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 ...
DSL = $70.00/mo
Cellular family plan = $200/mo
land line $30/mo
Direct TV $150/mo
We’re fine... Nothing to see here... As you were, people.
Meanwhile, LA teachers are getting ready to strike for a 10% raise over the next three years.
My thought is that a rise in wages of those still working when Obama was elected in 2008 would be dramatically offset by the 100% decrease in wages of the additional people who are now chronically unemployed. As example, at the time of Obama’s election, approximately 66.2% of the labor age workforce had a job. The current labor participation rate is approximately 62.4%.
If, for example, we said the overage wage in late 2008 was $40K per person and those working now make 9% more six years later, but there has been a 6% decrease in the amount of working age people making that wage, the net wage increase for the people working in 2008 over the last 6+ years is less than 3%. This excludes the effects of inflation, which puts us well into negative territory.
It isn't tech that's making you poorer--it's your spending decisions.
So for that, I pay about $180/month. Total.
I have a family do you?
Yes, I do. No one has moved out yet.
Allowing them access to that kind of freedom is not helping them.
I say that as an IT worker. I'm very familiar with the tech that comes into our home, and picky about what I allow.
My kids and spouse get to provide input to decisions, but I'm the one who makes them.
I went through a year of that.
Average wages are just that the average of wages. A person's zero wage is not a wage to be averaged in becuase then we'd have to consider the zero wages of children, of livestock, of the dead --it could go on and on. Yeah, lots of folks say we need to care about the unemployed. Others say we need to care about the starving children in Biafra and let's not forget the ozone hole either.
Reality is something that has to be taken on its own terms and that's why we accept the fact that the average of the wages that there were went up in '09. Sure, incomes went down so that's why we see a dip in '09 for average incomes (post 19). Apparently we got lots of Freepers who really really want things to be bad and they just can't bear the thought that into every rainstorm a little sun must shine.
I like your plan. Has she got a sister?
I agree average wages should be the average of all, including those who have been frozen out. Look at this from the perspective that the potential for economic activity is the aggregate of the average wage times the number of people of people actually making that wage.
It seems you believe that if one person out of 180 million working age people in America was working, and that person made one million dollars, the average wage of working people would be one million dollars and that we should celebrate because we’re all rich!
This is just another example of people selectively using statistics to obfuscate the big picture.
Wait a sec., my being a bad guy won't change what everyone says an average is because words mean things and people will talk the way they want. If it's really that important to someone then they can just up and decide that from now on averaging wages means we got to divide total wages paid out by the total population whether people receive those wages or not. It's a fee country. They'll just end up w/ different numbers then what everyone else gets..
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