Im-Politic: Why Progressives (& Mainstream Democrats) May Ditch American Workers For Good

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Bernie Sanders, Biden, budget deficits, Democrats, Donald Trump, economics, Elizabeth Warren, Im-Politic, Immigration, imports, manufacturing, Modern Monetary Theory, productivity, progressives, Stephanie Kelton, The New York Times, Trade, wages, working class

If you want to start a (hopefully verbal only) fight about American politics, one good way is to tell a Democrat that his or her party – and especially its powerful progressive wing – has been abandoning the country’s private sector working class in favor of what New York Times columnist Ross Douthat just called “the winners of globalization, from wealthy suburbanites to Wall Street and Silicon Valley elites….”  (Here’s some polling evidence for this proposition.)

So it’s more than a little interesting that if you take this position, you’ve recently gotten some devastating ammunition from no less than one of progressivism’s leading intellectual lights – economist Stephanie Kelton.

Kelton has achieved renown for her pioneering “Modern Monetary Theory” take on economic policy. As she has explained, it holds that “Governments in nations that maintain control of their own currencies — like Japan, Britain and the United States, and unlike Greece, Spain and Italy — can increase spending without needing to raise taxes or borrow currency from other countries or investors.”

Naturally, Democrats of most stripes have seized on this argument to varying extents to justify running much bigger federal budget deficits to deal much more ambitiously with a whole host of national problems – to engineering an adequate recovery from the CCP Virus-induced recession to remedying major social and economic ills that they believe dangerously plagued the economy before the pandemic.

One aspect of Kelton’s views, though, has been widely ignored, and it’s this stance that led her last week to support explicitly measures with proven records of harming domestic U.S. private sector workers but with which the increasingly elitist Democratic Party has grown increasingly comfortable over the last decade or so – on trade and especially immigration policy.

The ignored Kelton stance: on inflation. As she has specified (in the column linked above), “Politics aside, the only economic constraints currency-issuing states face are inflation and the availability of labor and other material resources in the real economy.” And in the author’s latest column, she argues that it’s precisely the appearance of these threats today that require the Biden administration to embrace unfettered trade and mass immigration policies.

As Kelton puts it, the combination of (1) President Biden’s massive spending plans and (2) undeniable contraints on the nation’s capacity to supply all the new demand that they’ll create will produce worrisome inflationary pressures. Too many customers will be chasing too few products to buy, thereby forcing up the prices of the latter and possibly generating more economic problems than this new consumption solves.

Among the solutions she offers? Enabling the economy much more easily to satisfy all the new demand by accessing productive capacity from abroad. Thus she suggests both

“Repealing tariffs would make it easier and cheaper for American businesses to buy supplies manufactured abroad and easier for consumers to spend more of their income on products made outside of our borders, draining off some domestic demand pressures” and

“loosening legal-immigration policies, so that even once America nears full employment there would still be an adequate labor pool to meet the increased demand for workers.”

These arguments are entirely consistent with more conventional schools of economic thought – which have long insisted that the freest possible worldwide flows of goods, services, and people will lead to the greatest possible degree of prosperity for the world as a whole.

The problem, though, is that recent decades have taught that when the United States opens its economy wide to a world full of countries that still tightly protect their own markets, and when it opens its borders wide to enormous foreign populations with much lower living standards, American workers take major hits. Abundant research even in the mainstream economics community, for example, has documented the devastating impact of the “China shock” on trade, and the Trump years showed that when immigration curbs helped U.S. labor markets tighten to unprecedented levels, wages for low-income workers, who overall compete directly for employment against illegal aliens, rose especially strongly.   

For many years, Kelton’s fellow Democrats and progressives have been increasingly determined to deny these immigration realities – even when employment levels have been less than stellar. And although private sector labor union-oriented Democrats and even progressives like Senators Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont still champion what might be called America First trade policies, the party’s rank and file has grown much more enthusiastic about the pre-Trump version of economic globalization — as indicated by the below survey results from the Pew Research Center.

Even more curious, and troubling for the economy as a whole: Kelton sorely neglects the concept of productivity, and the importance of continually boosting the economy’s efficiency in order to boost living standards in sustainable, as opposed to bubbly, ways.

Kelton does write that “Over time, the Biden plan’s investments in our physical and human infrastructure will enhance our economy’s productive capacity, leaving us with a better educated and more productive work force, more efficient railways, less congested roadways, improved technologies and much else.”    

But she also adds, crucially, “this can’t happen overnight. It will take years.”  Presumably, then she’d be OK with dropping the open trade policies at least to some degree.  What she misses, however, are the (further) productivity-killing effects bound to emerge during that period of re-enabling imports in sectors like manufacturing – which are central to the nation’s hopes for retaining sufficient productive capacity. 

Indeed, she seems unaware that those manufacturing sectors that have been heavily dependent on artificially cheap imports have been major productiviy laggards. (The same holds for parts of the economy that have leaned heavily on the comparable crutch of immigrant labor – especially low-wage, low-skill immigrant labor).

Kelton of course is only one Democratic party thinker, and as she complained in her latest Times column, too many Democratic leaders – including the President – are still clinging to their supposedly outmoded views on spending and taxing and promoting U.S.-made manufactures.  And as mentioned, even within progressive ranks, her views on trade may not prevail against the Warren and Sanders perspective.

But it’s just as reasonable to believe that progressives hold the whip hand among  Democrats today on many issues, and Kelton played the biggest role in turning their spending-happy views into virtual party orthodoxy.  If her immigration and especially trade positions take the same course, the Democrats’ once unchallengeable identity as “the party of the common man” will become an example of transparently false advertising.       

P.S. Special thanks to my Twitter friend who goes by the handle @RocCityBuilt for first alerting me to the trade and immigration material in Kelton’s latest article.   

Im-Politic: A Trifecta (& Not in a Good Way) for the Washington Post

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alliances, allies, benefits, contract workers, education, foreign policy, geopolitics, globalism, globalization, Jobs, Mainstream Media, manufacturing, media bias, MSM, national security, NATO, North Atlantic Treat Organization, remote learning, reopening, schools, teachers, teachers unions, temporary jobs, Trade, wages, Washington Post, Zoom

At 11:30 yesterday morning, when I sat down for my typical Sunday brunch at home (where else these days?), I had no idea what I’d blog about today. At 11:35, after perusing the Washington Post Outlook section, I had no fewer than three ideas, each of which focused on an article simultaneously whacko and emblematic of key Mainstream Media and broader establishment biases. Ultimately, I decided that they were all so inane and representative that a single post briefly examining each would suffice to get the message across.

First catching my eye was a proposal by Seton Hall University political scientist Sara Bjerg Moller that the North Atlantic Treaty Organization (NATO) “reorienting” its focus to add countering the rise of China to its list of missions, and even designating it the top priority. One obvious retort is that the European members of this alliance binding America’s own national security to that of the continent is that during the Cold War, when they readily acknowledged the threat posed by the old Soviet Union, these European members collectively never even mustered the will to provide adequately for their own defense even when they became wealthy enough to create such militaries.

They preferred to free ride on the United States instead – which perversely enabled this behavior by sticking hundreds of thousands of its own troops – and their dependents – in harm’s way, smack in the middle of the likeliest Soviet invasion roots. The idea was that since these units couldn’t possibly match the conventional armes of their Soviets and their East European satellite states, once the shooting started, their vulnerability and indeed impending destruction would leave a U.S. President no real choice but to use nuclear weapons to save them. The odds that the conflict would escalate to the all-out nuclear exchange level that would endanger the Soviet homeland itself was suppsed to keep Moscow at bay to begin with. (And if you think this sounds exactly like the U.S. “tripwire” strategy for defending South Korea that I just wrote about here, you’re absolutely right.)

As with the Korea approach, Washington’s NATO Europe strategy needlessly exposes the continental United States to the risk of nuclear attack because wealthy allies skimp on their own defense spending, but that’s not the main problem with Moller’s article. After all, if the Europeans never mobilized enough resources to prevail over a Soviet threat located right on their doorstep – and a Russian threat that presumably still exists today, since the alliance didn’t disband once Communism fell – why would they answer a call to arms against a danger that’s half a world away from them. And even if they agreed with the United States on the imperative of containing Beijing, why wouldn’t they simply repeat their free-riding strategy, which arguably would allow them once more to reap all the benefits of America’s efforts without incurring any of the costs or risks?

But weirdest of all, the author herself admits that Europe remains far from a new anti-China European mindset. In her own words:

“Regrettably, as with Russia [today], Europe is divided over how to deal with China. Many European allies are wary of picking sides in the struggle for influence between the United States and its Asian rival. Some, like Germany, even appear outright resentful at the suggestion that they must choose. German Chancellor Angela Merkel rushed last year to conclude the E.U.-China Comprehensive Agreement on Investment — even though the incoming U.S. national security adviser, Jake Sullivan, had strongly signaled that Europe should wait till Biden’s inauguration.”

Don’t get me wrong: It would be great if the Europeans were ready and willing to stand shoulder to shoulder with the United States against China. But they’re not today, and a heavy burden of proof rests with those arguing that this common front is even remotely possible for the foreseeable future, much less that the United States should spend much time trying to create one. So I’ve got to think that this article was run simply because the relentlessly globalist and therefore alliance-fetishizing Washington Post believes that wishing for (and hyping the prospects of) something can make it so.

The second item is actually a pair of Outlook articles this morning. Their theme – and I could scarcely believe my eyes: Everyone’s overlooking all the advantages that remote learning can create! In other words, for months, national dismay has been growing that conducting classes by Zoom etc at all educational levels has been at best completely inadequate and at worst could permanently scar both the educational attainment and the psyches of the a generation of American students. As warned by none other than President Biden:

“Today, an entire generation of young people is on the brink of being set back up to a year or more in their learning. We are already seeing rising mental health concerns due in part to isolation. Educational disparities that have always existed grow wider each day that our schools remain closed and remote learning isn’t the same for every student.” 

But it’s also clear that the President is loathe to antagonize politically powerful teachers’ unions, which have acted determined to keep schools closed unless a wildly ambitious – not to mention medically unnecessary – set of demands have been met. Largely as a result, all the evidence indicates that a large share of American students still aren’t back in class in person full time (although the hesitation of many parents is partly responsible, too).

It’s just as clear, though, that the Post as an institution, like the rest of the Mainstream Media, is wildly enthusiastic about Mr. Biden. So even though the editorial board has upbraided the unions for their foot-dragging, the Outlook section is run by a different staff and, call me paranoid, I can’t help but suspect that yeserday’s two pieces – by an “author and educator in Boston” and a college professor – aren’t part of an effort to pave the ground for a school re-closing if the CCP Virus shows signs of a comeback.

After all, the articles were dominated by claims to the effect that one author’s Zooming this semester is “light-years better than the last;” that his teaching is “radically improved” since then;  that “if remote learning has been good for one thing, it has closed that gap between authoritative teacher and abiding student”; and presumably best of all, “I used to invest a lot of importance in arbitrary deadlines and make-or-break exams to establish high academic standards. These days, I’ve let go of many of my old notions about penalties for late or missing work.”

It would be one thing – and indeed noteworthy – if these alleged developments were broadly, or increasingly, representative of the American educational scene today.  But the Outlook editors provided no such insights, and if these reported experiences have been exceptions to the rule – as the evidence overwhelmingly concludes – what else could they been trying to accomplish by airing them but soft-pedaling the harm resulting from mass remote teaching?   

The third Outlook item that set me off today was an article by a Washington University (St. Louis) sociologist that included a challenge to the claim that “Manufacturing jobs are the ‘good’ jobs.” The reason? “Unlike in the past, typical pay for these workers is now below the national average” and “the rise of temporary and contract work is a factor….” Moreover, “Not all [such jobs] were offshored or automated, it turns out. Many were just reclassified — downgraded into worse jobs.”

Sure, author Jake Rosenfeld didn’t devote a lot of space to the subject. But he definitely should have devoted more, because what he omitted was critical. For example, it’s true that overall private sector average hourly wages now exceed those for manufacturing, whether you’re talking about the total workforce or just the production/non-supervisory workforce.

But the changeover is pretty recent. According to the U.S. Bureau of Labor Statistics, for the former, it came in 2019; for the latter, in 2006. Moreover, a 2018 Economic Policy Institute study found that although manufacturing’s wage premium (its edge over the rest of the private sector) indeed eroded between the mid-1980s and 2017, the benefits premium actually increased. That’s a finding hard to square with the idea that temporary workers are increasingly dominating manufacturing payrolls.

Further, the idea that offshoring in particular has nothing to do with what growing popularity temps have had with manufacturers can’t withstand serious scrutiny. Or does Rosenfeld believe that super-low-wage pressure from countries like China is unrelated to U.S. workers’ declining bargaining power even when production and jobs aren’t actually sent overseas?

At the same time, efforts to downplay U.S. trade policy’s effects on manufacturing are incredibly convenient for a news organization that, like so many of its peers, enthusiastically backed the pre-Trump administration trade decisions that decimated U.S.-based manufacturing and its employees for decades – and still does.

Despite the expression, “Three strikes, you’re out,” I’m not going to stop reading the Post Outlook section or the rest of the paper. Both are just too influential. But no one should assume that the number of whiffs in yesterday’s paper was limited to three, or that other editions in recent years have been much better. And I do find myself wondering just how many strikes per day I’m going to give this once venerable publication.

(What’s Left of) Our Economy: More Reopening, Not Endless Money, is Now the Best Jobs Strategy

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African Americans, American Rescue Plan, Biden, CCP Virus, coronavirus, COVID 19, Covid relief, education, Employment, Federal Reserve, Hispanics, hotels, Jerome Powell, Jobs, Latinos, leisure and hospitality, lockdowns, recovery, restaurants, shutdown, stay-at-home, stimulus package, unemployment, wages, Wuhan virus, {What's Left of) Our Economy

There’s no doubt that the American jobs market has suffered an out-and-out disaster since it got hit by the CCP Virus and the follow-on lockdowns and other restrictions. There’s also no doubt that many workers and their families are still suffering greatly, and will need government aid to make it to the Other Side, and the Biden administration’s American Rescue Plan legislation that the President will likely sign into law soon will help fill this gap.

Plenty of doubt remains, however, about whether all, or close to all, of the massive funds approved in this measure are actually needed to cure the economy’s remaining employment woes, and one of the main reasons is the nature of the jobs blow that’s been delivered. Because it’s been so heavily concentrated in the country’s leisure and hospitality industries (encompassing eateries and drinking places of all kinds, plus hotels and motels, and entertainment and cultural venues), it’s entirely possible that nowadays, the most effective way to fix the jobs market fastest would be to lift the lockdowns and other mandated curbs that have fallen so hard on sectors that depend on serving in-person customers.

The case for relying on a virus-relief/stimulus package this big, at this stage of the economy’s recovery from its pandemic-induced recession, has been eloquently stated by President Biden and by Federal Reserve Chair Jerome Powell. The former warned just before the legislation passed that the U.S. economy “still has 9.5 million fewer jobs than it had this time last year. And at that rate, it would take two years to get us back on track.”

The latter has stated that he won’t be satisfied that full employment has returned until he sees what one reporter has called “broad-based gains in employment, and not just in the aggregate or at the median.” As a result, the Fed Chair is paying particular attention to (the reporter’s words again) “Black unemployment, wage growth for low-wage workers and labor force participation for those without college degrees, categories that historically have taken longer to recover from downturns than broader metrics.”

But it’s precisely these less fortunate portions of the workforce that would be helped disproportionately – and then some – by focusing on reopening steps that would surely affect the leisure and hospitality industries just as disproportionately.

If you doubt the importance of leisure and hospitality job loss over the last year in terms of overall U.S. jobs loss, here’s what you need to know. Of the 8.068 million positions shed by the country’s private sector between last Februrary (the final month of pre-CCP Virus normality for the American economy), fully 3.451 million have come in the leisure and hospitality industries. That’s nearly 43 percent.

Put differently, during that final normal economic month, leisure and hospitality workers represented just 13.04 percent of all private sector workers. Yet their employment plunge was more than three times as great relatively speaking.

Moreover, leisure and hospitality’s progress in getting back to pre-pandemic square one has been slower than that of the private sector overall. Since the April employment trough, leisure and hospitality has regained 4.955 million of the 8.224 million jobs lost during the worst of the pandemic, or 60.25 percent. For the private sector in toto, 13.267 million of the 21.353 million jobs lost in March and April have come back since – 62.13 percent.

It’s also clear that many of the kinds of workers about which Fed Chair Powell has been most concerned are concentrated in leisure and hospitality. For example, in 2019, (America’s last pre-CCP Virus full year), 13.1 percent of these sectors’ workers were African American versus 12.3 percent for the entire U.S. economy (including government workers at all levels), and 24 percent were Hispanic or Latino versus 17.6 percent for the entire economy.

Leisure and hospitality companies tend to employ Americans with low levels of formal education, too. According to the Labor Department, in 2019, 79.9 percent of the nation’s “first-line supervisors of house-keeping and janitorial workers” 25 years and older lack even an associate’s degree, and 76 percent of their food preparation and service counterparts fall into this category. The shares are even higher for the workers they supervise. Meanwhile, only 51.5 percent of all U.S. workers haven’t taken their education beyond high school.

Not surprisingly, therefore, leisure and hositality jobs pay poorly. In February, 2020, just before the arrivals of the pandemic and the lockdowns, their average hourly wages were only 59.28 percent those of all private sector workers. Last month, this figure had fallen to 57.58 percent. (See Table B-3 here.) 

For most of the pandemic period, the U.S. government at all levels pursued a mitigation strategy that aimed mainly at curbing economic and other forms of human activity across-the-board. Now, even with vaccinations and growing population-wide immunity showing strong signs of bringing the pandemic under control, the Biden administration and the Democratic Congress are just as determined to stimulate the economy that’s still significantly shut down by with an American Rescue Plan that seems just as indiscriminate.

As I’ve been writing (see, e.g., here), it should have been clear since late last spring that the anti-virus fight would have much more effective (and less harmful to the economy and other dimensions of public health) had it targeted protecting especially vulnerable populations. I strongly suspect that, with the fullness of time, it will become just as clear that a stimulus and jobs strategy emphasizing accelerating reopening, and thus aiding sectors and workers hardest hit by the remaining shutdowns, will prove a much more effective employment cure than the indiscriminate spending approach on which Washington has just doubled down.

(What’s Left of) Our Economy: An Open Borders Mainstay Gets (Kind of) Woke on Immigration

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amnesty, automation, illegal aliens, immigrants, Immigration, Open Borders, productivity, technology, The Economist, wages, {What's Left of) Our Economy

I’ve always felt that one of the most convincing ways to win an argument is to  spotlight instances of sources that normally oppose one’s positions actually agreeing with them. And I just stumbled onto an especially startling example that appeared about a year ago in the The Economist.

It’s often valid to view such dated material as old and therefore irrelevant news. But in this case, The Economist‘s February, 2020 feature titled “Immigration to America is down. Wages are up. Are the two related?” really is a landmark still worth examining, and for at least three reasons.

First, if there’s a single set of policies identified with this British magazine it’s staunch support for free trade. In fact, The Economist was founded in the mid-19^th century precisely to convince the United Kingdom to dismantle its longstanding tariffs. Not surprisingly, the magazine has also always backed the freest possible immigration flows.

Second, February, 2020 was just before the CCP Virus and the massive economic shutdowns it triggered swept over the United States. So The Economist was commenting on trends when the economy was normal by most definitions, and after three years of Donald Trump’s presidency.

And third, of course, even though a substantial return to a pre-virus normal economic normality is now widely expected sometime this year (whether or not President Biden’s virus relief bill and other “Build Back Better” programs are fully enacted or not), the new U.S. administration clearly is determined to turn the immigration spigots back on.

So it really was pretty startling to come across an Economist article leading off with this paragraph:

“In both 2018 and 2019 [U.S.] nominal wages rose by more than 3%, the fastest growth since before the recession a decade ago. Americans at the bottom of the labour market are doing especially well. In the past year the wages of those without a high-school diploma have risen by nearly 10%. Intriguingly, this has come as America has turned considerably less friendly to immigrants, who are assumed by many to steal jobs from natives and lower the wages of less-educated folk. The two phenomena may be connected….”

Moreover, in recent years, “It appears instead that the overall decline in the foreign-born population is a result of falling numbers of low-skilled migrants…. That is probably a consequence of policies implemented by President Donald Trump, as well as the off-putting effects of his rhetoric on foreigners.”

Not that The Economist endorsed this proposition wholeheartedly. The article correctly notes that “many factors” lie behind these wage increases. Indeed, that’s true for most trends in the economy and elsewhere in our big, complicated world. But it turns out that most of the reasons for skepticism about immigration policy’s decisive role cited in the piece are pretty flimsy when examined closely.

For example, minimum wage increases – and their benefits – have by definition been enjoyed exclusively by lower-income workers overall in the United States. But the magazine also has found that average wages in occupations that are especially low-skill-immigrant-heavy (e.g., construction and landscaping work) “are rising considerably faster than wages in other low-paid jobs.”

In addition, The Economist cites findings from the Brookings Institution (hardly a restrictionist organization itself) that “five big metro areas saw absolute declines in their foreign-born populations in 2010-18” and its own research showing that “wages in those areas are now rising by 5% a year….”

Perhaps most important, the magazine’s initial conclusion about the connection between fewer low-skilled immigrants and higher wages for the established national low-skill workforce is qualified with the phrase “but only for a while.”

In this vein, The Economist points to research allegedly demonstrating that during and after past “occasions when America has clamped down on immigration,” the results “ultimately [offered] little benefit to native workers—and may even harm them.” Yet some of these historical episodes – e.g., the freeze and follow-on restrictions on immigration from China that began in the late-19^th century, and expulsions of Mexican workers during the Great Depression of the 1930s – seem  marginally relevant at best to the U.S. economy today.

Even odder, the overarching lesson drawn by The Economist from this and related studies supports a claim made by current-day restrictionists (like me) that wide-open immigration policies retard productivity growth by enabling many industries to use cheap labor as an earnings- and profit-making or boosting crutch, rather than innovate their way to greater success.

According to The Economist, “In the short term, native workers may well see a wage boost as labour supply falls. But businesses then reorient production towards less labour-intensive products; natives take jobs previously occupied by foreign-born folk, which may be worse paid; and bosses invest in labour-saving machinery, which can reduce the pay of remaining workers.”

Yet logically, anyone supporting this position logically must also think that improving productivity and promoting technological progress doesn’t ultimately benefit entire economies – including workers initially displaced. Is The Economist really supporting such stick-in-the-mud-ism?

The answer, strangely, as readers learn in the very next paragraph, is “Of course not.” Because the article proceeds to claim that “Both low- and high-skilled migration are linked with higher productivity.” In other words, higher productivity is a long-run economic blessing after all, and it’s improved both by reducing and increasing low-skill immigration. Got that?

Of course, change at a single magazine, no matter how influential, is no guarantee of policy change.  But such publications aren’t often called opinion leaders for nothing.  And although rhetorically, the Biden administration seems as set as ever to supercharge U.S. immigration flows, maybe it’s no coincidence that its recent  stance on the southern border looks every bit as confused as this Economist take on immigration.       

(What’s Left of) Our Economy: In Case You Still Doubt How Much Manufacturing Matters

Tags

automotive, CCP Virus, coronavirus, COVID 19, electronics, Immigration, infotech, Nikkei Asia, semiconductors, stay-at-home, Taiwan, TSMC, wages, Wuhan virus, {What's Left of) Our Economy

One of the most encouraging recent developments in American public policy lately is the virtual disappearance of the idea that manufacturing boasts no special importance to the American economy. I guess that’ll happen when a pandemic reveals dangerous shortages of key medical equipment (and the long supply chains needed to supply equally key parts, components, materials and the production equipment to make all of these items).

Ditto for the loss by a U.S.-based company (Intel) of the global lead in the knowhow to produce the world’s most powerful semiconductors – which run not only the world’s exploding numbers of electronics devices and networks, but soaring percentages of production machinery, as well as lying at the heart of nearly all present and future defense-related goods.

But I’m far from taking this triumph for granted – no doubt because this victory has been so recent, and because I’ve spent so much of my career making the case for government promotion of manufacturing against a free market-worshipping opposition that not only represented an entrenched conventional wisdom, but that could vastly out-spend and therefore practically drown out us “industrial policy” supporters.

And that’s why I was so pleased to see an article just out from the Japanese publication Nikkei Asia that dramatically illustrated how a robust national manufacturing base can supercharge an entire national economy and its workforce’s well-being.

Nikkei Asia described the effect on Taiwan of the new expansion programs being carried out by its world-class semiconductor manufacturing company TSMC (the firm that, along with South Korea’s Samsung, has taken the global microchip manufacturing technology lead from Intel). TSMC’s planned growth is dramatic, largely because the CCP Virus and its effects have created such surging demand for and consequent shortages of microchips. Blame (or credit) the booming popularity of semiconductor-powered electronic devices critical for increasingly popular stay-at-home work and leisure, and the on-and-off jolts generated by the pandemic for giant semiconductor-using industries like the automotive sector.

Compounding the impact, according to authors Cheng Ting-Fang and Laury Li, is the trend of “other Taiwanese companies…bringing production home from China amid Beijing-US trade tensions.”

And the results? “Business has never been brisker for construction companies in Taiwan….” Consequently, wages are way up for construction workers with both ordinary skill sets and specialized knowledge. But even though labor shortages are evident, Taiwan’s government shows no signs of killing this living standards bonanza by trying to open immigration flood gates.

As explained by a manager in the construction industry itself, “Foreign workers are not the ultimate solution as the government sets limits on their entry and many positions, such as electroplating specialists, require professional knowledge.”

Bottlenecks are already appearing and more are sure to come. But it also seems that Taiwan’s businesses will be solving the problem in the way that brings the greatest, most broadly shared national benefits – with technological and managerial innovation (i.e., by improving productivity) rather than by suppressing wages via artificially pumping up Taiwan’s labor supply.

At the same time, it’s not just workers that are in great demand on Taiwan. As the Nikkei Asia article specifies, “Cranes, trucks, excavators and all manner of heavy vehicles stream in and out of the vast construction site for” TSMC’s new advanced semiconductor factory in the city of Tainan. So the need for these machines is pressing, too – and thus for the workers and machinery needed to turn them out.

Is there a downside? Absolutely. Higher wages (and they’ve advanced throughout the economy) have driven major real estate and housing price increases (though the wage hikes indicate that affordability remains pretty much the same, and therefore bubble fears are unwarranted so far). And Taiwan’s water supplies and other infrastructure systems are under strain.

Overall, though, I’d bet on Taiwan to cope successfully with these and other actual and potential problems – which most other countries would actually love to have. And that’s precisely because, to a practically unrivalled extent, the country knows how much manufacturing matters. 

Full disclosure: I own some TSMC stock.  

 

Im-Politic: It’s Americans Last for the Courts as Well as Business on Immigration

Tags

Biden, businesses, CCP Virus, coronavirus, COVID 19, guest workers, Im-Politic, immigrants, Immigration, Joe Biden, judges, labor shortages, lockdowns, recession, Reuters, Trump, unemployment, visas, wages, workers, Wuhan virus

So here I was about to give myself a day off from blogging today and spend most of it reading and then watching the big New Year’s Day college football games, but the news just keeps newsing. And I couldn’t forgive myself if I didn’t immediately seize on the opportunity to comment on today’s Reuters report titled “Trump extends immigration bans despite opposition from U.S. business groups.”

The piece wasn’t most remarkable for the kind of pro-globalist or Never Trump bias I often cover, or for the headline development. Everyone who’s followed the issue knows that the President has long favored and put into effect many measures aimed at curbing both legal and illegal immigration – and long before the CCP Virus and ensuing lockdowns-type government orders and consumer caution combined to create a genuine U.S. jobs depression.

Nor should anyone be especially struck by the observation that business groups are seeking to reopen American borders to green-card applicants (who will be seeking U.S. employment) and foreign guest workers (who enter the country in response to request from companies claiming labor shortages) even though, as the piece notes, 20 million Americans are currently receiving unemployment benefits.

No, what blew me away about the story were these two sentences:

“In October, a federal judge in California blocked Trump’s ban on foreign guest workers as it applied to hundreds of thousands of U.S. businesses that fought the policy in court.

“The judge found the ban would cause ‘irreparable harm’ to the businesses by interfering with their operations and leading them to lay off employees and close open positions.”

In other words, this judge supported allowing the number of workers overall available to American business to start growing again at a time when enormous numbers of domestic workers nationally have lost their jobs because enormous numbers of the businesses they worked for are being closed (many for good) by the aforementioned shutdown orders and consumer behavior changes.

Yet the judge’s stated reason for admitting these new (foreign) workers at a time when business are shedding enormous numbers of (domestic) workers is that enormous numbers of these same businesses would suffer “irreparable harm” – that is, harm for good – without the foreign workers. (See this post for an exceptionally intelligent discussion of the national business closure numbers, which so far are anything but from definitive.)

Even worse: The business lobbies that have opposed the Trump restrictions are the same groups that for months have condemned what they regard as overly sweeping lockdowns-type mandates for killing off enormous numbers of businesses, and threatening the survival of many others by sharply limiting the amount of customers they serve. And these business organizations insist that companies need more employees? Even though there’s every reason to believe that, at least through the winter, these shutdowns are much likelier to become tighter, not looser?

This isn’t to say that every business in this highly diverse economy during these highly difficult times is facing the same issues or dealing with the same labor market conditions. In fact, there can’t be any reasonable doubt that some companies are experiencing troubles finding the workers they need. Nor can there be any reasonable doubt that pandemic-related travel curbs are complicating their efforts to attract the necessary employees from other parts of the country, even if they raised wages strongly – the response identified by standard economic textbooks for ending labor shortages (even though this wage effect is overwhelmingly ignored by economists who use the same textbooks to support lenient immigration policies).

But how would new foreign workers solve this problem? They’d be subject to the same travel restrictions. And even if employers were willing to pay to bring them safely to their facilities, why couldn’t they extend the same services to any qualified domestic workers they could identify – if they bothered to look for them?

As for other businesses, chances are they favor reopening the immigration sluice gates now during a CCP Virus-induced economic slump for the same reason they favored it in normal times: They simply want to pump up the U.S. labor supply, and thereby drive down the price that labor can command.

Apparent President-elect Joe Biden ran as a champion of American workers. But he’s also taken many strongly pro-Open Borders positions. According to Reuters, although the Trump bans are “presidential proclamations that could be swiftly undone” and Biden has criticized them, the former Vice President “has not yet said whether he would immediately reverse them.”

But if he – not to mention the judge and the business groups – were really concerned about business survival, they’d all focus more on rolling back unjustified lockdown measures and securing more federal aid for struggling enterprises rather than delivering yet another immigration-related slap in the face to an already historically hammered domestic workforce.

(What’s Left of) Our Economy: Why Biden’s Immigration-Enabling Goals Couldn’t be Worse Timed

Tags

asylum seekers, California, CCP Virus, coronavirus, COVID 19, Department of Labor, Eduardo Porter, illegal aliens, illegal immigration, Immigration, Jobs, Joe Biden, NAFTA, North American Free Frade Agreement, Open Borders, path to citizenship, Pew Research Center, recession, refugees, services, The New York Times, The Race to the Bottom, wages, Wuhan virus, {What's Left of) Our Economy

Apparent President-elect Joe Biden emphatically and repeatedly told the nation that he’s determined to increase the flow of immigrants to America – whether we’re talking about his promises that will greatly strengthen the immigration magnet (like creating a “roadmap to citizenship” for America’s illegal alien population, tightly curbing immigation law enforcement activities, and offering free government-funded healthcare to anyone who can manage to cross the border lawfully or not), or his promises to boost admissions of refugees, speed systems for processing applications for asylum and (legal) green card applications, and generally “to ensure that the U.S. remains open and welcoming to people from every part of the world….”

During normal recent times such pledges – and the fallout of pre-Trump efforts to keep them – had proven troublesome enough for the U.S. economy and for working class Americans in particular. Inevitably, they pumped up the supply of labor available to U.S.-based businesses, and created surpluses that enabled companies to cut wages with the greatest of ease – exactly as the laws of supply and demand predict.

During the CCP Virus pandemic and its likely economic aftermath, however, this quasi-Open Borders strategy looks positively demented, as emerging trends most recently described by New York Times economics writer Eduardo Porter should make painfully obvious.

According to Porter in a December 1 piece, “The [U.S.] labor market has recovered 12 million of the 22 million jobs lost from February to April. But many positions may not return any time soon, even when a vaccine is deployed.

“This is likely to prove especially problematic for millions of low-paid workers in service industries like retailing, hospitality, building maintenance and transportation, which may be permanently impaired or fundamentally transformed. What will janitors do if fewer people work in offices? What will waiters do if the urban restaurant ecosystem never recovers its density?”

What’s the connection with immigration policy? As it happens, the service industries the author rightly identifies as sectors apparently vulnerable to major employment downsizing are industries that historically have employed outsized shares of immigrant workers (including illegals). And along with other personal service industries, they’re kinds of sectors whose modest skill requirements would continue to offer newcomers overall their best bets for employment.

The charts below, from the Pew Research Center, show just how thoroughly dominated by both kinds of immigrants these sectors, and present similar data broken down by occupation. (The U.S. Department of Labor tracks employment according to both kinds of categories.)

Twenty years ago, in my book The Race to the Bottom, I wrote about news reports making clear that

“immigrants were flooding into California in hopes of landing jobs in labor-intensive industries such a apparel and electronics assembly that NAFTA [the North American Free Trade Agreement] had steadily been sending to Mexico — where most of the immigrants come from! In other words, the state was importing people while exporting their likeliest jobs.” 

And not surprisingly, wages throughout the southern California in particular stagnated.  

If a Biden administration proceeds with its stated immigration plans as quickly as it’s promised (with many actions scheduled for the former Vice President’s first hundred days in office), this epic blunder will wind up being repeated — but this time on a national scale.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(What’s Left of) Our Economy: Restaurant Nation and its Consequences

Tags

(What's Left of) Our Economy, CCP Virus, coronavirus, drinking places, food services, Jobs, Manhattan Institute, New York City, private sector, private sector jobs, recession, restaurants, The New York Daily News, wages, Wuhan virus

If you’re interested in New York City and its economy, and how it’s been affected by the CCP Virus, and major changes in the nation’s economy and family life, Howard Husock’s op-ed piece in The New York Daily News last month dealing with all these subjects is a must-read. In fact, it’s so interesting and important that it led me to investigate how the rise of the restaurant sector in the City – his prime focus – has played out nationally.

As shown by the author, a researcher at the Manhattan Institute, the restaurant industry has become nothing less than vital to the city’s economy. The wallop it’s taken from the virus and resulting shutdowns has thrown its full recovery – at least for the foreseeable future – into serious doubt. And therefore its sagging fortunes and seemingly gloomy prospects are strongly influencing the debate over how fast the City should return to business-as-usual.

At least as consequential, Husock argues convincingly that the burgeoning importance of the broad food service industry in recent decades reflects a major New York economic and social trend: Restaurants “can no longer be understood as the luxury it once was but, rather, as both a prerequisite for a successful economic recovery and an indicator that one is underway.”

When I looked into the national data (some of which Husock presents), I found that something like this conclusion is warranted for the country as a whole as well – and that it’s worrisome news at best economically.

Husock’s national data goes way back to the early 20^th century, and it looks at the U.S. labor market measured in terms of the types of occupations Americans hold. I’ve looked at the data measuring employment by sector of the economy, and although the restaurant figures only begin with 1990, they picture they draw looks comparable. (RealityChek regulars will note that I’m not using my usual method of comparing economic expansions to economic expansions, or recessions to recessions. My reason: the trends described here seem to hold during all kinds of economies – as I’ll indicate below.)

Chiefly, the numbers make clear that from 1990 to the end of 2019 (just before the virus struck), on a December-to-December basis, total U.S. employment in the private sector grew by 42.58 percent. But in the food services and drinking places category, the increase was 86.48 percent – more than twice as great. In food service businesses alone (excluding bars), the growth was 89.52 percent. That is, the workforces in these sectors, white- and blue-collar employees combined, nearly doubled during this period.

Particularly noteworthy – during the 2000s (which include the 2007-09 Great Recession), total private sector jobs fell by 2.99 percent. For the food service and drinking places, they increased by 14.44 percent, and for eating places alone, by 16.24 percent. So as I just stated, these trends seem to have unfolded during booms and bust alike.

Viewed through another statistical lens, in 1990, food services and drinking places employees represented 7.22 percent of all private sector workers. In December, 2019, this share was 9.44 percent. For eating places alone, the 1990-2019 rise was from 6.44 percent to 8.56 percent.

Also crucial to note: However, increasingly convenient dining or taking out has become for Americans, the rapid relative growth of restaurant-type jobs doesn’t look like a plus for their economy. The main reason? Restaurant industry jobs really do pay poorly.

In December, 2019, the average hourly wage in the private sector was $28.37 before adjusting for inflation. For food services and drinking places in toto, it was $15.34 (not much more than half the private sector average) and for eating places alone, only $15.09.

The only real bright spot in this picture: wages in restaurant-type jobs have been rising faster lately than those for the private sector overall. The data here only date from 2006, but during the 2010-2019 period examined above, on a December-to-December basis, pre-inflation-dollar hourly wages in the private sector advanced by 24.65 percent. For all food service and drinking places, the improvement was 32.12 percent, and for eating places, 31.68 percent.

So the wages gap is closing, but not dramatically.

Precisely because the U.S. workforce was steadily turning into Restaurant Nation until the CCP Virus arrived, as with the New York City economy (though not quite so heavily), the entire economy’s return to a pre-virus normal will depend on financing that will enable a critical mass of this sector to survive. But someone needs to ask whether whether Restaurant Nation is a healthy and sustainable structure for the national economy over the longer haul

Im-Politic: On the Economy, Obama’s Record Looks Stronger than Trump’s

Tags

Barack Obama, CCP Virus, coronavirus, COVID 19, election 2020, Employment to Population Ratio, GDP, gross domestic product, Im-Politic, Jobs, Joe Biden, Labor Force Participation Rate, labor productivity, manufacturing, non-farm jobs, private sector, productivity, real GDP, real private sector, real wages, recession, subsidized private sector, Trump, value added, wages, Wuhan virus

Not surprisingly, as this U.S. presidential cycle gets ever more intense, so has the debate over which boasts a better record in helping steer the nation’s economy: the Obama administration in which Democratic presidential nominee Joe Biden served as second-in-command, or the incumbent Trump administration. I’ve just looked over some key data, and the verdict on most counts goes to the Obama administration. The margin of victory here isn’t huge, but it’s anything but razor thin, either. Moreover, any Obama edge is surprising given that the economy is President Trump’s major advantage in nearly all the polls.

All the same, here are the data. They compare performance during the last three full years of the Obama presidency and the first three full years of the Trump presidency. In my view, these time-frames deserve priority because they’re the ones closest to each other in the same expansionary business cycle, making apples to apples results much likelier.

The time-frames of course leave out the CCP Virus period, during which all the Trump numbers sank like stones. But if you regard the virus’ economic effects as purely artificial, having nothing to do with the economy’s fundamentals (as I do), then you want to strip them out.

Other methodological notes: Although the jobs-focused data come out from the federal government on a monthly basis, and therefore permit comparisons between completely identical (and virus-adjusted) three-year periods, the economic growth and productivity data don’t, so I show Trump results both through the first quarter of this year (affected by the shutdowns that began in March) and through the last quarter of 2019. In addition, regarding the monthly figures, because of the January 20 inauguration date, I peg the end of the Obama administration as January, 2017 and the beginning of the Trump administration as February, 2017.

And off we go, starting with overall employment, which consists of the Bureau of Labor Department’s U.S. employment universe – “non-farm jobs.”

Obama: +5.55 percent            Trump: +4.56 percent

But of course, non-farm jobs include all government jobs, and their status has much less to do with the economy’s underlying strengths and weaknesses than with politicians’ decision. So here are the numbers for private sector jobs.

Obama: +6.56 percent            Trump: +5.04 percent

So advantage Obama again. As RealityChek regulars know, however, not all private sector jobs are created equal. In fact, many barely deserve the term at all, because their circumstances depend so heavily on government spending. Healthcare is of course the leading example. Therefore, it’s useful to examine the employment results in what I’ve called the “real private sector”.

Obama +6.22 percent             Trump: + 4.63 percent

It’s another Obama out-performance. This string is broken when it comes to manufacturing jobs, however.

Obama: +2.38 percent           Trump: +3.78 percent

But Obama comes out ahead on inflation-adjusted wages for the entire private sector.

Obama +3.69 percent           Trump: +2.99 percent

And the margin is even bigger for real manufacturing wages.

Obama: +3.15 percent          Trump: +0.74 percent

One problem with looking at jobs gains or losses, or even the unemployment rate, is that these numbers don’t tell the whole story about the health of the labor market. To fill in the gaps, economists like to examine two performance measures called the Labor Force Participation Rate, and the Employment to Population Ratio.

The former, according to well regarded left-of-center economics think tank, reveals “the number of people in the labor force—defined as the sum of employed and unemployed persons—as a share of the total working-age population, which is the number of civilian, non-institutionalized people, age 16 and over.”

The latter, the same source explains, shows “the number of people currently employed as a share of the total working-age population, which is the number of civilian, non-institutionalized persons, age 16 and over.”

For what it’s worth, this reliable economics and finance website claims that the Employment to Population Ratio provides the best indication of job shrinkage or growth. So let’s begin there.

Obama: 58.8 percent to 59.9 percent       Trump: 59.9 percent to 61.1 percent

Pretty much a standoff.

As for Labor Force Participation:

Obama: 62.9 percent to 62.6 percent       Trump: 62.8 percent to 63.4 percent

Advantage, Mr. Trump.

As previously mentioned, the economic growth figures are only reported quarterly. Keeping that in mind, here’s how the two administrations stack up. The most commonly followed measure of the economy’s size and how it changes is inflation-adjusted gross domestic product (GDP).

Obama: +8.19 percent           Trump: +5.75 percent

These data, though, include shutdown-y March, 2020. Taking the story only through the end of 2019 brings the Trump years’ performance up to 7.11 percent – but he still trails.

Interestingly, even including the first quarter of this CCP Virus-y year, Mr. Trump’s record is slightly better when another metric for economic growth is used – value-added. Its value lies in trying to eliminate the double- and even more overcounting that results when the of the parts and other inputs of a complicated product are counted both when they’re turned out individually, and when they’re contained in that final product.

Obama: +12.09 percent          Trump: +12.24 percent

The Trump presidency’s margin is even bigger in manufacturing value-added, and even including the first quarter:

Obama: +7.09 percent            Trump: +10.58 percent

Importantly, all the above value-added numbers are pre-inflation. After-inflation value-added data are tracked by the federal government, too, but they’re not even measured on a quarterly basis. Only full-year numbers are available. So since these make precise comparisons less possible, I’m skipping them.

Finally, here are numbers that hardly ever make the news, but might be the most important of all – the productivity data. These various measures of efficiency are widely viewed by economists are crucial to determining how healthy and durable economic growth is and will be, and therefore how strongly and for how long living standards can rise.

Results aren’t up-to-date enough for the broadest measure of economic efficiency – multi-factor productivity. But they are for the narrower measure, labor productivity – which gauges how much a single worker can produce in a single hour on the job – starting with the overall economy

Obama: +3.97 percent           Trump: +3.95 percent

And if you want to remove the first quarter of this year, because of the virus effect in March, overall labor productivity during the Trump period was up 4.02 percent

Labor productivity is monitored for manufacturing, too, and here are those statistics including the first quarter of this year:

Obama: -2.57 percent           Trump: +0.29 percent .

Oddly, if the first quarter is removed, the Trump years’ performance worsens a bit – and even falls to an overall dip of 0.09 percent. But however poor, it still tops the record of the Obama years.

So why are the Trump economy poll numbers so good? One possible answer: The final year of the Obama presidency was feeble by nearly all measures. Real gross domestic product advanced by only 1.70 percent. Total employment grew by a mere 1.64 percent, versuss 2.19 percent in 2014. National manufacturing employment actually dipped by 6,000 from 2015 levels. Real wage growth overall slowed from 1.26 percent in 2014 to 0.56 percent in 2016. And inflation-adjusted manufacturing wages performed scarcely better.

Moreover, as the New York Times article linked above makes clear, the public’s evaluations of the Trump economic record are incredibly partisan – often conflicting with a respondent’s actual situation.

It’s also possible and legitimate, as I’ve noted, to point to some important reasons for this Trump under-performance.  The President’s trade policies clearly disrupted national and global supply chains, and the consequent inefficiencies surely dragged on GDP and employment in the short term.  Boeing aircraft’s safety woes have undercut national economic performance lately, too.  But good luck to you if you think these considerations are going to have any effect on voters.  

I’m hardly naive enough to think that these or other economic facts will be enough to determine November’s outcome. And I have no idea how voters will factor in the deep CCP Virus-induced recession into their thinking. But the facts aren’t a throwaway, either, and although the Obama record didn’t exactly thump Mr. Trump’s, it’ll certainly provide Biden with considerable ammunition.

(What’s Left of) Our Economy: Newest Numbers Show Trump’s Real Wages Problem Continues

Tags

Barack Obama, election 2020, inflation adjusted wages, manufacturing, private sector, real wages, Trump, wages, {What's Left of) Our Economy

The big economic message sent by today’s official U.S. data on inflation-adjusted wages is highly concentrated in the so-called benchmark revisions – which adjust the results going back to 2015. And the big political message sent by these revisions is that President Trump’s economic record still suffers from a serious real wage problem – especially in the manufacturing sector, and especially compared with his predecessor, Barack Obama, whose supposed economic failures Mr. Trump has made a major campaign issue.

To be sure, the newest (and unrevised) January statistics weren’t great news for Trump-World, either. Total private sector pay in real terms inched up only 0.09 percent month-to-month, and the annual increase was a mere 0.64 percent. Between the previous Januarys, constant dollar private sector wages improved by a much faster 1.77 percent. (The Labor Department doesn’t track public sector wages, because their levels and growth are determined overwhelmingly by government decisions, and therefore supposedly say little about the state of the labor market or of the entire economy.)

The story for blue-collar workers (called “production and nonsupervisory workers” by the Labor Department and abbreviated here “N/S”) was only a little better. Their real wages flat-lined on month in January, but year-on-year they were up 0.75 percent – more strongly than overall private sector wages, and thereby in synch with numerous observations that pay at the lower end of the scale is rising faster than it is at the upper end.

In manufacturing, however, that picture is more mixed. Overall after-inflation manufacturing wages dipped by -0.09 percent sequentially in January, though they advanced by 0.74 percent year-on-year. That rise was better not only than that of total private sector workers, but than of its own performance the previous year – which saw zero increase in these wages.

Price-adjusted wages for manufacturing’s blue collar workforce, however, fared only negligibly better than for all manufacturing employees – flat-lining versus a small decline. And year-on-year they increased by less than a third the rate of pay for all manufacturing workers (0.23 percent) and much more slowly than the year before (1.37 percent).

The good news for Mr. Trump – the revisions put more of a shine on his job creation record over the last two years, as shown in the tables below. (Keep in mind that they only take the story through December, 2019 – because today’s January figures haven’t been revised yet.)

                                                                     Unrevised

                                     Total private     N/S private     Total mfg      N/S mfg

Year-on-year, 2019:         +0.64%           +0.75%          +0.74%        +0.45%

Year-on-year, 2018:         +0.56%          +1.63%                0%          +1.14%

                                                                      Revised

                                    Total private      N/S private     Total mfg      N/S mfg

Year-on-year, 2019:        +0.73%           +0.85%           +0.74%        +0.45%

Year-on-year, 2018:        +1.40%          +1.74%                 0%          +1.03%

Interestingly, though, the biggest changes came for all private sector workers. And the updates make the picture for blue-collar manufacturing workers slightly gloomier.

But the revisions still left the Obama years’ real wages performance looking better than those of the Trump years – a comparison that might be raised frequently during this election year. The 34-month periods have been chosen because that’s the amount of time Mr. Trump has been in office since his first full month in the White House (February, 2017. Further, the two time periods are right next to each other in the current business cycle.

The bottom line? The gap between the two administrations closed for all private sector workers and blue collar private sector workers. But it widened in the manufacturing sector.

                                                                Unrevised

                                  Total private      N/S private      Total mfg    N/S mfg

1^st 34 Trump months:    +2.53%           +2.72%          +0.65%       +2.77%

last 34 Obama months: +3.50%           +3.97%          +3.05%       +2.97%

                                                                  Revised

                                  Total private      N/S private      Total mfg    N/S mfg

1^st 34 Trump months:    +2.71%            +3.05%          +0.65%      +2.65%

last 34 Obama months: +3.49%            +3.97%          +3.44%      +3.34%

And finally, the impact of the revisions on real wages trends during the current economic recovery, and on the previous two expansions:

                                                                                 Unrevised

                                                             Private    N/S private    Mfg      N/S mfg

1990s expansion (2Q 91-1Q 01):           n/a          +6.37%        n/a       +2.18%

bubble expansion (4Q 01-4Q 07)         : n/a          +0.35%        n/a       -2.77%

current expansion (2Q 09 – present): +6.30%      +6.79%    +1.59%   +3.01%

                                                                                 Revised                      

                                                              Private   N/S private    Mfg      N/S mfg

1990s expansion (2Q 91-1Q 01):            n/a          +6.51%       n/a        +1.81%

bubble expansion (4Q 01-4Q 07):           n/a         +0.35%        n/a        -2.77%

current expansion (2Q 09 – present):  +6.70%     +7.01% +   1.59%    +2.77%

The big takeaways, as I see them: The real wage performance of the current recovery looks somewhat better than previous thought – except for blue-collar manufacturing paychecks. And the widely admired 1990s expansion looks better for blue-collar private sector workers in toto but worse for their manufacturing counterparts.

Several recent polls show Americans to be unusually happy about the state of the economy and their own personal situations. (For the latest, see here.) These real wage figures indicate that it’s not yet entirely clear why.