Re: [A-List] "The Late '90s Never Happened"

["Michael Keaney" <michael.keaney@xxxxxx>]

Max writes:

I was referring to actual data on wages and incomes,
not unemployment as some kind of indirect indicator
of wages and incomes.  The actual data say what I said:
the late 90s was unusually good for the working class
in the U.S., across the board.  Hours are of course
distinct from hourly wages but not from income.  Hours
worked went up but not by a huge amount.

Somehow from this, you slide into a rant about
productivity, DeLong, and labor market flexibilization,
none of which applies to me and the progressive economists
I know.

I will state unequivocally that tight labor markets
are a good thing, as far as workers are concerned.

If you think this premise is ahistorical,
then perhaps you can identify a period in history when a
very low unemployment rate was associated with falling
incomes and eroding wages.

If anything is ahistorical, it is an inability to distinguish
times that are relatively good from times that are relatively
bad.

-----

Rant, moi?

I was irritated by the seemingly casual citation of statistics, as if they
spoke for themselves. Economists are the original postmoderns in their
belief in quantification for its own sake: the numerical equivalent of text
overriding context. I would like to see explanation and/or qualification of
figures like the ones you cited. It is not enough to say that an official
unemployment rate of 3.9 per cent is, of itself, a good thing. Observers
and/or citizens of Britain are acutely sensitive to the manipulations of
official unemployment statistics, which, since 1979, have been altered
approximately 40 times -- in almost all cases, with the effect of reducing
those "officially" unemployed. I don't pretend to have expertise on the US,
and I would defer to yours were you to display it more openly and
extensively, but what about the dependence on illegal immigrants and other
statistical tricks employed by the system (and not necessarily the fault of
the good, conscientious people at BLS)? In Britain the trick is to measure
unemployment by those who qualify to receive the "jobseeker's allowance"
(formerly unemployment benefit), a complete tautology since if the
powers-that-be do not recognise you as qualifying for the allowance you are
not unemployed. Is this the case in the US?

Meanwhile there is enough literature abroad to highlight the phenomenon of
the working poor, and the hardship experienced by many who have to hold down
multiple jobs in order to pay the bills:

"No Shame in My Game: The Working Poor in the Inner City" by Katherine S.
Newman
"Getting by on the Minimum: The Lives of Working-class Women" by Jennifer
Johnson
"Laboring Below the Line: The New Ethnography of Poverty, Low-Wage Work, and
Survival in the Global Economy" by Frank Munger
"Nickel and Dimed: Undercover in Low-wage America" by Barbara Ehrenreich

All of these books have been published in the last three years and deal with
the period of "prosperity" that was supposed to characterise the Clinton
era. Literature like this leads me to ask "why is it that, with apparently
only 3.9 per cent of the workforce unemployed, there is still so much
poverty and widening inequality in the United States?" Casually flipping
official statistics with the implied intent of correcting criticism of the
conventional wisdom on US economic performance in the 1990s is neither
sufficient nor acceptable in a forum like this. By all means feel free to
contend that the criticism is wrong -- there is no single political/economic
line being pursued here. But please be prepared to justify such points with
reasoned argumentation.

Re productivity, DeLong and labour market flexibilisation, these articles,
previously posted in our "New economy bull" thread, might explain a bit
about my perspective on the "prosperity decade":


Wal-Mart accused of forcing staff to work unpaid overtime
By Andrew Buncombe
The Independent, 26 June 2002

Wal-Mart, the American retail giant that owns the British supermarket
Asda, is facing legal actions over claims that it routinely demands
staff perform unpaid work "off-the-clock".

Hundreds of thousands of workers in 28 American states are involved in
lawsuits that allege Wal-Mart managers forced staff to work unpaid
overtime as part of a de facto policy created by the company's intense
focus on cost-cutting.

In one recent class-action in Texas, lawyers say 200,000 present and
former employees were underpaid by $150m (£100m) over four years by
making them work during their daily 15-minute breaks.

See http://archives.econ.utah.edu/archives/a-list/2002w26/msg00034.htm


Down and nearly out in Key West and London

Nickel and Dimed: Undercover in Low-wage USA by Barbara Ehrenreich
Granta 240pp £8.99
 Below the Breadline: Living on the Minimum Wage by Fran Abrams
Profile Books 192pp £6.99
 Reviewed by Matthew Collin

"You thought it would be simple; it is extraordinarily complicated. You
thought it would be terrible; it is merely squalid and boring. It is the
peculiar lowness of poverty that you discover first; the shifts that it
puts you to, the complicated meanness, the crust-wiping."
Almost 70 years after George Orwell's observations were published in
Down And Out In Paris And London, poverty remains a complex, difficult
and unattractive subject. Our celebrity-obsessed press rarely ventures
into the parallel universe of the terminally unglamorous, which is why
these two books deserve praise for attempting to lay bare the grim
banality of a breadline existence through good, old-fashioned
investigative reporting.

To find out whether people can actually survive on a wage of $7 an hour,
as millions of Americans must, journalist Barbara Ehrenreich spent
months doing unskilled labour, telling bosses she was a divorced
housewife returning to employment, and renting the cheapest
accommodation she could find. In Key West, Florida, she worked as a
waitress and couldn't even afford to live on a caravan site: "It is a
shock to realise that 'trailer trash' has become, for me, a demographic
to aspire to," she writes.

She soon discovered that one wage wouldn't cover her bills and took a
second job, as an estimated 7.8 million others do in the US, getting by
on caffeine and ibuprofen. Ultimately she walked out in tears. She went
on to toil as a cleaner and a shop assistant at Wal-Mart, where she
found she couldn't even afford to buy discounted clothes from the store
she worked in.

See http://archives.econ.utah.edu/archives/a-list/2002w37/msg00066.htm


Michael Keaney