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Re: Why Wages Lag
Like oil, there's many moving parts in the low wage story.
Among them, in addition to offshoring and lower pay, work-visa professionals, is:
the end of the Cold War.
the transition to a neoliberal global economy.
the US tipping from recession to depression for an increasing number of working people.
the full-court ideological offensive on organized labor in any form, including both unions and pensions. How quickly these have been embraced as 'dirty words' and/or 'lucky' benefits for a shrinking minority.
As tough as it is running a small business today - it was easier back in the late 70s to mid 90s - the loss of labor leverage is a factor in keepin' going.
from the NSBA ( a bit dated but I can't imagine it's improved significantly)
Small Business by the Numbers
More than one in two people in the U.S. private workforce work for or run a small business, according to data fromthe U.S. Small Business Administration Office of Advocacy and U.S. Census Bureau
Every one in two individuals in the U.S. private workforce run or work for a small business.
Since 1989, small business has created 93.5 percent of all net new jobs, totaling 21.9 million new jobs in the past19 years—or 4,000 jobs per day.
Small-business comprises 99.7 of all U.S. private employers and creates more than half of U.S. gross domestic product.
Small firms create 13 times more patents per employee than large firms, and export an average of $375 billion ingoods and services every year.
Fifty-four percent of adults surveyed in the 2007 Harris Interactive Poll, Confidence in Leaders of MajorInstitutions expressed a great deal of confidence in small-business owners—the only group in the past three yearsto garner such a high rating from a majority of people.
Economic Slowdown
When asked in early 2007 about their economic outlook, a majority of small-business owners responded positively. In early 2008, however, a whopping 71 percent expressed a negative outlook on the economy. That number jumped to 79 percent in September 2008.
Despite the relatively bleak outlook for the U.S. economy as a whole, 75 percent of small-business owners today are confident about the future of their own business.
More than half (55 percent) of business owners surveyed said they have faced difficulty securing credit over thelast year.
According to the October 2008 Federal Reserve Board Senior Loan Officer Survey, 75 percent of U.S. banks have tightened their lending standards on small business loans. When asked about credit cards, 20 percent cited reduced limits on prime borrowers while 60 percent lowered limits on nonprime borrowers. Ninety-five of those banks that lowered limits cited the poor economy and reduced tolerance for risk as reasons for lowering the credit card limits—neither of which are attributable to poor performance of the credit card holder.
Key Issues
Fifty percent of small-business owners cite “economic uncertainty” as one of the most significant challenges they face to the growth and survival of their business, with the cost of health insurance (35 percent) and lack of available capital (32 percent) rounding out the top three.
Spikes in energy costs have negatively impacted 77 percent of small-business owners, according to the February 2008 NSBA survey.
In 2008, only 38 percent of all small businesses were able to provide health insurance to their employees, downfrom 61 percent in 1993.
Credit cards continue to be the largest source of financing for small businesses, yet 57 percent report that their credit card terms are worsening.
Two years ago in 2011 a Nobel prize-winning economist, Michael Spence, confirmed my decade-old conclusion that the US economy no longer had the capability to create any jobs except low-wage domestic service jobs that do not produce tradable goods and services that can be exported to reduce the massive US trade deficit. Spence validated my argument that the “new economy” was the offshored economy. Spence concluded that the outlook for the US economy and US employment is dire. The US faces “a long-term structural challenge with respect to the quantity and quality of employment opportunities in the United States. A related set of challenges concerns the income distribution; almost all incremental employment has occurred in the non-tradable sector, which has experienced much slower growth in value added per employee. Because that number is highly correlated with income, it goes a long way to explain the stagnation of wages across large segments of the workforce.” http://www.cfr.org/industrial-policy...allenge/p24366
Among them, in addition to offshoring and lower pay, work-visa professionals, is:
the end of the Cold War.
the transition to a neoliberal global economy.
the US tipping from recession to depression for an increasing number of working people.
the full-court ideological offensive on organized labor in any form, including both unions and pensions. How quickly these have been embraced as 'dirty words' and/or 'lucky' benefits for a shrinking minority.
As tough as it is running a small business today - it was easier back in the late 70s to mid 90s - the loss of labor leverage is a factor in keepin' going.
from the NSBA ( a bit dated but I can't imagine it's improved significantly)
Small Business by the Numbers
More than one in two people in the U.S. private workforce work for or run a small business, according to data fromthe U.S. Small Business Administration Office of Advocacy and U.S. Census Bureau
Every one in two individuals in the U.S. private workforce run or work for a small business.
Since 1989, small business has created 93.5 percent of all net new jobs, totaling 21.9 million new jobs in the past19 years—or 4,000 jobs per day.
Small-business comprises 99.7 of all U.S. private employers and creates more than half of U.S. gross domestic product.
Small firms create 13 times more patents per employee than large firms, and export an average of $375 billion ingoods and services every year.
Fifty-four percent of adults surveyed in the 2007 Harris Interactive Poll, Confidence in Leaders of MajorInstitutions expressed a great deal of confidence in small-business owners—the only group in the past three yearsto garner such a high rating from a majority of people.
Economic Slowdown
When asked in early 2007 about their economic outlook, a majority of small-business owners responded positively. In early 2008, however, a whopping 71 percent expressed a negative outlook on the economy. That number jumped to 79 percent in September 2008.
Despite the relatively bleak outlook for the U.S. economy as a whole, 75 percent of small-business owners today are confident about the future of their own business.
More than half (55 percent) of business owners surveyed said they have faced difficulty securing credit over thelast year.
According to the October 2008 Federal Reserve Board Senior Loan Officer Survey, 75 percent of U.S. banks have tightened their lending standards on small business loans. When asked about credit cards, 20 percent cited reduced limits on prime borrowers while 60 percent lowered limits on nonprime borrowers. Ninety-five of those banks that lowered limits cited the poor economy and reduced tolerance for risk as reasons for lowering the credit card limits—neither of which are attributable to poor performance of the credit card holder.
Key Issues
Fifty percent of small-business owners cite “economic uncertainty” as one of the most significant challenges they face to the growth and survival of their business, with the cost of health insurance (35 percent) and lack of available capital (32 percent) rounding out the top three.
Spikes in energy costs have negatively impacted 77 percent of small-business owners, according to the February 2008 NSBA survey.
In 2008, only 38 percent of all small businesses were able to provide health insurance to their employees, downfrom 61 percent in 1993.
Credit cards continue to be the largest source of financing for small businesses, yet 57 percent report that their credit card terms are worsening.
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