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Politics : Formerly About Advanced Micro Devices

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To: Road Walker who wrote (303261)	9/15/2006 2:54:24 PM
From: TimF	Read Replies (1) of 1574017

But the point stands... an increase in the cost of employer paid benefits doesn't increase employee living standards. The inflation adjustments to total compensation, include the inflation in the areas were the benefits are provided. Inflation in for example medical costs, typically exceeds inflation in the rest of the economy. If benefits go up to cover the higher costs in medical care than perhaps the real benefit hasn't increased (real in this case meaning benefits adjusted for inflation in the areas where the benefit gets spent). But if you adjust the medical and other benefits for the higher inflation in the areas covered by such benefits you also have to properly adjust the wages or salaries and other cash income for the lower inflation in the economy outside of medical care. So the real wages in effect do go up even though the official statistics for real wages show them as stagnant or near stagnant. The simpler way is just to adjust the total compensation for the inflation in the whole economy. By that method total compensation has gone up. I don't know of any study that even attempts to use the more complex method described above. Another factor to consider is that adjustment for inflation is itself a very in exact science which gives any figures for "real wages", "real wages and benefits" etc. a fair degree of uncertainty that grows over time, so its hard to make any solid, and verifiable conclusion of the changes in real wealth over time. And its not just inflation that causes problems. The data from the Census Bureau for household income is much more negative than the data from BEA analysis of tax returns for personal income, or even the Census Bureau's own data for real disposable income which increases of 3.1 percent, 2.4 percent and 3.4 percent over the past three years. (2003-2005). The BLS' data on wages also is fairly negative, but it doesn't adjust for changes in the workforce (more women and young people with part time jobs than in past decades). Basically you have all different sorts of data with less then perfect reliability, being adjusted for inflation by methods that are themselves questionable (any method is somewhat problematic) and showing a bunch of different conclusions. You also have subjective appraisals and anecdotal evidence. Which are of course going to be questionable. Over the very long run any sustained trend will probably be obvious, and statistics that don't support it are probably faulty, but your talking about quite a long time (probably generations if growth or decline isn't very strong) before this is totally clear. You can look at 1950 and see that economically we are better off. But 1992 or 1987? Well obviously the economy as a whole has grown (even per capita), but how much has it grown and how typically employee compensation has changed over that time isn't a question that can be answered by pointing to clear totally reliable hard data. You look at your data points and I look at mine and we come to different conclusions.

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