Monthly Archives: October 2002

Andrew Cassel answers some of my Wal-Mart questions

Not directly atleast :) Here goes the Inquirer article.

“Did Wal-Mart displace other jobs?”

Nope, not in number of retailing jobs, and it had no effect on other employment sectors either. That’s important.

Although Wal-Mart grew like topsy in Pennsylvania in the 1990s, that has essentially nothing to do with the disappearance of manufacturing jobs.

The numbers prove it: In 1990 – before Wal-Mart had a presence in Pennsylvania – retailing accounted for 17.5 percent of the state’s nonagricultural jobs.

At the end of 2001, with more than 110 Wal-Mart stores scattered across the state, retail’s proportion of the state’s workforce was 17.6 percent – essentially unchanged.

“If so, were they low paying or high paying?”

This is unanswered. The quality of the new retailing positions vs. the old seems to be up for debate. Dave King was nice enough to post a link on a class action lawsuit filed on behalf of Wal-Mart employees against the company on it’s employment practices.

“If not, did Wal-Mart simply fill a gap?”

No as well. Wal-Mart jobs have not filled the void left as manufacturing jobs have left the area.

And what the statistics suggest is that we have two separate stories here.

One is about the evolution of Pennsylvania’s economy away from its old dependence on heavy manufacturing toward something that looks more like the rest of America.

The second is about the evolution of retailing, with large, well-financed discount chains taking market share from old-line department stores.

What’s the connection between the two? There isn’t one, unless you include the march of technology, which underlies every economic story of our time.

While it is true, in other words, that Pennsylvania has lost a lot of manufacturing jobs – around 100,000 during the 1990s – it’s a huge leap to conclude that those jobs have been replaced by jobs at Wal-Mart and other retailers.

New question – if Wal-Mart hasn’t filled those jobs – what has?

For Richer

My friends on the left will love this NYTimes article. My friends on the right will tear it to shreds. Me? I have doubts about some of it, but I find this hard to argue with:

…But then why weren’t executives paid lavishly 30 years ago? Again, it’s a matter of corporate culture. For a generation after World War II, fear of outrage kept executive salaries in check. Now the outrage is gone. That is, the explosion of executive pay represents a social change rather than the purely economic forces of supply and demand. We should think of it not as a market trend like the rising value of waterfront property, but as something more like the sexual revolution of the 1960′s — a relaxation of old strictures, a new permissiveness, but in this case the permissiveness is financial rather than sexual. Sure enough, John Kenneth Galbraith described the honest executive of 1967 as being one who ”eschews the lovely, available and even naked woman by whom he is intimately surrounded.” By the end of the 1990′s, the executive motto might as well have been ”If it feels good, do it.”

Think about it. Now some scary facts (that should be researched, statistics are funny ya know):

… the average annual salary in America, expressed in 1998 dollars (that is, adjusted for inflation), rose from $32,522 in 1970 to $35,864 in 1999. That’s about a 10 percent increase over 29 years — progress, but not much. Over the same period, however, according to Fortune magazine, the average real annual compensation of the top 100 C.E.O.’s went from $1.3 million — 39 times the pay of an average worker — to $37.5 million, more than 1,000 times the pay of ordinary workers.

…the past 15 years it has been hard to deny the evidence for growing inequality in the United States. Census data clearly show a rising share of income going to the top 20 percent of families, and within that top 20 percent to the top 5 percent, with a declining share going to families in the middle.

…The C.B.O. study found that between 1979 and 1997, the after-tax incomes of the top 1 percent of families rose 157 percent, compared with only a 10 percent gain for families near the middle of the income distribution.

…the top 10 percent contains a lot of people whom we would still consider middle class, but they weren’t the big winners. Most of the gains in the share of the top 10 percent of taxpayers over the past 30 years were actually gains to the top 1 percent, rather than the next 9 percent. In 1998 the top 1 percent started at $230,000. In turn, 60 percent of the gains of that top 1 percent went to the top 0.1 percent, those with incomes of more than $790,000. And almost half of those gains went to a mere 13,000 taxpayers, the top 0.01 percent, who had an income of at least $3.6 million and an average income of $17 million.

…According to Piketty and Saez, in 1970 the top 0.01 percent of taxpayers had 0.7 percent of total income — that is, they earned ”only” 70 times as much as the average, not enough to buy or maintain a mega-residence. But in 1998 the top 0.01 percent received more than 3 percent of all income. That meant that the 13,000 richest families in America had almost as much income as the 20 million poorest households; those 13,000 families had incomes 300 times that of average families.

… life expectancy in the U.S. is well below that in Canada, Japan and every major nation in Western Europe. On average, we can expect lives a bit shorter than those of Greeks, a bit longer than those of Portuguese. Male life expectancy is lower in the U.S. than it is in Costa Rica.

…These days 1 percent of families receive about 16 percent of total pretax income, and have about 14 percent of after-tax income. That share has roughly doubled over the past 30 years, and is now about as large as the share of the bottom 40 percent of the population. That’s a big shift of income to the top; as a matter of pure arithmetic, it must mean that the incomes of less well off families grew considerably more slowly than average income. And they did. Adjusting for inflation, average family income — total income divided by the number of families — grew 28 percent from 1979 to 1997. But median family income — the income of a family in the middle of the distribution, a better indicator of how typical American families are doing — grew only 10 percent. And the incomes of the bottom fifth of families actually fell slightly.

Don’t get me wrong. I’m a pull yourself up by your bootstraps kinda guy. But what does it mean? Is the middle class getting squeezed out of existence? By what exactly? Ourselves? Simply not caring anymore? What does it mean to be middle class?

Ahh, it doesn’t matter anyway does it? Not since we are all building our own personal ego satisfaction zones. Our own personal communities we are kings of. Garret got the right quote:

…you can construct your own multimedia community, in which every magazine you read, every cable show you watch, every radio station you listen to, reaffirms your values and reinforces the sense of your own rightness. it is possible, maybe even inevitable, that you will slide into a solipsism that allows you precious little contact with people totally unlike yourself. but in your enclosed sphere you will feel very important.