American Workers Are Making Way Too Much Money

Wall Street is freaking out that workers are being paid too much.
You read that right.
Greedy workers who want to both eat and afford a roof over their heads are the problem with this economy. Workers are shameless. They don't care about the real victims.

And as our colleagues in equity strategy have recently pointed out, rising wages are a threat to corporate profit margins (“Labor Costs and US Equities: Stocks Confront Rising Wages with Economy at Full Employment”, Portfolio Strategy Research, May 9, 2017).
...With this backdrop in mind, we ask: What would happen to US corporate profits if real wages were to catch up with average labor productivity?

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Yes, what would happen if workers kept a small share of the surplus they created? It would be a tragedy, I tell you.
Don't believe me? Consider the sad example of Chipotle.

Chipotle downgraded by Bank of America on concerns that labor is still too expensive

That'll teach Chipotle for not slashing the wages and hours of the employees enough.
It's up to Wall Street to reign in those greedy workers.

The investors on Wall Street and the policy makers on Constitution Avenue share a very strange view of the American economy. One of their biggest economic worries right now is whether workers may be getting too much money.

Needless to say, workers don’t share this concern.

Since 2000, workers have been underpaid by about $10 trillion, but the stock market is freaked out by a 9-cent an hour raise?
One of the catalysts for the recent selloff in the stock market was the report last Friday that average hourly earnings (that would be wages) increased by 2.9% over the past year.

Just think of what that 2.9% is doing to the unearned income of billionaires.
Now to be fair, that 2.9% isn't actually real.

In real terms (adjusted for inflation), through December wages were up just 0.6% year-over-year

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Real average hourly earnings have only increased 0.2% in the past year. It's essentially a nonexistent increase, but Wall Street wants it back anyway.

This complete lack of wage inflation is happening in an economy that has more open jobs than unemployed workers, better now than at any time during either the Reagan or Clinton booms. Bloomberg put it this way.

Wage inflation is alive and well in certain industries, and therein lies a challenge for managers to overcome. Some of the best insights into the overwhelming demand for workers can be gleaned from the less-followed but rich data published monthly by Challenger, Gray & Christmas.

My bad. It appears that there is wage inflation. Bloomberg said so.

It's into the teeth of the best labor market in the history of the world, that the U.N. released a report about poverty in America.

“The United States already leads the developed world in income and wealth inequality, and it is now moving full steam ahead to make itself even more unequal,” the report concludes. “High child and youth poverty rates perpetuate the intergenerational transmission of poverty very effectively, and ensure that the American dream is rapidly becoming the American illusion.”
...Alston described meeting “people who had lost all of their teeth because adult dental care is not covered by the vast majority of programs available to the very poor,” and people in Puerto Rico “living next to a mountain of completely unprotected coal ash, which rains down upon them bringing illness, disability, and death.” In Lowndes County, Alabama, the U.N. found cesspools of sewage that flowed out of dysfunctional (or nonexistent) septic systems, which has led to a resurgence in diseases that officials believed were eradicated. A recent study found that more than one-third of people surveyed in Alabama tested positive for hookworm—a parasite that thrives in areas of poor sanitation, which has not been well-documented in the United States since the 1950s.

I'm not sure how these things can be true in the greatest economy in the history of the universe, but I'm sure that the greedy and lazy working class is responsible.

“Americans have become lazy and it’s hurting the economy.”

Americans are the most overworked people in the developed world, but they are so lazy they won't even prevent themselves from getting hookworm.
Fewer people are starting businesses than ever before, nor are they demanding raises from employers because of laziness.
It's not that our economy is saturated with corporate monopolies, it's because of lazy workers.
In fact, the U.N. report on poverty in America should just be completely ignored.

What it shows is that the U.N. is wasting money, much of it provided by the U.S., on thoughtless political propaganda.
...There are many changes we could make to fight poverty. Two policies that many conservatives and liberals would embrace are loosening requirements for occupational licenses and easing zoning restrictions on housing. The U.N. ignores both issues.

Of course! American workers are constantly complaining about zoning restrictions holding them back!

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Don't overthink it

How do we know both the reported job vacancies and unemployed are an outright fabrication? Because wages would be soaring. It’s simple supply/demand economics. According to the Government, the demand for employees far exceeds the supply of workers. But if this were case, the price of workers would be rising quickly. It’s not.

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Let's not forget the Birth/Death Model.
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21 users have voted.

@gjohnsit employers who refuse to give raises, creating so much wage stagnation, why would wages rise?

Employers nowadays think employees should work for nothing.

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15 users have voted.

dfarrah

Wink's picture

It's not like employers
@dfarrah
are begging for workers, despite "all the jobs out there."
One, there Should be a Ton of jobs out there becuz 10,000 of us Boomers are retiring.
Every day.
That's over 200,000 jobs a month right there.
Are any of those being filled?
If they are, I'm guessing at 10% below what Boomers were paid. At least.

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11 users have voted.

the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-1.9) All about building progressive media.

@Wink that the number of open jobs now exceeds the number of unemployed....supposedly for the first time ever.

Then again, who knows if the number of unemployed as reported is correct.

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2 users have voted.

dfarrah

Steven D's picture

And Wall Street is pissing and moaning, worried that their bonus checks will a few thousand dollars less - maybe.

https://eand.co/why-americas-collapsing-at-light-speed-da304156dff0

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19 users have voted.

"You can't just leave those who created the problem in charge of the solution."---Tyree Scott

@Steven D Wall Street?

Does it perform an essential function for life?

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1 user has voted.

dfarrah

@dfarrah

between the pathologically greedy and real life, where neo economics don't work.

Except that which keeps the 'peasantry' out also traps the self-appointed 'elite' in a dead-end delusion.

Is there any way to bar the Wall St. gates from the 99% side, so that they can play their speculative data-dot games among themselves without affecting real life?

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1 user has voted.

Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.

A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.

@Ellen North this morning that it is something definitely worth looking into.

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1 user has voted.

dfarrah

@Ellen North

Understanding the Role of Wall Street in Civilization

"Wall Street, both the physical place and the metonymy, exists for three primary purposes:
1. To establish the primary market by connecting savers of capital with those who want to raise capital, most commonly either by borrowing it through the issuance of bonds or by selling ownership in a business through the issuance of stock. This is the core reason Wall Street is so important because it is what makes capitalism work; what moves money efficiently to its most productive uses, increasing standards of living over time."

https://www.thebalance.com/introduction-to-wall-street-for-beginners-358143

This writer needs to update his little fiction about Wall Street.

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1 user has voted.

dfarrah

detroitmechworks's picture

I thought I was being too harsh on America in my autopsy.

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13 users have voted.

I do not pretend I know what I do not know.

thanatokephaloides's picture

At long last it's coming back to bite Wall Street on the ass. Workers' inability to spend money they do not and will never have is now showing up in the form of smaller paychecks for the ultra-capitalists. (Remember CUSTOMERS, fuckers? You know, the people who used to give your businesses money for things they wanted? Remember them? Remember US?)

So what's the prescription of the ultra-capitalists for this problem? Why, more of the disease, of course!

We, the working-class People, need to take these parasites down! Close their fucking casino, make them earn an honest living for once!

Yes, friends, these articles are a full-blown Declaration of War against the working classes by the 0.01%. There's no question now: it's war, and it's on!

Words, especially such words as JtC would allow me to use on his blog site, fail miserably to express my disgust and utter loathing of the dickishness you've reported here, gjohnsit. Yet I thank you for reporting it, nonetheless.

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20 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

@thanatokephaloides corporate shareholder form of business needs to be banned.

For decades, corporations have been getting away with murder.

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12 users have voted.

dfarrah

@thanatokephaloides keep issuing credit at loan shark rates, Americans can keep up the illusion they're still middle class.

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7 users have voted.
thanatokephaloides's picture

...There are many changes we could make to fight poverty. Two policies that many conservatives and liberals would embrace are loosening requirements for occupational licenses and easing zoning restrictions on housing. The U.N. ignores both issues.

Oh, yeah, anybody can claim to be anything, and let the buyer beware!

I dread going to the doctor under such a scheme! Or rent a place to live!

"Issues" my ass! The only "issue" is labor's inability to charge its consumers the real costs of its production plus a reasonable profit!

Bad

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13 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

@thanatokephaloides there is plenty of profit floating around. It's just that the employees don't get any of it.

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11 users have voted.

dfarrah

thanatokephaloides's picture

@dfarrah

Actually, there is plenty of profit floating around. It's just that the employees don't get any of it.

From a worker's point of view, (s)he can't sell what (s)he has to sell -- his/her labor -- for its real production costs, much less turn a profit. We're having to sell our labor for a loss. Every time a fulltime worker has to apply for financial aid, that aid represents that net loss. That's what's wrong with "workfare" programs; it enables the below-production-cost sale of labor, rather than prohibit it, which is how those funds should be used.

Consider an industrial machine for a moment. All such machines have better unions than the workers who tend them. Fail to meet even one demand of the machine, and the machine simply stops producing until the demand is met, without compromise. Workers should have the same, or better; but they don't.

Sad

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11 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

@thanatokephaloides

And emblazoned on (oversized) T-shirts in large, angry letters.

And tattooed on the forehead of every corporate/billionaire/self-interest-serving politician on the planet.

You've just said it all, in language even a CorpoDem could understand, if they weren't programmed as a slot machine insert-money-here one-armed-argument-bandit policy production line.

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0 users have voted.

Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.

A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.

@thanatokephaloides what you meant. I thought you were talking about corporate profit.

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1 user has voted.

dfarrah

that wages (except in the lower margains) are not too low, but that prices (especially on certain things - eg. housing and health insurance and regressive taxation) are too high, especially for the lower middle class. In fact, the upper half of our middle class is overpaid, but that is only so that they can be dominated by socially mandated "lifestyle decisions" that are mandatory to empower capitalism. Also, (and so) far too many Americans are addicted to credit, and of course many more are trapped in debt by situations beyond their control.
The gist of my argument is that our society (not just our economy) is intentionally designed to impoverish us.

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A PROUD Hillary hater since 1993

ggersh's picture

a death spiral

And while it would be great news if wealth across all of America had indeed risen as much as the chart above shows, the reality is that there is a big catch: as shown previously, virtually all of the net worth, and associated increase thereof, has only benefited a handful of the wealthiest Americans.

https://www.zerohedge.com/news/2018-06-07/household-wealth-rises-above-1...

propaganda is all they have left.....

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14 users have voted.

“Before mass leaders seize the power to fit reality to their lies, their propaganda is marked by its extreme contempt for facts as such, for in their opinion fact depends entirely on the power of man who can fabricate it.”

Hannah Arendt

snoopydawg's picture

@ggersh

Great article on how fast the empire is dying and too many people are not noticing it happening.

First, of course, there is political collapse. From democracy to autocracy, kleptocracy, and authoritarianism. America’s political institutions simply don’t function anymore. It’s democracy doesn’t represent the 70% of people who want functioning healthcare, gun control, education, safety nets — but only the 25–30% of immovable extremists who apparently want to live in the Handmaid’s Tale meets 1984 by way of Mein Kampf. Its rule of law has devolved to mass trials and mass disappearances and mothers being separated from their kids at the border. It’s critical systems of governance are so broken that 5000 people died from negligence after…a storm.

Off topic, but speaking of what happened to Puerto Rico after the hurricanes i saw someone on ToP suggesting that the Clintons should be put in charge of the recovery efforts because that's what they did in Haiti after the earthquake. I sure wish that was snark because the Clintons gave most of the recovery money to their friends and family and the Haitians are still living in squalor.

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Self-censorship actually silences exponentially more anti-establishment opinions. For every one voice you crack down on overtly, a thousand more silence themselves out of self-preservation

ggersh's picture

@snoopydawg this should be taught the world over

Off topic, but speaking of what happened to Puerto Rico after the hurricanes i saw someone on ToP suggesting that the Clintons should be put in charge of the recovery efforts because that's what they did in Haiti after the earthquake. I sure wish that was snark because the Clintons gave most of the recovery money to their friends and family and the Haitians are still living in squalor.

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5 users have voted.

“Before mass leaders seize the power to fit reality to their lies, their propaganda is marked by its extreme contempt for facts as such, for in their opinion fact depends entirely on the power of man who can fabricate it.”

Hannah Arendt

@ggersh

well,there are those weapons.

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10 users have voted.

@ggersh when they reference "on average" when they talk about rising wages.

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6 users have voted.

I think modern "capitalism" as practiced now-a-days is built on the following.

  • There is a elite class of people who generate profits within the system. These are the CEOS, bankers, investors, upper levels of people in Wall Street, MIC, health care, etc. As only they generate all the value withing the system, they are the only ones who should get the rewards.
  • Working classes do not generate value, and therefore should not be rewarded. This is why unions are so hated by the capitalists--unions insist that workers add value and should be rewarded.
  • Money enpowers the rich. Money degrades the working classes. Give money to the rich, and society benefits. Give money to the working classes, and societies will collapse. See this in arguments against min. wage increases because oh my hamburgers will go to $20 a pop and entire cities will become job waste lands.
  • Social progress happens when government puts control and money into the hands of elites. The BP clean up? Obama put that totally in the hands of BP. Health care? Put that into the hands of segment elites.

Number of years ago, read an article about the President and founder of Costco. Very modest guy whose philosophy was to pay workers decent wages. He had idea pay better get better workers. Wall Street kept attacking the guy for not lowering wages and increasing the stock price.

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18 users have voted.

thank you wendy davis for introducing me to this one. I listen to it quite often lately.

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5 users have voted.

@lizzyh7 too frustrated to get the damned link to work. Boots Riley and The Coup, the Guillotine...

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travelerxxx's picture

@lizzyh7

Guessing you meant to insert this:

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snoopydawg's picture

Since 2000, workers have been underpaid by about $10 trillion.

That's a mighty big chunk of change right there ain't it? What do those f*ckers think is going to happen when no one can afford to buy their products? How will they make their obscene profits then? Or will they even care because by that time the world as we know it is coming to an end and they are boogieing out to their private hidey holes which will be behind big gates.

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18 users have voted.

Self-censorship actually silences exponentially more anti-establishment opinions. For every one voice you crack down on overtly, a thousand more silence themselves out of self-preservation