Sorry America: Hope For Income Growth Collapses As Real Wages Stagnate For Second Month In A Row

'Hope' was never a good strategy...

Since President Trump was elected, expectations for rising incomes soared to its highest level since 2001 in March.

However, as real average hourly earnings growth has subsided, that hope has suddenly crashed back to reality...

So much for those 'soft' survey questions!

In fact for the last two months, real average hourly earnings growth has been unchanged on a year-over-year basis.

But it's not like you didn't get a pay rise America - Real average weekly earnings up $0.88 from a year earlier to $371.05.

So stop complaining!!

 

 

Comments

DingleBarryObummer tmosley Thu, 07/12/2018 - 09:10 Permalink

Just like when Trump brags about the unemployment number?

you care more about the good of Trump's political career than you do for the good of the country.  The two are not the same thing, though they sometimes align (which is good).  Things that are good for his career in the short term may be bad for the country in the long term.

In reply to by tmosley

Rothbardian in… tmosley Thu, 07/12/2018 - 09:27 Permalink

 

Real Wages:

https://www.bls.gov/news.release/realer.tn.htm

 

Consumer Confidence Index:

https://www.conference-board.org/pdf_free/press/TechnicalPDF_4134_12983…

 

Are the numbers sketchy?  Yeah, particularly real wages because is used the same deflator that CPI uses.

Are the numbers just recently sketchy?  No.  Any trends you see would not be as a result of anyone changing metrics to torpedo Trump.  It's the same methodology that was used in Obama and GWB.  

 

It is what it is.

In reply to by tmosley

Rothbardian in… tmosley Thu, 07/12/2018 - 10:04 Permalink

I'll type slowly for you.

 

The data is over time.  That is what is called Time Series data.  It is essentially a line chart.  So for proper evaluation of any one "dot" on a line chart you must look at it in context of other "dots" in the series.  To do this you use statistical modeling techniques that apply positive and negative coefficients that change the data point of one dot (the actual value of that dot).  In this case they use a statistical technique called REGARIMA.  The effect of that technique is what is called "smoothing" to data.  It mutes outliers of data based on "dots" that look like it in the past.  aka they shared the same characteristics of that dot.  The model uses derived weights to determine how much any one attribute should affect any one dot.  In the end, you get dots that are comparable over times because they have been transformed to under the same method.  Because....the value is not in any one dot on a time series model (unless you are doing a forecast)...the value is being able to look at trending over time.

 

Again, you want to learn this shit then spend some money and go to school.  It's not my fucking job to give you stats and econ classes for free.  Click a link, read the document, educate yourself.  If not, then stfu and stop namecalling people who are having adult conversations.

In reply to by tmosley

tmosley Rothbardian in… Thu, 07/12/2018 - 10:20 Permalink

>I'll type slowly for you.

Lolbergs, folks.

>If not, then stfu and stop namecalling people who are having adult conversations.

I started this conversation, idiot. You interjected with a mostly worthless link which didn't actually demonstrate any actual understanding, which was the point of the entire exercise.

>To do this you use statistical modeling techniques that apply positive and negative coefficients that change the data point of one dot (the actual value of that dot).

IE you do a lot of handwaving and just print whatever you want. Or maybe not. The point is, you plebs will never know. Ignore your lying eyes and trust our incomprehensible methods that we learned in Princeton, seat of ultimate economic unlearning.

If you will excuse me, I have work to do. This boom won't perpetuate itself.

In reply to by Rothbardian in…

Baron von Bud tmosley Thu, 07/12/2018 - 11:31 Permalink

Rothbard seems to be describing the smoothing of a time series. This is often accomplished with a moving average. Seasonality is different. Theme parks have a time of year (a season) when attendance is higher or lower than the annual average. Another example is national employment which is seasonally higher at Christmas due to part-time hiring. This extreme percent up or down relative to the average is removed by various statistical methods. The revised data is called seasonally adjusted and makes it easier to see the true change.

In reply to by tmosley

Endgame Napoleon JibjeResearch Thu, 07/12/2018 - 20:36 Permalink

PRC made a great point about robots. Robots require too many natural resources and too much costly maintenance to just take over. The big corporations, with their massive cash flow, own some hardcore robots, and in businesses large and small, computer software does more of the work, reducing the number of work hours for humans.

It is the massive welfare or spousal-income-buttressed labor market. They can afford to accept low pay since their major household bills, like rent & groceries, do not need to be covered by earned-only income, not to mention the up to $6,431 in womb-productivity payouts from refundable child tax credits hoisting up their paychecks. That is what lowers wages in the rigged, anti-hard-work labor market. The womb-productive / welfare-eligible citizens and noncitizens must work part time in single-breadwinner households. If they work full time, they simply exceed the income limits for the programs. 

In reply to by JibjeResearch

Endgame Napoleon Angry White Guy Thu, 07/12/2018 - 20:45 Permalink

Isn’t the “confidence” measure just a survey of 1,000 households? 

Do you [feel] good about the economy, Mrs. Jones? 

Feelings are not concrete, and feelings also have variance, depending on the context. 

If you ask me, since I see little progress on core, structural issues that have developed over decades, I am very pessimistic. 

By comparison with earlier times, I am [ever so slightly] more confident, in that this administration at least got a few economic ssues on the table during the campaign season, anyway. 

 

 

In reply to by Angry White Guy

Endgame Napoleon Justin Case Thu, 07/12/2018 - 20:53 Permalink

Womb-productivity-based welfare rigs the labor market. It has caused wage stagnation for groups with historically low wages, like most women, and falling wages for men. Assortative mating artificially & deceptively bumped the average up a little for women, but it has hurt most women by halving the size of the college-educated middle class. When two jobs with breadwinner wages and benefits are concentrated under one roof—with $9-per-hour NannyCam-surveilled babysitters, $10-per-hour daycare workers or elderly grandparents doing the work of raising the dual-high-earner couple’s kids for them—it creates an elite top 20% that is more affluent than the widespread, larger middle class of earlier eras. 

In reply to by Justin Case

Rothbardian in… spastic_colon Thu, 07/12/2018 - 09:39 Permalink

They don't rejigger the spreadsheets.  Well...they don't secretly do it.  They have changed methodologies and will do so going forward.  For example the proportion of products in the "basket of goods" for CPI changes.  Everything they do is in the technical documents if you read them.  Furthermore, any changes go through peer review of industry and academic panels.  There is no secret, only being uninformed.

That being said, sure...there are problems with metrics.  The inflation calculations are just flat wrong.  The BEA uses a f'd up deflator calculation.  I think that is probably by design to manage the COLA adjustments for SSI/Entitlements in general.  U3/U6 have some serious problems in terms of how they compute the denominator in that calculation.

 

BUT...they don't start changing formulas in dark rooms when politicians who they don't like take office.  It simply just isn't true.

In reply to by spastic_colon

Rothbardian in… spastic_colon Thu, 07/12/2018 - 09:51 Permalink

Then I'm guessing, in the absence of a UCM/Arima analysis of coefficient elasticity, you could at least produce a timeline to support some sort of ocular regression that supports your point.

 

Yeah I was a little snarky there.  But the point that these changes (not nearly as frequent as people would like to believe) are purely politically motivated is simply not supported by fact.  My personal whipping boy metric BEA's deflator has changes about every 5-8 years, sometimes longer even.

In reply to by spastic_colon

spastic_colon Rothbardian in… Thu, 07/12/2018 - 09:59 Permalink

sure....but its already been done for us......part of my point is that if they are able to produce such a complicated method (to the lay person) then why are they unable to include ancillary items that make the numbers more accurate (e.g. add-on fees etc)....it is 2018....no offense taken to any snarkiness, thats the beauty of this site.

 

https://www.bls.gov/cpi/tables/supplemental-files/home.htm

https://www.bls.gov/ces/#tables

In reply to by Rothbardian in…

Rothbardian in… spastic_colon Thu, 07/12/2018 - 10:07 Permalink

That point is fair and my reply is drawn from personal experience rather than factual knowledge.  At least in my world we have to exclude data due to lack of quality over time.  What we call data lineage.  In cross sectional models it becomes less of an issue because there are techniques to proxy for element gaps (aka dummy variables).  In time series, we become much more sensitive to data lineage issues.   Just my hypothesis.

In reply to by spastic_colon

Endgame Napoleon Rothbardian in… Thu, 07/12/2018 - 20:02 Permalink

The corporate-owned press and the corporate-owned politicians pick & choose, using the academics’ numbers for PR or corporate-evasion purposes.

Corporate media owners do not want some things discussed on the news, like 101 million US citizens out of the workforce, 78 million gig pieceworkers and 42 million part-time-working citizens and noncitizens who qualify for the EBT program (and other monthly welfare programs) by staying under the income limits in single-earner households that are womb-productive.

The only way that media-owning corporations will tolerate discussion of this issue is in the context of a debate, wherein the only side presented is a pro-mass-immigration argument, which suggests that the solution to the fact that the SS trust fund is no longer running surpluses is bringing in even more immigrant workers.

They will make this absurd argument, even though we already have a BIGGER generation of youthful, working-age citizens than the Boomer generation—the Millennials—and they are massively underemployed.

We have already tried 40 years of paying noncitizens—including millions of illegal border crossers—to have sex, reproduce and work part time, staying under the income limits (in [traceable] earnings) for free EBT groceries, subsidized rent, monthly cash assistance and up to $6,431 in refundable child tax credits.

It has rigged the labor market with even more workers who do not need higher wages due to having somethin ’ comin in” from .gov, and we already had a ton of those, just counting all of the welfare-eligible single moms, dominating the “voted-best-for-moms” office jobs in a majority non-married population.

Flooding the labor market with cheap, foreign, welfare-eligible / womb-productive job seekers has been a big factor in 40 years of falling wages for US citizens. The plan also worked to expand the size of the bilgiest generations, the Millennial and Z generations, not the Boomer generation.   

The plan worked to drive down wages so much for citizens that hard work no longer pays, as reflected in the abysmal labor force participation rate. All across the country, per-capita income sits at $20k and below, and non-welfare-eligible citizens face rent that soaks up more than half of their earned-only, monthly income. This includes millions of single, childless citizens and single parents with kids over 18.

The plan likewise has not worked to bolster the SS trust fund’s solvency, even though citizens pay into that contributory program at either 7.65% or 15.3% of every dime we ever earn up to the $128,400 SS-taxation cap, whereas citizens, legal and illegal immigrants pay 0.00% into their plethora of pay-per-birth freebies from Uncle Sam.

Naturally, corporations, like Disney, which owns part of the media, do not want discussions of this mass underemployment of US citizens, not when they are doing things like firing a bunch of experienced, professional citizens, working in IT, forcing them to train their foreign temp-worker replacements.

And no, the fired IT workers were not unqualified Americans. If they had been unqualified, the company would not have trusted them to train their noncitizen replacements. Ditto for other Big Media owners; all of them are companies with a lot of low-wage churn employees.

In reply to by Rothbardian in…

Endgame Napoleon shankster Thu, 07/12/2018 - 20:12 Permalink

You guys make a good argument that central banks play a role in how far our money goes toward covering our bills, and I see your point about the overall, debt-based economy impacting everything, including wage growth, since employers’ cash flow also gets weighted down by the debt-based financing. 

However, you have not convinced me that too many welfare-subsidized workers, and workers with spousal income, chasing jobs without the need to cover their major household bills with earned-only income is not the main factor, along with the middle-class-halving wealth concentration that arises from assortative mating—i.e. dual-high-earner parents keeping two breadwinner jobs with benefits under one roof.

In reply to by shankster