An Economy for the Few This Labor Day

Chuck Sheketoff

This Labor Day Oregon’s workers are producing goods and services more efficiently than when the economic expansion began four years ago, but few workers have seen much income benefit as a result.

* Last year, Oregonians produced $40,881 per person in goods, services, and other economic output. That’s an increase of about $7,600 of output per person compared to four years earlier, in 2002. Oregon’s per capita output last year was nearly double what it was just 15 years ago.

* Some workers have seen substantial pay raises in the last four years, but most of the wage gains have gone to workers in sectors of the economy that already had high pay. Among the 25 industry subsectors in Oregon with the highest pay, average pay shot up by 10 percent over inflation between early 2003 and early 2007. In the 25 lowest-paying industries, by contrast, the average pay raise was just one percent over inflation.

* Only the highest-paid fifth of workers saw their earnings rise faster than inflation during the first three years of the expansion. The rest of the workforce, the bottom 80 percent, saw their wages fall behind inflation.

* From 2002 to 2005, nearly all (97 percent) of Oregon income gains went to the richest one percent— households with annual incomes exceeding about $360,000 or averaging about $862,000.

* The unequal distribution of income gains during the current expansion continues and exacerbates the widening income inequality of the last generation. From 1980 to 2005, the top one percent of households in Oregon saw their average real income skyrocket by nearly $580,000, over and above inflation. The typical Oregon household, by contrast, saw their income improve by just $618.

* In 2005, the 1,500 households in the top one-tenth of one percent of Oregon households raked in adjusted gross income totaling nearly $4.6 billion. That’s more income than was reported as a group by the 530,000 households in the lowest-income 35 percent of the income spectrum.

* In 2006, corporations realized nearly $13 billion in profits in Oregon, more than double their annual profits during the late 1990s high tech boom. The corporate profit take in 2006 was the highest on record.

Thoughtful public policies can protect the state from the negative consequences of an economy that works for the few at the expense of the many.

The 2007 legislature took some important steps to invest in protecting and promoting opportunities for all Oregonians. Legislators referred a measure to voters that would provide health coverage to all children, increased funding for Head Start pre-kindergarten education for poor children, expanded college financial assistance, regulated loan sharking, and gave workers the right to form a union if a majority of workers sign union cards or petitions. These efforts were a good start, but more aggressive policies are necessary to produce an economy that works for us all.

Read An Economy for the Few: Oregon workers are more productive, but households with incomes over $360,000 are getting most of the income gains (PDF) the latest report from the Oregon Center for Public Policy (OCPP).

NOTE: I have deleted an off subject comment about internal politics at SEIU 503. I suggest the author resubmit the comment as a guest opinion. The comment had nothing to do with this post and was thus inappropriate. I will let the BlueOregon editors decide whether the comment is worthy of a guest opinion.

  • (Show?)

    As noted above, there was an off subject comment that I removed. In response to that post by "Infuriated 503 Member" Kari Chisholm wrote "Hey Mr. 503. Please stop spamming this blog (and others) with this same comment over and over. You're welcome to write a guest column, or buy an ad, but stop spamming the blog."

    Then "East Bank Thom" wrote "Why not take the initiative and bump 503's post up to 'notable comment'?"

    If Infuriated wants to submit a notable comment or guest opinion, let him/her identify him/herself and I will let the editors of BlueOregon decide whether to post.

  • Kurt Chapman (unverified)

    Chuck, interesting statistics for sure. What happens when you add in the effects of double digit inflation in health insurance costs that many of these sectors provide for employees and their families? Of course the employees usually provide some of the monthly cost, however rarely absorb more than a small percentage of the actually increase in costs year over year.

  • paul spencer (unverified)

    What is your estimate (or data) as to the rate of inflation?

    My take is the same as John Williams (check out his web site, Shadow Government Statistics). Inflation rate indices changed substantially during the era of Greenspan's influence - including pre-Fed chairmanship. Inflation in the same terms as pre-Reagan indices has been closer to 10% per year for the last 6 or so years.

    For the past year an old-style CPI is well into double digits. I suggest that, in terms of the cost categories that truly affect working people, inflation is closer to 25% during the past year.

    Point being that I doubt that wages of even the best-paid working people have kept up with any real gauge of inflation.

  • Tom Civiletti (unverified)

    This is the kind of study that triggers accusations of class warfare from right wing pundits. The standard line is that some people are envious of those who do well, and it's just such bad manners to mention that some folks don't have a home, enough to eat, or health care.

    Unfortunately, many voters buy this claptrap and reject the kind of programs Chuck mentions as heinous governmental social engineering. They elect enough Republicans to prevent substantive efforts to reform the system in a way that reduces savage inequality. The poor will always be with us because the rich see to it.

    Too bad we can't do something to reduce the influence of big money on our elected officials.

  • STeve (unverified)

    "most of the wage gains have gone to workers in sectors of the economy"

    Ummm, you forgot one major employment sector that has seen pretty good wage/beenfit gains - government employees. I think they alone would be about 20% of the working population. However, I have to agree, I think they have doen a lot better than non-government employees for wage/benefit growth.

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