WSJ: Why Americans Are More Likely to Work for a Large Employer, in 20 Charts

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Will Truman

Will Truman is the Editor-in-Chief of Ordinary Times. He is also on Twitter.

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21 Responses

  1. Avatar Francis says:

    Link goes to sign-in page. Any way to bypass to article?Report

    • Avatar Will Truman in reply to Francis says:

      Hurm. It loaded up for me before (and isn’t now). I’m not sure what’s going on. I suppose I’ll just have to stop linking to WSJ until I can figure it out.Report

    • Avatar Michael Cain in reply to Francis says:

      Copy the link into a draft Facebook post, and after Facebook adds its graphic, click on that. This works even if the draft is never published. Less tedious after you’ve set it up, use a browser extension to forge the Referer: field in requests sent to the WSJ to be “http://www.facebook.com”.Report

  2. Avatar Will Truman says:

    Hmmm. Okay, try clicking on the tweet I added to the post. See if that works.Report

  3. Avatar Oscar Gordon says:

    I found the bit about how pay at big companies has largely stalled interesting. Be interesting to see if there is a logical reason besides “bean counters only like to give pay increases to executives”, especially given the improvements in individual productivity.Report

    • Avatar Brandon Berg in reply to Oscar Gordon says:

      What improvements in individual productivity? I’ve only ever seen aggregate productivity data.Report

      • Avatar Oscar Gordon in reply to Brandon Berg says:

        For instance, as an engineer, being able to utilize computing clusters and parallelized CAE tools allows me to explore new designs in a month that would have taken over a year to do prior to the 90’s. Oddly enough, my pay hasn’t increased by a factor of 12 (more like a factor of 0.4, IIRC). And no, the cost of those resources is nowhere close to to eating up the difference.

        Obviously, I don’t expect my pay to actually increase that dramatically, but 2x or 3x isn’t unreasonable.

        Also, the productivity increases are in the aggregate, but we don’t see similar aggregate compensation increases.Report

        • Avatar DensityDuck in reply to Oscar Gordon says:

          Your pay doesn’t go up because your employer is getting paid less money. Your pay doesn’t go down because the employer takes the savings in delivering a system that costs less money.

          Prior to the 90s you’d have delivered your first design and the shop guys would have to Just Make It Work, however much money that cost. Only hopelessly broken things would get fixed or redesigned.

          These days, it’s assumed that what you deliver will Just Work, with only minor issues of fit or function, because it’s all been simulated in the computer before anyone even started doing anything with it. All of that custom fitting and cutting and shimming and sanding and rework is gone, and that’s where the savings comes from.Report

        • Avatar Brandon Berg in reply to Oscar Gordon says:

          Oscar Gordon: Also, the productivity increases are in the aggregate, but we don’t see similar aggregate compensation increases.

          Yes we do. The myth that pay isn’t tracking productivity comes from comparing mean productivity to median pay, excluding benefits.Report

          • Avatar Brandon Berg in reply to Brandon Berg says:

            In other words, median pay isn’t tracking mean productivity, but mean total compensation is tracking mean productivity. The most likely explanation for this is that median productivity is not tracking mean productivity.Report

            • Avatar Oscar Gordon in reply to Brandon Berg says:

              Can you unpack that last bit, it’s not gelling in my head at the moment?Report

              • Avatar Brandon Berg in reply to Oscar Gordon says:

                @oscar-gordon Sorry, been a bit busy lately. Take a look at this article from the Minneapolis Fed. It’s a bit long, but explains things more clearly than I could.Report

              • Avatar Oscar Gordon in reply to Brandon Berg says:

                Still strikes me as a version of th explanation that we are making more, but it’s all very invisible. That may be the case, but it doesn’t help the perception that wages have stagnated. You can show all the charts you want, but at the end of the year, I’m looking at my bank account, bills, and tax liability, and thinking I’m still having trouble getting ahead. What this article tells me is that corporations have decided to limit wages to rise about even with inflation & push the rest of compensation increases into areas where it can avoid paying more taxes*.

                PS I think the employment tax remains one of the dumbest things FDR ever did, and we perpetuate this stupidity to this day.Report

          • Avatar Road Scholar in reply to Brandon Berg says:

            The problem here is that you’re both right and wrong — literally. Would you disagree that “benefits” mostly means health insurance at this point? And healthcare prices, as measured by CPI breakdown, have been increasing at 2.5X the rate of overall inflation since the mid seventies.

            One interesting (for me) consequence of the ACA is that your W-2 now has a line item for employer contribution to health insurance. That number for last year was over 12K, which is about what I also had deducted for my share. This is many multiples of my tax bite and by far our largest single household expense. That 12K is also a very significant fraction of my “total compensation”.

            But here’s the thing; compared to my first job out of college where I had much better insurance (5% copay, low deductible, no employee contribution) it’s not as if I’m getting more healthcare, “better” perhaps due to technology but not “more.” It’s just costing a hell of a lot more, both to me and my employer.

            Essentially, this is acting like a tax, imposing a deadweight loss on the employment transaction in the same way the payroll tax does, only much larger and steadily increasing. There’s a big difference between what the employer is paying for my services and what I’m actually receiving.Report

    • Avatar Brandon Berg in reply to Oscar Gordon says:

      I think the reason we see pay stalling at large companies and increasing at small companies is probably that a disproportionate percentage of workers moving from small companies to large companies are low-skilled. Bucketed data can be misleading when the composition of the buckets is changing over time.Report

    • Avatar Saul Degraw in reply to Oscar Gordon says:

      @oscar-gordon

      Kevin Drum theorized that at medium sized companies pay was better because they are probably not public and because the bosses know nearly everyone. So they are large enough to earn lots of money but small enough where you aren’t just a cog. Even if you are the lowest level employee.Report

  4. Avatar Kimmi says:

    Free Money Crisis! News at 11.Report

  5. Avatar Jaybird says:

    How smart do you have to be to run/operate your own small business?
    How much gumption do you need to have to be able to run your own small business?

    It seems to me that whatever the value for these numbers are, they are larger than they were in the 90’s, which was then larger than it was in the 70’s, which was then larger than it was in the 50′.

    If you’re really smart and you’ve got a lot of gumption, why would you risk the whole small business thing when one of the other options is a position at a global company where you could make similar money to running a small business, get a 401k, health insurance, and god knows whatever else benefits?

    If you’re really good at coding, or supply chain management, or customer service, you can just get a job at MegaCorp. Heck, if you do that, you don’t have to be good at coding *AND* supply chain management *AND* customer service.Report

    • Avatar DensityDuck in reply to Jaybird says:

      Yeah; from what I’ve seen in my life, only about half of running a business is the actual running of it, designing the things and making them and selling them. The rest is the same book-keeping and tax-paying and supply-managing and website-bashing that you would do anyplace else. (Oh, and some of those things have criminal penalties for doing them wrong so you can’t just half-ass it or let it slide.)Report