The Mystery of Low Wage Growth

BusinessWeek Online ^ | Aug 7,2006 | Michael Mandel

[hedgetrimmer]

Competition with low-cost workers in China, India, Eastern Europe, and the rest of the developing world may finally be taking its toll on American workers. With a surplus of labor around the world, real wages will stagnate, while returns to capital will rise.

Someone gets it.

[hedgetrimmer]

FYI

[Darteaus94025]

Someone gets it.

Almost. He left out "Illegal Alien."

[TexasKamaAina]

For middle-class Americans aged 50 and higher, the math may be much different, since they likely own their own homes, which have greatly appreciated.

So what happens when those 50+ homeowners start trying to sell their homes to the younger low-wage workers without capital?

[proxy_user]

Yes, returns to capital are rising. Perhaps it is not a good idea to rely on wages for all of your income?

Stock dividends taxed at low rates look good to me.

[Accygirl]

There isn't many illegal immigrants with college degrees and computer skills.

[dennisw]

The upper classes and the owners of capital have figured out ways to get a greater piece of the economic pie. Workers and wage slaves get a smaller piece than 10-20-30-40 years ago

[Jameison]

"The Mystery of Low Wage Growth"

No mystery here,mate.
Millions of illegals aliens that are ever ready to work for the lowest wages will do that to lower skilled hourly workers every time.
And there's plenty more illegals where that came from.

[sgtbono2002]

Which is better Low wage growth or Inflation.?

[Mase]

Someone gets it.

Oh, he gets it all right. By avoiding the increases in total compensation he gets to bash the Bush economy and push the left agenda that Business Week has become famous for.

Employers are picking up more and more of the rapidly increasing cost of healthcare. When included, total compensation shows an increase over the rate of inflation.

[LS]

The problem with this analysis is that it does not incorporate non-cash earnings, which have soared, and continue to soar in REAL dollars.

I get a 3% annual raise---but what my employer shells out for my health care, on an annual basis, has increased about 15%. If you TAXED all health care benefits, you'd see American workers' wages shoot up . . . but their real purchasing power would likely drop some.

[Jameison]

"There isn't many illegal immigrants with college degrees and computer skills."


But there are millions of illegal production and nonsupervisory workers as in this quote from the article:

"According to the latest numbers from the Bureau of Labor Statistics, average hourly earnings for production and nonsupervisory workers are up by 3.8% over the past year. That may sound halfway decent, but it still lags the 4.3% increase in consumer prices over the same period "

[Toddsterpatriot]

Obviously the only answer is to raise tariffs.

[Alberta's Child]

The author of this article missed a very important point.

I read an article a few years ago that tried to correlate wage rates for U.S. workers with various different factors that might influence it -- including things like basic intelligence, education, race, family background, etc. What they found was pretty interesting. By a wide margin, the factor that correlated most closely to wage rates was a worker's ability to read, write, and speak English.

I suspect that one of the biggest problems today is that a person's formal education is becoming increasingly unreliable as a measure for prospective employers to use when making hiring decisions. I can tell you from firsthand experience that the quality of college graduates has declined considerably over the years.

[oldbill]

"Returns on capital" means it goes to the CEOs and their option plans, not the stockholders.

[Darteaus94025]

There isn't many illegal immigrants with college degrees and computer skills.

Then why does CA grant illegal aliens in-state tuition rates?

[dennisw]

Most Employers Plan To Cut Medical Benefits For Current, Future Retirees, Study Shows

Main Category: Health Insurance / Medical Insurance News
Article Date: 03 Jul 2006 - 20:00pm (PDT)

Many U.S. companies are planning to reduce medical and pension benefits for current and future employees, according to two separate studies released Wednesday by consulting firm Watson Wyatt Worldwide, Long Island Newsday reports (Luhby, Long Island Newsday, 6/29). For the studies, researchers surveyed 163 mostly Fortune 500 companies (Dixon, Reuters, 6/28). The study on health benefits finds that most employers plan to reduce medical plans for current and future retirees within the next five years (Long Island Newsday, 6/29). Fourteen percent of employers said they plan to eliminate the benefit entirely for future retirees older than age 65, and 6% plan to ..............  SNIP

LINK

[dawn53]

Well, when my husband gets his yearly compensation report (i.e. what kind of raise he's getting), the compensation package always includes other things that we don't actually see in his paycheck, like insurance coverage (health and life), retirement plan, etc.

IMHO, in some white collar jobs, the actual "pay" has not increased as much because the companies cost of the "perks" has risen, insurance, being the main thing that has eaten away at rising salaries.

[Normal4me]

As a Carpenter, my job hasn't been outsourced. I took a 14.6% salary increase last year and now inflation, fuel costs and taxes have zeroed that out. :-(

[oldbill]

Employers are picking up more and more of the rapidly increasing cost of healthcare.

Boy where have you been - exactly the opposite has happened. Companies are dropping health and retirement plans all over the place.

In a few years, the only people left with health and retirement plans will be government workers and CEOs.