Enlighten Radio Podcasts:Podcast: The Winners and Losers Show: Imam Faruq Post Of the Islamic Society

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Link: http://podcasts.enlightenradio.org/2017/11/podcast-winners-and-losers-show-imam.html

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Enlighten Radio Podcasts:Podcast: Winners and Losers--Mary Ann Hitt (Sierra Club) on Beyond Coal in the Trump era

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Enlighten Radio Podcasts:Podcast: Winners and Losers -- Alan Essig on the Republican Tax Ripoff

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Enlighten Radio Podcasts:Podcast: Resistance Radio -- Nov 8, 2017 -- Celebrating Victories!

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Post: Podcast: Resistance Radio -- Nov 8, 2017 -- Celebrating Victories!
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New paper on pay-productivity link does not overturn EPI findings [feedly]

New paper on pay-productivity link does not overturn EPI findings
http://www.epi.org/blog/new-paper-on-pay-productivity-link-does-not-overturn-epi-findings/

Economists Anna Stansbury and Larry Summers released a new paper today, "Productivity and Pay: Is the Link Broken?" which explores the relationship between economic productivity and compensation.

We welcome further inquiry into the relationship between productivity growth, inequality, and the ability of typical workers to benefit from a growing economy—and what policies are needed to do that. The Stansbury/Summers analysis adds some light but also some confusion and, ultimately, makes oversized claims about the role of productivity, especially since minor changes in specification of one of the three variables—unemployment—both substantially weakens some of their results, and also highlights just what is being missed in this investigation.

What are the issues?

The iconic chart (data here) that Stansbury and Summers are investigating is one showing a typical workers' hourly compensation (measured as the compensation for production/nonsupervisory workers, roughly 80 percent of payroll employment) grew in tandem with productivity in the 1948-73 period but diverged thereafter. We have presented decompositions of the wedges between productivity and compensation for a typical worker that identifies the contribution to the divergence of: 1) changes of labor's share of income (gap between average productivity and average compensation); 2) changes in wage/compensation inequality (gap between typical worker's compensation and average compensation); and 3) differences in price deflators used for productivity and compensation. We find in the most recent period, 2000-2014, that rising inequality—both compensation inequality and reductions in labor's income share—explains eighty percent of the gap between productivity and a typical workers compensation.

The Stansbury/Summers paper does not dispute any of our data, or the key finding that there has been a substantial gap between the growth of productivity (net of depreciation) and the hourly compensation of a typical worker since 1973. Productivity since then has grown 73 percent, while a typical worker's compensation grew about 12 percent (using either median hourly compensation or the production worker series). Even if one measures this with alternative price indices the same overall picture remains. These data imply that a typical worker received only a small share of all the productivity growth generated over the past four decades.

Stansbury/Summers set out to examine whether productivity is linked to compensation growth, on average and for a typical worker, using the data we provided. We would stress that our findings on this topic have always focused on the gap between a typical workers' pay and productivity, which is why the title of our recent paper was "Understanding the Historic Divergence Between Productivity and a Typical Worker's Pay: Why It Matters and Why It's Real." Unfortunately, far too much of the Stansbury/Summers paper and its press coverage so far glosses over the crucial distinction in a world of continuous rising wage inequality between average and typical workers' compensation.

Stansbury and Summers examine whether increases in productivity translate seamlessly into higher compensation on average or for typical workers. Conventional economic analysis and punditry often asserts by assumption that there is a 1-to-1 link between these two. So, any wage problem that arises inspires only one policy diagnosis: make productivity grow more rapidly. Our argument has simply been that productivity is a necessary, but not sufficient, condition for broad-based wage growth. But if other policy decisions are made with the aim of suppressing wage growth for typical workers, pay can stagnate even as productivity rises. In the end, nothing in the Stansbury/Summers analysis makes us rethink this view. Instead, their results simply show that there may be a link (though generally not one-for-one) between productivity and a typical worker's pay, holding everything else equal. This finding does not support a claim that policymakers should only focus on productivity growth if they want wages to rise.

What did Stansbury and Summers find?

Given the previous discussion, we will focus now only on the Stansbury/Summers findings regarding the links between productivity and pay for production and non-supervisory workers. Again, our claim isn't that overall average pay has lagged terribly far behind productivity, it's that pay for most workers has, and that the average has been kept up by a large redistribution of pay to the high end (think CEOs and financial sector professionals). Production and non-supervisory workers constitute 80 percent of the private-sector workforce.

In Table 1 of their paper, Stansbury and Summers present results from regressing the 3-year average of hourly production worker pay on the 3-year average of productivity growth, controlling for changes in unemployment. They find that over the entire 1950-2014 period, the coefficient on productivity growth is 1, implying all else equal (this is very important) each 1 percent increase in productivity raises pay by 1 percent. When splitting this into two sub-samples, 1950-1973 and 1975-2014, they find a slightly smaller, but still large and statistically significant coefficient on productivity. Most surprisingly, it is an identical 0.6 in each sub-period.

At first blush, this seems like a big challenge to our claim that the link between productivity and pay has been radically weakened since the late 1970s. But it's really not. A regression coefficient shows the all-else-equal effect of one variable on another. So, it could well be true that after the mid-1970s, productivity growth was indeed "trying" to boost wages and that if only productivity had changed over that time that wages would have risen smartly.

But our claim is simply that "all else" was not equal after the mid-1970s. To illustrate what this means, consider one technical tweak to the Stansbury/Summers regression: adding the unemployment rate as a level, rather than change, into their regression of production worker pay on productivity. The table below shows coefficients from an almost-identical regression to the Stansbury/Summers results in Table 1, columns 1e-1g (the difference is how we deflate production worker pay, but that doesn't end up changing the regression in any significant way). With just productivity growth and the change in unemployment, the Stansbury/Summers results are essentially replicated.

But it's far more standard to regress compensation growth on unemployment levels and productivity (say in standard wage Phillips curves) than to use the unemployment change. Adding unemployment as a level actually pushes up the coefficient on productivity in the earlier period and pushes down the coefficient in the latter period, but that's less important.

More important is that the coefficient on unemployment is large and negative—higher unemployment rates are associated with slower pay growth. This is not surprising. But then consider the average unemployment rate in 1950-1973 compared to 1975-2014; it's about 1.8 percentage points higher in the second period. So, if one compares the effect of productivity plus unemployment rather than just the effect of productivity, it's clear that one would predict that pay growth would be slower in the second period (and reminder: it was).

Further, the constant term that results after adding in unemployment as a level is interesting. In the earlier period, this constant term indicates that trend pay growth (pay growth that would've resulted had the variables included in the regression not moved at all) in the earlier period was 2.5 percent, while it was essentially zero in the later period.

So, again, maybe productivity growth was indeed all-else-equal trying to push up hourly pay in the latter period, and with the same force it applied in earlier periods. But we know it failed. Pay growth decelerated markedly after the mid-1970—far more than did productivity growth (and these facts are not disputed).

It also seems that Stansbury and Summers have moved the goalposts. They tout that they find a link between productivity and the pay of a typical worker, even though that link is often in their regressions not the oft-claimed 1-to-1 linkage. The linkage is 0.6-to-1 in their work and falls to 0.5-to-1 when one adds unemployment levels. But these linkages are not even present when we omit the late 1990's period of accelerating productivity and wage growth: the linkage falls to a statistically insignificant 0.3-to-1. This suggests that modesty is in order about claims that there is any tight and proportional link between productivity and the compensation of a typical worker.

Our contention all along has been that this pay deceleration did not just reflect slower productivity growth, but that it in fact reflected a number of intentional policy decisions that undercut typical workers' ability to demand and achieve higher pay. One such policy decision was exactly over how aggressively the Federal Reserve and other macroeconomic policymakers should target low unemployment. Others included decisions about whether or not to protect workers' rights to organize and bargain collectively (the country obviously chose not to) and whether or not to raise the federal minimum wage in line with inflation or productivity growth (again, we chose not to).

In the end, our argument was never about what a regression coefficient would show about the all-else-equal association between productivity and pay. It has instead been about everything that was not kept equal in regards to pay-setting since the mid-1970s. As non-productivity influences on pay were systematically rigged to suppress wages, pay failed to rise even as productivity did. This should be a key concern for policymakers, regardless of the value of a regression coefficient.

What does all this mean to policy?

In regards to the claim that Stansbury and Summers are disputing, let's go back to our 2015 paper that they quote: "…boosting productivity growth…will not lead to broad-based wage gains unless we pursue policies that reconnect productivity growth and the pay of the vast majority." This still seems right-on to us. It's not an argument to not try to raise productivity growth. It's an argument that many things besides productivity influence typical workers' pay, and if they're manipulated to rob these workers of leverage, pay growth can absolutely stagnate even if productivity rises.

What one of us wrote the Wall Street Journal's Greg Ip when asked for our take for his storytoday is a decent summing-up:

To be really concrete, if (say) the next 15 years sees decent productivity growth (say 1.5 percent annually or above) but is characterized by the 6.5 percent average unemployment rate that characterized the 1979-2015 period, and we see no fundamental change in workers' organization, I think we'll see truly miserable wage growth for the majority of workers (basically the 0.2 percent growth that characterized the 1979-2013 period for the bottom 70 percent). If instead we see average unemployment lower than 5 percent, and see some growth in workers covered by a collective bargaining agreement and some ambitious increases in minimum wages, I think we can make typical workers' pay and productivity move a lot closer together.

In the end, it seems that Stansbury and Summers are saying the same thing as we do. Ip summarizes their point as "[Stansbury/Summers] found a strong and persistent link between hourly productivity and a variety of wage measures since 1973. The problem, they conclude, is that the positive influence of productivity on pay has been overwhelmed by other forces pushing the other way." That, in fact, sounds the same as our conclusions, and from the point of view of a typical worker is the same: if we raise productivity but do not address policies that escalate inequality—Stansbury and Summers' "other forces"—then those productivity augmenting policies will fail to result in higher living standards for typical workers.

 -- via my feedly newsfeed

How a Socialist Beat One of Virginia’s Most Powerful Republicans

How a Socialist Beat One of Virginia's Most Powerful Republicans


Is Lee Carter's shocking victory a sign of things to come across America?

BY GRAHAM VYSE

November 8, 2017

Within minutes of NBC News' calling Virginia's gubernatorial election for Ralph Northam on Tuesday night, Democratic National Committee chairman Tom Perez phoned into MSNBC to celebrate. "I'm feeling incredibly optimistic," he said when host Chris Hayes asked about Democratic gains in the state's House of Delegates. "The author of the anti-transgender bathroom bill just got defeated by a woman named Danica Roem—a transgender woman who is a spectacular candidate."



Perez proceeded to name-check Elizabeth Guzman and Hala Ayala, the first Latinas ever elected to the House, but then Hayes asked him about another candidate—one who'd barely received any national attention throughout the campaign. "There's also, I believe, a Marine veteran who identifies as a democratic socialist who, if I'm not mistaken, is running competitively with someone in the House GOP leadership," he said. "The House GOP whip might lose to a socialist Marine veteran? Is that actually happening?"

It was indeed. Democrat Lee Carter, a red-haired, 30-year-old Marine veteran from Manassas, won a remarkable nine-point victory to oust Delegate Jackson Miller, a deep-pocketed Republican incumbent who serves as House Majority Whip. Carter ran openly as a socialist—he and his supporters crooned the union anthem "Solidarity Forever" after their victory—and he won with almost no institutional support from the state Democratic Party. The Richmond Times-Dispatch's Patrick Wilson reportedlast month that party leaders "abandoned" Carter after he declined to report campaign metrics like the number of doors he'd knocked and the amount of money he'd raised. Carter told Wilson he "ceased reporting to the House caucus after multiple information security lapses in which confidential information that we reported to the House caucus was leaked outside of the party infrastructure." But he also said the party leaders "wanted a bit more editorial control over my messaging than I was comfortable with." Wilson wrote that "Democratic Party leaders were not eager to discuss Carter, preferring to promote other candidates." In fact, Wilson called Carter "the kind of rogue candidate that gives an apparatus like the Democratic Party of Virginia a fit."



Carter did receive funding from Democratic-aligned groups and $13,000 from the Democratic Party of Virginia, as well as support from WinVA, a PAC supporting Democratic House candidates run by former congressman and gubernatorial primary candidate Tom Perriello, according to a campaign finance report uploaded by The Intercept's Lee Fang. But Carter's victory is a testament to his own campaign and the work of outside groups, including the D.C. chapter of the Democratic Socialists of America, which caught the rising Democratic wave that swept even unlikely candidates into office on Tuesday.

________________________________

It's fitting that Carter's campaign ended with a shocking result, because it was inspired by a literal shock two summers ago. "I was installing lighting control systems and I got shocked because the lighting control panel I was working on was miswired by an electrician," he told me in Manassas last month. "I got a 245-volt shock—in one hand, out the other—right across the chest." He blew out his back in the incident. He could barely walk for months. His frustrating battle with the state to get workers' compensation for his injury inspired him to enter politics. "When I was able to walk again," he told me, "I decided I'm not just going to walk. I'm going to run for something because nobody should have to go through this."

Carter came to his political ideology recently—as in, just last year. "I was actually already running by the time I considered socialism as an economic philosophy," he told me. "My introduction to it actually came through the presidential campaign of Bernie Sanders. He went out there and said, 'I'm a democratic socialist. Here's what that means: It means I believe in strong unions, health care for everybody, and an end to discrimination.' Well, that's what I believe in, too. I dug a little more into it, and I realized a lot of the problems we have in today's society reflected in electoral politics are symptoms of economic problems."

Carter said he's "always been a bit to the left of where the Democratic Party was, and a little dissatisfied with what they were doing on a large scale, and never knew why. It wasn't until Bernie Sanders's presidential campaign that I put two and two together. I looked up to guys like FDR and Democrats of that era who were really rooted in working class politics. They had these mass movements of union workers who stood up and said 'we're not going to be mistreated by corporate interests anymore,' and they were able to achieve 50 year of stability and prosperity for this country. I always wondered why Democrats couldn't act like that again."


Miller, the Republican candidate, naturally didn't see Carter's socialism as part of a proud American tradition. After largely ignoring him for most of the campaign, he sent out mailers comparing Carter to Joseph Stalin and Mao Zedong. But Carter told me his own campaigning focused on the issues, including single-payer health care and getting money out of politics, which resonated with voters. "What we do when we get out there and talk to voters is get past the label entirely," he said. "My literature and all my paid communications are just about what I want to do when I go down to Richmond. In fact, my mail consultant had to add the word 'Democrat' to my walk cards at the last minute before he sent them to the printer."

At the same time, Carter was happy to talk about socialism when asked. "If you're to the left of Barry Goldwater, Republicans are going to call you a socialist anyway, so you may as well just own the label," he said. "The issues that I care about and the issues that the Democratic Socialists of America are working on are the issues that the Democratic Party's voter base cares about."

Carter worked well with his local Democratic Party throughout the campaign, but acknowledged the state party was a different story. "On the state level, it is a bit more strained," he said. "The corporations I'm actively attacking fund the state party. It's obviously going to create some tension." Yet despite this dynamic, he and his team were confident they could win based on a simple numbers game. They knew Miller had never received more than 9,500 votes in the district, and they believed they'd found enough voters to exceed that. As it turned out, Miller won 9,510 votes on Tuesday, but Carter won 11,360.

Plenty of the credit for this race belongs to a cadre of idealistic young people, since much of the ground organizing came from local members of the Democratic Socialists of America. The group's D.C. chapter endorsedCarter, and one of the chapter's leaders, 22-year-old American University graduate Jacquelyn Smith, managed his campaign. On Tuesday night, she tweeted that Carter's election is a bellwether of future success.


Long before he knew the results, Carter believed something similar about his campaign—that it could demonstrate how bold ideas are the pathway to rebuilding the Democratic Party. "Honestly, there are a lot of candidates who are playing it safe, but playing it safe is not the safe bet anymore," he told me last month. "That's the big takeaway I got from all of 2016. The center doesn't hold. We had Bernie Sanders on the left. We had Donald Trump on the right. Things are completely different. The parties are due for a realignment, and who knows how that's going to shake out."

Those weren't quite the tea leaves Tom Perez was reading on MSNBC. He didn't say much about Carter, even after Hayes brought him up. But on a night of surprising success for his party, the chairman did say this much: "There are a lot of remarkable things going on tonight in the House of Delegates races."

Graham Vyse is a staff writer at The New Republic.-- 

John Case
Harpers Ferry, WV

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The Poets and Mechanics Quaker Worship Group

The Zen of Bolshevism

The Zen of Bolshevism, and Baseball

Beautiful is better than ugly.
Explicit is better than implicit.
Simple is better than complex.
Complex is better than complicated.
Flat is better than nested.
Sparse is better than dense.
At the Plate, yr time to shine

In the field, part of the team.
Special cases aren't special enough to break the rules.
Although practicality beats purity.
Errors should never pass silently.
Unless explicitly silenced.

Throw foul play out of the game
In the face of ambiguity, refuse the temptation to guess.

IN the face of ambiguity's absence, be on guard for the trap.
There should be one-- and preferably only one --obvious way to do it.
Although that way may not be obvious at first unless you're from Brooklyn.
Now is better than never.
Although never is often better than *right* now.
If it's hard to explain, it's a bad idea.
If it's easy to explain, it might be a good idea.

The Namespace of Revolution -- is Not Revolution.