American workers' wages stagnant, even in a great economy: why?

[Aegon]

American Workers Just Got a Pay Cut in Economy Trump Calls Great

President Donald Trump has presided over an accelerating economy and the lowest unemployment in years, but American workers still aren’t seeing it in their wallets.

U.S. average hourly earnings adjusted for inflation fell 0.2 percent in July from a year earlier, data released on Friday showed, notching the lowest reading since 2012. While inflation isn’t high in historical terms, after years of being too low following the 2007-2009 recession, its recent gains are taking a bigger bite out of U.S. paychecks.

“Inflation has been climbing and wage growth, meanwhile, has been flat as a pancake,” said Laura Rosner, senior economist at MacroPolicy Perspectives LLC in New York. “In a very tight labor market you would expect that workers would negotiate their wages to at least keep up with the cost of living, and the picture tells you that they’re not.”

U.S. unemployment at 3.9 percent in July was near a 50-year low and a core measure of inflation that excludes food and energy prices has pushed to 2.4 percent, the highest reading in almost a decade. But wages are just not keeping up and part of the reason is probably a lack of bargaining power on the part of U.S. workers.

Ryan Sweet, an economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said given that inflation has been low in recent years, “the sense of urgency” hasn’t been there to negotiate for higher wages. In the post-recession labor market, workers have forgotten how to bargain.

“As the labor market came back, workers were just happy to have survived,” Sweet said. “They value their job security more than asking for a higher wage.”

What will determine real wages in the coming months is not inflation as much as what happen to wages, he said. “I do anticipate nominal wage growth picking up which should help drive up real wage gains over the next few months.”

As I've said countless times, the average worker suffers under the American economic model. Things have to change on a fundamental level. We know that wages have failed to keep up with inflation, and that the top 10 percent of income earners have seen magnificent gains while the rest of us have seen, statistically speaking, nothing. It seems Republicans (and moderate Democrats) have conditioned workers to be content with this reality. This has been an issue for over 30 years. Through Clinton and Obama too.

I align with the political philosophy of social democracy. It's time to take note from its success in the Nordic countries. The average American deserves more. Congress (Dems and Repubs alike) almost unanimously passed the disgusting and highly unnecessary $700 billion to our military complex while we bicker about whether or not we can afford a universal healthcare system. Repulsive.

[The Valkyrie]

Because it's an economy to benefit the rich, not the rest of the people.

[Chad32]

I have family that believes that if you increase wages, the price of everything will go up the exact same amount.

[purplepurpose]

Production is in Asia. Production generates wealth. Which means that you cannot physically rise the standard of living, unless Elon Musk makes cheap robots or something.

[BrianSoddingBoru4]

I have family that believes that if you increase wages, the price of everything will go up the exact same amount.

Yeah, that's kind of silly.  When wages increase, people have more disposable income, buy more stuff, creating a greater demand for services and manufactured goods, which increases production which lowers prices.  Economies of scale work best when wages grow moderately faster than inflation.

Boru

[Minimalist]

Because the Orange Turdfuhrer doesn't know what the fuck he is talking about.

[Angrboda]

I'm not overly bothered that real wages haven't improved. I have to wonder whether it's realistic to expect real wages to increase under any conditions. The balance between wages and cost may just be a fixed feature of economic reality. What I do object to, however, is the reapportionment of benefits from the public fund being diverted away from social programs and other things which benefit the greater part of society, and redistributing the savings from those cuts to the wealthy and corporations. Conservatives try to justify it with an appeal to the idea that if they prosper, the benefits will trickle down to the rest. But trickle down economics was shown to be an empty promise in the Reagan years, and the recent wave of companies using tax savings to make stock buy backs rather than making improvements that would benefit the workers simply shows this, again, to be the case. Instead, all you've done is take away resources and benefits from those who are struggling and need them, and given them to those who are not in need. The recent tax cuts are transparently regressive, and have nothing else to justify their implementation.

[Minimalist]

Wait until the republicunt shits start screaming about "out of control budget deficits" and how regardless the pentagon needs even more money to keep us safe from  enemies we go out of our way to create.

Their solution will be to totally fuck the poor and protect the upper 1% scumbags who hold their leashes.

[Chad32]

I have family that believes that if you increase wages, the price of everything will go up the exact same amount.

Yeah, that's kind of silly.  When wages increase, people have more disposable income, buy more stuff, creating a greater demand for services and manufactured goods, which increases production which lowers prices.  Economies of scale work best when wages grow moderately faster than inflation.

Boru

That's what I figured too. When you have more customers coming in with disposable income, you don't have to jack your prices up so much. They just don't seem to believe that, though.

Yeah. Deficits are out of control, so we need to cut funding in social safety nets while continuing to shovel money into the military and corporations. Those are two things the government will never cut back.

[The Grand Nudger]

Some poeple are under the impression that a $3 raise for employees would make a pack of yellow #2 pencils cost $50.  If the margins on whatever you're making are that slim...you're doing it wrong..but hey, welfare for me and none for thee has become the dominant corporate ethos in the US.