Why I’m not impressed by January’s 2.9% YoY wage growth
Why I’m not impressed by January’s 2.9% YoY wage growth
Average hourly wages jumped 9 cents, or 0.3%, to $26.74, according to the Bureau of Labor Statistics. That means wages have increased 2.9% over the last year — the biggest gain since the end of the Great Recession in June 2009.The federal minimum wage is $7.25 an hour and hasn’t increased since 2009. But many states and municipalities enacted laws to raise the wage this year.
{A]verage hourly earnings for private-sector workers increased by 0.34 percent this month, and 2.9 percent over the past year.Wage levels have struggled to gain traction in recent years, even as the labor market has tightened. But for labor economists and workers alike, these most recent increases could be a sign that wages might finally be on the upswing, thanks to progressive state policies. In the new year, 18 states across the country—from Florida to Maine, and from Washington state to Michigan—hiked their minimum wages, bringing $5 billion in additional pay to 4.5 million workers, according to the Economic Policy Institute.
There were some weak spots in the report. Wage growth for the lower-paid 80% of the workforce that have production or non-managerial jobs was up only 2.4%, implying that faster wage growth last month mostly benefited higher-paid workers.
It looks like bosses got, on average, a 2% bonus over and above their regular January wage, bonuses which were not shared with workers. And these are nominal numbers, so if consumer prices wewnt up 0.2% in January (we don’t know yet), workers got nothing, while their bosses got a nice pop.
When raises are given out, salaried professionals and management always get the bulk simply because it’s harder and much more costly to replace them than hourly paid employees.
This has been a well known given since long before I started my career and hasn’t changed a bit since. This has become even more the case as more and more employment continues to fall into the lower end of services employment.
There’s no economist on the globe including those at the BLS who aren’t intimately familiar with this. But to disclose it regularly with values to the public makes it too obvious that employers and salaried personnel are getting the bulk of income increases, and gives cause for the rank and file to complain more. Heaven forbid!
I’ve got laugh.
Anybody ever hear management tell it’s employees that hourly paid help will get an average raise equal to inflation…. some more, some less based on “merit”, but the average will be equal to inflation.
And then at the same time tell them that salaried personnel will receive on average raises 3% above inflation — some more, some less.
That’s how it works in practice but you never hear any manager disclose this. It’s certainly not a secret but never admit it openly and commit heresy. If you do you must be a Union organizer!
I don’t think I ever saw or heard of a fraction of a percent wage increase when I was a worker. could have happened, i didn’t pay much attention, figuring the only way to get a real wage increase was to get a better job. Even when I got a better job with the same employer I had to fight to get the wage increase… fight for myself: the union was worthless (pet union).
so I am guessing that most workers got no wage increase at all, but a small number got a percent “cost of living” increase, and a few others got a better job (promotion with pay increase, if not a real better job with another employer).
if i am right about this it would suggest that it might be hard to tease out just what the average wage increase means to real workers, especially those that didn’t get one.
(fight for myself: they were not hostile, but i did have to make a noise and shame them i had my immediate boss’s backing. but it wouldn’t have happened if i hadn’t made the noise. this was hard for me to do, and i think hard for most working class men who don’t like to have to ask, and were raised not to complain.)
Coberly,
Interesting contrast. I never once asked for, implied, or intimated that I wanted a raise…in nearly 40 yeas. I figured if they wanted my services they would give me raises to keep me happy, happy enough to not go to a competitor, and if they didn’t they would cease and then I would just quit and go to a competitor.
I always worked only for my own interests, and if that was also for the company’s interests, so much the better for the company. No skin off my nose. It wasn’t up to me to tell anybody what I was worth to them. It was up to them to decide that. I never threatened to quit (two exceptions when they wanted me to transfer to work for some manager I couldn’t stand — I prepared my letter of resignation and told them i would turn it in and I wouldn’t change my mind if they went through with the transfer… they chose not to take a chance on my threat.. they never every threatened me again)
I made it very clear though, through-out my career. They would never have to fire me… just tell me to do something I didn’t want to do and I’m gone in a flash, voluntarily out the door, no muss no fuss, no complaints..
I worked for me alone. Not for anybody else, ever. And yes, I was chastised at least 1x or 2x a year to be “more of a team player”, and “be more diplomatic”. I only said, “why should I cooperate with a team that is opposed to what I thought best for the business?” The company seemed to decide that what I wanted to do, 99.9% of the time, was what needed to be done though. , so the “team player” talks were for “show” only. Nobody really wanted me to be a “team player” in fact…they wanted me to go against the grain because they knew it was what needed to be done.. they just didn’t want to be the ones to go against the grain themselves. Corporate politics! I never played that game.
I was just lucky though. Every organization needs somebody to stir the pot, to upset the status quo, to make change happen, to create controversy, all in order to have reason to question what was being done or what was planned to be done. If it’s not questioned nothing changes.
If you let the powers that be shut you down because you’re afraid you’ll lose your job or not get promoted or not get a raise or not be liked, then you work for the powers that be and the status quo rather than for yourself. You become enslaved, no longer free.
I could always find another job … gas station attendant, maintenance man with a bucket and mop.. I was never concerned about making money or “succeeding”. I’d figure out a way to make ends meet somehow whenever I had to, but I was never going to work to keep my job or be told what to do or how to do it by anybody…. the only times that ever happened in my life was a) when parents told me in no uncertain terms, and b) when I was in the military .. and even then I disobeyed a direct order to keep my platoon from being recklessly endangered for no reason at all other than my sergeant’s power trip). Other than that I was the U.S. Army’s slave (Yes Sir; No Sir; No excuse Sir) I kept my butt down and my mouth shut and did what I was told without question or hesitation as my “duty” which was actually to not be dishonorably discharged..
So Cobely, we took different roads.
Oh, and for not being a team player and not being more diplomatic I got huge raises and “bonuses” and special monetary awards multiple times in the multiple thousands, and promoted faster than anybody else that started work when I did achieving high “rank” in unprecedented time. I was a manager of large units for several years and opted out of management when I decided I couldn’t lie to keep my management from being exposed to having made self-serving decisions. I actually had more power and prestige after that, and led huge teams of people across two continents… without being a “manager”, though I had more clout than most manager’s ever dreamed of having.
Changing the status quo as fast as I could was my forte’ and I was rewarded mightily for doing it my way on my terms… not to benefit myself, but to benefit the company’s profits, rather than serve my boss’s own self interests.
A lot of heavy’s wanted me fired all the time and some tried… they all ended up losing their own jobs instead… they cut their own throats without my help. I would say 1/3rd of the business wanted me gone and hated my guts, but the other 2/3’s loved me because I made change happen, they loved working on my projects and loved how I “managed” things. My personnel file had more letters demanding I be fired than I could count (one manager showed me my file once), but there were a few letters by some very high execs that said I was a major asset not to be trifled with. I never lied or misled by omission of things that made things look better or worse than they were, or tried to make myself look better either. I was highly trusted to be objective all the time.
We all march to the tune of a different drummer. I marched to the tune of my integrity and quest to change things. I just lucked out by doing so, despite my lack of “being a team player” or being “more diplomatic”, and ignoring the politics. I can honestly say I never worked… I was paid to do what I loved doing. I can’t imagine how difficult it must be to actually have to “work”. I could never have done it. I would have rather been a bum instead. I was truly just very lucky… right place, right time.
Actually an ocean racing sail bum… my other passion that I had to give up to stay married.
Anyone presenting a nominal increase as if it were a real increase is either stupid or lying. Inflation is not zero. So why not factor this in and present the inflation adjusted figure?
I saw one right wing troll calling us liberals stupid as we did not factor in the increases in fringe benefits. So he touted the 2.6% increase in ECI. Fine but that was the nominal increase. I’ll leave it to you to present this in real terms. DUH!
pgl:
Oh, but, they do present it that way and they do not know what YoY means. It got to the point I do not comment at one place because they are just plain ignorant. The right wing troll probably did not factor in the rise of deductibles and out-of-pocket for healthcare which is almost a yearly event now.
There was one thing about my job I eventually didn’t like — 12 hour flights to far east and Europe … 2nd and 1st class didn’t compensate. Company changed policies to require non-execs fly coach my last 10 years. I refused. ‘find some other sucker.” was my response. They always ended up flying me 2nd class and when no 2nd class seats were available last minute then 1st class. Their choice… not mine. If it was important enough to the company for me to go, then I sure as shit wasn’t going to suffer for it at my discomfort expense. Once I said I couldn’t go because I would be gone on my wife’s birthday. The company flew her over with me, and split for all her costs and stay for a week in England, while she took train rides to site-see all over southern England and London. “Nice Birthday”, she said. “Now what about next year?”
Longtooth
not so different as you might think.
NDD
Here’s what I don’t get. In the example’s you linked to like Jared’s
“There were some weak spots in the report. Wage growth for the lower-paid 80% of the workforce that have production or non-managerial jobs was up only 2.4%, implying that faster wage growth last month mostly benefited higher-paid workers.”
Why pull back with words like “implying” and not just out it in objective terms? These and other progressive organizations have access to a lot more sources than just the BLS Survey’s to report actual distributions of BLS’s average values.
What is their reluctance to disclose them? Why not just say the upper 30% of income earners received 90% (example) of the wage gain ($x/hr) while the lower 50% received 10% ($y/hr) and the lower 30%… etc.
As I said in my prior comment this would accentuate and provide objective information to the rank and file in the ways by which income gains increase and perpetuate income inequality to t are hugely biased to the professional and higher skill groups.
Employer’s could then only say “it’s because …. ” which would either be an outright lie or leave the rank & file with good reason to at least try to form or join unions.
So it seems to me that even progressive economists and groups who have a national podium directly to the public audience are supporting the major employers’ associations & investors (capital owners) to exploit the rank and file rather supporting and giving the public sound objective reason support the working class more.
Are they afraid of being labeled “socialists”? Are they afraid of undermining “individual responsibility” (e.g. “individualism”)? Are they afraid of domestic investors capital flight? Are they afraid of instigating ‘class warfare’? What?
Any insights?