"Our customers simply don't have the money to buy basic necessities between paychecks," he said in a speech to executives.
But a good portion of Americans are insulated from sluggish wages because they benefit from other income sources.
In the aggregate level, only 56 percent of all personal income comes from wages and salaries, with the rest flowing from other sources, such as investments, rent, Social Security and private retirement plans.
This partly explains why consumers have kept on spending: Personal consumption expenditures were up 3.9 percent in the last 12 months.
"A heck of a lot of people don't feel squeezed because they're going out and buying Coach bags and they're shopping at Nordstroms," Silvia said.
And in any case, if history is a guide, a rise in pay should be just around the corner, economists said.
"Wages are going to catch up," Hassett said. "They've always picked up in the past."
jessica.holzer@chron.com
Supply and demand. Tough luck workers.
Well, long ago I figured out that one depends on the others for the raises, bonuses, [and the paycheck, too]. They may give, or they may withhold. OTOH, if one saves and invests what one could, pretty soon there would be investment income stream which could be seen as a raise and a bonus one gives to oneself, without having to beg for it. If there is enough of it one could even do without a paycheck at all.
Because business is booming and corporate profits are up sharply, economists are having a tough time making sense of the sluggish wage growth.
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http://www.freerepublic.com/focus/f-news/1511555/posts
"On average, applications for H-1B workers in computer occupations were for wages $13,000 less than Americans in the same occupation..."
ping
Of course tax inceases have nothing to do with the decrease in income. [/sarcasm]
Screw the borrowing part!
We are just spending less, driving less, not buying anything unless we absolutely need it. Gotten to the point where few are getting raises or increased salaries.
Yet some people tell us how the economy is booming.
I say BS. Most everyone I know was making the same or better money 5 freaking years ago.
A 4.7% boost in profits is hardly an explosion. Wage growth measures the base line at an income of zero. Profit growth measures the base line at an income equal to expenses. So profit growth tend to be much more dynamic than wage growth; In recessions, workers don't get negative wages!
Further, 2.3% wage growth is NOT the slowest in 25 years... not by a long shot. The author must mean it's the slowest REALTIVE to inflation. But the inflation measure used is a lousy indicator of trends; it's artificially high because of fuel costs: The PRODUCER price index shot up 10% in the past year, the fastest ever. (You think maybe THAT'S where all the money for wages went?) The core inflation rate has barely budged.
Lastly, "wages" do not include benefits.
Next quarter, suppose the price of gas falls below $2 a gallon, as it expected. The PPI goes down several percent. The consumer inflation rate goes negative, also. And the wage index rises 1.9%. Do you think they'll be talking about the skyrocketing wages, RELATIVE TO INFLATION? No, they'll be saying wage growth is down again.
I readily part company with the Rush Limbaugh and even Alan Greenspan types, and frequently denounce business news reporting which treats wage growth as if it is deadly. But this article is garbage.
It doesn't help that the Federal Reserve will cause a recession every time the market favors the wage earner.
4.7% inflation doesn't that seem high?
That's way too high for core inflation. They may be counting energy costs, which skew the numbers due to their volatility.
Add living off the rising home equity and the wages might be below 50%.