Wages are Dropping When Adjusted for Inflation

[_Kevin Graham]

https://www.marketwatch.com/story/wages ... 2018-07-17

Not exactly what Trump camp has been saying.

[_subgenius]

What exactly has Trump been saying?

"The issue of inflation-adjusted wages stagnating came up in the hearing with Federal Reserve Chairman Jerome Powell on Tuesday. He was asked by Sen. Sherrod Brown, the Ohio Democrat, whether the typical worker really is better off than he or she was a year ago.

Powell said the typical worker was better off. “I would say that the labor market has strengthened. The labor report will show that wages went up 2.7%, that’s significantly higher than trend inflation. There is a bit of a bump from gas prices going up, and consumers do pay that. But I would say workers are better off.”

I think you will notice, if you bother to follow topics rather than just subscribe to Huffpost hair-fire du jour, that economists are currently puzzled by the increase in employment not falling in line with the usual Phillips Curve of wage increase. There are many economic opinions as to why but none of these are conclusive or agreed upon.

I tend to lean towards the "productivity" side of the argument as it is also seasoned with the global influence on these sort of statistics.

Wages would appear stagnant when productivity lowers. As our modern work environment evolves with these "gig economy" manifestations, we see that traditional economic measures are becoming rather analog while markets are digital.

[_canpakes]

The article linked below gives good information on the question -

https://www.washingtonpost.com/news/fac ... rs-rising/

Trump is referring to a 2.9 percent increase in the median hourly wage reported by the Bureau of Labor Statistics, meaning the difference between January 2017 and January 2018. That was the strongest annual gain since June 2009.

But here’s the rub: This is a nominal increase, not a real increase (in other words, after taking account inflation). We do not know yet the inflation in this period. That’s important because in recent years, unusually low inflation drove quite fast wage growth.

Indeed, after adjusting for inflation, U.S. wages were only 10 percent higher in 2017 than they were in 1973, with annual real wage growth just below 0.2 percent, according to a Hamilton Project analysis. This is the most important number — the one that decides whether you will have more money in your pocket at the end of the day.

As we noted, wage growth has also been remarkably uneven, with much of the increase going to people who already make good money.

[_Kevin Graham]

Subs, pretending to be up to speed on the latest in economics

He wants to know what Trump has been saying, then criticizes me for not expanding my exposure to actual news. Well here you go subs,

President Trump's claim that 'wages are now, for the first time in many years, rising'

Trump touts reports of bonuses, higher wages after tax bill

And also this:

MARTIN: So what about wages? Because we've heard for years that wages have been stagnant. Last night in his State of the Union, the president said that wages are rising. Are they?

BERLINER: Barely.

MARTIN: But they are.

BERLINER: They - barely.

(LAUGHTER)

MARTIN: So barely - you're saying barely.

BERLINER: I'm saying barely. Wages have been stagnant in the U.S. for a really, really long time. The average worker's wages really hasn't grown much since the mid-'70s. So last year, once you adjust for inflation, the average worker's pay increased by less than one-half of 1 percent. So that's a pretty meager increase. It is an increase, but it's not - there's - it's very hard to make the case that these years and years of wage stagnation have been reversed.