Posted on 01/19/2015 6:20:13 AM PST by SeekAndFind
The great wage mystery deepens. In economic recoveries, there usually comes a time when strong job gains lead to strong wage gains. Businesses must pay more to recruit and retain the workers they need. Not this time - or at least not yet. The unemployment rate has dropped from a peak of 10 percent in October 2009 to 5.6 percent at the end of 2014. But hourly wage gains haven't accelerated. They've plodded along at about a 2 percent annual rate, roughly matching inflation.
Economists are baffled. "This labor market recovery looks different from anything since World War II," says University of Chicago economist Steven Davis. Depending on the indicator, the job market appears either tight or loose. Low unemployment rates suggest tight, Davis says. So does the average time it takes firms to fill a vacancy; at nearly 25 days, it is just above levels before the Great Recession. But weak wage growth and the high share of jobless out of work for more than six months - a third of all unemployment - indicate a loose market.
(Excerpt) Read more at realclearmarkets.com ...
We hear that kind of number a lot but nobody seems to know where it comes from. The BLS says that the total working age not-in-jail population, minus the number of employed, leaves 102 million.
It's a number that was steady before the recession and then suddenly leapt 11 million. Another number the BLS publishes is the fact that we've also seen 6 million suddenly bumped from full time to part time.
Correct. Plus illegals and low skill immigrants driving the benefits down. Toss in municipalities, counties and states desperately sucking tax money to pay pensions and cronies and you’ve got the current economic picture.
Certain markets are hot and certain cold, but overall it’s tepid.
We cut cap gains, but left the labor taxes in place. That made/makes labor more expensive for both the employer and the employee. Take a look at the welfare cliff a person faces if they try to improve themselves.
Add the fact that government school central planners decided that everyone needed to go to college. Like global warming, the Food Pyramid, the War on Poverty, et. al. their top down, big money policy wasted countless lives and cause all kinds of misallocations in the economic lives of people.
We need good trades people. Get rid of local licensing, zoning and permitting regulations that stop people from working or innovating.
Obama Mandates On Employers Now Exceed $5 per hour.
Economists...the numbers don't tell the story. They just provide clues to the story.
HUH?
People leaving the workforce make the unemployment rate look onamatastic.
Obamacare raised the cost of hiring
Immigrants and illegal work cheap.
..... WHAT CAUSED THE DECLINE, despite the tight labor market? Some analysts, impressed by the degree to which government programs can cause disincentives to work, point out that the drop coincided with the mid-1960s advent of the Great Society programs. ..... < skip > ..... WHEN IT COMES TO the millions of people receiving Social Security disability income, however, it is fairly certain that virtually all of them are outside of the labor force. The SSDI program "creates a very strong incentive against meaningfully participating in the formal labor market," says Massachusetts Institute of Technology economics professor David Autor, author of the November 2011 study, "The Unsustainable Rise of the Disability Rolls in the United States." ..... < skip > Disability Explosion (The share of men and women receiving SSDI payments has soared over the past few decades - JPEG image ..... The surge in the number of recipients hasn't been driven by the aging of the population, argues Stanford University economics professor Mark Duggan, because the percentage receiving benefits has risen sharply within each age group. According to the chart above, the share of SSDI going to men ages 25 to 54 has risen from 1.4% in 1970 to 3.3% in 2013. This has occurred even though all other key factors indicate that the portion of workers on SSDI should have decreased, rather than increased. A smaller percentage of people are doing dangerous work, and the work that is dangerous is getting safer. In addition, the general population has gotten healthier. While those who used to file for disability typically had ailments such as cancer and heart trouble, today's filers more typically complain of mental disorders and back pain. The Social Security Website (ssa.gov) offers a "Disability Starter Kit" in both English and Spanish that walks you through the process of applying for SSDI, step-by-step. "There is a very powerful kind of for-profit advocacy component to getting people onto SSDI," says Autor. Law firms that represent claimants are given a percentage of the take, much like personal-injury lawyers. That might seem reasonable, but the sums involved are large enough to create a special-interest group that has a stake in perpetuating the system. As Autor puts it, "The Social Security Administration each year pays more than $1 billion directly to attorneys that prevail against it on behalf of claimants." ..... < skip > ..... But one new factor that is just around the corner is the depressing effect on labor-force participation of the Affordable Care Act. ... The disincentives work like this: By working more, people could lose subsidies bestowed by the ACA, amounting to an implicit tax on earnings, which could induce them to work less. ..... < skip > ..... But a firm with 49 full-time employees will face a $40,000 penalty if it fails to provide medical insurance after adding a 50th employee. The huge marginal cost of that 50th worker will deter expansion. ..... < skip > ..... The share of the adult population, 16 and over, participating in the labor force is at its lowest level since 1978, at 62.8% and 62.9% in June and July, respectively. In a comprehensive study of trends in the workforce released in December, the Bureau of Labor Statistics said it expects a further decline in labor-force participation, to 61.6%, by 2022. ..... < skip>
Consider this [seemingly implausible] scenario: Employer A has employee X working 40 hours per week. Employer B has employee Z working 40 hours a week, at the same wage as employee X.
Due to ObamaCare and/or other regulations/mandates/taxes Employer A cuts hours of Employee X to 20hrs/wk, and hires Employee Z (who just had his work time cut to 20 hrs/wk by Employer B) for other 20 hrs/wk, while Employee Z found additional 20 hrs/wk employment with Employer B.
From the point of labor statistics, you previously had 2 employers providing 80 hrs/wk to 2 employees (resulting in 2 jobs) at certain $$ rate per hour. Now you have same 2 employers, but it's now 4 employees (or 2 employees, if you prefer) working at the same $$ rate (resulting in 4 jobs), most likely with reduced non-wage benefits.
Voilà! The "economy" has just created 2 "new" jobs.
That's how it goes, and everybody knows.
David Autor is spot on. He’s been studying this for a long time. I believe you’ll find that US tax policy punishes the ‘working poor’ and creates a massive welfare cliff.
I know a guy on disability because he had to get a pin in his wrist. You wouldn’t notice any reduction in flexibility while he plays poker. He’s been on it for over 15 years. He makes side money in cash. A GOP POTUS and Congress could end this fast by paying a bounty as a percentage of benefits to the fraudulent recipient and doctors.
Democratcare itself puts a $5/hour burden on labor. Toss in state, county and local taxation, licensing, permitting and zoning laws and you make labor a suckers game.
‘Huh’ is not sufficiently descriptive, FRiend.
Worse than stupid. He’s the professor who’s book most college educated economists have read. He started in 1948 and noted that Soviet Russia is an excellent example of how well a planned economy can work.
He’s been hoping America would follow suit for 60+ years.
So imagine the economic effects of that on the nation. Things change and influence comes from the margins. We’ve lost the productivity and now bear the burden of 11 million jobless, plus the partial drag and burden of 6 million who want full-time, but now are part-time.
If we had a neutral and honest media this would be the story day in and day out.
Incentives matter. The welfare-industrial complex is real and it must be destroyed. Politically, it’s a hot potato. We need this Congress to hamper Obama with conservative populism. He’s on the offense, keep him and his Dems on the defense.
Think of all the crazy, radical Lefty judges Obama’s appointed to life terms. It’s a mess.
Wages are not rising, because there is no employment recovery.
America has nearly 100,000,000 now out of work.
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