Monday, August 28, 2006

Economic Outlook

The last few days have been another one of those periods when all the news seems dire... housing market about to crash, recession on the way... here is a front page article from today's NY Times that sums some of it up:

Real Wages Fail to Match a Rise in Productivity
Average family income, adjusted for inflation, has continued to advance at a good clip, a fact Mr. Bush has cited when speaking about the economy. But these gains are a result mainly of increases at the top of the income spectrum that pull up the overall numbers. Even for workers at the 90th percentile of earners — making about $80,000 a year — inflation has outpaced their pay increases over the last three years, according to the Labor Department.

“There are two economies out there,” Mr. Cook, the political analyst, said. “One has been just white hot, going great guns. Those are the people who have benefited from globalization, technology, greater productivity and higher corporate earnings.

“And then there’s the working stiffs,’’ he added, “who just don’t feel like they’re getting ahead despite the fact that they’re working very hard. And there are a lot more people in that group than the other group.”

In 2004, the top 1 percent of earners — a group that includes many chief executives — received 11.2 percent of all wage income, up from 8.7 percent a decade earlier and less than 6 percent three decades ago, according to Emmanuel Saez and Thomas Piketty, economists who analyzed the tax data.

One quote from the article that I found funny:
...wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s. UBS, the investment bank, recently described the current period as “the golden era of profitability.”

Until the last year, stagnating wages were somewhat offset by the rising value of benefits, especially health insurance, which caused overall compensation for most Americans to continue increasing. Since last summer, however, the value of workers’ benefits has also failed to keep pace with inflation, according to government data.

I was struck by the word "value" in relation to "health insurance." I'm sure no one would argue that health insurance is getting more expensive, but does that mean it is increasing in value? Leaving aside the purposes of calculating government stats, I think I'd find my health insurance a lot more valuable if I didn't have to jump through hoops of seeing primary care doctors and getting pre-approvals for certain things, and if the doctors I saw felt like they could take more than 5 seconds of their time to see me before rushing off to the rest of their huge patient load...
I feel sorry for doctors nowadays-- it seems like most of them are good, smart people who just want to do their job without insurance companies making it more difficult for them.

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