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On the first read, I didn't understand the article. On a second read, I feel that they have a good point. However, let's not miss the forest for the trees: "hig

On the first read, I didn't understand the article. On a second read, I feel that they have a good point. However, let's not miss the forest for the trees: "higher than we think" doesn't mean wage growth is high enough for a healthy, prospering middle class-- especially in an era where housing, education, and health care continually exceed inflation, coupled with the fact that most workers get a 1-2% raise (if any) per year.

deogeo 8y ago
I didn't understand it even on the third read. What are they measuring? An individuals wage growth through their career, or the growth of the US mean or median wage over time? And what of the mentioned weighting - other than that it's 'different' between the two methods, I'm utterly confused as to what it actually is, or why there is weighting at all.
- JMTQp8lwXL 8y ago
  How I understood it: the measure everyone thinks is wage growth (when we look at published economic data), is assumed to weight all workers equally: making it an unweighted average. What people are actually citing is a metric that gives greater weight to higher earners than lower earners-- that metric is called Average Hourly Earnings (AHE). The name is confusing: it implies an unweighted average (because the word 'average' alone implies adding up all data points, then dividing by the number of points), but in actuality it's weighted. If you calculate wage growth the way people assume it to be (an unweighted average), that growth number is greater.
joe_the_user 8y ago
The headline is completely deceptive in the sense that it implies overall wages were increasing more than BLS statistic showed. They make a correct observation that the average worker experiences more wage growth than is shown by growth in average wage. But this does not in any way show "what we thought was right is actually wrong" (a naive person might incorrectly their wages will average follow statistical average wages and the observation debunks that, however that's not the conception they claim to debunk). It is more of an apple to oranges comparison. Yes, the average worker experiences both wage growth based on increased averages and wage growth from moving from moving up in their occupation but this second part isn't relevant for any policy discussion of wages, any evaluation of overall benefits people get from society, etc. Averages are average wages, changed each year indeed roughly by continuing workers getting a raise, new workers entering the workforce and older workers retiring - this rough average is what families deal with. And, of course, their "remarkable" statistical observation isn't a situation that began yesterday but has been true for a long time (including times when inflation-adjust wages were higher, etc).

deogeo 8y ago

I didn't understand it even on the third read. What are they measuring? An individuals wage growth through their career, or the growth of the US mean or median wage over time? And what of the mentioned weighting - other than that it's 'different' between the two methods, I'm utterly confused as to what it actually is, or why there is weighting at all.

JMTQp8lwXL 8y ago
How I understood it: the measure everyone thinks is wage growth (when we look at published economic data), is assumed to weight all workers equally: making it an unweighted average. What people are actually citing is a metric that gives greater weight to higher earners than lower earners-- that metric is called Average Hourly Earnings (AHE). The name is confusing: it implies an unweighted average (because the word 'average' alone implies adding up all data points, then dividing by the number of points), but in actuality it's weighted. If you calculate wage growth the way people assume it to be (an unweighted average), that growth number is greater.

joe_the_user 8y ago

The headline is completely deceptive in the sense that it implies overall wages were increasing more than BLS statistic showed. They make a correct observation that the average worker experiences more wage growth than is shown by growth in average wage. But this does not in any way show "what we thought was right is actually wrong" (a naive person might incorrectly their wages will average follow statistical average wages and the observation debunks that, however that's not the conception they claim to debunk). It is more of an apple to oranges comparison. Yes, the average worker experiences both wage growth based on increased averages and wage growth from moving from moving up in their occupation but this second part isn't relevant for any policy discussion of wages, any evaluation of overall benefits people get from society, etc. Averages are average wages, changed each year indeed roughly by continuing workers getting a raise, new workers entering the workforce and older workers retiring - this rough average is what families deal with. And, of course, their "remarkable" statistical observation isn't a situation that began yesterday but has been true for a long time (including times when inflation-adjust wages were higher, etc).