And The Not So Pretty: Record Low Rise In Average Hourly Wages

Tyler Durden's picture

As we first observed in February of 2012, we will not tire of repeating that when it comes to the jobs picture there are two key components: the quantitative, or the headline jobs and unemployment rate numbers everyone is fascinated by at 8:30 am each first Friday of the month, and the qualitative, or the number that gets far less attention, yet which is so very critical to Americans on those occasions they want to use their earned wages to purchase goods and services. And this is where the ugly side of today's jobs report came out. Because while the quantitative data was good, just as we and everyone else had expected from the final datapoint before the election (the good news there is that finally we will revert to reality following November 6), the qualitative data was ugly. How ugly? As the BLS reported, the average hourly earnings in October declined from $19.80 to $19.79 in September, and at $19.57 last October. This was only the fifth sequential decline in this series since the start of the Depression in December 2007. But more important was the Y/Y change in average hourly earnings. At 1.1% (down from 1.4% a month ago), this was the lowest Y/Y increase in this series, topping the collapse in real earnings which started in December 2008, and is now the lowest in history. In other words, more jobs may be added, but on a real basis, wages are not even keeping up with inflation!

Compared to job "gains", it is obvious that all nominal gains are at the expense of wage losses:

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LawsofPhysics's picture

Wait what?  Wages matter?!?!  - < sarc off >

 

Stupid fucking sheep.

GetZeeGold's picture

 

 

You want to work for me? How much are you offering?

EnslavethechildrenforBen's picture

When adjusted for the amount of real estate an hour working will buy you, the chart would fall completely off your computer screen down on to your lap

Almost Solvent's picture

and through the floor to the basement.

GlobalCtzn's picture

and through the earth and land right on some employed China worker's head....................

Jumbotron's picture

and through the earth and land right on some employed China worker's head....................

 

ROFLMFSAO......(the S stands for SERF)

BandGap's picture

No way they throw out the BLS algo for jobs. It will be as useful to Romney as it was for the brown motherf*ckin' clown.

The pendulum swings back the other way. Next Tuesday it will be the exposed liberals who will be angry. But their anger will only fuel anger directed towards them. Tell you what, if Wisconsin goes for Romney then hell has frozen over.

And WTF is MaYour Bloomberg thinking? Does this asshole want to intentionally piss people off in a city a stone's throw from from a third world country?

Stock Tips Investment's picture

Correct. That may be one of the reasons for this reduction. The other, which is less dramatic is the following. Most of the jobs that our economy is generating, are at lower salary levels. Accordingly, the gain per hour promedo reduced. And this can be given, not because hourly wages are falling. The explanation may lie in the composition of new workers. Actually, by now, I do not like a dramatic situción to overshadow lower unemployment.

MilleniumJane's picture

But-but-but...money.cnn.com just posted yesterday that it's Not Just a Low-Wage Recovery!

http://www.money.cnn.com/2012/11/01/news/economy/wages-jobs/index.html

'Course we all believe what CNN says! (sarc)

DosZap's picture

Oh, and do not forget 75% of ALL new job placements went to Immigrants, or Illegals.................................ready for welcome to Wal Murt?.

midtowng's picture

So we replace full-time jobs with part-time jobs, but the headline BLS number looks great, so the news media celebrates.

economics9698's picture

Good work Tyler, this is what is important.

firstdivision's picture

Which means all these "jobs added" have been well below median income.  Goes to show what a growing (part-time) economy can do.

With the entire American labor force becoming part-time, does that mean I can pay my bills part of the time?

TeamDepends's picture

Hey, somebody has to twirl those signs.

Rainman's picture

Bernank's mandate is to produce McJobs....wage growth is assigned to some other unidentified bureaucrat.

disabledvet's picture

"With a hyper inflationary kicker...

Mercury's picture

Remember, in places like Cuba where they really have the central planning thing down to a science, the unemployment rate is always ~0%.

dwdollar's picture

Irrelevant numbers for an irrelevant market...

Broccoli's picture

Cave man unempolyment was 0%.

EnslavethechildrenforBen's picture

American indians pre-white people: 100% employment

Mercury's picture

The gee-whiz similarities between communism and stone-age cultures are even greater than you might think.

The Indians probably had free healthcare too.

Mrmojorisin515's picture

i knew my paychecks weren't going as far as before

Metalredneck's picture

My take-home pay takes me part way home.

Dr. Engali's picture

Wages are losing money against the propoganda inflation numbers but in real terms the consumer is losing about 8% per year.

firstdivision's picture

Wages are losing in general, not just to inflation.

EnslavethechildrenforBen's picture

Wages will soon lose 50% per year, then in a few years wages will lose 90% per year

and they call it a recession lol

HD's picture

It's worse than just falling wages. Consumers no longer have access to easy credit or using their house like a giant piggy bank...

LawsofPhysics's picture

"Consumers no longer have access to easy credit or using their house like a giant piggy bank..."

----------------------------------------

Sorry, I don't see that as a bad thing, stupid fucks need to live within their means.  Now inflation in essential goods and services is another thing altogether.

HD's picture

I'm not advocating debt mate. I am suggesting that large purchases (anything that costs more than a new - soon to be obsolete iThing) like college for the kids and health care can no longer just be financed and forgotten.

adr's picture

I've got an 800 credit score and a steady job for 8 years. Doesn't mean anything if my company goes bankrupt because of the economy.

Of course I could go on an all out debt binge and "help" the economy by spending over $150k in available credit on stuff. Stuff that will never be paid for.

But debt is actually wealth according to Krugman.

HD's picture

My point, which I failed miserably to convey - is that families who were supplementing falling wages with debt to buy essentials - whether that be food, rent, higher education, health care, child or elder care no longer have that option. Those needs don't go away.

"Someone" is going to pay for those needs one way or the other - look no further than the massive expansion of food stamps and "disability" recipients in the past few years.

MachoMan's picture

It went from debt to retirement account to selling everything not nailed down to a combination of all (raiding retirement and selling gold for pennies on the dollar to pay solely for debt service, at best).  Totally fucked.

EnslavethechildrenforBen's picture

@lawsofphysics - consumers don't have access to credit now, the banks do at zero interest. Soon the banks will have all our properties and they will start selling them to us again, but they will raise interest rates high so they can screw us royaly

LawsofPhysics's picture

so frontrun it all.  Don't quite know what your point is here, life is hard, deal with it (beat the fuckers at their own game) or go away.

EnslavethechildrenforBen's picture

To beat the fuckers at their own game we would have the printing press and control their money supply

Our founding fathers saw it wise to shoot them dead (the redcoats)

I'm just another messanger - behead me if you like

LawsofPhysics's picture

patience.  it's coming, so don't volunteer for the guillotine just yet.

firstdivision's picture

How the fuck am I supposed to keep up with the Jones', if I should not go into as much debt as the Jones'?

The big unzip's picture

Something is rotten in the state of Denmark.

Racer's picture

Real wages are not keeping up with the fake and very downplayed inflation that they make up. Compare against real inflation for necessities and the situation is much much worse

orangegeek's picture

Deflation folks.  Enjoy the next 20-30 years.

yrbmegr's picture

Correction:  wage deflation.

adr's picture

You don't need wages. Lots of people worked on cotton farms without wages for a couple hundred years and were provided for.

Hell for supreme irony today, millions of people can work jobs to support the millions of people who descended from the people who worked on the cotton farms so they no longer have to work.

You can even have one of them in the White House making sure they can get as much support as possible.

Slavery, the way of the world minus a couple hundred years.