| Topic: |
Politics > Politics-USA |
| User: |
"George Washington Admirer" |
| Date: |
29 Jun 2006 10:41:36 PM |
| Object: |
Slouching Towards Mexico: : Workers' wages DOWN but profits UP |
VDARE.COM - http://www.vdare.com/rubenstein/060628_nd.htm
June 28, 2006
National Data, By Edwin S. Rubenstein
Feeling good yet? How Immigration Hides Our Productivity Problem
Why do Americans feel so insecure in an economy that, by most
standards, is chugging along just fine?
Public opinion polls may themselves be to blame. Respondents are
usually more optimistic about their own economic prospects than the
country’s—a bias that invariably skews poll results downward. Moreover,
as Steve Sailer notes re immigration polls, wording matters greatly.
On the other hand, the economy may simply not be as healthy as the
economic statistics indicate. A recent memo by the Economic Policy
Institute titled What’s Wrong with the Economy, highlights areas in
which economic weakness coexists with ostensibly strong economic data.
“Profits are up, but the wages and incomes of average Americans are
down. Inflation-adjusted hourly and weekly wages are below what they
were at the start of the recovery in November 2001. Yet
productivity—the growth of the economic pie—is up by 14.7%.”
Source: What's wrong with the economy? by EPI President Lawrence Mishel
and Policy Director Ross Eisenbrey, based on their analysis of BLS data.
Labor productivity measures growth in output produced by the average
American worker in an hour. Rising productivity should mean that
employers can pay workers more without reducing profits or raising
prices.
The (alleged) 14.7 percent gain in output per hour since 2001 is well
above the historical average, and—if accurate—should by now have
produced the best of all worlds for business and labor, as well as for
Ben Bernanke.
Profits have indeed risen sharply since 2001. But incomes are stagnant
and inflation is higher than the Fed and most economists had
anticipated.
What went wrong?
One possible answer: labor productivity may not be growing nearly as
fast as the official statistics indicate. That’s because BLS calculates
productivity using payroll survey employment figures instead of the
larger, more rapidly growing, household survey numbers.
While the most recent payroll survey estimates 134.7 million workers
held jobs in the first quarter of 2006, the household survey counted
143.3 million – nearly 9 million more.
More importantly, employment growth since the fourth quarter of 2001 is
estimated at 3.8 million by the PS versus 7.1 million in the HS. (Table
1.)
Implication: labor productivity is growing about half as fast as the
official statistics indicate.
It gets worse. As noted above, productivity is measured per hour, not
per worker. If the “missing” workers are largely illegal Hispanics who
work longer hours than other workers, productivity growth will be
overstated by even more than the employment undercount alone would
suggest.
Some economists argue that the cyber-commuters, temporary workers, and
others who are not on payrolls but show up in the household survey, are
the major reason why employment growth is understated.
But there’s a better explanation—unmentioned (not for the first time)
by the left-leaning EPI: illegal aliens. They do not show up in the PS
for the simple reason that employers who admit to hiring them risk
stiff penalties. (Absent such an admission, employers can—and do—break
the law with impunity.)
Estimates of the illegal alien workforce range from 7.2 million ( Pew
Hispanic Center) to 20 million (Bear Stearns) The consensus gravitates
to between 8 to 9 million—a figure strikingly close to the gap between
the two employment surveys.
The illegal immigrant labor force may be the missing link between
apparently strong economic data and weak economic reality—for American
workers, if not for American capitalists.
----------------------------------------------------
Edwin S. Rubenstein (email him) is President of ESR Research Economic
Consultants in Indianapolis.
The articles on VDARE.com are brought to you by the Lexington Research
Institute and The Center for American Unity. We are supported by
generous donations from our readers. Contributions are tax deductible
and appreciated. Contribute...
--
.
|
|
|
Related Articles |
|
|
