There is no wage growth "mystery"
PayScale surveyed 7,000 companies and found two-thirds of them are concerned about losing their workforce. However, they aren't so concerned about it as to actually pay their workers what they are worth.
Companies appear willing to take that risk. Sixty-nine percent say they plan to increase base pay by 3 percent or less this year, and 19 percent are planning no increase, according to PayScale's report. An increase under 3 percent will likely just keep pace with inflation, which is projected to average 2.3 percent in 2019, according to Kiplinger.
...such reluctance to award raises following a banner year of robust corporate profits and lower tax rates might come as a shock to workers, whose wages, after accounting for inflation, carry about the same purchasing power as they did 40 years ago in 1978, according to Pew Research Center.
No, it's not a "shock" to anyone in the real workforce, and not in denial.
Going all the way back to 2014 there's been this ridiculous narrative by economists and the financial media that everything is great again with employment, but the lack of wage growth is some sort of incomprehensible "mystery".
2014: here and here
2015: here and here
2016: here and here and here
2017: here and here and here
2018: here and here and here
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”
- Upton Sinclair, 1934
Over and over again we are told that wages are about to start going up.
Often the media even announces that wages are going up. (Who are you going to believe? Your own lying eyes?)
Then the next week or month they are back to asking the question of why wages aren't rising.
Wash, rinse, repeat.
No one in the financial media bothers to ask the obvious question, "Are we being lied to?"
For example, remember how the Republican tax cuts were supposed to turn into wage hikes?
For many of those same companies, a tiny fraction of the total number of U.S. businesses, executives haven't yet announced another round of bonuses or wage increases with the same fanfare — even though the tax law continues to mean billions for their bottom lines. Several advocacy groups that tracked the announcements said no new proclamations have been issued. Americans for Tax Reform, a conservative anti-tax group run by Grover Norquist which boasted last year of ongoing "good news" in bonuses and benefit increases, hasn't reported any announcement for three months. Americans for Tax Reform didn't respond to requests for comment.
...Bonuses have registered less of an impact, increasing just 2 cents an hour in the first nine months of 2018, according to Lawrence Mishel, former president of the Economic Policy Institute, a left-leaning research group.
The increase was "imperceptible," Mishel wrote in December on EPI's blog.
Could it be that all of the talk of tax cuts turning into raises was total crap? YES!
Because that's not how capitalism works!
It speaks volumes that the most faithful disciples of capitalism didn't understand why capitalism wouldn't do that.
Many have claimed that wages aren't going up because of automation. However, 1) there is never any hard data to back up the claim, and 2) automation is not new. There was automation 20 years ago, 50 years ago, and 100 years ago.
Wage hikes and automation are not linked.
So what's holding down wages? There are theories.
Economists have several theories to explain the phenomenon, says Jay Shambaugh, senior fellow in economic studies at the Brookings Institution. Weaker unions, the proliferation of noncompete contracts and the consolidation of companies have made it harder for workers to effectively bargain for better pay. The federal minimum wage has not kept pace with rising costs of living, and fewer people than previously are moving to find better jobs.
All of those things are true, and all of them are important.
But one thing is missing from that list, and it happens to be a massively important contributing factor behind everything on that list - globalization.
Specifically FTAs.
"It is useless to argue with a man whose opinion is based upon a personal or pecuniary interest."
- William Jennings Bryan, 1893
It's real easy to understand. Free trade agreements aren't free trade agreements.
Forget for a moment that NAFTA was a 2,000 page agreement. As for the proposed Trans-Pacific Partnership (TPP), just the intellectual-property chapter is 30,000 words. In fact only a small part of these FTAs are about "trade". Most of the agreements concern “investor rights.”
Even if these were legit FTAs, something important would still be missing from these FTAs - labor.
Theoretically an FTA means the costless movement of goods and capital across borders.
No one expects labor to be able to freely cross borders.
Thus the jobs can go where labor can't, while labor can't prevent the goods from coming in.
The result of this one-sided playing field is the destruction of labor.
Government data clearly shows manufacturers fired American workers in order to move factories to Mexico.
The decline of the American middle class has finally reached the point that American workers can compete against Chinese peasants. Victory is in sight!
How much have things changed since the start of this Depression? A lot.
Whereas the gap in labor costs between the two countries was about $17 per hour in 2006, that could shrink to as little as $7 per hour by 2015,
With any luck our corporate masters will soon be installing suicide nets outside their American factories too.
Public polls show Americans are overwhelmingly against free trade agreements. This is true for Republicans, Democrats and Independents, and yet politicians keep trying to sell us FTAs.
The betrayal of politicians is completely bipartisan.
"[They say] if you had not had the Protective Tariff things would be a little cheaper. Well, whether a thing is cheap or dear depends upon what we can earn by our daily labor. Free trade cheapens the product by cheapening the producer. Protection cheapens the product by elevating the producer. Under free trade the trader is the master and the producer the slave. Protection is but the law of nature, the law of self-preservation, of self-development, of securing the highest and best destiny of the race of man."
- President William McKinley
Comments
Do you see what I see? (Singing along)
a wage growth fata morgana
a rent growth devil
a job loss dragon
That about says it all in a nutshell
Looking from the other end of the telescope, there is the 1% and their retinue. They own a political party, the 1% Party, Americas only major political party. They hire people to make them money. Harvard MBAs, politicians, armies, economists, lawyers, police, investment analysts. All with one goal. To make the 1% more money. Anyone that stands in the way is an enemy. Any other concerns are not important.
Oh but, they are philanthropists concerned with the lack of
wealth in poor nations. The cure was obviously to take jobs away from the American middle class so the ruling elite could launder the payroll and skim off so much more for themselves. Stagnant wages, lost jobs, household and student debt, declining infrastructure, crumbling schools, and the hallowing out of the American middle class are all thanks to trade and corrupt politicians. Obama would be charging $800 a speech instead o $400 if only he had passed TPP.
"Religion is what keeps the poor from murdering the rich."--Napoleon
I think he charges a lot more than that.
I've seen lots of changes. What doesn't change is people. Same old hairless apes.
Are you suggesting Trump had the right idea?
Uh, no, but he had half of the right idea. Anti cheap goods tariffs would have worked if the employment laws would have been skewed back in favor of the worker.
Uh, no. You see, if American workers were paid well enough to afford American goods we still would have to produce something in America. But then American productivity would be so high that we would produce more goods than we can consume. Damned if you don't, damned worse if you do. The problem of automation in the last 50 years is that now it produces more goods than more types of goods. Buggy whips replaced by cars? Now cars for... what? Computers? Then what? Uh, Pokemon Go apps? Designer pharmaceuticals? See the problem?
On to Biden since 1973
No
Overproduction is a problem only for incompetent managers.
I've seen lots of changes. What doesn't change is people. Same old hairless apes.
Accidental right idea with wrong method
Trump thought the problem with NAFTA was a nation-state problem rather than a class problem.
Interestingly
You are only seeing half the issue
Employers will only pay more if they have to, to get the people they want. Also if forced by minimum wage laws, union agreements, etc.
There are more people willing to work for low wages than there are jobs. Look at how it works in areas of extreme labor shortage. They pay $25 to work at Wendy's and unskilled hard labor makes two or three thousand a week. That's Williston North Dakota a couple years ago. Five hundred miles away it's $8 to work in Wendys and $500 a week for hard labor.
Both Republican's and Dems are terrified of having to pay a living wage for secure jobs with benefits. Plus everyone likes to pay little for iphones and furniture, nannies and home construction. Currently there's a big discussion over immigration, mostly over illegal immigration. Trump in his state of the union said in unscripted remarks (how he really feels) that he'd love to see a huge increase in legal immigration to supply workers for (his words) all the factories he'd brought back. If the middle class had to clean their own houses once again they'd riot, they'd become Republicans.
Pitchforks.
It's about power
The destruction of the unions went beyond just union members.
Weren't the high wages in Williston, ND only
possible because of the special fracking technology they could apply in the Brakken Shale Basin to extract oil and gas? I remember video footage of a man's camp in Williston to house all the workers who came from all over the US to work in oil rigs and fracking sites in the Bakken Shale Basin. Even the high hourly wages made life in that city something that not everyone would be able to endure.
That boom seems to be over.
Hard Times In ‘Boomtown, USA’: The Rise And Fall Of Oil In Williston, North Dakota
The article is from 2015.
May be Williston is a special case. Where else would you have an acute labor shortage?
I remember the images from Williston. If the hourly wages weren't so low elsewere and secure jobs rare, you wouldn't find those extreme high wages other than in the special cases like Williston. It's a tough living there. No fun those man camps.
and fewer people than previously are moving to find better jobs.
How could that be?
Maybe a worker with no/crappy job has no money saved up to pay for a move, pay for first/last/security/utility deposits in a new location, pay to survive while they find that elusive "better job" etc? Plus what if they've got a family/friends where they are in Crappyjobsville who provide them with support (like child care so both parents can work 2 jobs each)? What support structure do they have to lean on once they've uprooted to move to Betterjobburg?
"They should just move" is a very handy stick to use to beat people with.
Employers unwilling to pay in spite of need
This is just what I see around me:
Employers rather go short on labor than pay according to supply and demand of local job market.
I have seen ads where employers want bunches of skill but only willing to pay no better than a few dollars above prevailing min. wage.
There is a shortage of skilled workers because larger companies gutted manufacturing and service positions causing local labor pools to lack companies and opportunities where experience is gained. Add to this that companies don't want to pay.
In terms of high tech. Very large local companies use pretty exclusively H-1B workers. H-1B's depress local high tech wages. Colleges have pretty much gone to itinerant instructors who are paid horribly--lots of wasted intellectual firepower.
Age discrimination. Companies will simply not hire older workers even if they are qualified. Again, depresses local wage growth. Companies use cheaper younger workers.