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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JustObserving's picture

The $195 billion deficit for October is enough to hire 145 million workers at minimum wage ($7.50 per hour).  The total US workforce is currently only 135 million.

With such large deficits, we can create jobs for everyone and more.

dwdollar's picture

Sorry, that money needs to go to an elite minority because they know better than you.

I Am Not a Copper Top's picture

Guess "market" just realized "good" jobs report = more Obama

Shizzmoney's picture

LOL at this fucking graph.

Imagine if a Republican was in office?  We'd actually talk about this crap (as I say that as a progressive leaning libertarian).

GetZeeGold's picture



progressive leaning libertarian


Three words for oxymoron. Unless Joe Biden is saying it....then it's four.

lynnybee's picture

i earned $2.64 / hr. in 1968 packing pickles at the HEINZ pickle factory in my local community.   & gas was about  19cents/gallon & old junker cars cost about $300 & houses cost about $20,000 back then.    i was doing better in 1968 !   & in 1968 i had no debt & going to college only cost $4 per credit hour.    oh for the old days when there were no stores & nothing to do & nothing to buy.   

edifice's picture

My dad ran a jackhammer on a road construction crew, to put himself through college, in the mid '60s (which cost him $15,000, I believe). Still had enough left over to buy a GTO, a house, and support a family. My, how times have changed.

Then he got drafted and, well, you know the rest.

ebworthen's picture

Royalty and the Clergy must build their palaces and cathedrals somehow.

If not on the backs of peasants, how then?

All hail Caesar, and mammon.

edb5s's picture

Check out the spread between U-6 and unemployment rate.  It has more than doubled since lows (on this data set at least) around the turn of the century.

azzhatter's picture

The good news, you have a job. The bad news you still can't afford to eat

SheepDog-One's picture

Gee, the slaves wages are dropping while prices go up and the wealthy elite have never had it better? Gosh thats crazy!

TrumpXVI's picture

No surprise there.  Americans are getting poorer and poorer.  This will prove to be a long term trend; well, maybe not long term...... more like permanent.

Tombstone's picture

I would bet that adding jobs is costing the government more money.  Likely 2/3 of these "new" jobs are lower paying and thus the worker will pay little or no income tax and on top of that will qualify for a earned income tax credit.  They will get a refund instead of owing taxes.  All this does is add to the deficit.  It doesn't matter much since we are far past the point of no return on the monstrous debt.  But it does prove one thing; that socialism is working since incomes are becoming equalized, albeit at a lower level.  We see that with the lack of income growth.

ItsDanger's picture

This has been going on for quite a while.  The range, Id call lower income to upper income wages havent come close to matching the real inflation rate.

edifice's picture

Since 2000, my earned-income has tripled and I'm still spending, proportionally, the same on living expenses. Thank God for income-producing assets, otherwise I'd be no better off.

andyupnorth's picture

Lowering average wages are mainly due to demographics: Old people retiring and newbies coming into the workforce.

Seer's picture

Sorry for this hijack, but...

Stock certificates feared damaged by Sandy


Trillions of dollars worth of stock certificates and other paper securities that were stored in a vault in lower Manhattan may have suffered water damage from Superstorm Sandy.

Never let a tragedy go to waste...

Qualitative Tightening's picture

Quantitative Easing, Qualitative Tightening.

Stockmonger's picture

This is great news, wages are unsticking on the downside, people are seeing the real value of their debt go down along with their wages, although servicing costs are proportionally higher.  

If every country inflates currency and slashes wages, they can all have trade surpluses with each other.  "Accounting identities" are irrelevant.

So says the economist.

Seer's picture
Miners take "rail-veyors" and robots to automated future

I'm going to beat someone about the head and shoulders with this and other articles any time I hear "bring the jobs back!"  More and more we're automating things (until the robots are no longer able to be fueled).  Just not seeing robots as the new/next consumer market...

I suspect that in the end humans will have to kill off their iGod...

abgary1's picture

The world is awash in cheap labour and the standard of living in the western world is coming down.

If the west is going to compete with the developing nations for manufacturing jobs, the wages and benefits will have to come down in the west.

The central bankers will try to inflate the economy to produce jobs by devaluing their currencies, but anyway you look at it, the standard living of joe average is going take a hit.

Corporate greed (aka:the search for cheap labor) and the vast difference between the standard of living in the west compared to the developing nations is going to put downward pressure on benefits in the west for a long time.

The Fed's attempt to inflate their way out of this is being met by debt deflation and the notion that the USd is a safe haven. If the Fed had it's way there would be inflation, it just hasn't worked out that way.