Posted on 11/05/2015 2:55:26 AM PST by expat_panama
The Economy Is Up, but Pay Is NotÂ, So sayeth Steven Greenhouse in the New York Times this past weekend in a piece titled, The Mystery of the Vanishing Pay Raise. Well, consider this mystery solved.
To Greenhouse, and to Jared Bernstein as well, the economy is, as ever, defective. While unemployment has dropped to 5.1 percent from near 10 percent in 2009, wages haven't accelerated upward, as many had expected. The Greenhouse piece has a chart showing average hourly wages rising from $24.66 in 2009 to $25.09 today. Bernstein presents his own, even scarier, chart,,,
[snip].
But their basic conclusion is just wrong.
Here is my version of Jared’s chart, using data from the Current Employment Survey on the hourly wages of production and nonsupervisory workers (seasonally adjusted):
Look at that decline over 33 years! But Jared's chart, and mine, shows growth rates for nominal pay. While these rates are declining, the careful observer will note that the trend line is above zero over the whole period, meaning that nominal pay grew every year.
[snip] 
...real pay growth has also increased.
And it has. The blue line in the chart below shows how real (inflation-adjusted) average hourly pay has grown over time, using the inflation adjustment that Bernstein tends to prefer and that Greenhouse uses in his chart (the CPI-U-RSÂ). First, note that the line shows that average hourly pay is about 11 percent higher than at the beginning of 1982, and it has been rising â€with some pausesâ€since 1996. Not such a scary chart anymore.
The dark black vertical line indicates the start of 2009, and it is clear that real pay has stagnated between then and now...
(Excerpt) Read more at forbes.com ...
We need new indicators. The way we do business has changed so much since 2000 that the old CPI, unemployment rate, and even the definition of a job are not the same as they were in the mid-20th century when all these indicators were meaningful.
My pay is less than half my old job and even less than entry level of 20 years ago. No raise in the future and an earlier job I had saw a 1/3 hourly pay cut.
F the Obamaconomy.
No raise would even maintain standard of living.
AND I am bleeding hundreds every month paying for mandated medical coverage.
Yup they counted aggregate wages rather than median or per capita. So the growth of CEO and upper management salaries offset the flat wages of almost everyone else. Then add in actual inflation rather than the BS CPI and from my calculation wages have been falling since 2006.
And my healthcare sucks now too!
Good morning to ya and the hits keep comin'! Yesterday's close saw 'mild losses' and the reason stocks took a 'breather' is all Yellen's fault for saying that rates will come back up sometime during the life of the known universe. Gold also dipped, it went down to $1,102 but it's since come back up to $1,110.30.
Futures are mixed/off all around as the week winds down and forget Yellen, today we're getting a regular doc deluge:
7:30 AM Challenger Job Cuts
8:30 AM Initial Claims
8:30 AM Continuing Claims
8:30 AM Productivity-Prel
8:30 AM Unit Labor Costs-Prel
10:30 AM Natural Gas Inventories
Elsewhere:
December rate hike priced in? Maybe, experts say
Don't Buy the Gloom, This Is No Zombie Economy - Brian Hamilton, USAT
Rare Market Trend May Vindicate Bulls - Anora Mahmudova, MarketWatch
Nowhere Close To A Global Recession - A. Evans-Pritchard, Daily Telegraph
And add in $100 a week in commuting expense.
I’m working again but this doesn’t pay the bills, it just slows down the rise in my debt.
Exactly the same here
Effa Obama!!
I wish you luck.
I have managed to stave the bleeding, but this economy sucks.
I can only guess how much of a price increase I will see in my premiums soon.
You can opt out and pay the new increased “shared responsibility tax”
Spit!
I have no income
I have enough money in US dollars to live 5 to six more years. If the taxes, Obamacare are not repealed by then I will move back to China where my non-US citizen wife has her business.
I have gone Gault
Take out the public sector unions and see where wages stand.
So apparently the plan is to repeat the “happy days are here again” BS mantra - like they’ve been doing since 2008 - long enough that the sucky economy becomes the new normal and nobody remembers how much better things were prior to the ascension of the magic minority.
Your company healthcare plan isn't counted
Your company contributions to your retirement plan isn't counted.
In fact, no benefits are counted.
My wife works at a college and we get free tuition for our kids as one of her benefits. That one benefit is a hidden non taxable part of her salary that is worth an estimated 1 million easy for us.
We have new indicators. They are still using the old names but the “meanings have changed”.
Do these numbers include the public dole as “pay”? That is an ever increasing chunk of income for more people.
How could there have been a six point overnight jump in real income at the beginning of ‘09? That simply could not happen. It suggests govt bean counters changed methodology to make The King look good. Or did everybody else get a huge bump and not tell me?
What he said was that he used "average hourly wages", not total or aggregate.
...So the growth of CEO and upper management salaries offset the flat wages...
That's right, if we forget equality of opportunity and focus only on equality of results then we can say we're worse off. The economy as a whole is doing well while at the same time there are more people than ever who are saying their victims of inequality. Something else the essay left out was the fact that Americans are called 'capitalists' because they get incomes from working not only in the labor market but also in the capital markets. Total per person inflation adjusted incomes (after taxes) is at an all time high:
That's an argument I've heard a lot in the past, that we got inequality only when we ignore all the welfare payments. In fact, iirc the Heritage Foundation argued that if we consider hours/day worked, education, taxes, and welfare we find that income inequality is just about gone.
...six point overnight jump in real income at the beginning of ‘09?
That's a jump in average hourly wages, they're saying was caused by laying off everyone but management. The average wage went up because we dumped the low wagers. Over the next few years the low wagers came back and the average got stuck.
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