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"That helps explain why American workers’ wages have been rising relatively slowly despite a low unemployment rate." Wouldn't surprise me if that's a big part

"That helps explain why American workers’ wages have been rising relatively slowly despite a low unemployment rate." Wouldn't surprise me if that's a big part of the problem. Despite tax cuts, low interest rates, and other corporate handouts, nothing's getting passed onto the people who do most of the spending. Inequality is higher than ever and the people making the most money need it the least.

Spooky23 8y ago
Seriously. My family is relatively well off and our home was purchased back in 2004. Still, the steady march of expenses has certainly increased faster than income.
- killjoywashere 8y ago
  On a micro note, give YNAB a try. Diligent measurement has impressed on me how unconstrained our spending was. Cutting down the number of channels for payment goes a long way. There's a reason all the FAANG companies are happy to handle your credit cards.
  - mosiuerbarso 8y ago
    +1 on this. I was terrible with money till I started using it a few years ago. I was one of those people with a good job but nothing to show for it. Using YNAB made me realize i was frittering most of my money away on lots of little purchases here and there. YNAB enabled me to see this and I drastically altered my spending. Also, a few years ago I had to take over my fathers business. Subsequently, this involved me having to take a substantial pay cut. I wouldn't have been able to do this without YNAB and budgeting.
  - Spooky23 8y ago
    I agree this is great advice! For me the biggest things are that as the family grows, so has many expenses. We need two big cars now, which are like 150% more than they were in the early 2000s. For health reasons we need to really focus on fresh vegetables and meats and avoid most cheaper foods — which are very volitile price wise.
zozbot123 8y ago
Somewhat counter-intuitively, a low unemployment rate is a lot more important to workers' overall incomes than a rise in wages (given typical variation in both). This is also why high real wages are so damaging when they lead to higher involuntary unemployment: they actively rob those who are most in need of their rightful incomes! It's why recessions make people angry and anxious for "something to be done", whatever that might be. And make no mistake, a combination of low inflation and low growth is already something very near to a recession. The Fed and other central banks are worryingly close to dropping the ball now, as they did in late 2008. Luckily though the circumstances are not nearly as bad now as they were back then - there's a fair chance that we'll muddle through.
- jlarocco 8y ago
  > Somewhat counter-intuitively, a low unemployment rate is a lot more important to workers' overall incomes than a rise in wages (given typical variation in both). That's generally true, but it's not an absolute, and it doesn't rule out paying higher wages while also maintaining the current level of employment. It's pretty clear from the data [1] that corporations are earning more than ever and not passing it on to employees. > This is also why high real wages are so damaging when they lead to higher involuntary unemployment: they actively rob those who are most in need of their rightful incomes! It's why recessions make people angry and anxious for "something to be done", whatever that might be. That's true, but doesn't apply. Real wages aren't even keeping up with inflation, and are decreasing relative to productivity [2], so it's silly to claim they're so high they're causing unemployment. [1] https://fredblog.stlouisfed.org/2018/08/corporate-profits-versus-labor-income/ https://fredblog.stlouisfed.org/2018/08/corporate-profits-ve... [2] https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/
- FranzFerdiNaN 8y ago
  amazing how you put the blame on workers for unemployment instead of on corporations being greedy vampires sucking the life out of everything in the pursuit of ever more shareholder value.
  - 8y ago
deleted 8y ago
[deleted]
defertoreptar 8y ago
> Inequality is higher than ever and the people making the most money need it the least. In 2016, for the first time in a while, the middle class grew (in the USA, anyway): https://money.cnn.com/2018/04/12/news/economy/middle-class/index.html https://money.cnn.com/2018/04/12/news/economy/middle-class/i... . Also, we're seeing real median incomes that we haven't seen for over 20 years: https://seekingalpha.com/article/4231615-november-2018-median-household-income https://seekingalpha.com/article/4231615-november-2018-media...
- TomMckenny 8y ago
  Those trends began 2011 not 2016. But it's nice the preliminary data shows they may be continuing. But inequality continues to grow at an alarming rate with almost all economic growth going to asset value not wages. Likewise, the cost for necessary goods such as housing, medicine etc far out pace wages.
  - defertoreptar 8y ago
    > Those trends began 2011 not 2016. I'm not sure I'd call that totally accurate. Real wages have been increasing since the Great Recession turned around. That's true. However, it is continuing to increase past the point of previous highs. The middle class inflex happened in 2016, although there doesn't seem to be data since then.
- bitxbitxbitcoin 8y ago
  The middle class growing isn't mutually exclusive with inequality (GINI coefficient) getting worse.
  - defertoreptar 8y ago
    Growing the middle class raises the Lorenz curve in the center. That, in turn, lowers the GINI coefficient.
    - jlarocco 8y ago

Spooky23 8y ago

Seriously. My family is relatively well off and our home was purchased back in 2004. Still, the steady march of expenses has certainly increased faster than income.

killjoywashere 8y ago
On a micro note, give YNAB a try. Diligent measurement has impressed on me how unconstrained our spending was. Cutting down the number of channels for payment goes a long way. There's a reason all the FAANG companies are happy to handle your credit cards.
- mosiuerbarso 8y ago
  +1 on this. I was terrible with money till I started using it a few years ago. I was one of those people with a good job but nothing to show for it. Using YNAB made me realize i was frittering most of my money away on lots of little purchases here and there. YNAB enabled me to see this and I drastically altered my spending. Also, a few years ago I had to take over my fathers business. Subsequently, this involved me having to take a substantial pay cut. I wouldn't have been able to do this without YNAB and budgeting.
- Spooky23 8y ago
  I agree this is great advice! For me the biggest things are that as the family grows, so has many expenses. We need two big cars now, which are like 150% more than they were in the early 2000s. For health reasons we need to really focus on fresh vegetables and meats and avoid most cheaper foods — which are very volitile price wise.

zozbot123 8y ago

Somewhat counter-intuitively, a low unemployment rate is a lot more important to workers' overall incomes than a rise in wages (given typical variation in both). This is also why high real wages are so damaging when they lead to higher involuntary unemployment: they actively rob those who are most in need of their rightful incomes! It's why recessions make people angry and anxious for "something to be done", whatever that might be. And make no mistake, a combination of low inflation and low growth is already something very near to a recession. The Fed and other central banks are worryingly close to dropping the ball now, as they did in late 2008. Luckily though the circumstances are not nearly as bad now as they were back then - there's a fair chance that we'll muddle through.

jlarocco 8y ago
> Somewhat counter-intuitively, a low unemployment rate is a lot more important to workers' overall incomes than a rise in wages (given typical variation in both). That's generally true, but it's not an absolute, and it doesn't rule out paying higher wages while also maintaining the current level of employment. It's pretty clear from the data [1] that corporations are earning more than ever and not passing it on to employees. > This is also why high real wages are so damaging when they lead to higher involuntary unemployment: they actively rob those who are most in need of their rightful incomes! It's why recessions make people angry and anxious for "something to be done", whatever that might be. That's true, but doesn't apply. Real wages aren't even keeping up with inflation, and are decreasing relative to productivity [2], so it's silly to claim they're so high they're causing unemployment. [1] https://fredblog.stlouisfed.org/2018/08/corporate-profits-versus-labor-income/ https://fredblog.stlouisfed.org/2018/08/corporate-profits-ve... [2] https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/
FranzFerdiNaN 8y ago
amazing how you put the blame on workers for unemployment instead of on corporations being greedy vampires sucking the life out of everything in the pursuit of ever more shareholder value.
- 8y ago

deleted 8y ago

[deleted]

defertoreptar 8y ago

> Inequality is higher than ever and the people making the most money need it the least. In 2016, for the first time in a while, the middle class grew (in the USA, anyway): https://money.cnn.com/2018/04/12/news/economy/middle-class/index.html https://money.cnn.com/2018/04/12/news/economy/middle-class/i... . Also, we're seeing real median incomes that we haven't seen for over 20 years: https://seekingalpha.com/article/4231615-november-2018-median-household-income https://seekingalpha.com/article/4231615-november-2018-media...

TomMckenny 8y ago
Those trends began 2011 not 2016. But it's nice the preliminary data shows they may be continuing. But inequality continues to grow at an alarming rate with almost all economic growth going to asset value not wages. Likewise, the cost for necessary goods such as housing, medicine etc far out pace wages.
- defertoreptar 8y ago
  > Those trends began 2011 not 2016. I'm not sure I'd call that totally accurate. Real wages have been increasing since the Great Recession turned around. That's true. However, it is continuing to increase past the point of previous highs. The middle class inflex happened in 2016, although there doesn't seem to be data since then.
bitxbitxbitcoin 8y ago
The middle class growing isn't mutually exclusive with inequality (GINI coefficient) getting worse.
- defertoreptar 8y ago
  Growing the middle class raises the Lorenz curve in the center. That, in turn, lowers the GINI coefficient.
  - jlarocco 8y ago