Wednesday, September 13, 2006

NRO Nails the New York Times

All the News that Didn’t Fit
The New York Times is a capitalist enterprise, although you’d never know it by reading it.

By Jerry Bowyer

The New York Times Company is a business, and accordingly, it acts like one. Normally that wouldn’t be a problem. But when the New York Times takes all other businesses to task for not giving workers their fair share of the American Pie, it leaves the door of its own business open to scrutiny.

For instance, in a story late last month titled “Real Wages Fail to Match a Rise in Productivity,” the Times complained that the American economy, which used to allot 50 percent of its output to wages, now only allots 45 percent. My quick rebuttal to this complaint is that it’s not that people are making less money, it’s that the economy is growing faster than their paychecks. But what about the Times itself? How much of its revenue goes to wages?

Answer: 38 percent, well below the national average. But it’s even worse than that — the Times number counts benefits while the national statistic does not.

Is it fair to attack a mature company in a struggling industry for giving only about a third of its output to workers? Not normally, but it is when a particular business attacks everybody else for giving a little less than half.

The outlook isn’t all that good for the Times, either, while I’d say it’s pretty darn good for the rest of the nation.

The general economy is providing wage increases that beat cost-of-living adjustments. However, while the New York Times Co. has seen revenue increases of 4.5 percent, the wages-and-salaries line item in its profit-and-loss statement shows an increase of only 2.9 percent over the past two years.

That’s okay, and it’s a reality of business: Companies don’t pay their workers any more than they have to. They don’t charge their customers any less than their customers are willing to pay. And they generate as high a return for their shareholders as they can. That’s what they’re supposed to do, and no one has yet discovered a more efficient and effective way to deliver goods and services.

Business works. And the fact that the New York Times is chartered as a profit-seeking corporation — rather than, say, an anarcho-syndicalist commune — attests to this fact. But isn’t the hypocrisy startling?

The New York Times Co. may sell anti-capitalist drivel to its customers, but when it talks to its shareholders it has to reveal what it really believes. Capitalism works, even for its fiercest critics.

— Jerry Bowyer is an economic advisor to Blue Vase Capital Management and the author of The Bush Boom.