Economic Policy Institute answers two laymen questions on wage stagnation:
Why is wage growth so slow? It’s not because low-wage jobs are being added disproportionately:
One explanation worth looking into is whether today’s low wage growth is due to a composition effect—i.e. low-wage jobs being added faster than middle- and/or high-wage jobs and, as a result, pulling down wage growth…But since 2013, as the recovery has strengthened, the opposite has been true—low-wage jobs are actually declining on net while middle and high wage jobs are being added…
In a previous blog post, we also showed that it is not lack of worker skills that is keeping wage growth low. What is most likely happening is that worker leverage and bargaining power have been so decimated by policy choices—policy choices that have, for example, led to the erosion of union coverage and labor standards like the minimum wage—that for tight labor markets to spark upward wage pressure the economy requires a much lower unemployment rate now than it did in the past. The solution is clear: we need the Federal Reserve to allow the unemployment rate to continue to drop, and we need policies to shift bargaining power back to workers.
All in with “policies to shift bargaining power back to workers.”
But there is an immense political problem here. The white working class ahs for decades been voting for pols in state and federal elections that have decimated bargaining power. I cannot imagine anything that will get them to stop doing so.
“ahs” was a typo for “has”, but it really fits.
One thing we know: there is no chance for adoption of such policies until Republicans (1) do not control the White House, (2) are in the minority with room to spare in the House, and (3) have fewer than 40 seats in the House. Even then it’s problematical, because Republicans will control the Supreme Court for many years and these Republicans are so extremely ideological that they will dream up some ridiculous First Amendment theory to find any laws implementing such policies unconstitutional. The only chance to get it through this Court is if the Democratic majority is so overwhelming that the five extreme Republican members might be intimidated enough to ignore their ideology, and if they don’t, a justified and politically popular Court-packing will be a real threat.
If we want to know how extreme these Republican Justices are, consider this: the Abood “fair share” decision overturned by Janus was unanimous, 9 – 0, and six of the nine Justices who voted for it had been appointed by Republican Presidents. We should be constantly accusing these guys of being extremists because that’s what they are.
(Comment deleted by admin….Bert strikes again)
This may help you make your point. https://www.bls.gov/opub/mlr/2016/article/labor-force-participation-what-has-happened-since-the-peak.htm Look at Table 3, 4, and 5. The percentages from 1995 to 2000 to 2015. This one looks more at numbers https://www.bls.gov/opub/mlr/2015/article/labor-force-projections-to-2024.htm
“What is most likely happening is that worker leverage and bargaining power have been so decimated by policy choices—policy choices that have, for example, led to the erosion of union coverage and labor standards like the minimum wage—that for tight labor markets to spark upward wage pressure the economy requires a much lower unemployment rate now than it did in the past.”
Is it that current economic conditions require a much lower unemployment rate?
Or is it that the unemployment rate statistic was always conditioned on some minimum labor participation rate?
Then when the labor participation rate fell excessively, the unemployment rate statistic lost at least some of its meaning. And a side effect was that low unemployment rates no longer caused wages to rise.
The people of this nation need to wake up and realize that they, the people, outnumber legislators, judges and governors by a wide margin. When they realize just how lopsided the numbers are, 313 million against less than 2 million, they will realize who actually has the power. They will quit begging Congress to do things for them, and will do things for themselves.
Labor unions were formed without the help of Congress. They were formed by workers against the best efforts of business interests and law makers, who tried to prevent it. They were formed because the workers TOOK the power away from the moneyed interests.
Congress and the moneyed interests are never, never, ever going to give that power back to the working class. You can elect all of the Democrats you want. You can make the House and the Senate 100% Democrats, and they will still be controlled by moneyed interests who will make sure that the working class remains powerless. If the working class wants its power back, it is going to have to TAKE that power back.