When it comes to jobs, if there is one trend that really set apart 2018 from any prior year of this expansion, it is that ordinary workers are finally getting decent raises.
Let’s start by looking at the monthly % change in average hourly wages for non-managerial workers for the entire duration of this expansion. Since this has averaged about +0.2%/month, I’ve subtracted that so that any month above 0 is an above average increase in nominal hourly pay for ordinary workers:
Look at the far right. In ten of the last twelve months, average hourly wages have increased by more than the norm for this expansion.
There must be some way to put a stop to this?
“YoY nominal wage growth in the last two months has been a little over 3.3%”. I hate to say this but you are beginning to sound like Stephen Moore. Any reporting of wage growth must take into account inflation which was about 2.2% over the past year. Inflation adjusted (real) wages did not rise by more than 3%. Try 1%.
Yea I know some on Team Trump have been claiming we had zero inflation. They lied.
So much for the lies which are common place with this administration and everybody forgets about inflation.
There have been several reasons for that, but the bottom line is that the “underemployment rate” has to fall to a certain level to put any kind of floor under wage growth.
What’s the difference between the wages bottom line in, say, Germany and US? Labor unions.
4% is good news? Try 100% for the bottom 40% of earners more like it. The 40% take 10% of overall income — down from 20% whenever it was 20% (1973, 1980?) — 42% earning less than $15/hr. Mostly a lot less?
http://fortune.com/2015/04/13/who-makes-15-per-hour/
Bottom labor (union!) line: if McD can pay $15/hr with 33% labor costs (if it’s consumers can pay it — good idea to keep always the real market in sight), then, Target and Walgreen’s can $20/hr with 10-15% labor costs, and, wonderfully efficient Walmart can pay $25/hr with unbelievably 7% labor costs.
The mid-59% can pay 14% of their income — that’s 10% of overall income — to the low-40% if they want them to show up to work. The mid-59% can repo their 14% — that’s 10% of overall income — from the top 1% via confiscatory taxation of the kind we did in the 1950s-early 1960s.
https://www.nytimes.com/2019/01/05/opinion/alexandria-ocasio-cortez-tax-policy-dance.html
This Washington Post article details how we can take back (tax back!) about half of that 10% of overall income spill over from the top 1% who now take 20% (up from 10% whenever) — if we do every tax in the article.
https://www.washingtonpost.com/business/2019/01/05/ocasio-cortez-wants-higher-taxes-very-rich-americans-heres-how-much-money-could-that-raise/?noredirect=on
Problem is the mid-59% have the knowledge to do confiscatory taxes but not necessarily the will — can things really need that much rearranging? — while the bottom 40% are ready to try anything, beginning yesterday, but they don’t have the knowledge. Got to get these people together — to take America back again.
This means: unions, unions, unions.
[cut-and-paste]
Why Not Hold Union Representation Elections on a Regular Schedule?
Andrew Strom — November 1st, 2017
“Republicans in Congress have already proposed a bill that would require a new election in each [private employer] unionized bargaining unit whenever, through turnover, expansion, or merger, a unit experiences at least 50 percent turnover. While no union would be happy about expending limited resources on regular retention elections, I think it would be hard to turn down a trade that would allow the 93% of workers who are unrepresented to have a chance to opt for unionization on a regular schedule.”
https://onlabor.org/why-not-hold-union-representation-elections-on-a-regular-schedule/
Note that the 3 mth growth rate continues to be stronger than the 12 mth growth rate.
Wages are lagging indicators at about 6 months. Looks like 4% is the full employment rate post-Boomer era………….just like it was pre-Boomer era in BLS data history.
Sadly overcapacity is hitting just like in previous expansions as well……………
Jolts also suggests things are leveling off. 2019 is going to be interesting. The December job report reminded me alot of the April 2000 job report on many facets, though at that point, the economy had been at full employment for years. It just reached it now.
and no Spencer, this rise in wages is not due to productivity, but debt, which is the problem.