Low wage workers getting raises

[lawpoke87]

Found it interesting that low wage workers wages are now increasing substantially faster than their upper income counterparts. Suppose it could be expected due to the tight employment market.

Wages for nonsupervisory employees — who make up 82% of the workforce — are rising at the fastest rate in more than a decade, the Wall Street Journal reports.

Why it matters: It indicates that the benefits of a tightening labor market and a time of historically low unemployment rates are finally being passed along to most workers.

The big picture: Workers at the bottom of the pay scale have been feeling positive effects on their wages at the end of 2019 — especially when compared to those at the top.

• Pay rates the bottom 25% of wage earners rose 4.5% in November from a year earlier, while wages for the top 25% of earners rose only 2.9%, per data from the Federal Reserve Bank of Atlanta.
• The bank also found that the rate of pay rises for low-skilled workers matched those for high-skilled workers last month for the first time since 2010.

 

[astonmartin708]

Means more competition between the mcdonalds workers of the world.... however it doesn't really address the middle class. Also, I would think it represents a few states pricing in minimum wage hikes before they officially take effect by new state laws. 21 state increased their mandatory minumum wages (either through rate increases or mandatory COL adjustments) going into 2020.

 

[astonmartin708]

It's definitely a good thing though.

 

[lawpoke87]

Means more competition between the mcdonalds workers of the world.... however it doesn't really address the middle class. .

It includes all workers except the top 25%. That's a lot more than just the minimum wage service workers (only 2.3% of workers make the federal minimum wage btw). Not sure what you consider middle class and upper class. Some if not the majority of those from 50 to 75% would likely qualify as middle class while those in the top 20% I would consider the upper class. Regardless...nice to see.

 

[astonmartin708]

It includes all workers except the top 25%. That's a lot more than just the minimum wage service workers (only 2.3% of workers make the federal minimum wage btw). Not sure what you consider middle class and upper class. Some if not the majority of those from 50 to 75% would likely qualify as middle class while those in the top 20% I would consider the upper class. Regardless...nice to see.

I still think there's something funky going on with the statistics there. If the middle 50% stays stagnant while the bottom 25% rises substantially is it enough to skew the comparison? We know that minimum wages are rising this year across the country. I would like to see the numbers with those raises omitted.

http://nymag.com/intelligencer/2019/12/november-jobs-report-analysis-wage-growth-unemployment.html

 

[lawpoke87]

I still think there's something funky going on with the statistics there. If the middle 50% stays stagnant while the bottom 25% rises substantially is it enough to skew the comparison? We know that minimum wages are rising this year across the country. I would like to see the numbers with those raises omitted.

http://nymag.com/intelligencer/2019/12/november-jobs-report-analysis-wage-growth-unemployment.html

It certainly wouldn't contribute to the increase in median income...at least not near to the degree we've seen it. I'll trust the WSJ on financial data over the NYMAG btw.

 

[TUMe]

"Wages for nonsupervisory employees — who make up 82% of the workforce — are rising at the fastest rate in more than a decade, the Wall Street Journal reports." Lawpoke.

"Means more competition between the mcdonalds workers of the world.... however it doesn't really address the middle class." Aston

I don't think 82% of the workforce works for McDonalds.

 

[astonmartin708]

Looking at that same graph for this year, it shows the rate of increase tapering off as that end curve starts to flatten out. The biggest increase there was in 2015 under Obama. In fact, if anything the Tax Cuts / Trade Wars have probably hindered that growth rate.

 

[astonmartin708]

"Wages for nonsupervisory employees — who make up 82% of the workforce — are rising at the fastest rate in more than a decade, the Wall Street Journal reports." Lawpoke.

"Means more competition between the mcdonalds workers of the world.... however it doesn't really address the middle class." Aston

I don't think 82% of the workforce works for McDonalds.

If you raise the bottom up with the middle staying the same and then combine those two... it could potentially look like that. You need to see more data to see if your assumptions are matching reality. It's like the AAC getting rid of UConn.... everyone looks better by the dead weight at the bottom improving (or in this case, leaving in general)

 

[astonmartin708]

That FRED graph is so misleading lol. The newest one only goes up to January of 2018 (roughly one year of Trump's presidency plus some change)

In the last 3 years of Obama's his growth rate was $1885 per year in median income. In Trump's first year he was at ~$553. No new statistics for 2019 until next year.

 

[lawpoke87]

Looking at that same graph for this year, it shows the rate of increase tapering off as that end curve starts to flatten out. The biggest increase there was in 2015 under Obama. In fact, if anything the Tax Cuts / Trade Wars have probably hindered that growth rate.

Aston, surely you understand why we saw the increases in 2015ish? When income drops like it did prior to 2015 there is room for increases (as there was after the 2009 crash). Tons of historical data to support that statement. The difficult part is to keep those increases continuing year in year out...again, see graph. We are seeing the best economic numbers across the board in the last 20 years. Sustained numbers...which is not only the key but difficult to accomplish. The benchmark median income number occurred in 1999. We have finally passed that number. Hard to find much wrong with the current state of the economy. Now if you want to argue our national debt I’ll be onboard.

 

[astonmartin708]

Aston, surely you understand why we saw the increases in 2015ish? When income drops like it did prior to 2015 there is room for increases (as there was after the 2009 crash). Tons of historical data to support that statement. The difficult part is to keep those increases continuing year in year out...again, see graph. We are seeing the best economic numbers across the board in the last 20 years. Sustained numbers...which is not only the key but difficult to accomplish. The benchmark median income number occurred in 1999. We have finally passed that number. Hard to find much wrong with the current state of the economy. Now if you want to argue our national debt I’ll be onboard.

Yes I'm aware of the economy before 2015. There was a crash in 2008. The median wages have been growing since 2013. We've been riding a bullish economy for over 5 years with some significant underlying problems in terms of spending, GDP growth, and wage growth. I don't attribute any momentary wage growth that we've seen to Trump since last quarter we saw significant wage growth shrinkage.

The economy isn't as rosy as you think it is. The people it tends to be rosy for are the people with a lot of $ in the markets.

 

[lawpoke87]

Median wages actually took a fairly significant decline in 2014. Based on that graph there should be quite a few people few people feeling rosy about wages. I also assume you’ve looked at the declining poverty rate as well.