The Economy You Feel, Not the One You’re Told About – A Last Wire Five-Part Special Series

[Luis Gonzalez]

The Economy You Feel, Not the One You’re Told About – A Last Wire Five-Part Special Series

Part One: The Policies That Broke the Paycheck

The U.S. economy has grown in recent years, with headlines touting record GDP, rising corporate profits, and soaring stock markets. For many Americans, however, these numbers tell a very different story. Most households are still stretching paychecks to cover essentials, grappling with higher costs for housing, healthcare, and education, and struggling to save. Understanding this disconnect requires examining decades of policy decisions, pandemic-era interventions, and structural economic forces that together reshaped the financial landscape for wage earners.

1. The Productivity-Wage Gap
For much of the postwar era, workers’ wages broadly tracked productivity. As workers produced more value per hour, they saw a proportional rise in pay. Beginning in the late 1970s, this link weakened. Productivity continued to rise steadily, but median wages slowed dramatically.

Data shows the gap clearly. According to the Bureau of Labor Statistics, nonfarm business productivity rose roughly 12–15 percent over the past decade alone. Meanwhile, median real wages for typical workers grew by only 0–3 percent over the same period.
Source: BLS Productivity Data

The Congressional Research Service highlights structural shifts in labor markets, globalization, automation, and a declining labor share of income as key factors.
Source: CRS Labor Share Analysis

Household impact: Workers are producing more value than ever, but most do not see the financial benefit. Every year that wages lag productivity compounds the income gap, leaving households with less purchasing power over time. Even workers who own some assets still feel this gap in their day-to-day finances, because wages remain their primary source of income.

Continue reading at The Last Wire

[DefiantMassRINO]

Feelings of insecurity that affect human behaviors - including economic ones - do not show up in traditional statistics.

The ripples of the last Government shutdown are still permeating the economy.  The ripples of the next potential Government shutdown are already permeating the economy as organizations trim payrolls by eliminating unfilled positions, laying off contractors, asking people to use more PTO time (which comes from a different fiscal budget, creative accounting), and making plans for cutting more contractors, furloughs, and layoffs.

When you see the person next to you let go, it's only natural to ask "Am I next?"

[Luis Gonzalez]

Feelings of insecurity that affect human behaviors - including economic ones - do not show up in traditional statistics.

I wanted to do this series so that a better understanding can be reached by those who don’t understand the disconnect between a jamming economy and the fact that most Americans don’t feel that.

I set out to set up a solid argument about politicians running on “affordability” as an issue when the reason that there is an issue to begin with, is them.

Hopefully, some people will read all the stuff in the series and my bottomless hunger for overt nerdiness did not load the articles up with so much minutiae that they become boring.

[DefiantMassRINO]

If you primarily earn via Capital Gains, you are better off in the past 35 years.

If you primariy earn via wages or fixed income, you are worse off in the past 35 years.

The Federal Reserve precipitates a recession every time wages rise to prevent a repeat of the wage inflation of the 1970s.

Just as workers' paychecks start catching up to Real Inflation, the Federal Reserve has raised interest rates to slow economic activity, including hiring, to prevent wages from rising.

Between Globalist Trade Policies and the Federal Reserve's obsession with wage inflation, it has been the policy of the United States Government to supress the wages of working persons for the past 35 years.

Harvard Business School does not give MBA's for generosity.  It's about the shareholders, shareholders, and shareholders.  The addtional profit form productivity gains goes to shareholders, not the workers.

There sectors in the economy that having rising prices while experiencing little to no productivity gain - Goverment, Healthcare, Education.

Local Governments have used zoning laws to take available land for additional housing off the market, designating it as 'historic', 'preservation', 'wildlife', or 'historic'.

State Government has restricted the available land for development by setting it aside as 'state forest', 'state parks', 'state recreation areas', etc.  Railroad rights of way that have been landbanked have been converted into recreational 'rail trails'.  Those rights of way would be put to better use for utlity rights of way - more piplines, more electricity transmission lines.

For the past 35 years, at least, it has been Government policy to inflict economic harm upon wage earners while preferencing capital gains and increasing Government control of education and healthcare.

It is no accident that three sectors that are heavily unionized and heavily government regulated - Government, Education, Healthcare - have seen costs rise faster than Cost-Of-Living without commensurate increases in productivity and efficiencies.

Prescription Drug prices are high because Government permits anti-competitive collusion and racketeering  among 'pharmacy benefit managers' and pharmaceutical companies,  It was not accident that Senator Joe Manchin's daughter was the CEO of Mylan when they increase the price of EpiPens 400%.

We have the system we have because those with wealth, power, and influence are benfiting from it.  Every once in a while they throw us a bone to prevent outright revolution by the unwashed masses.  This is where political devisiveness serves them well by dividing the popular oppostion to the current economic regime into competing factions who fight each other, instead of Too Big To Exist.

My rant has run its course.

[DB]

"While wage earners struggled, those holding assets experienced substantial gains. Housing prices, stock portfolios, and business valuations soared."

Did those assets actually increase in value substantially or is it just in terms of dollars that are worth less? Taking more dollars to represent the same value. Nearly all assets dropped in value compared to gold for example.

The other killer with inflation is everyone pays more in taxes as a percentage of their income by moving up in brackets while their purchasing power declines.

[DefiantMassRINO]

Housing prices are also increasing because of investor companies that purchase single-family and multi-family properties to be rented.  This removes inventory available for purchse by owner-occupants.

In the wake of the 2008/2009 Financial Crisis, foreclosed residential properties were auctioned to investors.  In the wake of the real estate crash and bank failures of 1990-1991-1992, the FDIC established a Resolution Trust Company to sell foreclosed properties to owner-occupants, not Wall Street banksters.

[Luis Gonzalez]

"While wage earners struggled, those holding assets experienced substantial gains. Housing prices, stock portfolios, and business valuations soared."

Did those assets actually increase in value substantially or is it just in terms of dollars that are worth less? Taking more dollars to represent the same value. Nearly all assets dropped in value compared to gold for example.

The other killer with inflation is everyone pays more in taxes as a percentage of their income by moving up in brackets while their purchasing power declines.

That is a question that’s coming up in future installments

[libertybele]

If you primarily earn via Capital Gains, you are better off in the past 35 years.

If you primariy earn via wages or fixed income, you are worse off in the past 35 years.

The Federal Reserve precipitates a recession every time wages rise to prevent a repeat of the wage inflation of the 1970s.

Just as workers' paychecks start catching up to Real Inflation, the Federal Reserve has raised interest rates to slow economic activity, including hiring, to prevent wages from rising.

Between Globalist Trade Policies and the Federal Reserve's obsession with wage inflation, it has been the policy of the United States Government to supress the wages of working persons for the past 35 years.

Harvard Business School does not give MBA's for generosity.  It's about the shareholders, shareholders, and shareholders.  The addtional profit form productivity gains goes to shareholders, not the workers.

There sectors in the economy that having rising prices while experiencing little to no productivity gain - Goverment, Healthcare, Education.

Local Governments have used zoning laws to take available land for additional housing off the market, designating it as 'historic', 'preservation', 'wildlife', or 'historic'.

State Government has restricted the available land for development by setting it aside as 'state forest', 'state parks', 'state recreation areas', etc.  Railroad rights of way that have been landbanked have been converted into recreational 'rail trails'.  Those rights of way would be put to better use for utlity rights of way - more piplines, more electricity transmission lines.

For the past 35 years, at least, it has been Government policy to inflict economic harm upon wage earners while preferencing capital gains and increasing Government control of education and healthcare.

It is no accident that three sectors that are heavily unionized and heavily government regulated - Government, Education, Healthcare - have seen costs rise faster than Cost-Of-Living without commensurate increases in productivity and efficiencies.

Prescription Drug prices are high because Government permits anti-competitive collusion and racketeering  among 'pharmacy benefit managers' and pharmaceutical companies,  It was not accident that Senator Joe Manchin's daughter was the CEO of Mylan when they increase the price of EpiPens 400%.

We have the system we have because those with wealth, power, and influence are benfiting from it.  Every once in a while they throw us a bone to prevent outright revolution by the unwashed masses.  This is where political devisiveness serves them well by dividing the popular oppostion to the current economic regime into competing factions who fight each other, instead of Too Big To Exist.

My rant has run its course.

'

Your "rant" is spot on!

[Luis Gonzalez]

Housing prices are also increasing because of investor companies that purchase single-family and multi-family properties to be rented.  This removes inventory available for purchse by owner-occupants.

In the wake of the 2008/2009 Financial Crisis, foreclosed residential properties were auctioned to investors.  In the wake of the real estate crash and bank failures of 1990-1991-1992, the FDIC established a Resolution Trust Company to sell foreclosed properties to owner-occupants, not Wall Street banksters.

The more I read up and researched, the further I went back. While all figures used to illustrate the impact on our dollars today, real estate assets values increases seemed to outpace inflation.

Coming in future installments.

I broke it up into five pieces to leave reading time per installment to @ 5 minutes. 

[libertybele]

"While wage earners struggled, those holding assets experienced substantial gains. Housing prices, stock portfolios, and business valuations soared."

Did those assets actually increase in value substantially or is it just in terms of dollars that are worth less? Taking more dollars to represent the same value. Nearly all assets dropped in value compared to gold for example.

The other killer with inflation is everyone pays more in taxes as a percentage of their income by moving up in brackets while their purchasing power declines.

No assets didn't actually increase in value- the dollar is worth less.

Gold is something definitely worth hanging on to though there is a difference in opinion right now that gold is overvalued and will begin to plummet rather than rise and silver is the precious metal that's going to skyrocket.  I say hang on to both or buy more if you are able.

[roamer_1]

I think the article is wrong-headed - Particularly because it doesn't sample inflation as part of the problem.

They look only at employed as a percentage of a gross, without looking at the rest of the pie. Material costs also cost more with that stretched out dollar. So do tools and machinery, properties, vehicles, services - The whole thing costs more with a stretched dollar, to get a profit in dollars that are already stretched 3% more before you even earn them.

Another thing that costs WAY more are the leeches - Government and insurance - as the risk goes up and up, and the pressure gets greater and greater, everybody wants to - has to- protect against risk... But when you take away risk, you take away profit.

As a small business owner and employer almost all my life, I can tell you this: If I had it to do over again, I would build a business that didn't require employees. Employees are without a doubt, the most trouble, and the least profitable segment of business.

If I had it to do over again I wouldn't employ a soul. Not worth it.

[libertybele]

The more I read up and researched, the further I went back. While all figures used to illustrate the impact on our dollars today, real estate assets values increases seemed to outpace inflation.

Coming in future installments.

I broke it up into five pieces to leave reading time per installment to @ 5 minutes.

I enjoy your writing @Luis Gonzalez  - thought provoking and at the same some good information, there is no doubt that you are a talented writer!

[libertybele]

I think the article is wrong-headed - Particularly because it doesn't sample inflation as part of the problem.

They look only at employed as a percentage of a gross, without looking at the rest of the pie. Material costs also cost more with that stretched out dollar. So do tools and machinery, properties, vehicles, services - The whole thing costs more with a stretched dollar, to get a profit in dollars that are already stretched 3% more before you even earn them.

Another thing that costs WAY more are the leeches - Government and insurance - as the risk goes up and up, and the pressure gets greater and greater, everybody wants to - has to- protect against risk... But when you take away risk, you take away profit.

As a small business owner and employer almost all my life, I can tell you this: If I had it to do over again, I would build a business that didn't require employees. Employees are without a doubt, the most trouble, and the least profitable segment of business.

If I had it to do over again I wouldn't employ a soul. Not worth it.

At the same time @roamer_1 didn't your employees help you make money???  Sure they need to be paid and that's overhead, but wasn't production up??

[DB]

The more I read up and researched, the further I went back. While all figures used to illustrate the impact on our dollars today, real estate assets values increases seemed to outpace inflation.

Coming in future installments.

I broke it up into five pieces to leave reading time per installment to @ 5 minutes.

One reason real estate outpaced the official inflation numbers is that easy money throughout 2003-2008 caused a major warping of values. Cheap dollars lowered the payment making a higher price for the same property possible. That led to a perceived increase in value of real estate that was greater than the cost of money to acquire it via borrowed money. A circular feeding frenzy that damaged or destroyed many lives.

[Bigun]

If you primarily earn via Capital Gains, you are better off in the past 35 years.

If you primariy earn via wages or fixed income, you are worse off in the past 35 years.

The Federal Reserve precipitates a recession every time wages rise to prevent a repeat of the wage inflation of the 1970s.

Just as workers' paychecks start catching up to Real Inflation, the Federal Reserve has raised interest rates to slow economic activity, including hiring, to prevent wages from rising.

Between Globalist Trade Policies and the Federal Reserve's obsession with wage inflation, it has been the policy of the United States Government to supress the wages of working persons for the past 35 years.

Harvard Business School does not give MBA's for generosity.  It's about the shareholders, shareholders, and shareholders.  The addtional profit form productivity gains goes to shareholders, not the workers.

There sectors in the economy that having rising prices while experiencing little to no productivity gain - Goverment, Healthcare, Education.

Local Governments have used zoning laws to take available land for additional housing off the market, designating it as 'historic', 'preservation', 'wildlife', or 'historic'.

State Government has restricted the available land for development by setting it aside as 'state forest', 'state parks', 'state recreation areas', etc.  Railroad rights of way that have been landbanked have been converted into recreational 'rail trails'.  Those rights of way would be put to better use for utlity rights of way - more piplines, more electricity transmission lines.

For the past 35 years, at least, it has been Government policy to inflict economic harm upon wage earners while preferencing capital gains and increasing Government control of education and healthcare.

It is no accident that three sectors that are heavily unionized and heavily government regulated - Government, Education, Healthcare - have seen costs rise faster than Cost-Of-Living without commensurate increases in productivity and efficiencies.

Prescription Drug prices are high because Government permits anti-competitive collusion and racketeering  among 'pharmacy benefit managers' and pharmaceutical companies,  It was not accident that Senator Joe Manchin's daughter was the CEO of Mylan when they increase the price of EpiPens 400%.

We have the system we have because those with wealth, power, and influence are benfiting from it.  Every once in a while they throw us a bone to prevent outright revolution by the unwashed masses.  This is where political devisiveness serves them well by dividing the popular oppostion to the current economic regime into competing factions who fight each other, instead of Too Big To Exist.

My rant has run its course.

Your rant is excellent and raises the question:

What is the root cause?

I think Luis will get to it eventually.

[DB]

I think the article is wrong-headed - Particularly because it doesn't sample inflation as part of the problem.

They look only at employed as a percentage of a gross, without looking at the rest of the pie. Material costs also cost more with that stretched out dollar. So do tools and machinery, properties, vehicles, services - The whole thing costs more with a stretched dollar, to get a profit in dollars that are already stretched 3% more before you even earn them.

Another thing that costs WAY more are the leeches - Government and insurance - as the risk goes up and up, and the pressure gets greater and greater, everybody wants to - has to- protect against risk... But when you take away risk, you take away profit.

As a small business owner and employer almost all my life, I can tell you this: If I had it to do over again, I would build a business that didn't require employees. Employees are without a doubt, the most trouble, and the least profitable segment of business.

If I had it to do over again I wouldn't employ a soul. Not worth it.

I think I'm on the opposite page on employees... In spite of the many issues of having them. I was far too slow at recognizing that I needed to hire people instead of trying to do nearly everything myself. Employees are required to expand a business to something more robust and profitable than a single person can do.

[DB]

Your rant is excellent and raises the question:

What is the root cause?

I think Luis will get to it eventually.

Government first and "creative" banking second.

[Bigun]

Government first and "creative" banking second.

In the interest of letting Luis get his series out there, I'm going to hold my tongue for now.

[roamer_1]

Another thing... When you're young and hungry, you don't have the money to play, so you have to figure out how to skin that cat anyway...

Service trucks - I couldn't afford to lease. And no way was I going to buy new. The paint business destroys pretty trucks.

But, I bought Dodge Caravans, used... broken. Turn out there's a couple zillion of them laying around with 100,000 miles and a busted tranny.

I could buy em for under 500 bucks, pay my mechanic 1000 bucks, and have a great little runner-driver van that would easy go 50,000.

I needed a forklift. I went and bought an old Hyster from the 50's and restored it. Pennies on the dollar compared to new.

My point being that the used market well has been poisoned. The old, good stuff ain't there anymore, and the new stuff ain't worth fixing, and would cost too much to fix, if you could fix it - A whole lot of it, the parts are deprecated and made obsolete in 5-10 years... there is miles and miles of wiring that cannot be replaced... Purposeful and I believe, government required and planned, obsolescence.

It is getting way to hard to get into business, as the big pig players monopolize, and protect their share... In a disastrously over-regulated, materially driven market.

[DB]

Another thing... When you're young and hungry, you don't have the money to play, so you have to figure out how to skin that cat anyway...

Service trucks - I couldn't afford to lease. And no way was I going to buy new. The paint business destroys pretty trucks.

But, I bought Dodge Caravans, used... broken. Turn out there's a couple zillion of them laying around with 100,000 miles and a busted tranny.

I could buy em for under 500 bucks, pay my mechanic 1000 bucks, and have a great little runner-driver van that would easy go 50,000.

I needed a forklift. I went and bought an old Hyster from the 50's and restored it. Pennies on the dollar compared to new.

My point being that the used market well has been poisoned. The old, good stuff ain't there anymore, and the new stuff ain't worth fixing, and would cost too much to fix, if you could fix it - A whole lot of it, the parts are deprecated and made obsolete in 5-10 years... there is miles and miles of wiring that cannot be replaced... Purposeful and I believe, government required and planned, obsolescence.

It is getting way to hard to get into business, as the big pig players monopolize, and protect their share... In a disastrously over-regulated, materially driven market.

I used eBay for decades (and still do from time to time) to buy used equipment, typically 10 cents on the dollar (or less). That was a bridge to bigger and better things.

[andy58-in-nh]

Well done and entirely informative.

A few takeaways:

1. Inflation is not an accident; it is official government policy.
2. Inflation is not linear in nature, it compounds over time and is essentially irreversible.
3. Wage growth cannot hope to keep pace with inflation because labor is only one business expense of many. In the face of rising costs, businesses must control what they reasonably can in order to
    compete.
4. Because wages are more directly within their ability to control (as opposed to other expenses like electricity, rent, insurance and inventory/raw materials), they are tamped down while enterprise
    managers seek alternatives (automation and productivity enhancements).
5. Privately-owned companies do not have shareholders, but rather owners, who rationally seek to maximize their profits in whatever way they can. Also: taxes on business are not paid by companies,
    but by their customers (higher prices), employees (lower salaries) and vendors (smaller contracts), so inflationary policy winds up robbing all involved, to a greater extent.
6. Publicly-traded companies must also pass on increased costs to shareholders, reducing the value of their investments. 
7. Government mandates and regulations are not "inflation" in the sense of a reduced purchasing power of the currency. But they feel exactly the same way. Higher prices, lower wages.   

[roamer_1]

At the same time @roamer_1 didn't your employees help you make money???  Sure they need to be paid and that's overhead, but wasn't production up??

No. Not enough to make the difference. Employees are massive risk. Massive. one thing that is not accounted is damage they may do - That they get paid to do, that I get to warranty.

And scheduling is a nightmare, with all the soap opera bullshit - this guy can't work with that guy, that other guy is no good on ladders - Any given day one of em ain't gonna show up, and maybe you have to go fetch him, because he's broke down on the side of the road - which repurposes a truck and trailer and a couple more guys. One continual drama-fest in ALL CAPS.

And the ramp in pressure -  Twenty grand *JUST* to make payroll - and you have to make that happen whether the money is there or not - With uncle nanny as a permanent resident in one of your orifices.

Rolling that much guaranteed money per month means booking a couple years forward and landing on your marks every time, because you are stacked so hard that you CAN'T miss. But you WILL miss, because one of them dum azzoles will get too drunk and get thrown in jail.

No, that lemon ain't worth the squeeze.

[Bigun]

Well done and entirely informative.

A few takeaways:

1. Inflation is not an accident; it is official government policy.
2. Inflation is not linear in nature, it compounds over time and is essentially irreversible.
3. Wage growth cannot hope to keep pace with inflation because labor is only one business expense of many. In the face of rising costs, businesses must control what they reasonably can in order to
    compete.
4. Because wages are more directly within their ability to control (as opposed to other expenses like electricity, rent, insurance and inventory/raw materials), they are tamped down while enterprise
    managers seek alternatives (automation and productivity enhancements).
5. Privately-owned companies do not have shareholders, but rather owners, who rationally seek to maximize their profits in whatever way they can. Also: taxes on business are not paid by companies,
    but by their customers (higher prices), employees (lower salaries) and vendors (smaller contracts), so inflationary policy winds up robbing all involved, to a greater extent.
6. Publicly-traded companies must also pass on increased costs to shareholders, reducing the value of their investments. 
7. Government mandates and regulations are not "inflation" in the sense of a reduced purchasing power of the currency. But they feel exactly the same way. Higher prices, lower wages.   

IMHO it all boils down to three things @andy58-in-nh

The Federal Reserve Act, the Marxist income tax system, and Wickard v. Filburn, 317 U.S. 111 (1942).

[roamer_1]

I think I'm on the opposite page on employees... In spite of the many issues of having them. I was far too slow at recognizing that I needed to hire people instead of trying to do nearly everything myself. Employees are required to expand a business to something more robust and profitable than a single person can do.

Exception: A good, bullet-proof, battleaxe secretary that can run your office. That would have taken 30% or the weight off me, which I found out late in the game. I prided myself that my office only cost 2% of company gross - But that was a serious mistake. I should have taken Peter's share, and that would have covered at least one (maybe two) office chicks.

In my defense, all my family is in business (I mean all), and all of em, their wives run the show. My wife proved incapable, and didn't want it - I guess my counselors and I never figured out how to handle that.

But office chicks is the obvious answer. Totally blind to it at the time.

But no, if I had it to do over again, I think I would play a nice little jobber machine shop, full of CAD production tools, right inn my back yard. No employees. A trusted group of long-term clients. Trusted suppliers I can make word with over the phone.

[roamer_1]

I used eBay for decades (and still do from time to time) to buy used equipment, typically 10 cents on the dollar (or less). That was a bridge to bigger and better things.

Oh, me too - This box I am typing on is an off-lease bought from ebay. 

[Luis Gonzalez]

Well done and entirely informative.

A few takeaways:

1. Inflation is not an accident; it is official government policy.
2. Inflation is not linear in nature, it compounds over time and is essentially irreversible.
3. Wage growth cannot hope to keep pace with inflation because labor is only one business expense of many. In the face of rising costs, businesses must control what they reasonably can in order to
    compete.
4. Because wages are more directly within their ability to control (as opposed to other expenses like electricity, rent, insurance and inventory/raw materials), they are tamped down while enterprise
    managers seek alternatives (automation and productivity enhancements).
5. Privately-owned companies do not have shareholders, but rather owners, who rationally seek to maximize their profits in whatever way they can. Also: taxes on business are not paid by companies,
    but by their customers (higher prices), employees (lower salaries) and vendors (smaller contracts), so inflationary policy winds up robbing all involved, to a greater extent.
6. Publicly-traded companies must also pass on increased costs to shareholders, reducing the value of their investments. 
7. Government mandates and regulations are not "inflation" in the sense of a reduced purchasing power of the currency. But they feel exactly the same way. Higher prices, lower wages.   

Take away from my articles?

I love you😆

[Luis Gonzalez]

IMHO it all boils down to three things @andy58-in-nh

The Federal Reserve Act, the Marxist income tax system, and Wickard v. Filburn, 317 U.S. 111 (1942).

Since the Fed took over managing our money, the dollar has lost 98% of its value.

Have I mentioned that money fascinates me?

Wish I had some…

[Luis Gonzalez]

Your rant is excellent and raises the question:

What is the root cause?

I think Luis will get to it eventually.

Getting there Bigun

[roamer_1]

Well done and entirely informative.

A few takeaways:

[...]

5. Privately-owned companies do not have shareholders, but rather owners, who rationally seek to maximize their profits in whatever way they can.

That needs way more emphasis, since the lion's share are employed by small business, in shops with less than 50 employees.

Those ought to be the focus.

[andy58-in-nh]

Take away from my articles?

I love you😆

You had me at "take away". 

[roamer_1]

Another thing to discuss is the lack of loyalty in both directions.

Employers will talk a whole lot like me, finding employees to be the biggest PIA that they deal with... bringing little knowledge or energy into the business, and generally being a necessary evil.

Employees want cradle-to-grave promises, ridiculous wages, and tons of hand holding, like break rooms and child care... They think their sh*t don't stink.

This has lead to a veritable merry-go-round, with head hunters going after anyone desirable, and turnover in 2 or 3 years. Especially noticed in tech.

I was raised to ride for the brand, and give the owner first chance if I got a better offer... And the split, if it happened, was generally amicable.

It ain't like that now.

[DB]

My rule when I was an employee was do more than I was paid for. If you want to advance, that's the way to do it.

[Luis Gonzalez]

Thus graph shows how productivity and income began parting ways. Interestingly enough, they start to truly drift apart after Nixon took the dollar completely of gold.

[DB]

Thus graph shows how productivity and income began parting ways. Interestingly enough, they start to truly drift apart after Nixon took the dollar completely of gold.

The slope of the productivity curve also appears to change upward with each major advancement in technology. The transistor became a major game changer in the late 50's. Integrated circuits using transistors took off in the early 70's. PC's in the 80's and the Internet in the mid 90's. Each of those things changed how we worked dramatically.

[Luis Gonzalez]

The slope of the productivity curve also appears to change upward with each major advancement in technology. The transistor became a major game changer in the late 50's. Integrated circuits using transistors took off in the early 70's. PC's in the 80's and the Internet in the mid 90's. Each of those things changed how we worked dramatically.

Technology increased productivity, but that did not translate into $$ in pocket increases.

[Kamaji]

Thus graph shows how productivity and income began parting ways. Interestingly enough, they start to truly drift apart after Nixon took the dollar completely of gold.

To what extent does the income curve include non-taxable or tax-deferred items, such as pension contributions/benefits, 401(k), and employer-provided health insurance?

[DB]

Technology increased productivity, but that did not translate into $$ in pocket increases.

One could argue that technology improved productivity while using similar effort. And that productivity lowered the cost of the products produced with it making it available to everyone.

[roamer_1]

My rule when I was an employee was do more than I was paid for. If you want to advance, that's the way to do it.

One of the pieces of business wisdom I have held onto is this:

'Worry about the work, and the money will come.'

I do believe that is a principle thing, no matter what you do. I think that principle has been lost by many.

[roamer_1]

It's never, ever about the money - Money is just a way of keeping score.

[The_Reader_David]

Harvard Business School does not give MBA's for generosity.  It's about the shareholders, shareholders, and shareholders.  The addtional profit form productivity gains goes to shareholders, not the workers.

Your rant is in general spot on.  The exception is the paragraph quoted above.  Its about managers, managers, managers (esp. top managers, the denizens of C-Suites).  The professional managerial class is in charge, not the capitalists, the shareholders.  They don't even necessarily pay each other bonuses keyed to delivering shareholder value, that's what EGS and the Davos crowd's "stakeholder capitalism" are about.  Meeting DEI targets or carbon neutrality targets are easier than delivering shareholder value.  It's claimed 80% of the controlling shares in US companies are voted by the fund managers at BlackRock, State Street, Fidelity and Berkshire Hathaway combined. What actual capitalist would offer his management "golden parachutes" that pay them princely sums when they fail to deliver shareholder value and are turfed out?  None.  But managers write such things into other managers contracts, since it's not their money that gets paid to the failure, it's the shareholders' money.

[Luis Gonzalez]

To what extent does the income curve include non-taxable or tax-deferred items, such as pension contributions/benefits, 401(k), and employer-provided health insurance?

That line is strictly wages.

Assets (401K is one) are not included in that calculation.

[Smokin Joe]

My rule when I was an employee was do more than I was paid for. If you want to advance, that's the way to do it.

Mine, too. It worked.

[Smokin Joe]

One of the pieces of business wisdom I have held onto is this:

'Worry about the work, and the money will come.'

I do believe that is a principle thing, no matter what you do. I think that principle has been lost by many.

Yep. Quality, integrity, and a price point that doesn't leave clients feeling scalded. I paid my subcontractors well and promptly paid them and vendors. But underlying it all was quality work.

As for technology, I could type in accepted abbreviations and get full text (word corrected one into the other) and some custom strings of letters would put down full sentences. Great for doing geologic sample descriptions in record time and eliminated a mess of typos, too. So, yes, as drilling technology changed (got faster), I and my crew could keep up the same level of quality.
But computers used were remans, most equipment was bought used, and the most complicated stuff was leased, avoiding the issue of having aging tech on the shelf losing value and having to repair anything that went wrong.

As a model, it worked, not just for me, but the guys who worked with me.
In six months, I had gone from a 20K credit card loan to mid six figure/year business (gross) all running in the black, and able to pay invoices on the day they came in.

But then, the price of oil dropped, and that was that. A good ride while it lasted.

[Luis Gonzalez]

In the interest of letting Luis get his series out there, I'm going to hold my tongue for now.

The series aims to spark discussion and preemptively address counterarguments when Democrats claim they have solutions for the so-called ‘affordability crisis.’

Talk away!

[Luis Gonzalez]

One could argue that technology improved productivity while using similar effort. And that productivity lowered the cost of the products produced with it making it available to everyone.

Yes, but that doesn't negate the point.

Wages did not keep up. Lowering the costs just offsets the widening gap.