Posted on 05/10/2005 2:39:12 PM PDT by nickcarraway
Real wages in the US are falling at their fastest rate in 14 years, according to data surveyed by the Financial Times.
Inflation rose 3.1 per cent in the year to March but salaries climbed just 2.4 per cent, according to the Employment Cost Index. In the final three months of 2004, real wages fell by 0.9 per cent.
The last time salaries fell this steeply was at the start of 1991, when real wages declined by 1.1 per cent.
Stingy pay rises mean many Americans will have to work longer hours to keep up with the cost of living, and they could ultimately undermine consumer spending and economic growth.
Many economists believe that in spite of the unexpectedly large rise in job creation of 274,000 in April, the uneven revival in the labour market since the 2001 recession has made it hard for workers to negotiate real improvements in living standards.
Even after last month's bumper gain in employment, there are 22,000 fewer private sector jobs than when the recession began in March 2001, a 0.02 per cent fall. At the same point in the recovery from the recession of the early 1990s, private sector employment was up 4.7 per cent.
Stagnant salaries push more families towards the breadline
A surfeit of workers and the threat of off-shoring are allowing companies to call the shots on wages.
Go there
“There is still little evidence that workers are gaining much traction in their negotiations,” said Paul Ashworth, US analyst at Capital Economics, the consultancy. “If this does not pick up, it raises the prospect of a sharper slowdown in consumer spending than we have been expecting.”
Economists are divided over the best source for measuring pay increases in the US, since the government releases three main measures. A gauge of average hourly earnings is released with the employment report. This rose by 0.3 per cent in both March and April and 0.1 per cent in February. Even with a slight rise in the hours employees are working, from 33.7 to 33.9, this suggests wages are struggling to keep pace with inflation. The gauge covers non-supervisory workers, about 80 per cent of the workforce.
The Bureau of Economic Analysis figures for personal income showed wages rising at close to 6 per cent in 2004 but slowing down since. This measure also showed wages rising by just 0.3 per cent in each of the past 2 months. This is a broader gauge and includes small businesses and professional partnerships, but it measures total corporate wage bill rather than wages per person.
The Employment Cost Index, seen by some as the most reliable measure, excludes overtime and professional partnerships.
Without starting a food fight, let's just say your grasp of "economies" holds as much water as a sieve.
Quote: We produce nothing increasingly for nothing
A Seinfeld economy...
very good!
My wife has been carrying us all this time, getting the mortgage paid, auto insurance, food, utilities etc. But her salary is about 1/5 of what mine was. Our credit rating is trashed because virtually all of the bills that were created at $45/hr have gone by the wayside now.
But, A.A.E, that is the plan. I'm about to start my own recruiting business under another company's umbrella. It will take a LOT to get started, but it should be lucrative.
I've tried about half a dozen different businesses in that time, most of which I've lost confidence in fairly rapidly. But I've wanted to get into the recruiting business for years and this is my chance.
Yeah, self-employment is the way to go and I have a 20 year history of IT as a bonus. It may be a slow start, but six months to a year down the road, I expect to be able to make a good salary and have an efficient, streamlined business set up.
Godspeed
Spoke too soon. Looking closely at the components of my computer I spotted the dreaded "Made in China" markings several times. Perhaps it's inescapable at this point in time, but one can try.
Their comopany's are going to find out down the road however, that this is a serious miscalculation.
I drew a $45/hr paycheck because I provided superior work and was accountable for it and was a thorough professional who took my company's business data and methods in a VERY confidential manner, protecting it better than I would my own.
The $5/hr guy in india doesn't care about these things.
Godspeed
I've tried several different businesses but its been rough getting any traction in them. I live in REALLY rural Iowa. Finding a customer base is the biggest problem. But its by no means the only problem.
I do however, persevere :)
Godsped
Yikes... I'm really sorry to hear that, but I wish you the best of luck with your new business venture. With that many years of experience, it's such a waste of your talent being employed by a company that can't utilize it.
What happened (and this deflates the "they pay for quality" argument to those globalists who think America will maintain market share) is that the cost of labor is so low making the sell price down the line cheaper that those that outsource don't care so much about quality because they can afford the cost from the "quality gap".
"Since agriculture is also becoming highly mechanized and manual labor needs are decreasing, where in the h*ll are all these millions of illegals finding jobs? Are there really that many lawncare, room service and construction jobs going begging to absorb the millions crossing our borders each year?"
You forgot Heating / HVAC apprentice, Auto Body Apprentice, Auto mechanic, Mason / bricklayer apprentice, carpentry apprentice, plumbing apprentice, electrician apprentice........
All jobs that SHOULD be going to American citizens who will gtraduate this June from out State trade / tech highschools...... now these American kids can look forward to a freaking McJob the rest of their lives.
In the building where my business is located 1/2 of the people employed here (not in my business) are illegals. This is common place. The bogus figure that Goobermint floats about there being 7 to 9 million illegals in our country is laughable. I'd be willing to bet there are that many in the New England States alone.
The average "American working Joe" is being assaulted from both ends... from people coming in on work visas...as well as illegals ....
Quote: You forgot Heating / HVAC apprentice, Auto Body Apprentice, Auto mechanic, Mason / bricklayer apprentice, carpentry apprentice, plumbing apprentice, electrician apprentice........
My brother just built a house in Michigan. The only non mexicans who worked on the house was the plumbers and electricians. Everybody else from painting, bricklayers, insulators, roofers, concrete, drywall etc were Mexican.
His American bricklayer (owner of the companay) said he had to hire mexicans or go out of business as many of his competitors did. They could not compete with the cheap labor. It was a snowball effect. When one company did it they got an upper hand. The old companies were paying $11-$15 an hour for framers and now they pay the mexicans $7 per hour.
"The old companies were paying $11-$15 an hour for framers and now they pay the mexicans $7 per hour."
Do these NEW companies pass on this SAVINGS to the COMSUMER?
I thought not.
There SHOULD be some way to go after these scumbag employers / tax cheats....with laws pertaining to unfair business practices.
What do you think will happen when LEGAL services will be able to be conducted over the internet.... and what will happen when we US consumers can hire a lawyer in India and pay him / her $30.00 an hour... instead of $200.00 to $300.00 an hour for a US lawyer?
Do you think the Lawyers / polititians will let that fly?
I doubt it.
This is where the hypocracey lies.
That's a good one. And so true. You never here the politicians, MSM, or pundits ever utter the obvious solution to SS shortfalls. Don't spend the FICA money on general expenditures but invest it like every other pension does and have the pension rights vest in the payees. If that were to happen the people paying FICA would not have to constantly beg the politicians to let them get back some of their own money at retirement which is in effect the current system. Either have FICA payments vest or scap the whole thing and let people keep their own FICA money to do with what they will.
Its rather obvious that the third world labor supply is putting tremendous downward pressure on US labor wages. Mexico and Central America because of their proximity and direct immigration are substantial factors, but in my mind I lump all that Chinese and other asian labor in as well via the staggering trade deficit and offshoring of production. Even if the illegal immigration from Mexico ceased immediately, what does one do about the cents a day dirt cheap billions of Chinese laborors that will continue to put unrelenting downward pressure on US wages. Its not a rhetorical question.
Hello Serb,
I'm an independant IT Consultant offering "outsourcing" to small to mid sized firms which can't afford (or don't want to pay for) an IT Department.
This is "full service". I provide the systems, programming, database administration, etc... The customer can of course "pick and choose" his services.
The largest barrier is convincing the small guys that they CAN profit from this setup, but, once I get my foot in the door, most generally see how having a "full time" IT Professional "on staff" does help.
This means though that I work for many bosses at the same time, which, if I ever get big enough, will require additional man power to support.
I didn't run away; my computer crashed bigtime and I rebuilt it without the help of illegal labor.
The fast food redefined as manufacturing thing was actually proposed by the Bush Administration in 2003, but no one bought it and the report had to be rewritten. It reeked of a prior administration's proposal to consider ketchup a vegetable in school lunches.
You proudly label yourself a "freemarketeer" (what is that -All for One Means All for Me?). You have to adhere to that modern theory while trashing what enabled you to get there: Fair Trade practices that inspired other nations while enriching our own populace without socialistic redistribution schemes (which never work).
Don't be mistaken for a modern-day Kulak. The peasants are grumbling while checking their torches and pitchforks (Maglites and modern weaponry). But hey, I bet you've got some time-share escape hatch if they get that uppity.
Toddster.
Is that why I have more month at the end of my money?
So in Post #106 when you said this "Building a Whopper is now considered a manufacturing job" you were lying!!!
Don't be mistaken for a modern-day Kulak.
Are you saying the Kulaks deserved to be slaughtered by the Communists?
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