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What slowing wage growth? For the poorest the wages have essentially not increased for a long time right? It hasn’t even kept up with inflation. The recent bill

What slowing wage growth? For the poorest the wages have essentially not increased for a long time right? It hasn’t even kept up with inflation. The recent bill actually makes it much worse.

roywiggins 1y ago
As far as I can tell, over the last few years at least, that's mostly not true: wages outpaced inflation, and it outpaced inflation more for lower-income workers than higher. > In stark contrast to prior decades, low-wage workers experienced dramatically fast real wage growth between 2019 and 2023 https://www.epi.org/publication/swa-wages-2023/ https://www.epi.org/publication/swa-wages-2023/ ("real wages" are wages adjusted for inflation)
- silisili 1y ago
  I'm obviously not an expert, but assumed the same thing. I watched a fast food joint near me go from 9/hr to 21/hr in just a few years. Maybe that was just pandemic pricing, I don't know. But getting >2x salary in such short order is outpacing pretty much everyone else, percentage wise.
  - bluefirebrand 1y ago
    This probably means that those wages were being suppressed hard for years and they finally weren't able to hire people at that wage anymore
    - silisili 1y ago
      You're probably right, but it ultimately leads to wage compression which is for most of the middle class a disaster. You don't have to look far to see everyday people complaining about the price of a burger or movie ticket. IMHO, it doesn't "lift all boats", it pulls down the middle and upper middle classes. Yeah, the lower wage jobs made more money, but they didn't gain much if anything in affordability, since all of the necessities are produced by people also demanding more money.
      - tossandthrow 1y ago
        All arguments against lower class people getting higher wages are IMHO wildly inappropriate. "you need lower wages to avoid wage compression", "you need lower wage so we can have more employed people"... If wage compression occurs, then companies have to deal with Theo senior employees seeking elsewhere - or pay them fairly.
        silisili 1y ago
        Today, I'd agree. It felt like a dirty thing to even write. Historically, the lower wage jobs were for kids or bored folk, who'd eventually move onto something better and higher wages. Recently, the economy isn't great and people take what they can find. There's absolutely no shame in that. I know people in tech who were making low to mid 6 figures now doing retail. The jobs just aren't there, and I constantly fear I'll be in the same boat soon. But that inevitably does lead to wage compression, which to be clear isn't the fault of the lower wage earners.
        FirmwareBurner 1y ago
        >I know people in tech who were making low to mid 6 figures now doing retail. But in other threads, people on HN said they don't even get out of bed for a 140k remote job. What gives?
        ryanjshaw 1y ago
        > All arguments against lower class people getting higher wages are IMHO wildly inappropriate. This kind of emotional reasoning is wildly inappropriate IMHO. The commenter is not making an argument against lifting lower class wages. They’re making an observation of how economic theory may apply to this scenario. > pay them fairly Define “fairly”?
        wat10000 1y ago
        They said it’s bad for one group and neutral for another. How is that not an argument against it?
- Mountain_Skies 1y ago
  Activists love to use the Federal Minimum Wage, which has not increased in a long time (16 years), as their basis for that claim, ignoring how few workers are actually paid the Federal Minimum Wage. It's become a worthless metric for anything other than misleading arguments. In addition to state and local governments setting their own minimums, the decline in young people and competition for workers in that sector from food delivery companies, has put wage pressure on fast food companies. Most wouldn't be able to open their doors if they tried to pay the Federal Minimum Wage. Had it been pegged to inflation, it would be $10.90/hour, which is less than what fast food workers are paid almost anywhere.
- DanielHB 1y ago
  I imagine how cost of living/inflation is calculated became a lot more complex in the past few years which skews the comparison. Especially because of cost of buying homes and cost of renting and greater disparity between rural and urban in the context of increasingly higher urban populations. Also, predatory debt trapping, in part due to social media exposure and student loans, is way bigger thing now.
- dns_snek 1y ago
  If these reports say that things are better for low income people, why do people living that reality overwhelmingly disagree? Any statistics derived from inflation figures are doomed to be wrong when the inflation data was wrong to begin with. I'm not in the US, but our inflation data was just as wrong as I've heard the US data was. Official numbers were 10% but literally everything went up at least 20%. Everyone I spoke to had their cost of living increase by significantly more than the official inflation figures. And when "real wage growth" over 4 years is deemed to be just 13%, it's essentially guaranteed that real wage growth was in fact negative when you consider the disparity between real and official inflation figures. Statistics such as food insecurity rate, personal savings rate, and credit card delinquency rate would certainly support that.
  - vineyardmike 1y ago
    > why do people living that reality overwhelmingly disagree Because a hard life feels harder when prices rise. If you're at the bottom of the wage statistics, even a large increase in salary (eg. 20%) will still leave you struggling day to day, before inflation in your costs. > Official numbers were 10% but literally everything went up at least 20% Inflation numbers consider a wide variety of things. It's probably at least partially the reality that the necessities are rising faster than discretionary purchases. As an example, iPhones are "cheaper" today accounting for inflation since Apple hasn't raised prices much, especially on the high end. Obviously the poorest X% of people aren't buying new iPhones, so they don't get those savings. Anecdotally, my grocery bill for packaged goods has risen dramatically, while my produce costs are flat. I'm a vegetarian so IDK about meat costs. My utilities have risen, my housing costs have risen, and my subscription prices have risen. Meanwhile, most of my other non-travel spending (eg. home goods like towels, electronics, etc) is pretty flat for years.
    - iinnPP 1y ago
      Ingredients household here. My grocery bill doubled in 7 years without any packages of anything. Largest increase has been on every fresh food item grown in our many greenhouses. Such as lettuce (increased 200% from ~1 to ~3 for iceberg lettuce) and tomatoes. I keep a decent memory of pricing at multiple stores and can agree with part of your comment, packaged food got it worse. Edit: Ontario Canada
- smolder 1y ago
  That's a study that underestimates growth in cost of living, i.e. gouging by rent seekers and businesses, and ignores changes in status, i.e. people leaving the job market or moving down to something worse. It's not surprising that the lowest income earners got a substantial boost in that period, since life is getting substantially more expensive. Importantly, I don't think their "real wage" inflation adjusted values are fair. People being told inflation was one amount when their actual CoL was vastly outpacing that was part of what fueled the anger that got Trump elected again, not that he has helped (or will help) anything since '23 where that analysis ends. Anecdotally, many people I know would be in dire straits if they didn't own appreciating real property, because their cost of living adjustments at work aren't coming close to matching inflation. Others I know are actually in dire straits. Some are doing fine and getting the benefit of profitable work. Overall things have been awful economically post-COVID, and there are a lot of causal factors, from the policy decisions of the last decade, to the surprises of COVID, natural disasters and geopolitics, to the AI investment bubble and the changing zeitgeist. (Oh and let's not forget simple demographics, birth rate, etc...)
- Gareth321 1y ago
  The problem with comparing wages by cohort and average inflation is that inflation doesn't affect each cohort evenly. By and large, necessities continue to outpace top line inflation, and they have done so for decades. These include food, healthcare, housing, daycare, and education. Lower income people spend more of their income as a proportion on necessities, so they are impacted more than average by inflation. In order to tell if these lower income people have indeed received wage increases in line with inflation, we would need a model which uses a lower income basket of goods and services. If I had to put on my tinfoil hat, I presume we don't do this because it would illustrate how badly the poorest are affected by inflation, and validate the frustrations they feel and which are clearly reflected in economic sentiment surveys.
  - roywiggins 1y ago
    One thing is that 10th percentile wages did barely keep up with inflation from 1979-2019 (0.1% growth annualized), it's only since then that it showed an increase (3.1% annualized). So it seems to me that any effects along those lines strong enough to exactly negate the apparent real wage growth in recent years must have either 1) been basically constant, so effective wages in this group actually declined 3.1% every year on average for forty years, making 2019 10th-percentile workers reduced to 28.4% of their forbears' wages, or 2) the inflation numbers were about representative for the 10th percentile worker from 1979-2019 and then suddenly and abruptly weren't, or 3) some combination of the two. (or of course 4), the effect is real, nonzero, but not big enough to wipe out 3.1% apparent wage growth)
bennyHHW 1y ago
[flagged]
- roywiggins 1y ago
  Median real wages are up since the 80s by quite a bit: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
- agent_turtle 1y ago
  > Decades of worsening conditions for the commoner is Ron Wyden's idea of a booming economy. Democrats are useful idiots. I can't anymore, folks. Republicans passed the largest tax cuts for billionaires, increased the deficit by trillions, and kicked millions of people of medicaid. Meanwhile, Trump is out there creating the most regressive tax system via tariffs we've ever seen which affect the poorest the most. Yet Democrats are the useful idiots. Incredible.
  - WalterBright 1y ago
    > Republicans passed the largest tax cuts for billionaires There were no tax cuts for billionaires in the BBB. (Not increasing the tax is not a "cut".)
    - kyralis 1y ago
      It absolutely is when the status quo would have increased taxes. That may not be a cut of current taxes, but in the longer timeframe it is absolutely a tax cut.
      - WalterBright 1y ago
        Framing it as not increasing taxes being a cut is misleading. It's just as disingenuous as scaling back a proposed budget increase and calling it a "cut". The FTC wouldn't let businesses get away with such language, why should the government get a pass?
stretchwithme 1y ago
Maybe dramatically increasing the supply of something lowers its price.
- hdgvhicv 1y ago
  Lots of contrarians or simply wealthy people think increasing supply of housing does not cause this.
JumpCrisscross 1y ago
> For the poorest the wages have essentially not increased for a long time right? No. Nominal wages grew from ‘21 to ‘23, hitting all-time highs in ‘24 [1]. > It hasn’t even kept up with inflation It did [2]. [1] https://fred.stlouisfed.org/series/CXU900000LB0102M https://fred.stlouisfed.org/series/CXU900000LB0102M [2] https://www.epi.org/publication/swa-wages-2023/ https://www.epi.org/publication/swa-wages-2023/
- meetingthrower 1y ago
  Good data! Looking at the objective figure on the chart is sobering tho - $4k in income!(I think it may go up after taxes given tax credits?)
bandrami 1y ago
That hasn't been true for a decade but nobody updated their mental models
renewiltord 1y ago
Great example in how humans do this thing called “hallucination” where they just make up facts. I wouldn’t trust them to write code.

What slowing wage growth? For the poorest the wages have essentially not increased for a long time right? It hasn’t even kept up with inflation. The recent bill actually makes it much worse.

roywiggins 1y ago

As far as I can tell, over the last few years at least, that's mostly not true: wages outpaced inflation, and it outpaced inflation more for lower-income workers than higher. > In stark contrast to prior decades, low-wage workers experienced dramatically fast real wage growth between 2019 and 2023 https://www.epi.org/publication/swa-wages-2023/ https://www.epi.org/publication/swa-wages-2023/ ("real wages" are wages adjusted for inflation)

silisili 1y ago
I'm obviously not an expert, but assumed the same thing. I watched a fast food joint near me go from 9/hr to 21/hr in just a few years. Maybe that was just pandemic pricing, I don't know. But getting >2x salary in such short order is outpacing pretty much everyone else, percentage wise.
- bluefirebrand 1y ago
  This probably means that those wages were being suppressed hard for years and they finally weren't able to hire people at that wage anymore
  - silisili 1y ago
    You're probably right, but it ultimately leads to wage compression which is for most of the middle class a disaster. You don't have to look far to see everyday people complaining about the price of a burger or movie ticket. IMHO, it doesn't "lift all boats", it pulls down the middle and upper middle classes. Yeah, the lower wage jobs made more money, but they didn't gain much if anything in affordability, since all of the necessities are produced by people also demanding more money.
    - tossandthrow 1y ago
      All arguments against lower class people getting higher wages are IMHO wildly inappropriate. "you need lower wages to avoid wage compression", "you need lower wage so we can have more employed people"... If wage compression occurs, then companies have to deal with Theo senior employees seeking elsewhere - or pay them fairly.
      - silisili 1y ago
        Today, I'd agree. It felt like a dirty thing to even write. Historically, the lower wage jobs were for kids or bored folk, who'd eventually move onto something better and higher wages. Recently, the economy isn't great and people take what they can find. There's absolutely no shame in that. I know people in tech who were making low to mid 6 figures now doing retail. The jobs just aren't there, and I constantly fear I'll be in the same boat soon. But that inevitably does lead to wage compression, which to be clear isn't the fault of the lower wage earners.
        FirmwareBurner 1y ago
        >I know people in tech who were making low to mid 6 figures now doing retail. But in other threads, people on HN said they don't even get out of bed for a 140k remote job. What gives?
      - ryanjshaw 1y ago
        > All arguments against lower class people getting higher wages are IMHO wildly inappropriate. This kind of emotional reasoning is wildly inappropriate IMHO. The commenter is not making an argument against lifting lower class wages. They’re making an observation of how economic theory may apply to this scenario. > pay them fairly Define “fairly”?
        wat10000 1y ago
        They said it’s bad for one group and neutral for another. How is that not an argument against it?
Mountain_Skies 1y ago
Activists love to use the Federal Minimum Wage, which has not increased in a long time (16 years), as their basis for that claim, ignoring how few workers are actually paid the Federal Minimum Wage. It's become a worthless metric for anything other than misleading arguments. In addition to state and local governments setting their own minimums, the decline in young people and competition for workers in that sector from food delivery companies, has put wage pressure on fast food companies. Most wouldn't be able to open their doors if they tried to pay the Federal Minimum Wage. Had it been pegged to inflation, it would be $10.90/hour, which is less than what fast food workers are paid almost anywhere.
DanielHB 1y ago
I imagine how cost of living/inflation is calculated became a lot more complex in the past few years which skews the comparison. Especially because of cost of buying homes and cost of renting and greater disparity between rural and urban in the context of increasingly higher urban populations. Also, predatory debt trapping, in part due to social media exposure and student loans, is way bigger thing now.
dns_snek 1y ago
If these reports say that things are better for low income people, why do people living that reality overwhelmingly disagree? Any statistics derived from inflation figures are doomed to be wrong when the inflation data was wrong to begin with. I'm not in the US, but our inflation data was just as wrong as I've heard the US data was. Official numbers were 10% but literally everything went up at least 20%. Everyone I spoke to had their cost of living increase by significantly more than the official inflation figures. And when "real wage growth" over 4 years is deemed to be just 13%, it's essentially guaranteed that real wage growth was in fact negative when you consider the disparity between real and official inflation figures. Statistics such as food insecurity rate, personal savings rate, and credit card delinquency rate would certainly support that.
- vineyardmike 1y ago
  > why do people living that reality overwhelmingly disagree Because a hard life feels harder when prices rise. If you're at the bottom of the wage statistics, even a large increase in salary (eg. 20%) will still leave you struggling day to day, before inflation in your costs. > Official numbers were 10% but literally everything went up at least 20% Inflation numbers consider a wide variety of things. It's probably at least partially the reality that the necessities are rising faster than discretionary purchases. As an example, iPhones are "cheaper" today accounting for inflation since Apple hasn't raised prices much, especially on the high end. Obviously the poorest X% of people aren't buying new iPhones, so they don't get those savings. Anecdotally, my grocery bill for packaged goods has risen dramatically, while my produce costs are flat. I'm a vegetarian so IDK about meat costs. My utilities have risen, my housing costs have risen, and my subscription prices have risen. Meanwhile, most of my other non-travel spending (eg. home goods like towels, electronics, etc) is pretty flat for years.
  - iinnPP 1y ago
    Ingredients household here. My grocery bill doubled in 7 years without any packages of anything. Largest increase has been on every fresh food item grown in our many greenhouses. Such as lettuce (increased 200% from ~1 to ~3 for iceberg lettuce) and tomatoes. I keep a decent memory of pricing at multiple stores and can agree with part of your comment, packaged food got it worse. Edit: Ontario Canada
smolder 1y ago
That's a study that underestimates growth in cost of living, i.e. gouging by rent seekers and businesses, and ignores changes in status, i.e. people leaving the job market or moving down to something worse. It's not surprising that the lowest income earners got a substantial boost in that period, since life is getting substantially more expensive. Importantly, I don't think their "real wage" inflation adjusted values are fair. People being told inflation was one amount when their actual CoL was vastly outpacing that was part of what fueled the anger that got Trump elected again, not that he has helped (or will help) anything since '23 where that analysis ends. Anecdotally, many people I know would be in dire straits if they didn't own appreciating real property, because their cost of living adjustments at work aren't coming close to matching inflation. Others I know are actually in dire straits. Some are doing fine and getting the benefit of profitable work. Overall things have been awful economically post-COVID, and there are a lot of causal factors, from the policy decisions of the last decade, to the surprises of COVID, natural disasters and geopolitics, to the AI investment bubble and the changing zeitgeist. (Oh and let's not forget simple demographics, birth rate, etc...)
Gareth321 1y ago
The problem with comparing wages by cohort and average inflation is that inflation doesn't affect each cohort evenly. By and large, necessities continue to outpace top line inflation, and they have done so for decades. These include food, healthcare, housing, daycare, and education. Lower income people spend more of their income as a proportion on necessities, so they are impacted more than average by inflation. In order to tell if these lower income people have indeed received wage increases in line with inflation, we would need a model which uses a lower income basket of goods and services. If I had to put on my tinfoil hat, I presume we don't do this because it would illustrate how badly the poorest are affected by inflation, and validate the frustrations they feel and which are clearly reflected in economic sentiment surveys.
- roywiggins 1y ago
  One thing is that 10th percentile wages did barely keep up with inflation from 1979-2019 (0.1% growth annualized), it's only since then that it showed an increase (3.1% annualized). So it seems to me that any effects along those lines strong enough to exactly negate the apparent real wage growth in recent years must have either 1) been basically constant, so effective wages in this group actually declined 3.1% every year on average for forty years, making 2019 10th-percentile workers reduced to 28.4% of their forbears' wages, or 2) the inflation numbers were about representative for the 10th percentile worker from 1979-2019 and then suddenly and abruptly weren't, or 3) some combination of the two. (or of course 4), the effect is real, nonzero, but not big enough to wipe out 3.1% apparent wage growth)

bennyHHW 1y ago

[flagged]

roywiggins 1y ago
Median real wages are up since the 80s by quite a bit: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
agent_turtle 1y ago
> Decades of worsening conditions for the commoner is Ron Wyden's idea of a booming economy. Democrats are useful idiots. I can't anymore, folks. Republicans passed the largest tax cuts for billionaires, increased the deficit by trillions, and kicked millions of people of medicaid. Meanwhile, Trump is out there creating the most regressive tax system via tariffs we've ever seen which affect the poorest the most. Yet Democrats are the useful idiots. Incredible.
- WalterBright 1y ago
  > Republicans passed the largest tax cuts for billionaires There were no tax cuts for billionaires in the BBB. (Not increasing the tax is not a "cut".)
  - kyralis 1y ago
    It absolutely is when the status quo would have increased taxes. That may not be a cut of current taxes, but in the longer timeframe it is absolutely a tax cut.
    - WalterBright 1y ago
      Framing it as not increasing taxes being a cut is misleading. It's just as disingenuous as scaling back a proposed budget increase and calling it a "cut". The FTC wouldn't let businesses get away with such language, why should the government get a pass?

stretchwithme 1y ago

Maybe dramatically increasing the supply of something lowers its price.

hdgvhicv 1y ago
Lots of contrarians or simply wealthy people think increasing supply of housing does not cause this.

JumpCrisscross 1y ago

> For the poorest the wages have essentially not increased for a long time right? No. Nominal wages grew from ‘21 to ‘23, hitting all-time highs in ‘24 [1]. > It hasn’t even kept up with inflation It did [2]. [1] https://fred.stlouisfed.org/series/CXU900000LB0102M https://fred.stlouisfed.org/series/CXU900000LB0102M [2] https://www.epi.org/publication/swa-wages-2023/ https://www.epi.org/publication/swa-wages-2023/

meetingthrower 1y ago
Good data! Looking at the objective figure on the chart is sobering tho - $4k in income!(I think it may go up after taxes given tax credits?)

bandrami 1y ago

That hasn't been true for a decade but nobody updated their mental models

renewiltord 1y ago

Great example in how humans do this thing called “hallucination” where they just make up facts. I wouldn’t trust them to write code.