Why did the US send so much work overseas?

[bwolinsky]

Quote from Renegen:

Well real incomes went up during the 70s, and before. I guess I'll have to pull the charts to make the point, aw man

Thing is, that real incomes should go up because productivity goes up. Corporate profits have certainly gone up more than inflation.

I think you forget the millions of manufactured jobs that were outsourced. Everything that you find in the Wal Mart story basically. It's true we run a trade surplus in services, and a much bigger trade deficit overall.

There you go, it seems the charts go back to 1947 :
http://www.exponentialimprovement.com/cms/uploads/productivity_compensationtrend192ndgraph2_002.jpg
Says the data is even from the BLS and BEA.

http://www.exponentialimprovement.com/cms/wealthhappens.shtml

Neither one of those charts are from a credible source. If it's not from the government, I don't trust it. Bullshit that's from the BLS and BEA. There's not any charts I've found that ever showed that.

 

[Renegen]

Quote from bwolinsky:

Neither one of those charts are from a credible source. If it's not from the government, I don't trust it. Bullshit that's from the BLS and BEA. There's not any charts I've found that ever showed that.

Click on the second link, go to the chart and right under it, it says who it's from and even the name of the person who did it! You could contact him.

I guess globalization spreads the opportunities around, now not only the US and Europe have a monopoly on technology and innovation, but for now it has also brought a big change in America's job market. People will keep losing their jobs until wages are the same everywhere in the world, and with regulations starkly different in different countries (like China), will that ever happen? The Chine are not for free trade, they're in for themselves.

 

[Cache Landing]

Quote from bwolinsky:

Go find one, because I guarantee you won't discover anything that even remotely supports that claim.

Yeah, real incomes have averaged about 1% growth annually since the mid 70's. I pulled the actual census data. But I do believe that real GDP growth outpaced that.

{edit} yep just pulled the real GDP growth at almost 3% annually

 

[Cache Landing]

Thought about it a bit more and population growth makes up for the disparity between income growth and GDP growth.

Turns out that the job market has been growing at a much faster than expected rate, given that more women are entering the work force. So the job market is actually growing faster than the population.

When I calculated for the increase in the number of people reporting income domestically, and then adjusted both incomes and GDP for inflation I end up with the following for the period starting 1969 and ending 2008.

Real GDP has grown at a rate of 2.7% annually.

Mean real income has grown at 2.312%.

Median real income has grown at 1.9%.


Total payouts have been growing at 2.312% annually

 

[ByLoSellHi]

I'm really not trying to be redundant, but back in the 70's, while we had cyclical recessions, we didn't have a massive and permanent structural change to the U.S. economy like we have in the last decade or so. In the 70s, people at factories, tool and die and machine shops, etc., may have been laid off, but they were rehired when things picked back up. Now, their former factories closed down and are for sale, as Chinese and Mexican facilities have replaced them.

Construction booming hid the warts from about 2002 to 2007, as people laid off in other industries got jobs as carpenters, electricians, excavators, plumbers, realtors, mortgage brokers, bank loan officers, etc., but now that this has crashed, the warts and permanent destruction is quite visible.

In the 1930s, there was a light at the end of the tunnel: WWII, where we had more than full employment, as even women were building tanks and fighter planes and bombers, due to the shortage of male labor.

When the men got back after WWII, Japan, Germany, England, Russia, France, Italy - all decimated with factories blown to smithereens - America was the only center of production available, and we built everything, from cars to planes to TVs to washers and dryers and christmas tree lights, for a long, long time.

 

[Cache Landing]

Quote from Cache Landing:

Thought about it a bit more and population growth makes up for the disparity between income growth and GDP growth.

Turns out that the job market has been growing at a much faster than expected rate, given that more women are entering the work force. So the job market is actually growing faster than the population.

When I calculated for the increase in the number of people reporting income domestically, and then adjusted both incomes and GDP for inflation I end up with the following for the period starting 1969 and ending 2008.

Real GDP has grown at a rate of 2.7% annually.

Mean real income has grown at 2.312%.

Median real income has grown at 1.9%.


Total payouts have been growing at 2.312% annually

So yes, according to the median income numbers, the gap between the rich and the poor is getting larger. But one thing to consider is that the numbers don't factor in all the workers on payroll in foreign countries. They make up less than 5% of all jobs, but that is still worth noting, as the pay for those individuals has been rising at a much faster pace than domestic incomes. For example India is seeing pay increases at about 12% annual.

What it comes down to according to the actual numbers is that incomes are very much keeping up with productivity increases. Unfortunately for the poor, they aren't benefiting as much as those who make over $35K a year.

 

[Random.Capital]

Quote from Cache Landing:

{edit} yep just pulled the real GDP growth at almost 3% annually

Would be interesting to see GDP growth normalized to debt growth over the past 3 decades or so. The data is available, I just haven't had a chance to put it together yet.

 

[fkbsuhites]

http://politics.theatlantic.com/2009/09/closing_the_book_on_the_bush_legacy.php

When Bill Clinton left office after 2000, the median income-the income line around which half of households come in above, and half fall below-stood at $52,500 (measured in inflation-adjusted 2008 dollars). When Bush left office after 2008, the median income had fallen to $50,303. That's a decline of 4.2 per cent.


The median household income increased during the two terms of Clinton (by 14 per cent, as we'll see in more detail below), Ronald Reagan (8.1 per cent), and Richard Nixon and Gerald Ford (3.9 per cent). As Mishel notes, although the global recession decidedly deepened the hole-the percentage decline in the median income from 2007 to 2008 is the largest single year fall on record-average families were already worse off in 2007 than they were in 2000, a remarkable result through an entire business expansion. "What is phenomenal about the years under Bush is that through the entire business cycle from 2000 through 2007, even before this recession...working families were worse off at the end of the recovery, in the best of times during that period, than they were in 2000 before he took office,"


Now that's from a well researched book available for purchase to READ in your leisure time.


I don't expect you to refute anything stated here with FACTS, FIGURES or LOGIC. After all, we all know by now that Facts, Figures and Logic are trivial and meaningless pursuits for those who believe the earth is flat and 6000 years old.

Quote from Maverickz:

You need to replace the word Republican with Democrat and you have this part right.

It's the Dems that want to obliterate the middle class and make everyone illiterate and dependent on Democrat supported government programs like welfare to entrap them into having to vote Democratic (to keep the programs they are now dependent on) and thus locking the Dems into power...perpetually.

 

[Cache Landing]

Quote from fkbsuhites:

http://politics.theatlantic.com/2009/09/closing_the_book_on_the_bush_legacy.php

When Bill Clinton left office after 2000, the median income-the income line around which half of households come in above, and half fall below-stood at $52,500 (measured in inflation-adjusted 2008 dollars). When Bush left office after 2008, the median income had fallen to $50,303. That's a decline of 4.2 per cent.


The median household income increased during the two terms of Clinton (by 14 per cent, as we'll see in more detail below), Ronald Reagan (8.1 per cent), and Richard Nixon and Gerald Ford (3.9 per cent). As Mishel notes, although the global recession decidedly deepened the hole-the percentage decline in the median income from 2007 to 2008 is the largest single year fall on record-average families were already worse off in 2007 than they were in 2000, a remarkable result through an entire business expansion. "What is phenomenal about the years under Bush is that through the entire business cycle from 2000 through 2007, even before this recession...working families were worse off at the end of the recovery, in the best of times during that period, than they were in 2000 before he took office,"


Now that's from a well researched book available for purchase to READ in your leisure time.


I don't expect you to refute anything stated here with FACTS, FIGURES or LOGIC. After all, we all know by now that Facts, Figures and Logic are trivial and meaningless pursuits for those who believe the earth is flat and 6000 years old.

I can't believe I'm gonna even remotely defend the economics during the Bush terms, but your source has done what all people do when they have an agenda they are trying to push. Misrepresenting the worst piece of data they can find, and implying that it was typical of the entire period.

In this case the cited material is household income. But the author doesn't make the disclaimer that household income is affected dramatically by the number of people with income in each household. Household income is useful, but not very indicative of the success of economic policies. Rather the real income of an individual worker is much more useful and representative there.

When Clinton left office the Median Individual income was $26,900. During the Bush term it peaked in 2007 @ $27,650 but then dropped down to $26,513 in 2008.

A break-down of real annual income growth during each presidency is as follows..

Bush = -0.181%
Clinton = 2.28%
Bush Sr. = -0.251%
Reagan = 1.689%
Carter = -1.774%

Then we have to be realistic. Your source then tries to claim that incomes were not increasing during the expansion phase of the Bush term. That is just plain false, and misrepresentation of fact. Realistically, Bush policies had nothing to do with the Dot com problems which lasted all the way through 2003. The expansion phase which it refers to only took place from 2004-2007, during which time real individual income rose by 1.1% annually.

To be honest, the fact that the author lumps two recessions in with the expansion phase to show that there was "no growth" during that phase is pretty sleazy. Unfortunately, the same thing is gonna happen to Obama. Real income growth is gonna be negative during the first couple years of his term, and there will undoubtedly be an article claiming that it was somehow a result of his failed policy.

 

[Cache Landing]

To illustrate the problem with using household income a little better. During the Clinton terms, the number of women in the work force increase by almost 9%. While during the Bush terms, the number of women in the work force increased by only 4.5%.