
How the Recession Reshaped the Economy, in 255 Charts (2014) - Kortaggio
http://www.nytimes.com/interactive/2014/06/05/upshot/how-the-recession-reshaped-the-economy-in-255-charts.html
======
smackay
A very interesting set of graphs but it takes quite a bit of time to digest
the information presented. The most interesting part, which is not immediately
obvious until you start checking the graphs individually is how little wages
have grown over the past 10 years. Even in booming sectors such as pet
grooming, etc. today will will be earning essentially the same wage as you
were 9 years ago.

The growth in (mostly) all-things related to software is not much of a
surprise, though that old gas related activity was the only other bright spot
in the economy (more jobs, higher wages) was. However, even in software,
average wages are increasing, but not by a lot. Obviously the average wage is
probably not that informative but perhaps it does point to a fundamental limit
in human productivity that will only be overcome with better tools and
techniques.

~~~
larzang
Wage stagnation isn't just the last decade, it stretches back 40 years, and it
has nothing to do with limits in productivity.

In inflation adjusted terms, worker productivity has increased almost 75%
between 1973 and 2013, while compensation for production workers has increased
less than 10%. Wages at the top 1% have grown 138% since 1979 compared to 15%
for the bottom 90%, and it gets direr if you start looking at the bottom 50%
(stagnant) or bottom 10% (5% decrease) instead.

Our economy is producing more and more, we are far from hitting any kind of
limits on productivity, but it's only enriching a select few while the vast
majority deal with flat income and ever-rising cost of living.

[http://www.epi.org/publication/charting-wage-
stagnation/](http://www.epi.org/publication/charting-wage-stagnation/)

~~~
rory096
Just gonna rip this straight from an /r/Economics comment yesterday:

>Using wages as a picture welfare is unproductively restrictive. Using total
compensation yields a very different
picture.([http://i.imgur.com/nCCCuSC.png](http://i.imgur.com/nCCCuSC.png))
Real compensation accounts for all forms of income paid to employees,
including health care costs and defined contribution plans. Additionally, the
CPI overstates inflation, and changing household dynamics/other forms of
income ([https://www.minneapolisfed.org/publications/the-
region/where...](https://www.minneapolisfed.org/publications/the-region/where-
has-all-the-income-gone)) have substantive implications for any picture of
overall income growth. Context matters for how we should view these
trends.([http://www.igmchicago.org/igm-economic-experts-panel/poll-
re...](http://www.igmchicago.org/igm-economic-experts-panel/poll-
results?SurveyID=SV_dbvXvc4ED41vtv7))

[https://www.reddit.com/r/Economics/comments/3by8tb/elizabeth...](https://www.reddit.com/r/Economics/comments/3by8tb/elizabeth_warren_the_average_family_in_the_bottom/csqnpop)

~~~
TheOtherHobbes
Unfortunately that's clearly sophistry. The money is being spent
involuntarily, for benefits the recipients has no control over, with little or
no market leverage, priced in ways that aren't genuinely open to competition.

It shouldn't take much thought to realise that's exactly how taxation works.

So effectively that argument simply treats benefits that would be funded from
taxation in more rationally managed countries as somehow _magically equivalent
to private income._

Clearly, that's not even _good_ sophistry - although it's about par for the
course for a modern orthodox economic argument, so I suppose no one is going
to be surprised by the low quality.

~~~
refurb
Those benefits aren't funded from taxation, they are funded by your employer.
And they most certainly count as compensation. If your employer promised you a
full pension, wouldn't you consider that a part of compensation?

~~~
nmrm2
Parent's argument was that it's disingenuous to count e.g. health insurance as
part of compensation when it's required by the State. That's not private
compensation, it's a tax on corporations.

Post-ACA, a company calling health insurance part of your compensation package
is like them calling payroll tax part of your compensation. Which almost no
one does historically, because that's stupid.

It's not reasonable to argue that "real compensation" has increased between
year X and year Y by counting tax burdens in year Y but not in year X. The
reason that such a comparison is stupid and wrong should be obvious. It's
slightly more reasonable to argue that additional taxes have eaten up
projected wage increases. (But that argument is wrong.)

 _> If your employer promised you a full pension, wouldn't you consider that a
part of compensation?_

The difference here is that the Government more or less never requires a
private company to provide a full pension.

~~~
JesperRavn
So if the government taxed each corporation $1000 per employee, then gave you
that $1000 back at the end of the year, that would mean your wages were less
by $1000 a year?

 _it 's not reasonable to argue that "real compensation" has increased between
year X and year Y by counting tax burdens in year Y but not in year X._

It is when the government introduces new "taxes" in year Y, which would have
been equivalent to salary in year X.

~~~
nmrm2
_> It is when the government introduces new "taxes" in year Y, which would
have been equivalent to salary in year X. _

This is a different argument and I've already addressed it in my post above:

 _It 's slightly more reasonable to argue that additional taxes have eaten up
projected wage increases. (But that argument is wrong.)_

Again, the argument you are making is that taxes offset increases in income
that would have increased otherwise, _NOT_ that income has actually increased.

But, as I stated above, this argument is clearly and obviously wrong -- a
conclusion that is unambiguously supported by the data. Tax increases cannot
explain a multi-decade stagnation in income, _ESPECIALLY_ because _NET_
corporate taxes have net decreased in that period of time [1].

(As a complete aside, when every corporate tax break is passed on to either
the customer or the employee, I'll be ready to entertain even the criteria I
established above. But while companies pocket the difference and perform stock
buy backs [2], economists who argue tax increases count as increases in income
are being disingenuous (edit: changed wording).

[1]
[https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_St...](https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States#/media/File:US_Effective_Corporate_Tax_Rate_1947-2011_v2.jpg)

[2] Clinton mentioned that H.W. Bush warned him not to provide a no-strings-
attached tax holiday for this exact reason; see his latest interview on the
Daily Show.

~~~
JesperRavn
Please be civil, I'm not going to "fuck off" just because you argue in an
aggressive manner.

All your verbal arguments are obfuscation. This is simple arithmetic.

What we would _like_ to measure is the total post-tax and post-govt spending
utility of a person:

total utility = post-tax compensation + govt spending per person.

That is what should be going up. But it's hard to measure all these things, so
instead we can try to measure total compensation. When you redefine health
care to be a tax, you are moving health care from the "post-tax compensation"
category, to the "govt spending per person" category. Then you are arguing
that post-tax compensation is going down, but that is just because of your
accounting choice.

Your logic would only apply if the government was initially providing free
healthcare, and then moved to a regime where healthcare was provided by
employers, which is not what happened. The problem with your reasoning is that
it deals with everything _except_ economic fundamentals, i.e. total
consumption per person.

~~~
nmrm2
_> Please be civil, I'm not going to "fuck off"_

Sorry, I didn't mean you specifically (unless you're an economist, I guess).
You're right though, I've changed the wording.

 _> Your logic would only apply if the government was initially providing free
healthcare, and then moved to a regime where healthcare was provided by
employers, which is not what happened._

The government shifted the responsibility for insurance from individuals to
corporations. Fact: if a company does not provide insurance, then they pay a
tax. Fact: SCOTUS called this requirement a tax.

 _> The problem with your reasoning is that it deals with everything except
economic fundamentals, i.e. total consumption per person._

The problem with your argument is that you assume that taxes attached to
empoyment are somehow different from other taxes, and ignore the fact that
businesses have benefited from decreased taxes for decades and yet wages have
stagnated. (Edit: Concretely, if I impose a new flat tax on corporate profits,
does that count as "compensation"? No, it doesn't. The issue of how it effects
compensation is separate. Just because a tax is attached to employment doesn't
make that tax part of compensation.)

Again, the issue is dead simple: do increased corporate taxes explain income
stagnation? Given that corporate taxes have in fact _decreased_ over the time
period we are talking about, the causation you're proposed is literally
vacuous ("vacuous" here is a technical description of the problem with your
argument, not an insult).

In general, think of taxes attached to income "use taxes" on the country's
human capital, rather than "mandatory employee compensation". Because
historically we have _never_ included taxes as part of "compensation", and
starting that practice now is uninformative unless we take into account the
global perspective on corporate taxes.

------
tormeh
Very interesting. It seems recessions always accelerate economic shifts. Any
similar articles about Europe?

~~~
danbruc
I can not see much economic shift - in the majority of the cases the trends
pre and post crisis are pretty much the same, they just experienced a dent. A
few show trend changes but this is of course expected when you look at that
many time series.

------
danteembermage
What happened to HR professionals? That was a devastating decline in an
otherwise stable sector.

~~~
nmrm2
If you're looking to shed weight ASAP without undercutting the future of the
organization, HR is an easy target. Maybe not wise, but you can understand how
executives could come to the decision to cut HR before Engineering, for
example.

Also, I'd imagine at least some of the decline is for the same reason we've
seen decline in lots of other sectors -- HR processes are some of the easier
ones to automate (no robotics, often tasks are fairly well defined)

