Are stagnating wages a myth?

[Manc Skipper]

I can see you might not like reality to intrude.

 

[Jack Hays]

I can see you might not like reality to intrude.

Well no. This thread is about a US topic. Events in the UK are not germane.

 

[radcen]

OK. I get that. My question is whether the classification itself has seen an increase.

I don't believe so.

 

[Jack Hays]

I don't believe so.

Well then that is interesting. Is your industry under particular competitive pressure? Why do you suppose there has not even been a cost living increase?

 

[radcen]

Well then that is interesting. Is your industry under particular competitive pressure? Why do you suppose there has not even been a cost living increase?

There's a great deal of competition and pressure to keep costs down. Much of our work is for local governments, and despite popular perception they are not bottomless pits of money.

It's also an industry where we have to compete with 1 or 2 man operations that can easily undercut our prices.

 

[Jack Hays]

There's a great deal of competition and pressure to keep costs down. Much of our work is for local governments, and despite popular perception they are not bottomless pits of money.

It's also an industry where we have to compete with 1 or 2 man operations that can easily undercut our prices.

Ah. OK. So your vote would be that yes, there is real stagnation. Correct?

 

[radcen]

Ah. OK. So your vote would be that yes, there is real stagnation. Correct?

I don't know how I would vote. I think there are vast disparities between differing industries. Some seem to be expanding quite nicely. Some, like mine, are indeed stagnant, but in return I feel that mine is more stable. It's almost like you can have either stable or expanding, but you can't have both.

 

[Jack Hays]

I don't know how I would vote. I think there are vast disparities between differing industries. Some seem to be expanding quite nicely. Some, like mine, are indeed stagnant, but in return I feel that mine is more stable. It's almost like you can have either stable or expanding, but you can't have both.

There is probably a trade-off there, I agree.

 

[Gimmesometruth]

Sorry, but the opinion piece was fundamentally about a political topic.

the baseline subject...is the way that wage gains is portrayed. That is a discussion of economics.

As for the forum, I don't believe you have any special charter to decide what should be posted where.

I was discussing what you are avoiding, the economics....in an economics sub-forum. Don't tell me that I am not discussing the subject, since the subject....and the forum....is economics.

And the fact that I read Samuelson in no way indicates anything about his political lean or absence thereof.

I never claimed your reading a conservative columnist determines his lean. derp.

The concluding passage: The larger implication is that the study compromises the prevailing economic narrative, which emphasizes the stagnation of wages and living standards. Clearly, millions of households — especially the recently unemployed — have suffered large losses, and the gains of many others are underwhelming. But the impression that most people in the middle class are slipping backward seems overwrought. The anxiety about the future is real, but its causes must be more complicated than commonly thought.

It is an opinion piece on economics, specifically wage gains, which the study he cites, is ALL ABOUT economics. You posted in an economics subforum, you obviously recognized that the underlying CONTEXT of the editorial....was ECONOMICS.....by a columnist that focuses on ECONOMICS.....but yet you stupidly announce...that you are not going to debate the economic aspect of the column or the study....that the column is completely based on.

That is so pathetic.

 

[Gimmesometruth]

Ah. OK. So your vote would be that yes, there is real stagnation. Correct?

That is an economics debate.

 

[Jack Hays]

the baseline subject...is the way that wage gains is portrayed. That is a discussion of economics. I was discussing what you are avoiding, the economics....in an economics sub-forum. Don't tell me that I am not discussing the subject, since the subject....and the forum....is economics.I never claimed your reading a conservative columnist determines his lean. derp.

It is an opinion piece on economics, specifically wage gains, which the study he cites, is ALL ABOUT economics. You posted in an economics subforum, you obviously recognized that the underlying CONTEXT of the editorial....was ECONOMICS.....by a columnist that focuses on ECONOMICS.....but yet you stupidly announce...that you are not going to debate the economic aspect of the column or the study....that the column is completely based on.

That is so pathetic.

That is an economics debate.

Just asking questions. Good luck in your future endeavors.

 

[Gimmesometruth]

There is probably a trade-off there, I agree.

An economic trade-off, again, an economic argument, nothing to do with politics.

Hypocrisy.

 

[DA60]

the baseline subject...is the way that wage gains is portrayed. That is a discussion of economics. I was discussing what you are avoiding, the economics....in an economics sub-forum. Don't tell me that I am not discussing the subject, since the subject....and the forum....is economics.I never claimed your reading a conservative columnist determines his lean. derp.

It is an opinion piece on economics, specifically wage gains, which the study he cites, is ALL ABOUT economics. You posted in an economics subforum, you obviously recognized that the underlying CONTEXT of the editorial....was ECONOMICS.....by a columnist that focuses on ECONOMICS.....but yet you stupidly announce...that you are not going to debate the economic aspect of the column or the study....that the column is completely based on.

That is so pathetic.

That is an economics debate.

:roll:

What are you blathering about now?

What do you care whether he calls it an economics or a political debate?

Both questions are rhetorical as I do not respect you nearly enough to care about your answers.


Leave it to Gimmesometruth to try and stir up trouble on such a ridiculous subject.

 

[James972]

This is interesting. I wonder if it will have any effect on the political rhetoric of victimhood.

Have U.S. wages stagnated? Probably not.


The impression that most people in the middle class are slipping backward seems overwrought.

How many times have you heard that Americans’ wages have stagnated? Countless commentators (including me) have repeated this complaint. Naturally, politicians of both parties — Hillary Clinton and Donald Trump — deplore it. It’s conventional wisdom that wage stagnation has contributed to the sluggish recovery and the downcast attitudes of millions.
But what if it’s not true?
A new study from the Federal Reserve Bank of San Francisco suggests just that. It concludes that widely cited figures showing stagnation are mostly a statistical fluke. Workers continuously employed in full-time jobs received wage increases higher than inflation from 2002 to 2015. Last year, the gain was a 3.5 percent increase after inflation, up from 1.2 percent in 2010. . . .

Here's how Bill Clinton put it!!
“The problem is, 80% of the American people are still living on what they were living on the day before the [2008 finnan*cial] crash. And about half the American people, after you adjust for inflation, are living on what they were living on the last day I was president 15 years ago. So that’s what’s the matter.”

 

[Jack Hays]

Here's how Bill Clinton put it!!
“The problem is, 80% of the American people are still living on what they were living on the day before the [2008 finnan*cial] crash. And about half the American people, after you adjust for inflation, are living on what they were living on the last day I was president 15 years ago. So that’s what’s the matter.”

That's a fine answer but the political point is that this study undermines it.

 

[Gimmesometruth]

:roll:

What are you blathering about now?

It is obvious, I'm sorry it is beyond your capacity to process because I'm not about to attempt enlighten you

What do you care whether he calls it an economics or a political debate?

Because it said it was not going to debate the economic aspect.....hurr durr.

Both questions are rhetorical as I do not respect you nearly enough to care about your answers.

Again, I already know you "don't care", it gives you cover to remain ignorant.

Leave it to Gimmesometruth to try and stir up trouble on such a ridiculous subject.

Sure, bringing up debate in an economic forum on an economic topic....is causing trouble.....at least it is trouble for those wanting to avoid debate on economics......like the op.....who created a topic where the baseline subject is .....economics.

 

[eohrnberger]

This is interesting. I wonder if it will have any effect on the political rhetoric of victimhood.

Have U.S. wages stagnated? Probably not.


The impression that most people in the middle class are slipping backward seems overwrought.

How many times have you heard that Americans’ wages have stagnated? Countless commentators (including me) have repeated this complaint. Naturally, politicians of both parties — Hillary Clinton and Donald Trump — deplore it. It’s conventional wisdom that wage stagnation has contributed to the sluggish recovery and the downcast attitudes of millions.
But what if it’s not true?
A new study from the Federal Reserve Bank of San Francisco suggests just that. It concludes that widely cited figures showing stagnation are mostly a statistical fluke. Workers continuously employed in full-time jobs received wage increases higher than inflation from 2002 to 2015. Last year, the gain was a 3.5 percent increase after inflation, up from 1.2 percent in 2010. . . .

Err. Must be a statistical outlier then. I've not received an increase in 5 years now.

 

[MrWonka]

from the Federal Reserve Bank of San Francisco suggests just that. It concludes that widely cited figures showing stagnation are mostly a statistical fluke. Workers continuously employed in full-time jobs received wage increases higher than inflation from 2002 to 2015. Last year, the gain was a 3.5 percent increase after inflation, up from 1.2 percent in 2010. . . .

But the problem is that more and more jobs in this day and age are part time jobs that are replacing jobs that used to be full time, and what happens when an employee gets enough experience to warrant a raise they just let them go and hire a fresh employee at the lower wage. Solid employees with skills that are in demand usually aren't the people we worry too much about, however the reality is that we need a lot of workers to do some what menial jobs, but the fact that they are menial doesn't mean they should pay slave wages.

 

[ludin]

Fair enough, but still begs the question whether that graph is driven a real decline, or by replacement in the workforce of senior (retiring) workers by junior (entering) workers.

that graph also doesn't take into account replacement by automation.
you are right though. people are retiring and new workers are taking their place
at lower wages because of lack of experience.

 

[SocialD]

This is interesting. I wonder if it will have any effect on the political rhetoric of victimhood.

Have U.S. wages stagnated? Probably not.


The impression that most people in the middle class are slipping backward seems overwrought.

How many times have you heard that Americans’ wages have stagnated? Countless commentators (including me) have repeated this complaint. Naturally, politicians of both parties — Hillary Clinton and Donald Trump — deplore it. It’s conventional wisdom that wage stagnation has contributed to the sluggish recovery and the downcast attitudes of millions.
But what if it’s not true?
A new study from the Federal Reserve Bank of San Francisco suggests just that. It concludes that widely cited figures showing stagnation are mostly a statistical fluke. Workers continuously employed in full-time jobs received wage increases higher than inflation from 2002 to 2015. Last year, the gain was a 3.5 percent increase after inflation, up from 1.2 percent in 2010. . . .

One thing you should keep in mind. the FEDs job is to enact policy to stabilize the economy. With that in mind this is a self interested article in which they try and do some statistical juggling to promote the appearance that thigns are better than people think they are.
Second thing to keep in mind. graph charts are usually ( as in the great majority of the time ) misleading. you need raw numbers to see through the smoke and mirrors you get with articles like this.
What is of significance.... if it had just beena few years of declining or stagnant wages that would be one thing to be able to explain away as the SanFran Fed tries to here... but honestly its been 15+ years of stagnant wages. you cant use seasonal and situational irregularities to explain away more than a decade and a half of wage stagnation as they are trying to do.

to add I had recently posted somewhere that wages when adjusted for CPI inflation .. during the Bush years the median annual wage buying power lost $600 and during the Obama years lost $1300. You cant explain that away with their in and out job flow charts.

 

[Jack Hays]

One thing you should keep in mind. the FEDs job is to enact policy to stabilize the economy. With that in mind this is a self interested article in which they try and do some statistical juggling to promote the appearance that thigns are better than people think they are.
Second thing to keep in mind. graph charts are usually ( as in the great majority of the time ) misleading. you need raw numbers to see through the smoke and mirrors you get with articles like this.
What is of significance.... if it had just beena few years of declining or stagnant wages that would be one thing to be able to explain away as the SanFran Fed tries to here... but honestly its been 15+ years of stagnant wages. you cant use seasonal and situational irregularities to explain away more than a decade and a half of wage stagnation as they are trying to do.

I believe they were citing long term demographic changes rather than seasonal and situational irregularities.

 

[SocialD]

I believe they were citing long term demographic changes rather than seasonal and situational irregularities.

They were looking at 2002 thru 2014 however they were only trying to explain away 2008-2014. The argument being that as we had a recession low wage earners were the ones who mostly lost their jobs, and in effect painting a better picture of average wages.
Then as things improved the low wage workers getting hired again added a lower factor to the average making it appear that the rebound was less than it was.... that's their argument.
My point is... this kind of thing happens on regular cycles. and they really cant explain previous years either using this model.
So nothing of any real significance with this article.

 

[Jack Hays]

They were looking at 2002 thru 2014 however they were only trying to explain away 2008-2014. The argument being that as we had a recession low wage earners were the ones who mostly lost their jobs, and in effect painting a better picture of average wages.
Then as things improved the low wage workers getting hired again added a lower factor to the average making it appear that the rebound was less than it was.... that's their argument.
My point is... this kind of thing happens on regular cycles. and they really cant explain previous years either using this model.
So nothing of any real significance with this article.

From the article:

". . . Typically, the median wage — the wage exactly in the middle of all wages — is cited as evidence of stagnation. Indeed, the Fed study confirms this. Median wage increases have fluctuated around 2 percent, unadjusted for inflation. But the median wage is misleading, the report argues, because it’s heavily driven by demographic changes: an influx of young and part-time workers whose relatively low wages drag down the median; and the retirement of baby-boom workers whose relatively higher pay no longer lifts up the median.

“Exiting workers with higher wage levels are [being] replaced by entrants to full-time employment who earn less than the median wage,” says the study, which was done by economists Mary Daly and Benjamin Pyle of the San Francisco Fed and Bart Hobijn of Arizona State University. The result is that all workers, as judged by the median wage, seem to be treading water when many workers are actually receiving modest increases. . . ."

 

[James972]

From the article:

". . . Typically, the median wage — the wage exactly in the middle of all wages — is cited as evidence of stagnation. Indeed, the Fed study confirms this. Median wage increases have fluctuated around 2 percent, unadjusted for inflation. But the median wage is misleading, the report argues, because it’s heavily driven by demographic changes: an influx of young and part-time workers whose relatively low wages drag down the median; and the retirement of baby-boom workers whose relatively higher pay no longer lifts up the median.

“Exiting workers with higher wage levels are [being] replaced by entrants to full-time employment who earn less than the median wage,” says the study, which was done by economists Mary Daly and Benjamin Pyle of the San Francisco Fed and Bart Hobijn of Arizona State University. The result is that all workers, as judged by the median wage, seem to be treading water when many workers are actually receiving modest increases. . . ."

Silly topic really since none of us can do the actual research ourselves but the concensus among 99% of economists on left and right is that wages are stagnating.

 

[SocialD]

From the article:

". . . Typically, the median wage — the wage exactly in the middle of all wages — is cited as evidence of stagnation. Indeed, the Fed study confirms this. Median wage increases have fluctuated around 2 percent, unadjusted for inflation. But the median wage is misleading, the report argues, because it’s heavily driven by demographic changes: an influx of young and part-time workers whose relatively low wages drag down the median; and the retirement of baby-boom workers whose relatively higher pay no longer lifts up the median.

“Exiting workers with higher wage levels are [being] replaced by entrants to full-time employment who earn less than the median wage,” says the study, which was done by economists Mary Daly and Benjamin Pyle of the San Francisco Fed and Bart Hobijn of Arizona State University. The result is that all workers, as judged by the median wage, seem to be treading water when many workers are actually receiving modest increases. . . ."

That's basically what I was saying yes. Although median wage isn't the wage exactly in the middle of all wages. taht would be just a plain average.
Median is calculated by finding the point in which half of income earners earn more than X amount and half earn less. their reasoning might explain a fraction of the issue in median, but there is a bigger picture that it doesn't really.
example.
the statistical average wage in 2005 was about ~35500. adjusted for inflation that's about 43100 in 2015. in 2015 the average was about ~44500. so there was a gain in that decade albeit small.
Looking at the previous decade 23000 average in 1995 is about 29500 adjusted in 2005. As noted though the average in 2005 was ~35500. so we had some significant wage increases in that period.

Now if we look at 'median' wage during the same periods.
median in 1995 is ~$17000 . adjusted in 2005 would be ~$21800
the median in 2005 was ~$24500 which adjusted to 2015 would be ~$29700
however the median in 2015 is ~$28500.

So speaking about 'average income we had an increase of ~20.3% in average income between 1995 and 2005. and between 2005 and 2015 we had an increase of about 3.2%
and speaking to 'median' income we had an increase of ~12.4% from 1995 to 2005. and from 2005 to 2015 we had a decrease of about 4.2%

So this article could possibly explain the difference between a the results of average compared to the results of median ( et al a 3.2% increase vs a 4.2% decrease ) by implicating the outflow of older experienced workers vs the influx of younger workers.
yet I find the extremity of the contrast between the decades a bit large to explain a away a 17.1% loss in average or a 16.6% loss in median a bit much, to understate it for the explanation.