The following article from the New York Times is actually pretty awful. However, the admission that wages have failed to grow in 15 years is important. Particularly in light of the fact that we are five years into the second so-called “recovery” since the turn of the century. These are recoveries that only Joseph Goebbels could love.
While the wage growth stagnation observation is helpful, what’s so sad about the article is that rather than dive into the underlying systemic issues driving this horrible statistic, the author spends most of the article explaining why we should be optimistic. It’s a nice try, but when systemic issues aren’t being addressed from a systemic standpoint, things don’t just magically get better.
Here are some excepts from the article as well as my commentary:
American workers have been receiving meager pay increases for so long now that it’s reasonable to talk in sweeping terms about the trend. It is the great wage slowdown of the 21st century.
The typical American family makes less than the typical family did 15 years ago, a statement that hadn’t previously been true since the Great Depression. Even as the unemployment rate has fallen in the last few years, wage growth has remained mediocre. Last week’s jobs report offered the latest evidence: The jobless rate fell below 6 percent, yet hourly pay has risen just 2 percent over the last year, not much faster than inflation. The combination has puzzled economists and frustrated workers.
The oversight here is simply incredible. “Puzzled economists?” What is so puzzling when you look at the labor force participation rate. Is it actually possible that the author is unaware of this chart?
Of course, there is a long history of pessimistic predictions about dark new economic eras, and those predictions are generally wrong. But things have been disappointing for long enough now that we should take the pessimistic case seriously. In some fundamental way, the economy seems broken.
Yes, it is fundamentally broken, but rather than try to explain what exactly is broken, the author proceeds to explain why we should be optimistic.
Last year, 33.6 percent of 25- to 29-year-olds had a four-year college degree, up from 30.8 percent in 2008, according to the National Center for Education Statistics. That leaves a lot of room for further improvement, but it’s more progress than in prior years. In 2000, the share was 29.1 percent.
Is this really a reason for optimism? Students piling on debt to get questionable educations and then graduate into an economy with no jobs and zero wage growth. This looks like a reason for pessimism not optimism:
Now here is where it goes from just ignorant to downright absurd. The author claims that the institution most responsible for the transformation of the U.S. economy into a neo-feudal oligarchy, the Federal Reserve, will somehow save the peasantry.
Mr. Obama didn’t mention her in the speech, but another reason for optimism at the White House is Janet Yellen, who took over the Federal Reserve this year. Under Ben Bernanke, her predecessor, the Fed was heroically creative in fighting the financial crisis. After the crisis, though, Fed officials made the same mistake repeatedly: overestimating the health of the economy. Ms. Yellen has suggested that she’s learned that lesson and will be even more aggressive about trying to lift growth with low interest rates.
But here’s where I become less optimistic than the president. Imagine that same prognosticator had added one more bit of clairvoyance: Despite all those positive trends, the real median weekly pay of full-time workers in mid-2014 would be slightly lower than it was in mid-2011. Or than it was in mid-2008, the year before Mr. Obama took office. Or in mid-2000.
It’s certainly possible that we’re on the verge of a pay surge, much as we were in the mid-1990s, when the situation also seemed bleak.
It’s also possible that we aren’t…
In Liberty,
Michael Krieger
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I saw this and had to relate a gawd awful true story that happened to me. I live in Boise, land of the worst wage in America…just so ya know.
In 2010, I was thinking about applying for an assistant manger job at a local thrift store. (the Idaho Youth Ranch)
I went into the store and spoke with the manager. I asked her what an assistant manager does. She rattled off a list of 20 things, schedules, unloading trucks, pricing items, operating tills, all the stuff you’d expect in any retail store. So I asked her what the wage was. She said it was 8.25 an hr. but after 90 days it went to 8.75.
I stared at her in disbelief and said I made that kind of money in 1978 throwing freight for Albertson’s grocery when gas was .67 a gallon and rent was 200. She looked at me and said we have a pile of applications- somebody will be happy to have a job. I told her “it won’t be me” and I left.
Maybe the sheeple don’t know it, but that article is 99% propaganda. To people that can still think, its mostly nonsense. Its amazing you have to explain to people how ridiculous it is. That’s how lost in space the sheeple are.
Its called the Baby Boomer generation retiring with regard to Labor Force Participation!!! Labor force participation focuses on older adults working or looking for work. As older adults retire, their high salaries are replaced with entry level employment. What’s so difficult about the issue?