If You Like Your Stagnant Wages, You Can Keep Your Stagnant Wages

Ever since the great recession of 2008/2009, economists have grown increasingly perplexed by the lack of real wage growth in the U.S. economy despite improving unemployment trends.  Even with a 4.4% unemployment rate, real wage growth has been elusive and hovered between negative 1% and positive 1% for years now.


Of course, it all could have something to do with the ~95 million people who have given up looking for jobs and/or the massive transition to part-time laborers in the Obamacare era, but we're just spitballing here.


Regardless of the reasons, according to a new survey from Aon Hewitt, the downward pressure on U.S. wage growth is unlikely to subside in 2018 with many employers saying their wage growth will be flat YoY.  Per the Wall Street Journal:

Businesses are planning to keep budgets for raises relatively flat in 2018, while continuing to devote more payroll dollars to performance-based pay, according to a survey of salary planning at 1,062 organizations conducted by consulting firm Aon Hewitt.


Despite low unemployment and increased competition for talent, companies are bearish on across-the-board pay raises, said Ken Abosch, an Aon Hewitt executive who works on the annual survey, now in its 41st year.


“Organizations are expressing reservations about the years coming and, for the first time since the recession, are signaling doubt or uncertainty about what they think their performance will look like in the coming year,” he said.

Moreover, in a move that will undoubtedly draw the ire of Bernie Sanders and his socialist followers, companies are increasingly saying that a higher percentage of their overall compensation will be dedicated to merit-based bonuses. 

Companies are paying to keep their highest performers happy and in place, with an average 12.5% of payroll going to incentive and bonus pay next year.


Overall, two-thirds of the organizations in the survey said they will use merit pay to show workers who’s doing a good job, and who could stand to improve. Of those companies, 40% said they would reduce or eliminate raises for low performers. And some high performers will have to work harder next year—15% of the companies changing merit pay say they will set more aggressive targets for bonuses and incentive pay.


Lindenwood University, a liberal-arts school near St. Louis, Mo., recently introduced a merit pay system for the school’s staff of 950. Previously, there was no formal structure for rewarding performance.


High performers get rewarded for their extra effort, said Dr. Deb Ayres, the university’s vice president of human resources. “They’re not getting the same small increases as everyone else. It’s very motivating for them.”

All of which is just a long way of confirming that "if you like your stagnant wages, you can keep your stagnant wages."


NoDebt Bubba Rum Das Tue, 09/19/2017 - 13:59 Permalink

"Lindenwood University, a liberal-arts school near St. Louis, Mo., recently introduced a merit pay system for the school’s staff of 950. Previously, there was no formal structure for rewarding performance.High performers get rewarded for their extra effort, said Dr. Deb Ayres, the university’s vice president of human resources. “They’re not getting the same small increases as everyone else. It’s very motivating for them.”"Those who do the best job teaching Communism get pay raises. 

In reply to by Bubba Rum Das

Justin Case Tue, 09/19/2017 - 13:25 Permalink

real wage growth has been elusive and hovered between negative 1% and positive 1% for years now.It's been filled with debt, pulling future income forward. When rates return to normal, the economy will fall into a big fat recession and bankruptcies.

Ben A Drill Tue, 09/19/2017 - 13:25 Permalink

As long as we keep giving our tax dollars to the free shit nation nothing will change.

Free free free! Food stamps recharged every month. Check.

Why work when it's free.

Want more food stamps? Have a baby. Check.

Don't live here legally? Don't speak English? No job, no problem. Take this piece of plastic to the store and buy all the food you want. Check.

Need a cell phone? Need free housing? Need free health care? No problem. Check, check and double check.

America home of the free.

Robert Trip Tue, 09/19/2017 - 13:38 Permalink

Stagnant wages are what is keeping the millions of lazy motherfuckers afloat in this Nation.In third world countries these lazy motherfuckers would be left in the streets to die.Not here though. You have a "problem" or an "issue" you qualify for a FREE RIDE.That's one of the main reasons our country is going down the tubes.The other two are Women's Liberation and Integration.But heaven forbid if those subjects are ever brought up for discussion.

aloha_snakbar Tue, 09/19/2017 - 13:40 Permalink

Its all good; at least Barky bin Obanana, the mulatto Kenyan faggot, still gets his pension, as well as obscene pay for play payments from when he was pretending to be a POTUS for eight years...

Vlad the Inhaler Tue, 09/19/2017 - 13:42 Permalink

Basic stuff here.  Real wages = wages minus inflation.  When you create inflation by printing money instead of real productivity, then the benefits of inflation go mainly to the wealthy and the borrowers, while the costs of inflation are born mainly by the workers and the savers (plus the foreign holders of the currency).  In other words, the Wealth Effect is a certain kind of inflation, but the Fedspeak always refers to inflation as a uniform thing.

GunnerySgtHartman Tue, 09/19/2017 - 13:42 Permalink

'Stagnant' wages?  My gross has declined by $5000 in the last five years, and that doesn't include non-existent inflation in food or health insurance.  And I know I'm not the only one in that boat.

Justin Case GunnerySgtHartman Tue, 09/19/2017 - 14:01 Permalink

It's the root cause of growing poverty, stagnent wages and failed pension plans. This is just the begining. The economy was structured this way but the plan wasn't followed by the corporations.Pensioners are going to be the next biggest growth in poverty class. NIRP has destroyed many pension plans and many fortune 500 companies aren't keeping up with contributions to those plans. Bonuses have gone up and the wage gap between laborer and management has passed 300:1. CEO of GM earns a base salary equivelent to 230 laborers earning $20.00 per hour working a full year. Then there are bonuses, health plan, car/insurance, expence acct., travel etc. Best way to help the poor is, don't become one of them.

In reply to by GunnerySgtHartman

Justin Case Tue, 09/19/2017 - 13:46 Permalink

By far, the biggest category of discretionary spending is spending on the Pentagon and related military programs.People's wages need to at least keep up with the real cost of living. If wages aren't keeping up, people can't afford to buy necessities or pay for housing. This creates the working poor. If wages stagnate then the number of poor will continue to grow. Everyone knows the fake numbers on inflation and BLS put out.Here's a stat:San Francisco once again claimed the highest rents statewide for both 1- and 2-bedroom units. A 1-bedroom in San Francisco costs $3,560 while 2-bedrooms had a median price of $4,730/mth.Without affordable housing even the average person can't afford to rent. We have the same issue here in Toronto. If they can't afford to pay rent, then where do they live? In a cardboard box under the highway bridge? There are 10,000 people a day retiring in merica. Some might even get a pension from the company plan that they paid into most of their life. Most companies failed to contribute to those plans, under funded. Failed promises to retain workers. There will be thousands moar in poverty, b/c the pension deficit is in trillions under funded.There is always money for the MIC.

Faeriedust Pernicious Gol… Tue, 09/19/2017 - 17:19 Permalink

False equivalence.  Social Security and Medicare are paid for by decades of having your salary sapped for the eventual payoff.  Medicaid, EITC, WIC, SNAP, etc. are not.  Don't lump in what is essentially a public pension plan with absolutely free giveaways (which are stupidly designed to encourage those who cannot or do not work to have MORE CHILDREN by providing benefits "for the children" at a per-head basis).  We need to stop encouraging the LEAST capable, physically and mentally, to reproduce!

In reply to by Pernicious Gol…

21st.century Faeriedust Tue, 09/19/2017 - 17:40 Permalink

well, not really--- SS taxes are-- and always were "general revenue to the Treasury" -- just exactly as the cynical, New Dealers wrote the law --  no "trust fund" was ever createdthe ss law of 1935 only speaks about an "accounting" of the funds to occur --- you have no right to an SS check . those TAXES were spent-- like all taxes -- by vote-buying, cynical, corrupt politicians--- medicare was just tacked on to the payroll taxoh, and that is what the 21st Century socialist want to do with "universal" medical insurance .... tack it onto payroll taxes -- more, more, more !wonder how that will affect stagnant wages ?

In reply to by Faeriedust

MoreFreedom Tue, 09/19/2017 - 13:59 Permalink

The reason real wages are stagnant, is simply because government growth, and the costs to support that growth, exceeds any increases in productivity. Government is simply like a bunch of leeches sucking the blood from workers and producers.  What's been growing are the number and size of the leeches.  

bkboy MoreFreedom Tue, 09/19/2017 - 16:30 Permalink

For anybody doubting MoreFreedom's opinion, consider this anecdote.  I know three IRS retirees who receive annual paychecks of $90k, $120K and $130k, respectively.  All they had were BS college degrees. These LIFETIME paychecks will increase each year by the COLA.  They also receive full medical and dental for LIFE.Any actuary will tell you that $120k of income a year with today's interest rate is the same as having over $2,000,000 today.  To save $2,000,000 over a 35 year working life would have required additional income of over $65,000 to have enough left, after taxes, to create such a pot of money.  In other words, US taxpayers have grossly overpaid these three IRS employees (and are overpaying almost ALL government employees) by tens of thousands of dollars a year.At least the millionaire next door who made it in the private sector did so by taking risks and usually creating jobs in the process.  All these three did, and millions like them, was suck the real producers' blood (and the real producers are all those who work in the private sector, not just the owners in the private sector) while squeezing even more blood out of the private sector to help fund their own paychecks.Leeches indeed.  Yet they will be driving their golf carts around gated communities for another 25 years while the rest of us will likely end up in a trailer park and a soup line.

In reply to by MoreFreedom

Stan Smith Tue, 09/19/2017 - 14:01 Permalink

Lots of people ignore (or are to stupid to notice), that since ObamaCare kicked in,  any theoretical "wage gains" are going straight to employees health care costs, not wages or salary.   And my guess this is across the board, regardless of income.  When you squeeze everyone, it's not going to be good for the economy as a whole, regardless of share buy backs and cashed in stock options.

ElTerco Tue, 09/19/2017 - 14:17 Permalink

"Businesses are planning to keep budgets for raises relatively flat in 2018, while continuing to devote more payroll dollars to performance-based pay"

Why not just say, "From this point forward, all revenues will be funneled to the CEO and his immediate sycophants." I say revenue rather than profit because debt-based stock buybacks will be in the mix.

Angry White Guy Tue, 09/19/2017 - 14:26 Permalink

This is the one aspect of contemporary America that is literally slowly driving me insane.  Seems to me, that the 1% who doesn't actually WORK or PRODUCE keeps earning more and more while the rest of us WORK more, earn less, and hate our very existance.I would normally say something must give but this kind of slavery has been the norm for half my life now, it's just become even more pronounced recently.Between this economic reality along with the fact the country has become the White man-hating capital of the world, living in this country is a GD nightmere.Wonderful country.

Faeriedust Angry White Guy Tue, 09/19/2017 - 17:12 Permalink

Might I suggest that you take up a trade in plumbing?  It looks like I will be paying a plumber $5,000 this week for three days' work and thanking him profusely on bended knee.  There's something about having raw sewage backing up in your home that makes a person willing to give anything to someone who can rescue them.Don't mistake me.  It's not an easy job.  It's dirty, nasty, and back-breaking.  You can't entirely set your own hours as the best money comes from emergency work, which is always 2 am on Sunday.  After a blizzard.  But you can take vacations (and afford them!).  You can start small, as a bit of a sideline, and work your way up as you buy more and fancier tools. Most important, you can be your own boss, without any kind of a degree or the attendant debt.  Just answer the desperate phone calls, show up, fix the problem, and pocket the check. In a couple of years, you'll be rich enough to attract a wife.  Maybe even afford kids.  And you can leave them, instead of a little cash or a college education, a working trade and a business that will provide them with a living when you're gone.Again,  it's not an easy job.  But it's one of the few where you can still be your own master, make a decent living, and climb out of the rathole.  Think about it.

In reply to by Angry White Guy

Angry White Guy Faeriedust Wed, 09/20/2017 - 10:46 Permalink

I'm highly educated and have worked in IT for years.  If we could get the fucking .gov to stop enabling h1-b invasions I wouldn't have this problem.I'm almost 40 and don't really feel like making a switch to poop patrol, but I get your point and it's valid.I was thinking car mechanic.  Cars are a system just like computers and networks.I don't want to be 50 bent over sludge.

In reply to by Faeriedust

21st.century Angry White Guy Tue, 09/19/2017 - 17:50 Permalink

so, then why not START taxing the spending of the 1% ?  why tolerate this last century tax code ... that taxes your wages ? the 1% will howl ... tax the spending of the -now tax exempt-- clinton charity /trust fund -- they spend a lot of money, you know ?demand a better tax code (something like the FairTax) --- why not ?  it's a new century-- time for a new tax code

In reply to by Angry White Guy

Mena Arkansas Tue, 09/19/2017 - 14:34 Permalink

And yet somehow at bonus time the company will determine they really cannot afford to pay bonuses this year.Something about having to rebuild the engines on the CEO's jet.

moonmac Tue, 09/19/2017 - 16:23 Permalink

If you like your low wage McJob you can keep it. If you don't like it there's another one 2 minutes away at the next strip mall, shopping center or fast food joint.

21st.century Tue, 09/19/2017 - 17:16 Permalink

Stanant wages .... but by all means let's keep the moronic , last century, UN-fair - 1930's payroll tax yoke on the working citizens of the US !sure-- 2017 and we still have this ramshackle tax code , which is UN-fit to sustain a modern USA. Oh, they'll keep yapping about minimumn wages, and the "working poor"as the Bernie socialists are right there at the end of the week ... taking their cut of the meager wages of citizens... keep that crummy payroll tax on their backs !the thing is, raising the minumn wage national -- just means MORE payroll tax ... so, no benifit to the worker at all.want to help the poor-- and every one for that matter --- then dump the New Deal, last century tax code