Wages falling
Real wages decline by Kenneth Thomas
Speaking of inequality by Kenneth Thomas
Wage stickiness coming unglued.
And an op ed by David Cay Johnston this last week:
Breaking news alert! Wages fell at the fastest rate ever recorded during the first quarter of this year, the government’s Bureau of Labor Statistics reported.
Hourly wages fell 3.8 percent in the first quarter, the biggest drop since the BLS began tracking compensation in 1947. Productivity rose half a percentage point. The result was that what economists call “labor unit costs” fell 4.3 percent.
In plain English, that means paychecks overall shrank, but work output grew. If you are a business owner, that is news worthy of a toast with a bottle of the finest Cristal champagne, which at $595 is more than the $518 that a median-wage worker earns in a week.
If you have not heard this news about plummeting wages, it is not surprising. Except for right-wing websites, and an item at the liberal Huffington Post, the June 5 announcement went unreported.
The networks and the major newspapers all have staffs of business reporters, yet they missed the third paragraph of the official government announcement that contained this important news.
That is because they are mostly assigned to write about hedge funds, high finance and the latest smartphone app. Hardly any business reporters cover workers or work, and when they do, it is often from the perspective of company executives and investors.
robert oak at the economic populist covered the whole report thoroughly:
Productivity & Costs for Q1 2013 Shows Biggest Wage Decline on Record
In the past it was not the business reporters, it was the reporters on the labor beat that would report such news.
As for business cheering, maybe the monster size companies, but for us local business size companies I did not see my employees’ wages decline, but I’m sure I’m going to feel it in sales!
As I see it, wages need to rise. But in raising the cost of labor in the face of cheap capital (low interest rates), we must raise the cost of capital by raising interest rates so that labor is not put at a further disadvantage.
http://effectivedemand.typepad.com/ed/2013/06/the-solution-to-the-economy-raise-social-standards-and-social-efficiency.html
Edward:
I enjoyed your post on Effective Demand. It is not my blog; but, would you consider cross posting it at Angry Bear?
Run75441…
Sure… Please go ahead and post it… How do we do it? If you can copy it, go ahead.
Thanks Dan,
When profit rate has turned down and financial uncertainty up, when most countries indicate slowing [and not from a high ‘base’], when
Global monthly wages grew by 1.2 % in 2011, down
from 3 % in 2007 and 2.1 % in 2010, when wages
and productivity have long been disconnected,
when counter-cyclic policies are both
dismissed and at limit———-
Well – Uncontrollability becomes prevalent
and Revoluciones posible……..
http://www.ilo.org/global/research/global-reports/global-wage-report/2012/lang–en/index.htm
where is MG
”where is MG”
battling for the ‘cure all’ of global [or prhaps just national] austerity ?