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Not So Fast With Those "Rising Wages"
Perhaps the biggest catalyst why Fed Funds rate increased following today's payrolls miss is not so much the prior monthly payroll revisions but that after stagnating for months, August average hourly wages rose by 0.3%, the biggest sequential increase since January. The reason why pundits are focused on this number is because Yellen has repeatedly noted that with the unemployment having become utterly meaningless as a result of the 94 million Americans not in the labor force, the only indicator of labor slack is wages, and whether they are finally - after 5 years of waiting - rising.
Well, for the headline-scanning algos who saw the 0.3% number, they were although a Y/Y chart reveals a very different picture:
That said, a quick dig through the data reveals that as we first reported almost half a year ago, there are two vastly different pictures emerging when looking at the two key segment of the US labor force: the supervisors, managers and other workers in position of power, and everyone else.
First, this is how wages for the supervisory workers looked like: nothing but blue skies here, and rising at 3.7%, this was in line with the biggest wage gains in the past decade.
And if this was indicative of the overall work force, the Fed could indeed claim mission accomplished and hike not 0.25% but 2.5%.
There is a problem: supervisory workers only make up 17.5% of the US work force. As such, their wage gains are anything but indicative of the vast 140 or so million US workers.
What about the wages for the remaining 82.5% of US workers: the non-supervisory one. Here is the answer.
This means that on an inflation adjusted basis, 82% of the US population can't even keep up with inflation!
So before anyone decides that the Fed is one and done in September based on the "strong" August average hourly wages, if the Fed is looking at the real chart that matters, that of non-supervisory workers, it will be zero and nothing for a long, long time.
Source: BLS
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You're forgetting that yoy inflation is zero.
I've got YoY at 4%, personally. Definitely down from previous years where inflation was well over 6%.
Inflation = productivity theft.
What a joke.
America land of prosperity ?/s
America land of opportunity ?/s
Here comes that '29 feeling again.
I think I'll go ask for that 0.3% pay increase right now.
I'm betting the boss man says "turn around, bend over and I'll show you that raise".
And, nothing against the bossman. You can't demand wage increases if you aren't able to pass those costs on to the "consumer". And, as a whole, business is muddling along. Hell, the only business that is booming is the local food pantry.
#ObamaWinning, #SocialistUtopia!
Madcows -> you have a job, that's more the 94 million that's more than called it quits.
American standard of living is down 40% in 25 years 'nuff said.
don't need super-vision to see the deflationary impacts of 'free' illegal labor, temporary imported labor, 97 million non-worker-workers (not looking for work), and general economic deflationary spiral.
Good supervision is the difference between staying in business and going out of business.
How many quality employees will quit their job because the supervisor is a POS? MANY
How many quality employees will stick with a good supervisor - even when times are tough? MANY
I am not saying employees don't matter - of course they do - supervisors just matter more. But you can't keep quality employees unless you have good supervisors. To keep them you need to pay them.
I will guess if you dig into the numbers a little - you would discover that really good supervisors have gotten 10% + increases - shitty supervisors that keep their jobs got almost no raise or were fired.
I don't get the ZH supervisory hate - if people think supervisors jobs are so fucking sweet then step on up boys and girls and take a supervisory position - and then you will find that is is a ROYAL PITA that never ends - because you are then the one that is responsible for everything.
The ZH point is that BROAD-BASED wage gains are not happening. Therefore there cannot be any incrase in growth since AVERAGE consumer isn't seeing wage gains.
Just stating facts nothing "hatey" about it.
I'm not anti supervisor.
I'm anti business being big enough to need the current level of supervisional authority we have now.
I have the pleasure of working for a small company that happens to be a licensee of a multi billion dollar corporation. What takes over a year to accomplish in the multibillion dollar corporation can be done by the small company I work for in three months.
That is because in the multibillion dollar corporation everything has to go through six levels of supervisors who all have their own opinions before a decision can be made.
Valid point - small companies are vital. Our current government seems to hate small business.
But
Hard to see how you could manufacture autos, handle a major construction project, build airplanes, have an internet, cable TV, make movies, manage a cell phone system unless you have BIG companies.
You willing to give up all the good things big business provides? Or Do you think we can do all of these things with companies that have less than 500 employees?
I read it differently - maybe because there have been several articles with the same twist.
Note that "the supervisors, managers and other workers in position of power" statement is a clue.
Go back to the prior article that is referenced. And find this (I did not bold it the author did)
all of it going straight into the pockets of those lucky 20% of America's workers who are there to give orders, to wear business suits, and to sound important.
A blind man could see the bias against supervisors.
But that really doesn't matter - what I posted is still true - you can't move anything forward without good supervision - and it is totally normal - AND acceptable - that supervisors get paid more - and earn bigger raises.
Or do most of the folks on ZH think raises should all be equal?
Side note - one reason government is so totally fuck up and incompetent is because the quality of their supervisors is shit.
20% of the country is doing well...which is why the "99 % vs the 1%" meme is bogus.
If we were at a true "99 v 1" scanrio, the streets would be burning.
I think they need to. People don't give a fuck.
Or do most of the folks on ZH think raises should all be equal?
No - but there should be more of an equilibrium when you match the charts together. From what it looks like here, 80+% of the wage gains are going to supervisors. This is the type of stuff you see in facsist corporate economies and a direct result of ZIRP and QE and free money for nothing.
The suits at the TOP are paying the middle to keep the bottom quiet. The bottom is trapped. This is getting dangerous.
"Good supervision is the difference between staying in business and going out of business."
Somewhat true years ago,,, In reality, If your business depends on sales it's the slave group that deals with the customers out front,,, not the managers that sit in a back room office. Bad managers can ruin a business but it takes some time.... bad employees can ruin business almost overnight!
Managers Responsible? Anything going wrong is instantly blamed on the slave group. This has pretty much stayed the same throughout the ages.
The only ones to make supervisors are usually the ones that sweeten up to upper managers the best. In most management positions skill and knowledge are unnecessary and may actually impede advancement. The manager that cares is a soon to be layed off puppy. He/She scares the shit out of the upper managers who are gutting the company. Suck it up has an entire new meaning these days.
And ZH should be commended for revealing the sad state of American business. This .01 percent Wall Street wealth effect has trickled down to Mom and Pop businesses.
Not trying to nit pick - but I am talking about GOOD supervision & management -
Everyone has had a really crappy boss before - so many tend to lump all "supervisors" into this crappy group.
BTW - sales are always the life blood of a strong company - but a well managed sales force will always outperform a group just running around knocking on doors.
If you don't manage your sales people you will end up with boat loads of unit sales - but at negative margins -
I must have had this conversation a dozen times per year -
Sales guy - I can get an order for 25,000 cases if we commit to $45 a case.
Me - our cost is $55 a case -
Sales guy - but don't you want the volume??
#Unemployedlivesmatter
Of course most wages won't beat inflation, else the whole wealth transfer scheme wouldn't work. What I don't get is why you think continued ZIRP or NIRP (plus QE) would in any way raise worker-wages, or benefit anyone outside the financial sector? Just look at the graph, wages are declining for years while money keeps getting printed at breakneck speed. More QE equals digging a deeper hole.
You can't force wage-growth in a depressed economy, all of this data is bullshit, until we get through this recession nothing is going to get better for average Joe sixpack. While we kick the can wealth inequality continues to grow, the gap between the poor and the rich is getting bigger every day, if they don't stop this farce at some point the recession might turn into a proper revolution. But I'm sure they know when to pull the plug and are already working on the big crash "nobody could've seen coming" ..
Silver getting ever more rare by the day at my local dealer, some coins only available again in about two months, just a coincidence I guess. Same as the whole gold hoarding/repatriation by Russia/China/Germany - I'm sure there's nothing brewing whatsoever, just coincidence after coincidence. JPM hoarding tonnes of physical silver? Coincidence. Coincidentally I feel like this is shaping to become one enormous muppet slaughterfest. Who'da seen that one comin huh?
My pay increased over 20% this year. All I had to do was switch companies and lie like hell on my resume to do it.
here is something from Nelp about occupational wage decline among low wage occupations
http://www.nelp.org/content/uploads/Occupational-Wage-Declines-Since-the...
Our supervisors don't even report to an office on my plantation. Has a whole 12 employees under him,,, haven't seen him in over a year, e-mails only,,, unless I call him. He calls only if something happens to upset the internal numbers we strive to maintain,,, which is changed by upper management on a daily basis. Bonuses for them, none for the slave group. Infrastructure, buildings, property and equipment, all neglected and ruining. They don't even clean the bathrooms any longer. Of course those 'savings' will likely reflect larger bonuses. I'm talking a major company here. The really bad part is the give a shit attitude that now pervades the slave group.They have reduced staffing to a level that only allows time for quick band aid fixes. In my fifty years in the work force I have seen nothing like it. I have worked for companies that actually made money by producing,,, not by gutting itself.
'Managers' among us here will state managers can be a plus for a company,,, those days are gone. Most are simply lap dogs for upper management and only serve to 'push' the slaves while not realizing they too are slaves. All companies now have high turnover rates, low pay and pretty much useless benefits,,, especially after Obama Care kicked in. A few are left but only because they are unionized and still have old contracts but that is changing too.Prestige? Like everyone is a technician or manager these days. LOL.
This is a result of the great jobs giveaway by the corporations, sanctioned and paid for by government to China and other third world countries. The corporations got their beloved slave wages and government was able to make dependents of those they feared might not like their fascist warlike ways. Win, Win from their perspective.
Managers can just stand by. Their upper managers will soon run out of slaves to fire and infrastructure to sell/ruin and will start eating it's own. The American way,,, at least these days.
It's a sad thing to watch the slow death of a once great productive nation. Our products were the best in the world. Others tried to copy us..... Now we copy them and their cheapness invades our daily lives.
I feel like this graph is the same I would see during the time of slavery.....except non-supervisory workers wages would be in the negative.
Where do the "wages" of the top 1% go? I'll bet they are split between both supervisory and non-supervisory. And I'll bet if you pull them out, the overall charts are dramatically worse, even a handful of million dollar "wages" can bend the whole chart.