1 of 1- Goose
- Cogito ergo sum
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- Registered: 1/29/2015
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Wages aren’t just flat, They're Falling
For the biggest group of American workers, wages aren’t just flat. They’re falling.
The average hourly wage paid to a key group of American workers has fallen from last year when accounting for inflation, as an economy that appears strong by several measures continues to fail to create bigger paychecks, the federal government said Tuesday.
For workers in “production and nonsupervisory” positions, the value of the average paycheck has declined in the past year. For those workers, average “real wages” — a measure of pay that takes inflation into account — fell from $22.62 in May 2017 to $22.59 in May 2018, the Bureau of Labor Statistics said.
This pool of workers includes those in manufacturing and construction jobs, as well as all “nonsupervisory” workers in service industries such health care or fast food. The group accounts for about four-fifths of the privately employed workers in America, according to BLS.
Without adjusting for inflation, these “nonsupervisory” workers saw their average hourly earnings jump 2.8 percent from last year. But that was not enough to keep pace with the 2.9 percent increase in inflation, which economists attributed to rising gas prices.
“This is very likely because of the spike in oil prices eating into inflation-adjusted earnings,” said Allen Sinai, chief global economist and strategist at Decision Economics. “We pay for energy-related costs out of our wages, out of our compensation. And it's making a real impact.”
The fall in those wages has alarmed some economists, who say paychecks should be getting fatter at a time when unemployment is low and businesses are hiring.
“This is odd and remarkable,” said Steven Kyle, an economist at Cornell University. “You would not normally see this kind of thing unless there were some kind of external shock, like a bad hurricane season, but we haven't had that.”
The falling wages promise to exacerbate historic levels of U.S. inequality. Within the labor force, it means workers who were already making less are falling further behind. And if private laborers as a whole are seeing their earnings flatten while the economy as a whole grows at an annual rate of more than 2 percent, that means the gains are going almost exclusively to people already at the top of the economic ladder, economists say.
“The extra growth we are seeing in the economy is going somewhere: to capital owners and people at the top of the income distribution,”
We live in a time in which decent and otherwise sensible people are surrendering too easily to the hectoring of morons or extremists.