- Bulletin to Harrisburg: Philadelphia is Part of Pennsylvania
- Today's Email from Siobhan Reardon
- Seth Williams Office Opening Party: TODAY
- Hear, hear: Judge Fox's Order
- Bob Brady saves New Year's and the Mummers!
- Mayoral Petulance: Unbelievable
- ’San Quentin Six’ prisoner Hugo Pinell to have Parole Hearing Jan. 17
- The Nutter administration (and us) at the crossroads
- Ring around the rosey, pockets full of.....
- Ring around the rosey, pockets full of.....
Actual Issues and Ideas Up at KnoxforPhilly.com, so let's take a look...
First, I want to point out that candidate Knox gets the official "you’re so money" award for being the first Democrat in Philadelphia history to use the word "productivity" in the way that it was intended to be applied to economic development thinking. Without endorsing Knox, I recommend that other elected officials and candidates for office follow his lead and research how productivity drives competitiveness and supports high and growing wages. Get it, preach it.
In keeping with the theme of harnessing Philadelphia's entrepreneurial potential - in every corner of the city - as the most pressing issue on our agenda, I am going to ignore Knox's sections on violence, education, and fighting addiction and skip right to "Upgrading Philadelphia’s Workforce." Other than K-12 public education, obviously vitally important to our economy, this seems to be his only economic development thinking to-date. (Mr. Knox, you’ve know that you would be running for how long now? Get with the program.)
Also, in fairness to candidates Fattah and Nutter, who seem to be leading the way as it relates to fairly exhaustive (which, note, does not necessarily always mean good) policy ideas, Knox’s "On the Issues" section seems to be less "I am passionate about these issues, and my ideas represent the results of many sleepless nights poring over them" and more "My staff threw some ideas on my website because people at YPP pointed out I am the only Democratic candidate without ideas online."
The centerpiece of candidate Knox’s economic development strategy thus far is workforce development, specifically, skills development designed to enhance the environment for Philadelphia companies looking to create and sustain high productivity. This is excellent, and other candidates should take note. As I pointed out in one of my posts on candidate Fattah’s small business plan, he literally ignores labor force productivity, and should be hit in the head with a bell for such a terrible oversight.
Despite infusing productivity into the debate, however, candidate Knox seems to lack the kind of clarity of vision and passion for entrepreneurship that would allow him to be the agent of change and inspiration as it relates to Philadelphia's generally sour focus on the power of entrepreneurship and the trillions of dollars of market opportunity up for grabs around the world. This is a shame, because of all the candidates currently in the race, Knox is the only one - and the first person in a while - to be able to stand up in front of a crowd of entrepreneurs in Frankford and say "I've been there."
Furthermore, and in fairness to the criticism leveled at candidate Fattah last week, it should also be noted that Knox’s ideas lack any sort of underlying statistical backbone. It seems that candidates are either adverse to or incapable of conducting any statistical analysis to inform their ideas. I’d love to know why, as most of these candidates have either been in a leadership position in the region and had access to data, or – in Knox’s case – known they would be running for mayor for a long, long time.
Knox’s most attractive idea is to offer training to Philadelphia’s existing workforce through the Community College of Philadelphia. He surmises that CCP can serve "as a partner to companies moving to the region by training Philadelphians for specific jobs before these companies arrive." He plans to make CCP’s Corporate College "more affordable for employees and employers and offer free job training to city workers."
These are steps in the right direction, but I am not sure why we just cannot allow Philadelphians (or our employers) to apply some percentage of our wage tax accrual towards our next level of education at any Philadelphia-based institution. Why restrict employers’ and residents’ choices, when we can allow them to be free and nimble about where, when, and why they pursue educational opportunity. Simply put, while I agree that CCP is a sufficient resource to address the problems of our unskilled labor force, I’d like to see us get more aggressive in our response. Investments designed to improve the quality of our labor force create the conditions that will allow Philadelphia companies to create high productivity. High productivity allows us to support high and growing wages.











He will "give the college a substantial endowment"
according to his website.
Wouldn't $15 million be agood start for an endowment and a better use for his money than TV commercials?
questioning your premise
I recommend that other elected officials and candidates for office follow his lead and research how productivity drives competitiveness and supports high and growing wages.
Lessee, how does this statement fit in with the data that the productivity of the average American worker has gone up some 20-fold in the last two decades while wages remained stagnant??
acm
So glad you questioned my premise...
Saying that wages have remained stagnant just is not true.
If you look at the last 20 years, say from 1986 to 2005, households headed by a high school graduate saw an 11% decrease in median household income, while those headed by someone with a Bachelor’s degree saw a 7% increase in median household income and those headed by someone with an advanced degree saw a 4% increase in median household income.
While I have never compared the data by counties with the highest productivity growth due to limited time, my sense is that you would see similar increases in wages in places (and perhaps industries) marked by high and growing productivity. Just a theory, of course.
Stay away from national Democratic talking points. Statistics at the national level are sometimes instructive, but usually it's where the rubber meets the air.
I'm highly dubious of this statement
So I'd be curious to see if you do come up with some numbers. My guess is that the industries with the highest productivity growths are also those with the least growth in wages. What would lead to higher productivity? Increased outsourcing (to lower wage service providers), increased automation (meaning that in order to compete, humans would have to work for less). Downsizing (self explanitory). Improved technology (leading perhaps to more specialized, higher-paying jobs - but less of them). Agreed, lumping all industries and locations without differentiating can lead to misleading conclusions - but do you have any examples to point to that you use for making your conclusions?
The gentlemans observation
The gentlemans observation was that overall productivity increases didn't lead to increased wages - your response noting that some workers had increased wages is a tad less than applicable. Especially as you don't show the productivity changes for the groups you note.
The larger point remains - how can you compare a 2000% increase in income to your best case for one segment of the population of a 7% increase and think anyone would find this evidence compelling?
You just don't believe enough...
As Steven Colbert reminds us, we need not look to actual statistics when making claims, we need to look to our gut. The fact that real wages have stagnated since the 1970s, despite huge gains in productivity, just means that those damned workers are lazy.
The "factonista" creators of the following graph, clearly hate our freedom:

I work for Damon K. Roberts in his run for City Council. Unless otherwise stated this and every comment by myself is the opinion of myself, and not of Damon or any other candidate, organization, committee, etc.
As stated, a lot of that
As stated, a lot of that also stems from cheaper outsourcing of manufacturing to other countries, not to mention the trade deficit.
Part of the problem is the US is facing an increasingly industrialized global economy where labor is cheaper elsewhere.
So, what is your recommendation?
Fox; my friend -
http://www.chosenones.net/believe.jpg
I'm with you.
And that observer ain't no gentleman
think about the name "Redfox" for a minute.
ooops
Just realized that was a potentially gender-biased comment. My apologies.
No more than I. Though in my
No more than I. Though in my defence - I just immediately thought Redd Foxx. But - at least it gave me the opprotunity to look at this persons profile and go to visit two great blogs associated with it.
http://asmokefilledroom.blogspot.com/
http://justbetweenstrangers.blogspot.com/
BTW
Although I'm also kind of skeptical about your obsession with "entrepreneurship," and even if you do seem to be a bit dazzled by your own brilliance as evidenced by your rather consistent denigration of others' intelligence - and not just the intellgence of candidates as you claimed - (go back and read your posts over time if you aren't aware of that tendency), I do completely agree with your focus on training and education as vital issues.
I do completely agree with
I think we can all agree on this as crucial.
Tisk! Tisk!
Francis wrote:
Francis, using your numbers households with a Bachelor’s degree saw their incomes increase by 0.35% annually whereas output per hour over the same period went up by 2.5% annually. Or alternatively at those rates productivity doubles in 28 years and income in 198 years. Nice!
And Francis, why o why do you insist on oversimplifying such a complex world?
Controling for age, race, gender, region where workers live, and marital status Bernstein and Mishel find that:
They continue:
And succinctly they write:
do you have any credentials Price?
like a Phd in Econ?
Enough of your back talk Murphy
Listen up Ray Murphy if that is your real name? I have had about enough of your anonymous posts attacking me. And don’t think I don’t know who has been calling me on the phone and just giggling on the other end. I’m on to you man.
I'm just saying...
fake stats and econ 101 are just not enough...
Yes, but
Yes, but how about fake stats, econ 101 and the entrails of a goat? As Alex points out it's all in the gut.
An interesting new study.........
An interesting new study that reinforces your observation and has important implications for Philadelphia in particular has just been released. It documents over a 10 year period that traditional measures used to raise productivity lead to lower profits in the nations newspapers. Investing in the newsroom to increase the quality of the product increased profits.
You can hold down your costs as aggressively as you like - in the end - people have to find value in your product.
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reut...
Newsroom spending raises U.S. newspaper profits-study
By Robert MacMillan
NEW YORK, Feb 14 (Reuters) - U.S. newspapers that spend more money on their newsrooms will make more money, according to a study released on Wednesday, which questioned the wisdom of the media industry's trend of cutting jobs to save costs.
Kathy, you do not know the definition of productivity...
Productivity is defined, by folks who have not just had ECON 101, as the value of goods and services produced in an economy per unit of input. Looking at productivity in the efficiency sense alone just is not correct.
But it is accurate and
But it is accurate and actually defends your point. Increased productivity doesn't necessarily mean workers are working harder, they are possibly just getting more done with the same amount of effort. As an example a factory that moves from a normal metal lathe to run disks to a CNC machine is going to have more units moved and the same level of energy expended by the employee.
The other factor is what increased productivity means. This doesn't mean "we built more widgets cheaper per capita, so that means we make more money and we are screwing the worker". It also means prices of goods drop as well.
hmmm
"...they are possibly just getting more done with the same amount of effort."
Possibly. But here's a hypthetical for you. You employ a bunch of people and they start producing more at the same labor cost. Assuming that there is a fixed demand for your product, what would you do (well, in addition to pocketing the addtional profit, that is)?
Well, it is a tough
Well, it is a tough hypothetical because the only way there is fixed demand is if you have a monopoly, so only happens in a very rare circumstance (much of the time in a competitive market, price is lowered to undercut competition and increase market share or use increase in profits to further reinvest in the company or the other possibility is the owners/stockholders generate better profits for themselves).
So, in a monopoly situation where there is set demand and you increased efficiency to not need the same amount of workers, most likely what happens is the fat is trimmed so as not to make unpurchased surplus. To tone down production, it means you have people sitting around doing nothing as well.
But again, the vast majority companies aren't in that situation. If labor costs do not go up, but they have excessive manhours available, a good company will try to find new contracts, even if it is in a different business.
The appropriate goal for business is not to increase efficiency to get rid of workers, but to increase efficiency so as to get more work done and get more business therefore being able to insure job growth for its employees.
So, now a question for you. In that situation, are you recommending the company doesn't add automation so that there is no threat to layoffs and just have the workers work harder than necessary?
First a follow-up comment
"a good company will try to find new contracts, even if it is in a different business"
When I was saying fixed demand, I wasn't necessarily referring to a monopoly, but a market condition where you can't just sell more of your product simply because you can make it with less labor cost. Seems to me there are usually a lot of market conditions that relate to demand, and they aren't necessarily correlated with productivity.
From what I've seen, there is frequent tendency to lay off workers and turn the advantage of reduced cost into immediate dividends. Surely, a good company would look to diversify, move into new markets, increase market share, etc. But I think there's a lot of precident for companies to use reduced labor costs to reward investors, drive up stock prices, etc.
But hey, I sure ain't no enconomist.
As for your question:
"are you recommending the company doesn't add automation so that there is no threat to layoffs and just have the workers work harder than necessary?"
Well, in my dreamworld, where as the CEO I don't need to make more than a reasonable salary or don't need to attract investors, sure, why not? But in the real world, of course that is not very likely to happen. Although, there really are examples of companies making business decisions on the rationale that their employees are their most important asset -- and that reducing labor costs by replacing people with automated processes can bite you in the ass down the road.
But I'm not making an argument against capitalism here, I'm questioning the assumptions in the post - that makes sweeping correlations between increased productivity and increased wages.
I agree there are a lot of
I agree there are a lot of additional factors and economists have been going at this with heat since at least Keynes vs Laissez Faire.
The reason I said monopoly is because, if there is competition, you can always sell more by going after your competition's sales.
And I also agree "good business practices" are nice in theory. Same way with politicians. Ideally we would think they wouldn't do legislation in their best interest and do it for the best interest of the City, but that doesn't always happen either.
In regards to "cashing out for dividends" that is also part of American mentality as well. Instant gratification. Me, I am a bit of an egomaniac. I would want to live well off the profits of my company, but even more important to me is building a company and strategy that thrives with my name well beyond my grand kids pass. To do that, you have to always have the quest for efficiency while expanding your business to be diversified. You install new machines that have two workers idle? If you did your research, you knew that possibility before you purchased the equipment. So, why increasing efficiency, find out what you can do with your surplus labor.
Of course, that also takes a significant amount of personal energy and many times it is easier to just coast.
So, to get back on track, productivity doesn't necessarily translate to higher wages. It could translate to less manual labor and easier work for the pay check, it could mean more salary because of specialized equipment training or it could mean no difference at all. Also, it could equate to higher quality of life. Two people get laid off, but the increased savings allows the business to build a day care center. Too many variables to rate an independent company, but I am sure you can see patterns in data if the data is gathered appropriately.
lowering prices
"much of the time in a competitive market, price is lowered to undercut competition "
That seems to assume that your competitors don't have the same ability to reduce labor costs in the same way to increase productivity.
Again, I'm not at all saying that doesn't happen. Of course it does, I'm just questioning the blanket analysis made above regarding the relationship between productivity and wages.
I look forward to seeing if fran comes up with some of his beloved statistical analysis - as I think the topic is interesting.
I love talking about wages!
It may be slightly off topic, but like DE i am bemused by Fran (who I had the pleasure of meeting last Saturday and who was actually the same in terms of his intensity offline as he is on about his issues--which is nice, cause a lot of folks blog to be bold, and are meek in real life--with the notable exception of Alex U-A of course).
I admittedly never took a course on entrepreneurship, but running a business--with or without a physical location--is hard work, long hours and it takes a while for your profits exceed your losses.
Meanwhile, real median wages in Philadelphia (you may want to check into that county level data sometimes Fran)have not increased since 1969. I wrote extensively about this almost a year ago, and i just love to give the link again and again: check it out here Fran (and others).
The bottom line is that raising the wages of working and middle income is the most important thing the city can do to save itself--far beyond the gains made by attracting very high wage earners.
But why has not the median
But why has not the median wage increased in Philly?
Lack of jobs and uneducated work force is my guess. You fix the schools and get business in the city and it fixes a lot of that.
And this is an example of why I hate the "republicans are for business and democrats are for the working man" line of demarcation. Dems have been in power for 50 years and the Philly government is what failed the Philadelphia worker. Helping workers is not about handouts. Helping workers is about making sure they have good jobs and the education to get them so they don't need handouts.
Are you talking REAL wages?
If so, than I'm pretty sure that the median REAL wages have not increased by much in the United States as a whole since the early 70s. It's not hard to imagine why: high-paying, low skilled jobs have been exported and many small businesses have been hurt by a combination of the multiplier effect and the huge retailers that have displaced so many small businesses.
You seem to want to blame Philadelphia for problems that are happening across the nation...
That is not to say that we shouldn't or couldn't do more to increase median wages in our area, but blaming Democrats in this city for these problems seems to be a bit much.
I work for Damon K. Roberts in his run for City w. hatUnless otherwise stated this and every comment by myself is the opinion of myself, and not of Damon or any other candidate, organization, committee, etc.
800 lb. Gorilla
Alex is dead-on: the entire US economy radically changed in the 70's when industry went overseas and our country has never really fully recovered. It's the 800 lb. gorilla in the room when talking about Philadelphia which is why i am so skeptical of the "entrepreneurs can save the day model," or for that matter, the "improving the business climate" model.
Our city's economic development must be planned according to the location of high-wage work and then create an environment to attract and nurture those types of jobs.
Cutting taxes willy-nilly or introducing TIFS, abatements, and more MAY work, but right now folks talk about giving those out independent of any analysis of the clusters, companies or fields that are sustainable for a 20 or 30 year period of time.
"Meanwhile, real median
"Meanwhile, real median wages in Philadelphia (you may want to check into that county level data sometimes Fran)have not increased since 1969."
So if this is nationwide, what was the point of drilling down to specifically Philadelphia?
And ...
"The bottom line is that raising the wages of working and middle income is the most important thing the city can do to save itself--far beyond the gains made by attracting very high wage earners."
So what have the Dems in Philly done for this in the last 50 years?
They declared war on Communism
50 years is a long time. Like it or not, the military-industrial complex created a lot of jobs. The Cold War is over though, and in its wake a global economy that lowered median wages in our own country. Doh.
And are we really having a debate about Republicans vs. Democrats?
See Raider, if you want to debate just for debate's sake, you are just in the wrong place.
No, I am not having a debate
No, I am not having a debate on Republicans verse Democrats. A variety of people that post here and on this thread have had the comments and mindset of "I would never vote for a republican ever" and "republicans are for business and democrats for workers" (I believe that last one is a close paraphrase of Rep Cohen).
Philadelphia is a good case study because one party has been in power for 50 years. Since we got onto the topic of wages and increasing the quality for the working family and you made the point of nothing has changed for Philly since 1969, my direct question is "what has Philadelphia done to help the working class and raising their income"?
Is that not a legitimate question to analyze? We have 20 or so posts about how wages suck in Philly and nationally and we live in a city with one political party in power for decades and I am legitimately asking what have the Philly Democrats done? If it was a city run by republicans for 50 years and the business sector sucked, I would call them to the mat as well.
So, since this is a major election year for Philadelphia, back to the question. If the Democratic Party is supposed to be a supporter of the working family, what has the Philly Dems done in regards to salaries to warrant that distinction as a reason to vote for them in this election? No debate of Republican verse Democrat. This is a straight up question about the Philadelphia Democratic Party and what they have accomplished for the working class and their salaries and quality of life.