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Wages Are Finally Rising, 10 Years After the Recession
- fatjokes 8y agoI guess Trump is getting 4 more years.
- TAForObvReasons 8y ago> The faster growth at the bottom is probably being fueled in part by recent minimum-wage increases in cities and states across the country ... wages for low-wage workers rose 13 percent in states that raised their minimum wages, compared with 8.4 percent in states that did not "Blue states" saw a much bigger bump
- deleted 8y ago[deleted]
- kortilla 8y agoSetting the price does not set demand. The only thing that makes min wage bumps sustainable is a strong economy. Additionally, it’s easy to increase the average by eliminating people on the lower end. If a min wage increase results in a 50% loss of jobs in that range, it’s still an average wage increase for the workers that survived. There’s just a higher unemployed pool that isn’t counted in the average.
- jellicle 8y agoLuckily, all the evidence is that minimum wage increases don't cause any job losses.
- skookumchuck 8y agoMcDonald's has eliminated a number of jobs, replacing them with kiosks. When I visit the hardware store, and others, there are noticeably fewer employees there.
- fucking_tragedy 8y agoThey were doing this well before minimum wage increases.
- skookumchuck 8y agoThey knew it was coming. McD's didn't become a global empire with fools running it. It probably accelerated their plans, though, because the kiosks were installed coincident with the rises. Personally, I eat out a lot less due to the menu price increases attributable to the min wage increases.
- drak0n1c 8y agoYes, but a higher minimum wage (effectively a carbon tax on labor) isn't helping.
- gwright 8y ago"All" the evidence? I don't think that is true. https://foodinstitute.com/blog/nyc-restaurants-feel-the-squeeze-of-minimum-wage-hikes https://foodinstitute.com/blog/nyc-restaurants-feel-the-sque...
- stale2002 8y agoOh cool. Let's set those minimum wages to 1 thousand dollars an hour. No job loss, right?
- redisman 8y agoGot em!
- oblib 8y ago"if a min wage increase results in a 50% loss of jobs in that range" That is a huge "if". Is there anywhere that actually happened?
- sadris 8y agoOregon. https://www.researchgate.net/publication/266495645_Effects_of_the_1998-1999_Oregon_Minimum_Wage_Increase https://www.researchgate.net/publication/266495645_Effects_o...
- scarejunba 8y agoTrue enough, but minimum wage increases can capture economic surplus to labour. So if there is an increase in economic surplus due to increased efficiency (say warehouse allocation improves to require 50 workers instead of a 100), then normally the warehouse owner gets all (well, presumably they could use that to lower prices or something as well) the surplus from that. A minimum wage increase can move some of that surplus to labour. So if productivity rapidly rises over some period of time, it makes sense to increase minimum wage if you want some of that to go to labour. The idea being demand won't drop that much. We do know that productivity has been rising quite a bit recently, but real wages are stagnant. This may mean that more of the surplus is going to capital. Given all that, minimum wage increases will probably not lead to diminished demand overall (it's possible some industries don't have the capacity) unless they eat up more than the surplus.
- threwawasy1228 8y agoThis minimum wage loss of jobs did not happen at least not in my region.
- codingslave 8y agoIt’s no secret; tight labor markets produce higher wages. The deleterious effects of labor gluts are felt most profoundly at the bottom: the greater the number of people seeking unskilled labor, the lower the wages for “those who need it most”. Hence, the solution to low wages is to stop importing poor foreigners who undercut American wages. Couple that with the elimination of corporate taxes, and there will be no incentive for offshoring or inverting. Become the world's biggest tax haven, and incomes will skyrocket. The laws of economics cannot be wished away, and the lesson is clear: cut taxes, close the borders, and prosperity will result. If we could, now, substantially cut social spending – with all these people working, it should be possible to seriously reduce handouts – then we could afford to cut taxes AND pay for the sort of infrastructure program (exclusively projects of national importance) while reducing the deficit.
- blfr 8y agoThis is a completely reasonable comment. Why would you downvote it without a response?
- sbzodnsbd 8y agoBecause that’s hard.
- scarejunba 8y agoTwo people are sufficient to grey out a comment early on. Probably not worth the meta-discussion over.
- drewblaisdell 8y agoBecause it isn’t reasonable - it is confidently worded nonsense.
- 542458 8y agoThe comment was probably poorly received because it presents a lot of things as economic fact, when in reality the evidence is much less conclusive. Many studies have shown the the labor market is far from a simple supply/demand system, and predicting the impact of many policies - looser immigration, minimum wage - is difficult, and quite often runs contrary to the simpler models.
- Eleopteryx 8y agoIs there any value to citing wages as opposed to real wages? It even says "Not adjusted for inflation" in the chart showing the increase in average hourly earnings. Real wages have increased +1.5% March 2018 - March 2019, which the article would do well to point out. Citing that growth has topped 3% for nine months is almost in some ways misleading if it turns out that growth doesn't confer a similar increase in purchasing power. The BLS tracks real wages which is where I got my 1.5% figure. To further put things in perspective, from March 2018 through March 2019 average paychecks increased by about $30 a week. At the same time, real average weekly earnings only increased by about $5. I don't get why they would avoid (edit: less so "avoid" more like "miss/omit") this subject completely.
- joe_the_user 8y agoYeah, the chart is pretty strange. It is the yearly increase rate for wages not adjusted for inflation. Even if this is somehow a reasonable proxy for increases in real median wages, it seems unnecessary given that you could just have a chart of real median wages instead. I suspect a factor is that actual changes in income have been quite small and it's nicer to have an image that shows something dramatic instead of the marginal blip that we've actually seen.
- worik 8y agoPossibly. But "inflation" is a slippery concept. It is often published as a single number but it is not. Prices do not rise in the same way for all people. Relative costs and prices across the things money is used for. A poor family is buying different things from a middle class one. Nominal wages matter a lot. And these days prices are not moving much and it is recognised that it is very important that they go up, a lot, for those at the bottom.
- roenxi 8y agoNominal wages are almost completely irrelevant, that is why real wages exist as a concept. Inflation is slippery but arguing that nominal wages matter is pushing it too far. The official inflation rate is a polite fabrication in the sense that strictly speaking there aren't a lot of people who experience the official inflation rate in a year. But it is measuring an all too real effect that needs to be factored in to everything to have a serious debate about what is happening in the real world. I'm not even sure how to rebut the idea because I don't know any arguments in favour of using nominal wages over real that aren't straw man arguments. > And these days prices are not moving much and it is recognised that it is very important that they go up, a lot, for those at the bottom. I'm not totally sure I'm reading this right, but I assume you mean nominal prices for people who are poor. If so, this is a horrible idea. Nobody but nobody should want to raise the real or even nominal cost of living for poor people. It is obviously a brutal thing to do, and as a social group they don't command enough money to get a worthwhile effect from squeezing them.
- NTDF9 8y agoIt only took a bunch of billionaires to earn multi-billions for a few years and sabotage the debt situation to FINALLY trickle the wealth down.
- deleted 8y ago[deleted]
- clairity 8y agothe article suggests a simple explanation: > "Perhaps the job market wasn’t as good as the unemployment rate made it look." so basically, the politically expedient version of unemployment, u3, doesn't have explanatory power in the economy. instead we should use u6, which includes the underemployed and the discouraged [0]. so the slack of the un-/under- employed has now been eaten up and competition in the labor force is driving up prices. [0] https://en.wikipedia.org/wiki/Unemployment#cite_ref-47 https://en.wikipedia.org/wiki/Unemployment#cite_ref-47
- makomk 8y agoUnfortunately, all the self-proclaimed fact checkers spent the last presidential election campaign bravely defending democracy by insisting that U3 was the one true measure of unemployment and that anyone who didn't believe what it said was a filthy liar.
- tootie 8y agoU1 through U6 all move in absolute lock step with each other. https://upload.wikimedia.org/wikipedia/commons/thumb/9/9b/US_Unemployment_measures.svg/220px-US_Unemployment_measures.svg.png https://upload.wikimedia.org/wikipedia/commons/thumb/9/9b/US...
- strken 8y agoPerhaps there's a magic number which is the unemployment rate in a healthy economy[0], and when you get close to that magic number then competition has a much greater effect. If you think the magic number is very small, say 2%, then the choice between U1, U3, and U6 obviously affects whether you've hit it or not. [0] perhaps mean_time_to_find_job / (mean_time_to_find_job + mean_job_duration + mean_time_not_working), or something
- gizmo686 8y agoIf there is such a number (which there almost certainly is; literal 0 unemployment strikes me as very unhealthy), then you obviously need to specify which version of unemployment you are stating it against. As long as they continue to move in lock-step, they are effectivly measuring the same thing.
- skookumchuck 8y ago"a result of a tightening labor market that is forcing employers to raise pay even for workers at the bottom of the earnings ladder." I.e. Supply & Demand (It's the law!)
- m0zg 8y agoWhaddaya know, a businessman who ran hundreds of companies over the course of his 50-year business career knows how to do business. It's as if Trump is not a total dummy CNN wants to portray him as, and he's instead a pretty decent executive who knows what to do and who to hire (and fire) to make things run better, economy-wise, and stimulate competition for the lower end of the labor market. Wait until he also starts a crackdown on employers who offer jobs (illegally) to illegal migrants. That $15 minimum wage will become irrelevant overnight as employers will be fighting to get Americans and legal immigrants to do the jobs. Then there's also substantial growth (highest in the last 30 years) in well-paying manufacturing jobs and employment among minorities. But that goes against the narrative, so I'm sure this will be downvoted into oblivion. Unsurprisingly, there's no mention of Trump in the article at all. :-)
- dang 8y agoCan you please not take HN threads on flamewar tangents? This is in the site guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- bsder 8y agoIs this because minimum wage increases are finally kicking in in the blue states? I read something recently like 70% of all jobs added were in California. And the vast majority of the rest was all in solid blue territory. The real question is where is Texas on this? It's pretty much the only "red" state that ever posts job growth.
- sl1ck731 8y agoI'd like to see where that 70% of job growth being from California comes from. Not that I'm trying to be argumentative, but seems to be wildly unlikely. The top "growth" in terms of average number of employed increase doesn't seem to back that up: https://www.governing.com/topics/mgmt/gov-states-strongest-job-growth-in-2018.html https://www.governing.com/topics/mgmt/gov-states-strongest-j... In terms of raw job additions it looks like it goes: Washington, California, Texas with all similar raw numbers. https://www.deptofnumbers.com/employment/states/ https://www.deptofnumbers.com/employment/states/
- faissaloo 8y agoBut for who.
- timbit42 7y agowhom.
- RickJWagner 8y agoWages are rising, unemployment is low, the stock market is near an all-time high. It's probably smart to consider the broad economic landscape and make appropriate moves in the personal finance arena. In a while we'll probably consider these to be very good times, economically. (But they won't last forever.)
- lostphilosopher 8y agoWhy is the focus always on "closing the border" or other actions taken on the immigrants themselves and not on cracking down - hard - on the companies that illegally employee and abuse them? Trying to stop or even slow down immigration without addressing the incentives that drive them to leave home and come to the US seems like a doomed and inefficient game of whack a mole...
- basetop 8y agoPolitically expediency. Neither the democrats nor the republicans want to go after the elites. So naturally they take turns attacking illegal immigrants. But it's all lipservice. Neither the republicans nor democrats want to stop illegal immigration. They want to use it to get votes. Stopping immigration isn't an inefficient game of whack a mole. It's been done before through american history. And it's been done in most countries around the world. If the political and business elites wanted to end illegal immigration today, we'd end it easily. It's really not difficult to stop illegal immigration if we wanted to.
- imtringued 8y ago>It appears as if that is exactly what is happening. In recent months, more than 70 percent of people getting jobs had not been counted as unemployed the previous month. That is well above historical levels, and a sign that the strong labor market is drawing people off the sidelines. Interesting. If you run the numbers you will basically see that if someone isn't counted as looking for jobs and then gets a job they barely shift the unemployment figures at all compared to someone who declares himself as unemployed but is counted as looking for jobs. The idealized scenario with a 10% unemployment rate and 100 workers would look like this. 90/100 -> 1 worker who "seeks job" gets a job -> 91/100 -> unemployment down to 9% (-1% change) But reality looks closer to this. 90/100 -> 1 worker who "stopped looking for jobs" gets a job -> 91/101 -> unemployment down to 9.9% (-0.1% change) In other words you have to be insane to base any political decisions on this number.
- srndh 8y ago10 Yrs back, a can of coke was 1, now the same is 2.50.