Mailvox: the challenge of reading graphs

Phoenician attempts economics again, hilarity once more ensues:

Brief clue, Dipshit, if your argument is based on a discontinuity –

(” And in fact, the deleterious effects on wages of women entering the work force was largely hidden until 1973, when men finally stopped leaving the work force in numbers sufficient to conceal what was happening.”)
– and the actual data shows no such discontinuity but a fairly smooth and continuing trend instead, then your argument is disproven.

in the situation of someone who claims that rising icecream sales in
May are caused by the Easter Bunny and, when shown the Easter Bunny
doesn’t actually exists, goes out to prove that more icecream is being
sold than you originally stated.

Yes, that may be true – real
wages may be actually less than you stated before – but your
‘explanation” for that has been shown to be crap.

Because you’re a misogynist little dickhead who can’t let go of your bigotry, Dipshit.

Some readers don’t understand why I often respond directly to Phony and would prefer that I simply ban him from commenting. But he serves a useful purpose, which is to illustrate the way people on the Left often communicate in a dismissive, superior, and insulting tone that is meant to convince people that they know what they are talking about.

It’s related to the way that they are forever claiming that their opponents are stupid without providing any evidence for it, thereby implying that they themselves are much more intelligent. But the fact of the matter, as Phony often demonstrates, their level of knowledge doesn’t even rise to the level of Wikipedia and it is usually quite easy to show that they don’t understand what the evidence they have mustered in a brief Google search actually means.

What Phony was attempting to do here is try to salvage his incorrect position that “if women are producing more value than they get paid for, as seems
reasonable in a capitalist society, then the wages paid will go up”.  This is exactly backward, as it happens, because increased productivity actually reduces wages, as it reduces the amount of labor required to produce the same amount of goods, thereby reducing demand for labor as well as its price.

And in his desperate flailing about to attempt to defend himself by prove both me and the law of supply and demand wrong, he cited this graph from the Federal Reserve while claiming it showed me to be “a liar AND a fool.”  Which is bizarre, since it shows exactly what I described, a continuing plunge in the male labor participation rate from 1950 to the present.

What Phony didn’t understand is that my argument isn’t based on any discontinuity and that to understand the net effect of female employment on wages, it isn’t enough to simply look at the declining male participation rate, however continuous, one has to take into account the increasing female participation rate and the population growth rate as well.  Or, better yet, do what I did back in 2006 and actually do the math rather than simply looking at the pretty pictures.

It’s not enough to note that the lines appear to cross, which they actually don’t. Wages didn’t stagnate from 1950 to 1975 because the number of men leaving the labor force in excess of the growth of the population was roughly equivalent to the number of women entering it. Consider: 45.8 percent of 65+ men worked in 1950. By 1980, only 19 percent did, a number that has remained basically flat ever since. With women, the biggest change was from the 25-34 demographic, as only 34 percent worked in 1950 compared to 65.5 percent in 1980.  In sum, by 1980, 27 million additional women had entered the labor force and the female percentage of the labor force rose from 29.6 percent to 42.5 percent. And don’t forget that inexperienced female workers tend to command considerably less salary than the most experienced male ones; a simple exchange of younger women for older men would tend to reduce wages in itself.

The current female share of the labor force is 46.9 percent. So, it is easy to see that the larger part of the male-to-female labor exchange took place prior to 1980. In fact, we can safely conclude that the crossover point was reached in 1973 because that’s when average wages peaked.  As the first chart indicates, men were still leaving the workforce, and women were still entering it at that time, but combined with the slowdown of economic growth that began in the 70s, the point at which the net wage-depressing effect had become statistically obvious had been reached.  If you look at the actual data, you can see that the crossover point was likely sometime between Q4 1972 and Q2 1973, when men temporarily stopped leaving the labor force for two years even as the pace of women entering it jumped up by two percentage points in a matter of months.

The Phonies of the world can point their finger and call names all they like. But it should be abundantly clear that what they call misogyny and bigotry is simply economic reality. The facts are what they are.  The addition of 55.3 million women to the labor force since 1950 has done exactly what one would expect a 315 percent increase in the supply of female labor to do in driving down its price. Whether one thinks that is a good thing or a bad thing depends upon one’s perspective, but what one cannot reasonably do is to deny that it happened.

UPDATE: Perhaps the graph below will help those who can’t seem to understand anything but pictures. Probably not, but if you still can’t get the concept after seeing this, I have to conclude you’re simply incapable of it. Note that these are based on the actual BLS numbers, adding the male and female participation rates as a percentage of the actual civilian population that year. The magic number with regards to wage rate growth appears to be around 60, as the 59.85 percent in January 1973 marked the very last time the total labor participation rate as a percentage of the civilian non-institutional population was below 60 percent.

It should be fascinating to hear Phoney and others attempt to explain the mysterious inverse correlation between the labor force participation rate and the weekly wages while simultaneously denying the law of supply and demand.