total compensation argument, but he countered that it says nothing of to whom the compensation is going. He doesn't deny that compensation is growing, but rather that it is mostly/only going to the rich. They use this graph for their argument:

 

Your thoughts?

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I think if you did an inflation adjusted graph with a percentage value of specific goods out of the average salary then take in to consideration the increase quality and value for money that technology has brought us. I think we will find that there has been growth in spite of the socialist burden on the productive half of the economy. There is no knowing how much more growth we could have seen if we did not have the (poorly) managed currency and banking industries.

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cporter replied on Tue, Mar 15 2011 7:35 AM

Scrooge McDuck:
I used the rising total compensation argument, but he countered that it says nothing of to whom the compensation is going. He doesn't deny that compensation is growing, but rather that it is mostly/only going to the rich. They use this graph for their argument:

Your thoughts?

Yeah, it's a really old post but I'll respond anyway because this sort of trickery comes up often when arguing with charts.

Scrooge, those charts are meaningless to the argument you were having. The question was "is real compensation rising". First, income is only a subset of compensation so that chart is immediately useless on its own. More importantly, percentage of the total income pie says absolutely nothing about the total size of the pie. The top decile can go from 32% to 42% of the total income (as it did in the chart) and everyone else could still have higher real income.

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I think if you did an inflation adjusted graph with a percentage value of specific goods out of the average salary then take in to consideration the increase quality and value for money that technology has brought us. I think we will find that there has been growth in spite of the socialist burden on the productive half of the economy. There is no knowing how much more growth we could have seen if we did not have the (poorly) managed currency and banking industries.

Sure there's a way. Look at inflation adjusted growth per capita during the Gilded Age and compare to now. There's no denying that the rate of growth today is much lower than it was back then.

Yes, I am a huge Dodgers fan.

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I used the rising total compensation argument, but he countered that it says nothing of to whom the compensation is going. He doesn't deny that compensation is growing, but rather that it is mostly/only going to the rich. They use this graph for their argument:

 

Your thoughts?

Following income by class gets us nowhere as the compensation of classes changes yearly. See a blog post I recently wrote for some evidence as to the extent of the problem.

http://teconom.blogspot.com/2011/05/problem-with-following-income-trends.html

Yes, I am a huge Dodgers fan.

Anti-state since I learned about the Cuban Revolution and why my dad had to flee the country.

Beer, Guns and Baseball My blog

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Although the price of eggs doesn't tell us much by itself, it does indicate that productivity increases have made life-necessities like food much more affordable to the average person.

 

An egg in 1900 is not the same good as an egg today (or dozens, as they are commonly sold). Not because they are larger or packaged differently (though modern packaging is likely superior in protecting the eggs from breaking). Pastured eggs (as they mostly were in 1900) are nutritionally superior:

 

http://www.localharvest.org/pastured-eggs.jsp

 

The comparison should be between pastured eggs from 1900 to the present. The failure to account for such an important factor means the graph is that much less informative. The same can be said of many food products which differ nutritionally when one compares them: grain-finished versus grass-finished beef, milk from grass-fed cows, and so on.

 

But empirical data have no place in economic theory anyway.

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sastm replied on Wed, Nov 9 2011 7:32 PM

i know this discussion has been stale since 2010 but i just encountered it and it's just as applicable today of course... i'd be very curious to see either mises' or stefan's video - can't locate either one though. can you post a link? in general i was looking for a detailed discussion on the subject of fed's money supply and falling standards of living in us. any links/pointers would be much appreciated...

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Does anyone know what is included in "compensation" in the first graph? I looked around research.stlouisfed.org but couldn't find the data for what is being measured. I would like to get data specific to real wages, benefits such as vacation time, sick leave, pensions, 401k, etc. This would be more illuminating than just lumping it all in with " real compensation."

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Bebob replied on Tue, Dec 13 2011 5:50 AM

Also interesting data about income growth can be found here:http://www.census.gov/prod/2004pubs/p60-226.pdf

Income, Poverty, and Health Insurance Coverage in the United States: 2003
Carmen DeNavas-Walt, Bernadette D. Proctor, Robert J. Mills
August 2004
U.S. Census Bureau
U.S. Department of Commerce
Table A-3: Selected Measures of Household Income Dispersion: 1967 to 2003
pages 36-37

The tables on pages 36-37 break down household income at quintiles and selected percentiles over the period 1967-2003. You can see income growth for the very rich and the very poor alike.

 

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Student replied on Sat, Dec 17 2011 1:06 AM

I've went back two pages and can't find any mention of Tyler Cowen and his latest book the Great Stagnation. I think the discussion would benefit greatly from his discussion of the data and research alone.

As he notes, median real income is actually lower today than it was 1998.

http://www.census.gov/prod/2009pubs/p60-236.pdf

As he notes, there have been real quality improvements in the goods we consume that are not captured in the CPI and we could thus be underestimating real median income. But the same could be said for the 1940s, 50s, and 60s when we saw much faster median income growth as well the introduction of new products.

You could try talk about changes in composition of compensation. But that argument has little intuitive appeal explaining income stagnation over the past decade. And even if you look at average GDP per person (data which should not be sensative to this argument) we see that year-over-year average income growth has been slower for the past two decade than previous post-war decades (illustration below).

Cowen offers even more evidence in his book, and a variety of data from a variety of sources all pretty clearly show that real incomes have stagnated in recent decades. For some reason this is a controvertial claim on this board. But in an EconTalk with Russ Roberts Cowen cleverly asks why libertarians would think otherwise. If misguided government intervention in the economy is suppose to make us poorer, why shouldn't we expect to that in the data when the government has interevened so much since WW2?

Of course, Cowen doesn't blame income stagnation entirely on government policy. But I think it is an excellent question to ponder when so many libertarians attack the notion that of falling income. Really, every one should read what Cowen has to say before moving forward with the thred.

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Income stagnation and falling incomes are two different things... which is it, Student?

IIRC, household data frequently shows falling income - but this is because household size has shrinked (shrunk?) in recent years.

Regarding stagnant, not falling income, I wouldn't be too surprised by that claim. International trade does have some redistributive effects, and it wouldn't be surprising to see stagnant incomes for unskilled and low-skilled laborers in the United States has a result of greater trade.

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Student replied on Sat, Dec 17 2011 1:32 AM

Income is falling by some measures (like median income) but stagnant by others. I would agree with Cowen that over all the evidence tells us income is *at best* stagnant.

Cowen also deals with the shrinking household claim in his book and in the EconTalk podcast. The long and short of it is this has been dealt with in the literature and shown to not be the primary driver. Intuitively this should make sense. During the 1960s and 70s households shrank much more greatly than they have today, yet income grew more rapidly than now. So something else must be going on (Cowen argues a productivity slow down).

Check out the book. All the references and data are there.

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krazy kaju replied on Sat, Dec 17 2011 10:15 AM

I'll be sure to check out the book. And I'm not denying that incomes have been growing less than before, I think that's a fairly wide accepted fact with quite a few explanations. But looking at the actual data, the household income has been falling as individual income has risen due to falling household size - I have not yet seen any reliable evidence regarding falling median incomes, but I'll definitely look into it.

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Joe replied on Sun, Dec 18 2011 10:43 AM

In a recent Lew Rockwell Podcast, he mentions the idea of how we used to have great growth with only one individual in the household contributing to household income, then that started to stagnate (due to gov't intervention),  and this encouraged more and more households to adopt a system in which two parents were contributing to income, which initially lead to incomes increasing again (at other obvious costs to the family), but then even that started stagnating and shrinking due to gov't intervention.

 

He didn't bring up the smaller size of household issue, which could also be put on the gov't for social engineering and playing the role of father in so many poor neighborhoods.

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'Commies and other wacko leftists often like to claim that real wages are falling in the United States, and that this fall is due to "free markets."'

How I love a polemic argument!  So, the BLS data that  Dr. Perry has plotted I believe to come from the following report, and other similar reports that cover earlier decades.

http://www.bls.gov/web/eci/ecconstnaics.pdf

For those who are actually employed, the wage rates are indeed rising, especially if one includes the rapidly rising cost of health care benefits and the indirect contributions to compulsory government pension and social security programs through payroll taxes.  However, there are two things to consider:  One is that the these are averages that include a small minority of highly compensated individuals that skew the mean value upward.  The second is that these are averages of those lucky enough to be employed.  If you are unemployed, your "zero" wage rate is not included in the average.   While I'm sure Ayn Rand would approve, I think there is a global free market effect that our 'wacko leftist' friends are rightly concerned about.  It is that in the global labor commodity market, skill sets that take a long time to develop through training and education can rapidly become obsolete leaving a significant fraction of the population unemployed or underemployed.  Moreover, it is not simply competition with cheaper human labor, elsewhere in the world, but also cheaper robotic technologies that replace much of the unskilled labor.  Factories are slowly returning to the US market, but as often as not, these are so-called "Lights-Out" factories, that require little labor and no 'unskilled' labor.  The growing number of people who have obsolete skills and will never be fully employed again, comprise a vast social problem for which both "commie pinkos" and "neo-liberals" must suggest solutions.  

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Dogstar replied on Wed, Apr 11 2012 8:09 PM

We consume more, not because we earn more, but because we borrow more.  The only reason we had gains in real household income is because women have joined the workforce in increasing numbers since 1970.  We went from one-income households to two-income households.

The past 25 years of prosperity have been an illusion.  We've been living through a 25-year long consumer debt supercycle that's now being replaced by a government debt supercycle.

Many of these problems are due to Keynesian Economics & the Fed.

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wb8594 replied on Fri, May 25 2012 6:09 PM

Your charts do not take into consideration for inflation (thats what REAL WAGES mean, median wage increase adjusted to inflation),

since a high of 1972 real wages have been in decline for the past 40 years.

As such your argument is bunk.

 

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jodiphour replied on Thu, Jun 21 2012 5:54 PM

ChroMattic wrote the following post at 04-17-2010 9:00 AM:

Funny how "education", "health care", and "housing" are all things that the government is extensively involved in, no?

Isn't the government extensively involved in food too? Where isn't the govt involved?

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jjminelli replied on Thu, Jun 21 2012 8:55 PM

(Hey everybody, never posted here before even though I often read posts, so go easy on me!)

In response to the above post, even taking in inflation, wages have increased a little bit since then(1972 as you cited). Since the late 1970's the rate of increase in real wages has declined, but at the same time health care and other forms of compensation like pensions have gone up. Also, the share of national income between waged workers and the upper class(salaried, managment etc) has remained more or less the same. The real change in the last 40 years has been a fall in the rate of profit and capital acumulation, which probably lead to the "restructuring" that happened in the late 70's and 80's.

In response to the orignal post. I have to say that not every left-winger or marxist believes that wages have fallen since the 70's in the USA. In fact, some prominent marxit theorists have gone to a great deal of trouble to put away this fallacy. The economist, Andrew Kliman, being the most notable. He wrote a very interesting book recently that goes almost into painfull detail explaining how total compensation and wages have not fallen (although evidence suggests the rate of increase has declined) for the working class. To add, his critisicisms of left-wing theories on this issue is tied to his belief that under-consumption is not a cause of recession, but a result of one. Many of you regulars here might be interested in reading this book, "the Failure of Capitalist Production," if you are up for an intellectual challenge since I am assuming most of you are ardent followers of the Austrian School and Kliman is indeed a Marxist! ;)  http://akliman.squarespace.com/failure-capitalist-production/

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