Why There Is No Wage Growth In America

Zero Hedge ^ | 03/28/2015 | Tyler Durden

[SeekAndFind]

Over the past 2 years the Obama administration has been desperate to boost minimum wages, usually over tedious bickering with republicans and corporations who have resisted such an increase, with neither party realizing that such a measure would not do much to actually boost aggregate spending. Instead, what Obama should have been focusing on was to limit the maximum number of hours worked per week, because as the following chart shows, the reason why weekly pay is rising and aggregate earnings is not due to an increase in hourly wages but because Americans are simply working longer hours every week: not quality but quantity.

 

What this means is that we can start the countdown to the next executive order which will make it illegal for any full time worker to work over 40 hours. Of course, none of that will do much since corporations have long since figured out how to eradicate the quantity problem, and increasingly American workers limited to 29.5 hours or less so their employers can avoid spending ridiculous amount of money on Obamacare.

In fact, as we have shown, over the past half year, non-supervisory workers, those who are not bosses or in any leadership positions, have seen the growth in their hourly earnings tumble...

... even as those of their bosses - naturally - has soared!

 

Meanwhile, as we showed earlier this week in "Home What A Permabull Thinks Is The Biggest Threat To The Stock Market", the main reason behind America's depressed economy is that its workers, scrambling to achieve higher wages, and yet distracted by a countless number of iGizmos and numerous other reasons, have suffered an unprecedented collapse in productivity to never before seen levels.

 

And what all of the above goes back to, is one simple thing: an unprecedented amount of labor slack in the work force as can be seen by the following chart not of the unemployment rate, which can easily be manipulated and fudged by adjusting the number of Americans not in the labor force, but by the ratio of civilian employment to the total US population. This, clearly, is at depressionary levels.

 

Good luck with those rate hikes dear Janet Yellen...

The bottom line culprit: a record 92.9 million Americans not in the labor force. Until this primary problem plaguing the US economy is fixed, nothing else can be.

[wideawake]

Ah, so now the commies at ZeroHedge want restrictions on work hours.

[Organic Panic]

More obamaphones. More obamastamps. More onamacare subsidies. More welfare. What’s the downside?

[Lurkinanloomin]

If you flood a labor market, wages will fall. Econ 101.

That’s the whole point of The Cheap Labor Express that’s being called immigration. Cheap Labor importation is bankrupting the country. The taxpayers are paying the true costs, both financial and human, while the employers get a more compliant and less costly workforce.
Multi-nationals have no loyalty to this country by definition. We’re simply a market to them. To me, it’s more than that.

[SeekAndFind]

RE: If you flood a labor market, wages will fall. Econ 101.

I think we have to qualify that with “if you flood the labor market with not enough businesses needing employees”.

But then, I thought businesses everywhere are picking up... or so we’re told.

[SeekAndFind]

RE: Ah, so now the commies at ZeroHedge want restrictions on work hours.

Where did the author say that in the article?

[rbg81]

It’s the combination of plentiful labor and automation that is lethal. Automated factories can churn out goods cheaply, but who is going to buy them in no one has a good job? This is why electronics and even cars have stayed relatively cheap. With Artificial Intelligence becoming ever more capable, you will see many “knowledge” workers get replaced too. If you can boil your job down to a set of rules, you are in trouble. Even jobs which involve significant amounts of creativity will eventually be on the chopping block.

Jobs that involve very complex movements and crawling into tight places will be safe (plumbers and electricians).

[minnesota_bound]

I keep reading how well Goerge Soros and Warren Buffett and those in Wall Street are doing. Their puppets in gov’t are working hard for them.

[Cringing Negativism Network]

What is happening is America has exported millions of former America jobs, mostly to the Peoples Republic of China.

Have you shopped for anything recently?

Everything is imported from China anymore.

Not incidentally, China now has the second-largest defense budget. And unlike our own, theirs is growing.

[OneWingedShark]

> With Artificial Intelligence becoming ever more capable,

It’s still woefully lacking; we have about the technology/knowledge to make an epileptic chicken so far as real AI is concerned.

[central_va]

What do you call it when a blonde dyes her hair brown?

[rbg81]

I disagree.

Image recognition algorithms are extremely good now, to the point where they rival humans. They will eventually surpass humans. Also, did you catch the Jeopardy games where a computer (Watson) handily beat past Jeopardy champions?

One of the major remaining hurdles for AI is the ability to be able to intelligently participate in a conversation. Once that is breached, a lot of people whose job is producing hot air can be replaced.

The other thing about AI is the ability to rate, publish and share outcomes in a globally distributed fashion. This would potentially allow it to “learn” much faster than any single human could.

[Oatka]

Automated factories can churn out goods cheaply, but who is going to buy them in no one has a good job?

Back in the '50s I was up in the NorthEast and read where a Ford representative, or one of the automakers, was giving a demo on some new automated production line equipment. He was bragging on how the robots needed no vacations, sick days, rest room breaks, etc.

One of the union reps asked him how many cars did those robots buy. Embarrassed silence. While I always looked askance at any union, I thought the guy had a point.

Although not automation, a similar situation showed up years later, when Perot was running for President. He showed a photo of a Ford plant in Mexico and asked "What's wrong with this picture?" Hell, I couldn't see anything wrong. He pointed out that the factory had no parking lots. The workers there couldn't afford to buy the product they were making - they were bused in from the nearby slums. That, to me, was NAFTA in a nutshell, and has been reinforced every year since.

[OneWingedShark]

What do you call it when a blonde dyes her hair brown?

Artificial intelligence.

[OneWingedShark]

Image recognition algorithms are extremely good now, to the point where they rival humans. They will eventually surpass humans. Also, did you catch the Jeopardy games where a computer (Watson) handily beat past Jeopardy champions?

Except that's not really AI; it's [a very specific] pattern recognition.

One of the major remaining hurdles for AI is the ability to be able to intelligently participate in a conversation. Once that is breached, a lot of people whose job is producing hot air can be replaced.

That's a goal [the turing test], but not as much a major hurdle as you think, in the way you think.
One of the things that AI has to do is "goal planning", say taking "build aPL/I compiler targeting MIPSV" and generating such given only the spec for MIPSV and PL/I.

The other thing about AI is the ability to rate, publish and share outcomes in a globally distributed fashion. This would potentially allow it to “learn” much faster than any single human could.

And?
Lots of social networking sites do this half-way w/ 'like' and 'share', that says nothing about the level of intelligence therein.

[Vaduz]

Obama logic the from the top (educated) and blow in the bottom (non educated) gain votes and power.
Van Jones wasn’t kidding.

[OneWingedShark]

That’s essentially what the open-borders crowd wants to do w/ us.

[9thLife]

because no money has flowed into the economy.

[Cowman]

I disagree, Consider the words of T Coleman Andrews IRS Commissioner 1952 - 1955

“The income tax is bad because it was conceived in class hatred, is an instrument of vengeance and plays right into the hands of the communists. It employs the vicious communist principle of taking from each according to his accumulation of the fruits of his labor and giving to others according to their needs, regardless of whether those needs are the result of indolence or lack of pride, self-respect, personal dignity or other attributes of men.” “The income tax is fulfilling the Marxist prophecy that the surest way to destroy a capitalist society is by steeply graduated taxes on income and heavy levies upon the estates of people when they die.”  (see communist goals)  “As matters now stand, if our children make the most of their capabilities and training, they will have to give most of it to the tax collector and so become slaves of the government. People cannot pull themselves up by the bootstraps anymore because the tax collector gets the boots and the straps as well.” 

“The income tax is bad because it is oppressive to all and discriminates particularly against those people who prove themselves most adept at keeping the wheels of business turning and creating maximum employment and a high standard of living for their fellow men.” 

“I believe that a better way to raise revenue not only can be found but must be found because I am convinced that the present system is leading us right back to the very tyranny from which those, who established this land of freedom, risked their lives, their fortunes and their sacred honor to forever free themselves.

The reason there is no wage growth is the economy has been blown to bits by government policy not too many hours

[caww]

...”because no money has flowed into the economy”...

Because it’s all being invested overseas and otherwise into political coffers.