About Those Rising Wages: Real Hourly Earnings Drop To Lowest In 2015

Tyler Durden's picture

When the "expert" weathermen advocates of a Fed rate hike (because it "proves the economy is getting better") are cornered, their cop out excuse is that "wage growth is just around the corner", and then the promptly point to soaring labor costs, which as we showed have nothing to do with actual wages and everything to do with even more soaring healthcare costs incurred by employers courtesy of Obamacare. 

What they don't touch on is facts, which as we have shown before are bad because not only is nominal wage growth for over 80% of the labor force barely above recession levels, and in a clear downtrend...

 

... and they certainly don't discuss real, i.e. net of in/deflation hourly earnings, which in May just dropped to $10.53, indicating zero real wage growth and in fact, the lowest real wage number of 2015.

 

And zoomed in:

Bring on those rate hikes and the economic "recovery."

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-.-'s picture

But, but, but...the .gov'ment said that Inflation was...

-.-'s picture

"When the "expert" weathermen advocates of a Fed rate hike (because it "proves the economy is getting better") are cornered, their cop out excuse is that..."

 

Freudian slip?

JustObserving's picture
Real Hourly Earnings Drop To Lowest In 2015

If you use real inflation, earnings are falling at least 8% a year.

http://www.chapwoodindex.com/

Real inflation-adjusted wages have fallen 39.9% from 2011 to 2014

http://www.zerohedge.com/news/2015-05-29/inaccurate-statistics-and-threa...

khakuda's picture

The only people who believe that the Fed can somehow edict job and real wage growth via ZIRP and QE work at the Fed.  Global labor pools opening up and increased automation are pressuring wages, not some BS economist lack of demand issue.  There is lots of demand for Apple products, but the fact that they are made in China and automated factories does little for job and wage growth in the US.

MagicMoney's picture

That's why the US is a service economy. US is simply uncompetitive. Too much government. China smaller government when it comes to entitlements. Chinese are rugged individuals who save and are competitive. Oh well back to mercantilist ideas. People don't seem to understand, there is savors and spenders. If one economy spends almost all of their money, they become a nation of consumers. If another economy with no nanny state saves some of their money, which is a virtue, they become a investor economy, because savings allows capital investment. You can't have both. The economy that spends 98% of it's income on consumption can't be a productive economy. It's as simple as that and why is the US economy not creating significant new manufacturing, and "industrial production", because the US has too much government, and the nation has almost no savings. and a monetary policy that rewards instant gratification of consumption instead of working to create. A lot of those manufacturing you hold so dear, most of it created in a different era. We don't live in that era no more. US is a dysfunctional economy. It's not even real economy if you ask me.

 

And now out of frustration, we have more and more people advocating mercantilist ideas.

youngman's picture

Our economy is changing to lower paid part time work....and illegals will take cash under the table...the old days of punching the clock at the factory are over....its more like a company needs some short time help...and will hire the labor to do it...part time.....with our regulations and lawyers we will never be a manufacturing country again..

Intelligence_Insulter's picture

A lot of places are using the day labor places to hire temporary workers with the hook that if they work hard and show up everyday they will get hired on full time.  If you are unemployed and work for a temp service for a day or two you can't file for unemployment cause it fucks you all up and you are technically employed by the temp agency even if you are not.  Works out for the companies hiring from these temp services cause they don't have to pay bennies and it makes the unemployment numbers look good.

I've seen this transition first hand over the last few years, huge rise in temp service / day labor places.   I work at a small business that cashes checks.  It also amazes me how many people don't have bank accounts.

Creepy A. Cracker's picture

Way to go Walmart!!!!  Thank God that some people/businesses are able to figure out how to survive in a climate of extreme government taxation, regulation, and business crushing insider dealing where only the government and government connected win.

Creepy A. Cracker's picture

Government employe and/or EBT lifer down voting me...

khakuda's picture

I don't have to even read this to know it is more union sponsored propaganda.  They should be worried about amazon replacing warehouse workers with robots and delivery workers with drones and their moves into the supermarket, a union stronghold.  Instead, they fight the last war.

MagicMoney's picture

What's wrong with robots? Don't you want cheaper prices and do less work? How is higher prices beneficial? You make a fallacy that doing things cheaper is somehow bad, when it's absolutely necessary for human progress. What is better, Ferraris that are 10 cents per car, or Ferrari that is 10s of thousands of dollars and requires you to take out a auto loan? We want wealth, not higher nominal wages. Higher prices get society no where. Society wants more stuff that is usable and cheap. Doesn't every household want a ferrari? If they cost dirt cheap, they would have bunch of ferraris, BMWs, etc in their garage. More money is a fallacy, we want more stuff, not more money. We want more stuff, this is why in ancient times, commodities were expensive. Commodities were not as productively produced back in ancient times compared to today. Why? Because of innovations in technology and methods of productivity. That's what robots and machines do, they increase human productivity so that we can create supply cheaply.

 

Economic iliterateracy continues to float the idea that if robots do most of the work, hell if all work, we all be dead. Lol. Sure. If we can use robots to efficiently create such an abundance, why work those type of jobs. We all be musicians, movie actors, and other types of activity that involves more entertainment, we all be drinking fine wine at a beaches. Prices of such goods would be so cheap, we all can afford to do that. Such ridiculous meme that robots are the great evil if we use them to replace human labor. May be you watch too many Terminator movies.

Creepy A. Cracker's picture

What the?!?!?!.  Another person who understands econimics on ZH.

Space Animatoltipap's picture

All nonsense, the FED, the NY/London money mobsters and Washington are right! Everything is into recovery gear! btw, Got gold? 

Bunga Bunga's picture

So what's the problem? Hilsenrath can explain how to spend more with less money - economics 101.

Herdee's picture

The U.S. sold out its' manufacturing and industrial base to China.Politicians needed the Communist Chinese to finance their big military plans in Iraq and AfganLand.The result was running down Cities across the U.S. at the cost of the middleclass and the poor so that Corporate profits could be sustained.The bottom line being that competition from China,India,Vietnam and Asian countries are an obstacle to the U.S. tax base.Countries now have other options to bypass the U.S. Dollar sytem as as buy gold.5 trillion is sitting offshore in tax havens to avoid taxes.Scum like WalMart with billions transferred out of the country and sitting in offshore accounts at the cost of poor people.WalMart and Corporate America are nothing but scumbags.

Digmen1's picture

Great article.

 

I am sick of ecnomists talking about wage growth and gdp and productivity etc etc.

 

What is more important is what is happening in the real world out there.

Are factories opening or closing

Are US and western exports going up or down.

How many people are working ful time or making a good living wokring in part time jobs etc.

The answer as many have said on here is that the west is on a downhill slide as we do not save and we do not produce what the world wants.

You cannot have a consumption based economy. You have to have wealth first. And every one has to have some spare money to spend.