4 ms·

I mean the question you need to be asking is if things are getting better or getting worse. A year ago, you would have included "nobody is hiring" in your list

by gfodor 8y ago

I mean the question you need to be asking is if things are getting better or getting worse. A year ago, you would have included "nobody is hiring" in your list of criticisms, but now you are forced to say "employers are hiring, but...." Clearly improvements in the things you mention can't happen overnight. But improving the availability of jobs and having the stock market going up instead of crashing are objectively better than the opposite. The article you cite explains that the net loss of YoY wages was entirely due to inflation, and in nominal terms wages actually increased YoY, and it also cherry picks the "production and nonsupervisory" group of workers (inflation adjusted wages for all workers actually increased) -- so its somewhat dishonest to not clarify those aspects. Inflation adjustments are also a notoriously tricky business, and without delving into the details of what inflation metric was used, and if it was applied on a region-by-region basis, hair splitting over the effects of inflation on wages to drive a narrative around wage growth (when the direction is generally "upwards") seems wrong. You seem to be looking for reasons to explain why the trajectory of the US economy is negative, but I'm afraid that the evidence is mounting that wage growth and job opportunities should be expected to improve over time going forward, absent some new financial crisis. edit: Also worth mentioning: staring at medians around wages is, imho, missing an critical aspect to understanding the actual experience of participants in the economy: income mobility. There's evidence that upward mobility has been stable despite an increase in point-in-time income inequality [1]. The question we should be asking is if income inequality at a point-in-time is necessarily bad if participants in the economy have ample opportunity to move up to higher levels of income. I don't have the answer to this, but any arguments about wage growth or income inequality need to take into account mobility, and they almost never do. https://www.npr.org/2014/01/23/265356290/study-upward-mobility-no-tougher-in-u-s-than-two-decades-ago https://www.npr.org/2014/01/23/265356290/study-upward-mobili...

prolikewh0a 8y ago
Wage growth without accounting for inflation makes any wage growth insignificant. The lower 40% of Americans have seen NEGATIVE wage growth since the 1970's, and the 40%-60% of wage earners have seen a measly 0.5% increase since the 1970's when adjusted for inflation [1] Stock market is entirely irrelevant for most of Americans [2] [1] https://www.businessinsider.com/record-median-household-income-is-hiding-a-chilling-fact-2017-9 https://www.businessinsider.com/record-median-household-inco... [2] http://time.com/money/5054009/stock-ownership-10-percent-richest/ http://time.com/money/5054009/stock-ownership-10-percent-ric...
- gfodor 8y ago
  If you assume that people are locked into a fixed position in the economy, then yes, those people have seen negative wage growth when adjusted for inflation. But if you assume that new entrants to the economy develop skills and move up over time as they acquire skills and responsibility, as is likely a closer reflection of reality, then their wages have grown over time. The observation you are making shows that for new entrants to the economy at low income levels, there has not been a net increase in the starting wages those people earn since the 1970s. I guess the question to ask is: should we expect the real earnings of low level, low skill jobs (not people) to increase over time as the economy does? As you said, these are relatively flat. I have no reason to assume someone performing low-skilled labor in 1970 should be paid more in real terms than someone today doing the same job, in pure economic terms. For that to be true, they'd need to be performing some kind of increased value in their job relative to 40 years ago -- but if they were doing that, they wouldn't be performing a low-skilled job anymore, and hence would be moving up in income level!
  - TheBeardKing 8y ago
    The underlying argument is that although the economy is improving in some aspects for some people, what good is it if the majority of the population sees no to negative benefit? If a journeyman level low skill worker makes less real wages today than 30 years ago, and the majority of the country is comprised of low skill workers, how on earth could anyone consider the recent economy a net positive for the country?
  - prolikewh0a 8y ago
    >If you assume that people are locked into a fixed position in the economy, then yes, those people have seen negative wage growth when adjusted for inflation. 80% of the country makes under $65k[1]. They're pretty locked in. This talk of "upward mobility" is not really true. Only a few will move up the chain, but not the majority. Not everyone is moving into management, not everyone is becoming a software engineer. With the costs of college education & textbooks rising exorbitantly, less people are able to afford to get the skills to move up [2]. >I guess the question to ask is: should we expect the real earnings of low level, low skill jobs (not people) to increase over time as the economy does? As you said, these are relatively flat. I have no reason to assume someone performing low-skilled labor in 1970 should be paid more in real terms than someone today doing the same job, in pure economic terms. The cost of everything necessary is rising[2] while income's have stayed the same since the 70's when adjusted for inflation, so yes I expect "low skill" jobs to keep up. "Low skill" jobs are still a necessary part of the economy and someone hast to do them; who's going to pick up your trash at work, who's going to make your smoothies, who's going to prepare your breakfast sandwiches, who's going to pick up trash at event stadiums, who's going to cut your hair? [1] https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2016 https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2016 [2] https://www.abi.org/newsroom/chart-of-the-day/price-changes-for-select-us-consumer-goods-and-services-and-wages https://www.abi.org/newsroom/chart-of-the-day/price-changes-...

by gfodor 8y ago

prolikewh0a 8y ago

Wage growth without accounting for inflation makes any wage growth insignificant. The lower 40% of Americans have seen NEGATIVE wage growth since the 1970's, and the 40%-60% of wage earners have seen a measly 0.5% increase since the 1970's when adjusted for inflation [1] Stock market is entirely irrelevant for most of Americans [2] [1] https://www.businessinsider.com/record-median-household-income-is-hiding-a-chilling-fact-2017-9 https://www.businessinsider.com/record-median-household-inco... [2] http://time.com/money/5054009/stock-ownership-10-percent-richest/ http://time.com/money/5054009/stock-ownership-10-percent-ric...

gfodor 8y ago
If you assume that people are locked into a fixed position in the economy, then yes, those people have seen negative wage growth when adjusted for inflation. But if you assume that new entrants to the economy develop skills and move up over time as they acquire skills and responsibility, as is likely a closer reflection of reality, then their wages have grown over time. The observation you are making shows that for new entrants to the economy at low income levels, there has not been a net increase in the starting wages those people earn since the 1970s. I guess the question to ask is: should we expect the real earnings of low level, low skill jobs (not people) to increase over time as the economy does? As you said, these are relatively flat. I have no reason to assume someone performing low-skilled labor in 1970 should be paid more in real terms than someone today doing the same job, in pure economic terms. For that to be true, they'd need to be performing some kind of increased value in their job relative to 40 years ago -- but if they were doing that, they wouldn't be performing a low-skilled job anymore, and hence would be moving up in income level!
- TheBeardKing 8y ago
  The underlying argument is that although the economy is improving in some aspects for some people, what good is it if the majority of the population sees no to negative benefit? If a journeyman level low skill worker makes less real wages today than 30 years ago, and the majority of the country is comprised of low skill workers, how on earth could anyone consider the recent economy a net positive for the country?
- prolikewh0a 8y ago
  >If you assume that people are locked into a fixed position in the economy, then yes, those people have seen negative wage growth when adjusted for inflation. 80% of the country makes under $65k[1]. They're pretty locked in. This talk of "upward mobility" is not really true. Only a few will move up the chain, but not the majority. Not everyone is moving into management, not everyone is becoming a software engineer. With the costs of college education & textbooks rising exorbitantly, less people are able to afford to get the skills to move up [2]. >I guess the question to ask is: should we expect the real earnings of low level, low skill jobs (not people) to increase over time as the economy does? As you said, these are relatively flat. I have no reason to assume someone performing low-skilled labor in 1970 should be paid more in real terms than someone today doing the same job, in pure economic terms. The cost of everything necessary is rising[2] while income's have stayed the same since the 70's when adjusted for inflation, so yes I expect "low skill" jobs to keep up. "Low skill" jobs are still a necessary part of the economy and someone hast to do them; who's going to pick up your trash at work, who's going to make your smoothies, who's going to prepare your breakfast sandwiches, who's going to pick up trash at event stadiums, who's going to cut your hair? [1] https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2016 https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2016 [2] https://www.abi.org/newsroom/chart-of-the-day/price-changes-for-select-us-consumer-goods-and-services-and-wages https://www.abi.org/newsroom/chart-of-the-day/price-changes-...