Why Can’t Americans Get a Raise?

http://www.slate.com/articles/business/moneybox/2017/07/why_can_t_americans_get_a_raise.html

by drewrv • 9 years ago

195 361 9 years ago

slate.com

thatfrenchguy• 9 years ago

Profits ?

LMYahooTFY• 9 years ago

A large factor of the answer to this problem is in the second paragraph and the author glosses right over it:

"This state of things has left analysts stumped. For nearly a decade, the Federal Reserve has kept interest rates at extraordinarily low levels in order to initiate growth and rising demand, inflation, and ultimately higher wages. But the higher wages have been stubbornly slow to materialize."

Interest rates have been dropped into the ground, and it hasn't increased investment(growth). We have the highest savings in the history of capitalism and the lowest level of investment.

This is the wheel of capitalism literally coming to a halt because the oligarchs are staring each other down waiting for someone to go first.

And I think there is a lot to be said about Wall Street leaching most of the investors' money because it promises better returns than actual investment into actual things with utility.

Wall Street is 'supposed' to be the mechanism for recycling profits into investments so that this wheel keeps spinning. Does anyone honestly still believe it's functional?

toomuchtodo3• 9 years ago

It's because the real unemployment rate is higher than the "official rate". U-6 is the best indicator. Workers are still being pulled into the labor force, hence why wages have not risen despite the labor market tightening. We still have a long way to go to "full employment", at which point wage inflation would accelerate.

Interest rates were held low because the Federal Reserve has limited tools to stoke demand (and heh, who doesn't love a good asset bubble amirite?). It therefore "pushes the string", attempting to use monetary policy when what is really necessary is Congress to act (higher taxes and government spending, or pushing wages up with legislation).

Call your representatives.

harryh14• 9 years ago

It's weird to me that there are all kinds of wacky theories in this thread except for you with the obvious answer: the supply of workers exceeds demand so the price (their wage) is not rising.

We had a really big recession in 2008-9 folks! You might have read about it? We've been recovering since mid 2010...adding 200k jobs per month or so. But these things take time.

walrus10662• 9 years ago

In the UK the broad employment rate (including people not seeking work, students, homemakers etc) is the highest since the 70's. Yet wage growth has been much worse than in the US, and the rest of the EU barring Greece. So I think the story is a bit more complex than be explained by classic macroeconomic theory.

kerbalspacepro2• 9 years ago

http://www.macrotrends.net/1377/u6-unemployment-rate

The U-6 rate is at pre-recession levels though? And it's only 1% away from pre-Dot Com levels?

NTDF96• 9 years ago

The solution to this is plain and simple wealth-tax that can only be avoided if their investment creates X% jobs.

There are corner cases to it but the underlying reasoning is, if your investment is just lying around accruing wealth, it's bullshit wealth.

flamedoge• 9 years ago

Ah, so either take the risk or get taxed? Kind of bold.

dclowd9901• 9 years ago

Sitting on money isn't profitable either. Equity investment is a risk, and simply saving it is a loss (due to inflation). It's just that businesses don't _need_ to spend more on payroll to be successful, or they don't see the relationship of that investment to payoff vs. any other investment they could make. And to be fair, it _is_ rather fluffy. How many more dollars do you need to pay on a position to get 10x return? Can you even quantify that at the level of a single business? If you pay a lot, but have a shitty workplace culture, you may be just as unproductive as a place that pays less, but has a great culture.

Unfortunately dollars for employees doesn't necessarily translate to return as well as, say, hiring a process manager or automation engineer to try to eliminate the effects of a bad employee.

jaredklewis• 9 years ago

Seems like the cure is worse than the disease. In addition to incentivizing investments that create more jobs at the expense of those that create less (using robots, software, and all that), the government must now evaluate and track how many jobs all investment vehicles create.

Also, queue massive new industry that specializes in creative job accounting/number fixing in 3, 2, 1...

paulddraper2• 9 years ago

That sounds not at all plain not simple.

harryh14• 9 years ago

So if I invest money into a manufacturing process and build an automated factory that can do with 100 people what used to take 500 people, and then I therefore lower costs to all the people buying things from me...that's now bad? And I get to pay an extra special wealth tax for my trouble?

LOL

specialist3• 9 years ago

Oddly enough, Amazon is apparently the only major corporation utterly committed to spending every nickel it earns. Creating plenty of jobs in the process. Keeps the money moving.

jaggederest3• 9 years ago

No need for any ability to avoid it. You could replace nearly all federal taxation with a 50 basis point net asset value annual tax.

I for one would rather pay 0.5% of my book value than the vastly larger amount in income taxes I pay. And it's a small enough value I think even extremely thin margin businesses could probably afford it.

Everyone on HN says "People would just flee" but in the end almost all the value in the US is real assets i.e. you can't move a physical building overseas.

caesarshift• 9 years ago

You've summed up my feelings well: I can't afford to not be in the stock market as all other financial investments pay peanuts on the dollar. And yet I don't trust that the stock market numbers represents actual growth. It's propped up. When does this end?

JumpCrisscross• 9 years ago

I can't afford to not be in the stock market as all other financial investments pay peanuts on the dollar

If the market crashes then cash outperformed. There is also a lot in terms of bonds, structured products and fund products between cash and equities.

billmalarky2• 9 years ago

You shouldn't necessarily be all equities. Look up "Risk Adjusted Return" and "Modern Portfolio Theory."

You can significantly lower variance (risk) and at the same time only slightly lower returns using diversification.

luckydata3• 9 years ago

You are seeing what happens to a workforce that lacks any kind of EFFECTIVE collective bargaining system.

adventured• 9 years ago

That's blatantly not the issue, as supported by the actual facts of the global economy.

The French have seen their wages grow at 1/4 to 1/2 the typical rate of American wage growth for the last decade. They do not lack for collective bargaining.

The American median wage is higher than the German median wage. The Germans do not lack for collective bargaining.

The American economy and median wage has outperformed: France, Germany, Spain, Italy, Finland, Britain, among many other developed nations.

The American median wage is also higher than: Sweden, Finland, Netherlands, Germany, France.

The American median wage is so high, nations such as Britain barely qualify as matching up with our poorest states.

So much for your theory.

basicplus2• 9 years ago

You've absolutely nailed it

'This is the wheel of capitalism literally coming to a halt because the oligarchs are staring each other down waiting for someone to go first.'

aphextron2• 9 years ago

This is the wheel of capitalism literally coming to a halt because the oligarchs are staring each other down waiting for someone to go first.

This makes a lot of sense. I constantly get the feeling in the US that we don't actually "do" anything anymore. And I don't just mean manufacturing. You look around at the rest of the world and infrastructure programs are at the forefront of every expanding economy. China, India, Turkey. All pouring hundreds of billions into great works at home and abroad.

Where are the massive capital expenditures we saw in the 19th and 20th centuries? America has the largest population of highly skilled, financially endowed consumers on earth yet the most that any genius Venture Capitalist can figure out to do with these billions in free money from the fed is come up with a new skin for IRC.

flashman• 9 years ago

"The best minds of my generation are thinking about how to make people click ads," said Jeffrey Hammerbacher.

thisrod• 9 years ago

Where are the massive capital expenditures we saw in the 19th and 20th centuries?

Those expenditures are still around: they built the roads, runways and skyscrapers that we all use today.

Why do developing countries spend a lot more on development than developed countries do? That's almost a tautology.

atemerev3• 9 years ago

We do not need any more infrastructure because there is _enough_ infrastructure. And material goods, for that matter.

Do you want a limitless money sinkhole with largest positive externalities and quality of life effects? Try science.

mr_spothawk• 9 years ago

Where are the massive capital expenditures we saw in the 19th and 20th centuries?

we have been at "war" for 15 years

apexalpha• 9 years ago

You look around at the rest of the world and infrastructure programs are at the forefront of every expanding economy. China, India, Turkey. All pouring hundreds of billions into great works at home and abroad.

So is the US government! They poured $1,4 trillion into Iraq and Afghanistan.

chaosbutters314• 9 years ago

Not the US government, but Elon's gigafactory and SpaceX are fairly large technological and manufacturing developments.

specialist3• 9 years ago

Labor income has stagnated because we have a glut of labor.

Corporate profitability continues to grow because of increased productivity (increasing the surplus), which they haven't shared with their investors, employees, or government (taxes).

Corporate savings continue to accrue because their (effective) tax rate is low.

Whatever can be said about (low) interest rates, its effect on wage stagnation is second-order, at best.

nnq• 9 years ago

100% Agree. And this is my 2 cents of WHY:

Basically all current investments are high-risk in the age we live in, because we are "at the brink of the chasm" on all fronts:

- general technology: ...the barriers to market are so low that a startup can spring to being at any moment and eat all your profits away

- (social) media / communication: anything can change anytime, today's Facebook can be tomorrow's Hi5

- biotech: we're getting closer to the "you can do it your garage stage" which will change everything

- world politics: India and China are big players now and their moves can no longer be predicted, also US internal politics is a cauldron of volatility, and in a decade or two we'll have the "New Africa" rising... good luck predicting anything

- ML/AI: we might be at the brink of f Singularity with superhuman-AI around the corner... but we have no idea whether it will be in 5 years or 100 years (!) ...this alone is enough to fuck up all worldwide future prediction on anything... when you're staring up from somewhere around the foot of an exponential curve everything looks like "wtf, nothing makes sense"

And also, the last economic "crisis" increased everyone's aversion to risk, kind of the opposite of what you'd need now to increase level of investment...

What needs to change is the attitude of people with money towards risk! I'd love to see people like Elon Musk succeed long-term, not because I like them or what they are doing, but because they are the only ones with an attitude that can create growth right now.

We should really re-learn thinking and working with volatility, maybe starting from what Nassim Taleb says in his Antifragile (https://www.amazon.com/Antifragile-Things-That-Disorder-Ince...) and his talks like How to Live in a World we Don't Understand (https://www.youtube.com/watch?v=iEnmjMgP_Jo - warning: he's a terrible speaker... and not a great writer either, so getting to the root of his ideas will take time). Maybe not. But current "risk reduction" attitude cannot work (hint why: even if you reduce Infinity by 20% you still have f Infinity!).

logicchains• 9 years ago

Interest rates have been dropped into the ground, and it hasn't increased investment(growth). We have the highest savings in the history of capitalism and the lowest level of investment.

Savings _rates_ in the US are actually low by historical standards: https://tradingeconomics.com/united-states/personal-savings (click the 'MAX' timespan toggle). Low interest rates discourage savings and encourage borrowing. One of the fundamentals of economics is that all other things being equal, in the long term savings is needed for growth: if we consume everything we produce, then nothing remains to be invested, so productivity won't increase. If we save more, then we have more to invest, and this greater investment will increase productivity more.

The key thing to note here is that it is investment of forgone consumption that produces value (at a simple level, compare saving some wheat seeds to plant next season vs eating them all as flour). Lowering interest rates, printing money and similar things don't achieve this: they can create _money_, but not necessarily value. What they can do is increase demand, to address temporary shortfalls in demand, which under a popular form of economic reasoning will produce more growth than letting demand slump. That demand-boosting approach is however meant to be used as an immediate solution to a temporary slump, not an ongoing thing, as few economists deny a long term positive relationship between savings rates and growth.

There've actually been attempts to model what the ideal savings rate would be: https://en.wikipedia.org/wiki/Golden_Rule_savings_rate. Such models seem to have little influence on interest rate policy, however.

awkwarddaturtle2• 9 years ago

Interest rates were kept low to bail out wall street, banks, auto industry, housing industry, etc. It was used to reinflate stock, housing, etc bubbles.

If low interest rates boosted wages, the japanese worker would be the highest paid worker in the world. Instead, the japanese wage has declined for 20+ years.

Spooky23• 9 years ago

IMO, you need more inflation to make it too costly to just stockpile money.

chank• 9 years ago

They hit the nail on the head right here: "Companies are psychologically and emotionally geared not to raise wages as a matter of course." Our current business culture is basically to maximize profits and minimize expenditures.

krapp2• 9 years ago

Our current business culture is basically to maximize profits and minimize expenditures.

Yep, what the shareholders get is profit, what employees get is an expenditure.

liveoneggs3• 9 years ago

shareholders don't get profits; hardly anyone is paying dividends. Corporations are just hoarding cash.

blawson• 9 years ago

Which isn't necessarily a problem is employees share in ownership. Unfortunately, it seems this is generally an option only for those that already make a relatively good income.

salmonet• 9 years ago

For whatever reason, maximizing profits and minimizing expenditures is a popular trend among many successful companies

salesguy222• 9 years ago

Potential side-effects directly caused by this are also similarly trending

underemployment, opioid addiction, crime, suicide, widening wealth gap all come to mind

electricEmu• 9 years ago

It's popular until a company loses its market. Minimal expenditures mean minimal investment and retainment. That's not healthy in the long-term for a company.

If you'd like to discuss further then please provide more than a summarized sentence.

bsder2• 9 years ago

Those employers don't want employees, they want CHEAP employees. If you pay $100/hour, you will get employees. So, the only question is "where is that wage number?"

Employers aren't stupid. If they could make more money by hiring employees, they would. What this tells me is that demand isn't high enough for an employer to calculate an increased return from hiring someone.

So, what this tells us is that demand is dead. That's what happens when you hollow out the middle class.

harryh14• 9 years ago

This is wrong. Employers are adding employees, at a consistent rate of 200k or so per month for 7 years:

https://data.bls.gov/timeseries/CES0000000001?output_view=ne...

The issue is that even with all these hires there is still a fairly large pool of people that want to work that don't currently have jobs. This is why wages aren't rising.

codexon7• 9 years ago

Filling cheap/temp jobs doesn't mean demand isn't weak.

If companies were truly desperate for people they would offer higher prices or even pay to train people to their standards.

I remember in the 90s, someone telling me that tech companies (even established ones like IBM) saying they were hiring anyone with a pulse, and that they were trained on the job instead of being asked for 20 years of experience with X, Y, and Z.

If you can afford to be so picky to only hire people that can answer absurd questions like why are manhole covers round or coding a minimum spanning tree operation on a whiteboard with 0 screwups, you do not have a very large demand for people.

enraged_camel• 9 years ago

No, you can't look at a simple statistic like that and draw broad conclusions.

Yes, about 200k jobs are added per month. The question you have to ask yourself, the question that actually matters, is this: what kinds of jobs are those? Are we talking about well-paying white collar jobs with benefits that turn into stable careers, or temporary, low-paying jobs with no benefits that typically represent underemployment?

Gibbon1• 9 years ago

200k/mo isn't really keeping ahead of the number of people entering the work force.

ScottBurson• 9 years ago

Employers aren't stupid. If they could make more money by hiring employees, they would.

That's not so clear: https://news.ycombinator.com/item?id=13017766

bsder2• 9 years ago

This actually probably fits more into the "I know my market demand, and it will fade again."

Rickenbacker had close to a 3 year waiting time for guitars until recently. Yet, the CEO absolutely refused to expand more than very slightly. They have been in business more than 75 years and know that business cycles in guitars come and go.

I think they are now down below 12 months and continuing to fall. Had they staffed up, they would be laying off right now.

jandrewrogers• 9 years ago

Another fundamental issue is that business has never been structured for high wage elasticity. When the market clearing price for wages becomes volatile, which seems to be increasingly the case, it is generally very difficult for business to track the market because their operating models are predicated on the relatively non-volatility of wages. Adjusting to that is generally not easy or quick as it often forces companies to change the way they do business at a pretty fundamental level.

I've seen this play out at companies big and small when changes in market wages force them to change the way they think about hiring. Ironically, the replacement strategy is often to eliminate positions from the bottom half of the wage pool and to add a much smaller number of positions in the top half, at least in my experience. (It is increasingly widely believed that this latter strategy is superior in any case and there is evidence to at least suggest this is true.)

SapphireSun2• 9 years ago

If a business was structured to deal with wages elastically, that's great for business, but can you imagine working for such a corporation? In theory, the reason we allow business to profit is because we all share in the benefits, but if a significant chunk of the market were structured like this, a large benefit to ordinary people (i.e. the ability to stabilly eat and shelter themselves) would be removed, removing a large chunk of legitimacy from the economic system.

chongli2• 9 years ago

If businesses were structured for high turnover, then we'd have to structure society for it too. This means providing all of the normal benefits to people via government services. Then, all employers would simply bid on workers with piece work or hourly contracts. People would continue having their medical care, food, and housing covered by the government, perhaps from a basic income.

vinceguidry4• 9 years ago

It's really silly to think of labor prices as just being a matter of "people knowing what they're worth." The example given was painting jobs. If you're someone that maybe could offer such a job, there's a price at which it makes more sense for you to do it yourself. That price is a hard limit to the amount you can offer for such a job. If someone demands more, then you can't satisfy them because then you're losing out on the deal.

Only growing commercial concerns can afford to hire new employees. The world used to have a way of keeping people who would otherwise be economically impotent engaged, and that is cheap service work, but we've decided as a society that such things are not politically palatable.

So instead we just place more and more expectations on the people that participate usefully in society, and less and less on those who can't. The older I get, the less sympathetic I get to this viewpoint, but I suppose that's a quite common moral journey so I won't belabor the point too much.

kalleboo• 9 years ago

The world used to have a way of keeping people who would otherwise be economically impotent engaged, and that is cheap service work

Service work is up over the decades. What we used to have was manual labor/manufacturing jobs. https://cdn.static-economist.com/sites/default/files/images/... http://www.zerohedge.com/sites/default/files/images/user5/im...

vinceguidry4• 9 years ago

Manufacturing and the Industrial Revolution is what destroyed cheap service work. Factories had such a big thirst for labor that they outbid families for the same labor that used to go into households and farms.

Eventually it got stigmatized. Now most countries' labor laws prevent anything like what used to happen. Probably for good reason, some of these people toiled in horrid conditions, but I don't think re-allowing them is going to recreate those conditions.

lsiebert• 9 years ago

Remember, if you do end up quitting your job, be sure to tell your employer that they weren't paying enough. Then when they hire to fill your position, they may be more likely to offer a better wage.

krapp2• 9 years ago

More likely, they'll try to offer less to your replacement, given the opportunity to pay less for the same labor. This is why many employers ask potential hires about their salary expectations and prior wage history.

maxxxxx• 9 years ago

Any ideas for a tax system that makes raising wages attractive?

cakedoggie• 9 years ago

Our current one.

projectileboy• 9 years ago

Most employers have been giving their workers steady pay increases for years - those pay increases just happen to go to health insurance companies.

mordant• 9 years ago

One word - immigration.

c0nducktr• 9 years ago

Two words - prove it.

mpweiher• 9 years ago

Reminds me of an article in Aviation Week recently bemoaning the lack of new pilots coming into the profession and saying how this was completely baffling to the companies involved.

A few paragraphs down they mentioned the starting salary at regional airlines: $26000.

I think I can solve your mystery

When the wage of the person responsible for 40+ lives and millions of dollars worth of equipment isn't enough to feed a family (many pilots are on food stamps) you aren't paying them enough. Never mind that they also have to pay for their own education and that includes several thousand hours of Pilot in Command time. Renting a plane is typically > $100/h. Which is why flight instructors are often cheaper than tennis instructors: the main benefit for the instructor is that the student pays for the plane.

And that's one of the main reasons why Sully said he can't recommend the profession to anyone.

Scaevolus• 9 years ago

By comparison, bus drivers in many metro areas start at over $50,000/yr before overtime. With overtime, they can make _significantly_ more.

And they get to see their families every day!

em3rgent0rdr3• 9 years ago

I think the low price can be justified because flying has been going to automation.

dx034• 9 years ago

Not really, you still need extensive training. Requirements have rather increased over the past years.

The reason why pilot salaries are low nowadays is because the job is so popular. It's a dream job of many so that airlines could access a pool of self-trained pilots (i.e. paid for aviation school with loans) for low salaries. This pool now seems to slowly exhaust so that airlines will have to start training their own pilots again at some point.

collyw3• 9 years ago

Have you flown any planes without a pilot recently?

skgoa3• 9 years ago

Yep, the crazy thing is that being a copilot in a regional airline isn't even an entry level job. In the US, you have to somehow manage to finance your pilot licenses AND 1500 hours of flying, before you can even apply to airlines.

And even if you make it that far into this career, being a copilot in a regional airlines sucks. It's not just bad pay, but also really bad schedules. Long days with short turnarounds in-between flights. Many young copilots even have an obscenely long commute to their first flight and back home after their last one. All for the hope of being picked up by one of the major airlines.

coryfklein• 9 years ago

A few paragraphs down they mentioned the starting salary at regional airlines: $26000

That may be the starting salary in some places, but keep in mind that median salary is closer to $100-120k. Starting pilots either are unaware of the longer-term salary, or that longer-term salary is still too low in comparison to other professions with similar characteristics.

bzbarsky• 9 years ago

but keep in mind that median salary is closer to $100-120k

Not at regional airlines. According to http://work.chron.com/average-salary-regional-airline-pilot-... $26k is typical entry-level, $55k is average once you get promoted to captain, and the top of the range is about $60k as of 2012.

If you get picked up by a major airline, the numbers look quite different, and the median in 2016 across all airlines in the US was about $128k according to https://www.bls.gov/ooh/Transportation-and-Material-Moving/A... so presumably a lot of people have in fact made the move from regional to major in the past. What the future prospects of that happening are is not clear.

Animats2• 9 years ago

Part of the problem is that people are much more reluctant to move for a new job, because job security is now so low. Also, moving to a town with one major non-union employer is like signing up for indentured servitude.

asah• 9 years ago

This is all temporary - as the fed raises rates, we'll finally get back to 'normal'. This is exactly the fed playbook.

nitwit005• 9 years ago

My observation in the US is that there is a pretty big gap in perception of how professionals or managers should be paid versus ordinary workers. You'll find people who would never consider paying workers more than minimum wage, and yet consider the bills from lawyers and consultants perfectly reasonable.

Part of it seems to be a general belief that some sorts of expensive professionals are better, much like how people assume pricey wine tastes better, but I suspect most of it's just class issues.

shados3• 9 years ago

Someone above mentioned it, but basically, for low skill/manual labor, there is a level at which you'll say "I can do it myself", or "I can hire some intern or random kid to do this". And that's the hard cap ofr those jobs. While you can represent yourself in court, it's probably a bad idea (and you can't legally do it for someone else, so you HAVE to cough up t he $$$).

On the other hand, I personally have a very high appreciation for high quality manual labor (eg: carpentry) and I'm always looking for the best money can buy in those areas....and it's impossibly hard.

Since no one else seem to value it, no one does it. Everyone's optimizing for cost. I had a very difficult carpentry job that needed to be done recently, and I went hunting for the best of the best, offering well over what a lawyer or software engineer would make. Crickets. It took over a year to find someone. Those people no longer exist since there's no market for it.

Animats2• 9 years ago

Because Republican state legislatures are keeping minimum wages down.[1]

[1] http://www.foxnews.com/us/2017/07/12/minimum-wage-hikes-by-c...

ge96• 9 years ago

I'm just glad I have a way out potentially as a developer. Starting to build up client base still far from being able to be self employed but I'm grateful to be aware/know where to look to learn.

I'm not a fan of my day job with regard to, regardless of their customer input (say they did a lot of business) I don't get a bump or tip or anything. No incentive to try harder also my day job any kid off the street can do so what can I say.

erikb2• 9 years ago

Getting a raise and bargaining for a starting pay, and offering a default pay for a job, these are three different things, I think.

Most people don't ask for raises, or draw no consequences from being mad about not getting a raise. So after a few generations companies adapted and simply don't offer raises anymore as default.

People who really want to make more money, still get more money. Just not in the same job. While working less in their current job they start to look for other jobs with better pay, and since they have a current job they can proactively bargain for the pay they want. If they don't get it they just don't switch.

And last but not least, but I hope at least here people have noticed that now we have a method called Start-up. That is a way to get a lot of raises in a very short time frame as well. The only requirement is the cruel real life fairness of having a growing marketshare.

So we have everything, non-increasing incomes for lazy people, regular raises by job switching from dedicated people, and fast-lane high-risers for people who can really take a risk.

And of course we also have a problem. But that problem has nothing to do with any of the three things (raises, job offer bargaining, default pay): We have more and more jobs that are automated and replaced by machines. If you have autopilots in airplanes that do a well enough job, you simply don't really need the pilots any more, for instance. I honestly don't know if we can find a solution for that, or if we are heading for another period like feudalism where only a small percentage of people actually have a good life.

But, well, as long as we don't talk about that problem we certainly won't resolve it.

linkregister4• 9 years ago

The opportunity to job hop is not as universal as you might think. Until fairly recently I also had the false impression that anyone could do it to achieve a pay raise. There are plenty of occupations and industries that preclude job hopping.

1. Company towns, heavy industries, monopsony; many regions have one large employer or customer offering a variety of jobs to the inhabitants. Think: auto workers, chicken farmers. There is nobody else in the region to buy their labor or product, so unless an individual moves, they cannot change jobs without retraining and/or liquidating their assets.

2. Ultra-specialists. There are many occupations where turnover is low and the total number of people in the field is low. Compensation may be high due to a scarcity of qualified applicants, but the overall number of positions may be low. Changing jobs in a region might be exceptionally difficult since there may only be a total of a dozen jobs for a given region. Example: speech pathologists, radiographers, elevator repairers.

3. Middle management. Once someone enters the ranks of middle management, job hopping can be destructive to a career. Instead, it is expected that a manager will move to different departments. A middle manager or company officer is expected to quantifiably add value to a company. If you look at the successful managers in tech, you will find most have only been managers at 2 or 3 companies in total, with a tenure of at least 5 years at each.

erikb2• 9 years ago

In theory yes, but in practice I think people who want to make a good amount of money don't work in these jobs, or at least not for long. For instance, you aren't born as ultra-specialist. You get there by dedicated work and the goal to stick to that kind of task. People who want to earn money know a little about a lot of different things.

About the middle management I can only suggest to read the Gervais Principle. They may be mostly the people who are not smart enough to get to the top and not socially skilled enough to job-hop easily enough.

xxSparkleSxx• 9 years ago

I don't know about that. My last job, awful awful company, flat out refused any semi-decent raises. 1.5% was a common yearly raise (only after we were bought out by an international pharma, prior 5% was pretty standard).

I asked for a large raise, 20%, but I had the numbers to back them up. For 1.5 years I completed 2x the work everyday as the average person in my department. I was pulled around for awhile before they refused and said they would evaluate at the next raise cycle...and I managed a 4% raise (which included a promotion).

It was pathetic. If I was in sales it wouldn't be a problem, but I didn't have the leverage so they screwed me over. I left a few months after and even a couple years later the company is in a downward spiral (they sold off the division I used to work in - guess fucking over all your employees and forcing all the competent ones to leave results in lower profits over the long term).

So, I think "people don't ask for raises" is a very dubious claim.

honestoHeminway2• 9 years ago

Its a consequence of all risks on the individual. You get a raise with the implied alternatives you can show up with - and to consider playing this poker game, you need to have no risky cards on your hand. No wife or children that can get sick, etc.

r0brodz2• 9 years ago

We will never move out of this situation until we repeal the de facto currency and go back to real money based on gold. We have had only legal tender since 1933. Lincoln got killed for printing Greenbacks. Kennedy was assassinated for exposing secret socities. We are under the rule of a fictional commercial entity incorporated in a land taken by war and therefor the laws of admiralty are the true rule of this land. The Fed, IRS and US CORP are Vatican/British entities. The world continues to be conquered by the Roman Empire. Lets get rid of US Debt Currency and move into real money. That's the real solution, a true independence. We are nothing more than a subsidiary of the IMF and WorldBank. If the people of US don't realize this basic truth nothing will ever change. The reality is that those who control currency are in power. Before you judge do some research on Puerto Rico and IRS. Also look at the US code itself. The creators use the loopholes (remedies) to remain in control.

logfromblammo3• 9 years ago

Buddy, I feel for you. I really do. I caught this kind of crazy about 20 years ago. But then I got over it.

Yes, a great many people are essentially ruled by the lies told by the rich and powerful. But ferreting out and exposing those lies won't do you a bit of good. The bullshit you are repeating here is likely to be spread and encouraged by those who stand to profit by increased consumer demand for gold, and for disaster preparation supplies.

You took the red pill, and now you think Zion is the real world. It isn't. It's the pressure release valve--the special program loaded to house "problem" residents of the Matrix. You're in an oubliette made of your own thoughts.

It just doesn't matter if the world has a secret emperor supported by a cabal of Illuminati. If you want to survive in it, you get a job or start a business that transacts in the commonly accepted currency, and you pay your taxes--not because they are just, but because you will get beaten, caged, or killed if you don't.

If you truly believe that those who threaten the system are assassinated by it, then who are you to escape that fate? You can play the game by the rules defined for it, even if they are not fair, or you can flip the game board off the table and get dogpiled into a bloody pulp by all the players who thought they had a chance at winning. You're not going to get anywhere by spending your whole turn whining about changing the rules. You'll just piss off the other players as the gamemaster waits you out.

The world is not fair. Knowing it is not fair does not make it more fair. Going back will not move you forward. The unethical asses of this world already know about gold, and have planned ahead to negate it as a threat to their influence. You would be far better off tossing out all the conspiracy theory, and trying to puzzle out some Etherium smart contracts that would obviate the kind of power one may wield by exerting private control over fiat money. Good luck.

nkurz• 9 years ago

This is a beautiful response, but would seem to indicate that truth is not worth pursuing, and that social reality is all that matters. Disregarding whether this particular conspiracy theory is true, do you not think (hope?) that knowledge of what is actually true can at least help to inform effective strategies for change? That a model that stays tight to reality can lead one to a better place than a black box that makes decent predictions and provides steady paycheck?

Shivetya• 9 years ago

so what are the chances that a significant portion of the population was being paid more than they are worth? Whether because of skill set or simply the industries are adversely affected by more competition?

there are certainly people getting raises, so is this limited to specific industries, regions, or other category? Is there a break out where raises are occurring versus where they are lacking?

anecdotally, personally I have no friends in my circle who made mention of no raises. poor raises sure, but that is always relative to expectations

randomdata13• 9 years ago

The most obvious answer seems to be that the workforce keeps growing relative to the demand for that work. Wage stagnation began at the same time the number of women in the workplace started to grow. While a corresponding increase in demand with the supply of workers would have kept incomes moving upward, women were actually already consumers. They had to eat, be sheltered and clothed, etc. even when men made up the vast majority of the workforce.

The rate of the growing female workforce itself started to stagnant around the 90s and 2000s, but a new worker had fully emerged on the scene by that point: The robot. It's a slight misconception that robots eliminate jobs. In reality, they compete for them just like people do. They are another worker in the supply of workers. And while robots bring new demand, as they didn't exist before, it is not proportional to what they can create like with humans.

And so, increasing supply over the rate of what increases to demand exist, and you get downward price pressure.

geezerjay• 9 years ago

The most obvious answer seems to be that the workforce keeps growing relative to the demand for that work.

Interesting, and very plausible as well. Please don't get me wrong, but you happen to have any source that supports that hypothesis? I don't doubt any of what you've said and I do believe you're on to something, but I would like to read more on the subject.

saint_fiasco3• 9 years ago

A popular book on the subject is The Two-Income Trap, by Elizabeth Warren.

hashkb• 9 years ago

Aren't you ignoring all the unfilled positions the article is suggesting would be filled if employers paid fairly?

randomdata13• 9 years ago

Not really. Demand, by definition, is the willingness and ability to pay the price to acquire what you are looking for. A job that doesn't pay sufficiently to attract people into the role is a job that was never part of the demand in the first place. Since the demand is not real in these cases, there is no additional demand pressure on the price.

Anyone can say they want to buy a new Ferrari for $10,000, but that does not mean Ferrari should get excited about a new customer. It's all imaginary.

RestlessMind• 9 years ago

women were actually already consumers

But what about extra discretionary income which would stimulate extra demand (another car, another vacation, another gadget, home services now that both partners are working)?

shados3• 9 years ago

A lot of the extra income is just going to housing.

randomdata13• 9 years ago

It appears that the additional income coming into the household largely went into the existing costs that the household already had. For instance, shelter. If every home only has one earner, shelter costs can only rise to the maximum a single earner can pay. But once households started having two incomes, the the second income helped place higher bids on securing a place to live and eventually you get to the point where you cannot live somewhere without having two incomes. In some cities today, we are reaching the point where you need three incomes (see: the robot).

FussyZeus• 9 years ago

It seems oversimplifying to say that robots are "just another worker." When women entered the workforce, they came with similar costs to their male counterparts; wanted breaks, expected time off, lunch break, commuting time, various facilities. Robots require...well, power. They don't need breaks or bathrooms, they don't even need to go home. Hell, if you really wanted to, you could run an entire auto plant with little/no climate control in complete darkness and the robots wouldn't mind one bit.

There's simply no competition between robots and humans, that's why I'm a firm believer that automation will take all the jobs and we need to figure out how to handle a post-work future before we start riots.

davidf183• 9 years ago

Like any other form of capital equipment, robots have other costs besides initial purchase and electricity such as maintenance and reprogramming.

Various forms of farm machinery such as combines automated farm jobs for the better. So true with robots in factories and artificial intelligence that replaces lawyers for standard contracts.

sharemywin4• 9 years ago

Except the article cites several examples of where demand isn't being met.

-Farmers in Alabama are fretting that crops may rot in the ground for a lack of workers to bring in the harvest.

-Despite high demand, home builders in Colorado are throttling back activity because they can’t find the workers to erect frames.

-An airline canceled flights because it couldn’t find enough pilots to steer them.

Those aren't demand problem but supply problems.

jdavis7033• 9 years ago

I was on an airline that could not find enough pilots at a low enough rate to fly the planes. That was Spirit Airlines, an ultra-low cost carrier. I don't mind small, hard seats and no snacks for a quick flight, so I thought I'd save the money. Well, it turns out that Spirit has one of the highest profit margins [0] of any domestic U.S. airline, yet they decided they'd rather cancel flights than pay pilots enough to show up [1] -- they'd even rather hand out $100 vouchers to all the affected passengers than pay the pilots more. On a flight of 50 people, that's at least $5000 they lost, not to mention the staffers they had to pay (baggage handlers, gate agents, etc) that didn't actually wind up being able to complete their jobs.

[0] https://www.dallasnews.com/business/airlines/2014/09/22/seve... [1] http://money.cnn.com/2017/05/09/news/companies/spirit-airlin....

lotsofpulp• 9 years ago

It's a combination, where the demand curve never meets the supply curve at an acceptable price for the consumer.

It could be due to being able to obtain a product cheaper from somewhere else due to lower labor costs (happens due to converging standards of living across the world), and it could also happen that there are alternatives, such as other jobs and/or social security disability or welfare that make doing undesirable jobs need an even higher price point to make it worthwhile.

s73ver10• 9 years ago

Well, kinda. Those are supply problems, but the supply is low because the wages are poor.

mason2403• 9 years ago

- Farmers in Alabama are fretting that crops may rot in the ground for a lack of workers to bring in the harvest.

The oil field boom in ND didn't have a problem getting skilled workers from across the country to live in tents because they paid them well.

They AL farmers are not worried about finding workers, they want to lowball American laborers so they can throw their hands the air and claim that they need a supply of immigrants laborers, which they can exploit.

MrFantastic3• 9 years ago

Are temporary field hands the future of the US economy?

Many construction workers can't move to high demand areas because they are financially locked into the areas they currently live.

Most planes could function with 1 pilot due to automation but regulations won't allow it.

caseysoftware• 9 years ago

I'd love to see how those demand areas line up with the high unemployment areas. I'd wager they're geographically far apart because other than the pilots, the rest don't take much training (days to weeks) to get up to speed.

In Austin, the unemployment rate is <3% and Texas as a whole is incredibly low. Since we're one of the largest population states with an unemployment rate well below average, I assume there are numerous smaller places with well above average unemployment.

reefoctopus2• 9 years ago

If you can't find workers, you aren't offering high enough wages. This is econ 101.

JPKab2• 9 years ago

Coloradan here who is having a home built currently, and oh yeah, I used to be a construction worker when I was in my early 20s:

The issue with the entire building industry is that they don't pay carpenters, electricians, etc enough. Period. They have been able to avoid paying enough by using what I refer to as "illegally imported labor" at below-market wages. (I like the term because the verbage puts responsibility on the hiring companies who are clearly exploiting un-documented workers)

Having worked in construction, I've seen what happened to the wages paid. Essentially the large home-building companies who build the bulk of homes in this country in single, large-scale subdivision builds have increasingly been able to lower the skill threshold for construction. This by itself would have lowered the barrier to entry for documented workers, and probably has a minor downward pressure on wages.

However, the lowering of the skill threshold also made hiring undocumented workers much more viable. I didn't have to speak Spanish to train guys to use a nail gun and a saw to do framing. I usually worked on high-end, custom homes for the wealthy. These jobs paid well, required a lot of skill, and were pretty much exclusively staffed by legal workers. However, at times, I'd have to find work with the big builders doing the giant subdivisions.

They paid shit, and were largely staffed with undocumented workers. In North Carolina where I worked, the bulk of these folks came from central America. McDonald's wages were literally higher than what these folks were paid. McDonalds doesn't hire illegals, but construction companies do. So this creates a very weird situation: Why would an American work a dangerous, hot, back-breaking job for a lower wage than McDonalds?

The local construction companies in Colorado were decimated in 2009, and many never came back. Now, the bulk of building here is being executed by national builders who are used to paying low wages, and there aren't enough undocumented workers to fill the jobs at these artificially low rates. The worst part is that the low wages have caused documented workers to not even BEGIN to pursue construction, and therefore they aren't learning the skills (in certain markets), which creates a long-term labor supply issue.

There is a very easy solution to this:

Make all construction companies and their sub-contractors use E-verify. But that will never happen because congress has two parties who both have interests in not doing this:

The GOP loves cheap labor while simultaneously saying they want to crack down (using completely unrealistic plans by design) on illegal immigration to appeal to the bigots in their base as well as the "law and order" crowd.

The Democratic Party views illegals as a source of votes once their kids are old enough. They ignore the fact that illegal immigration helped to break the back of unions in the meatpacking and construction industries because they have long-since replaced alignment with labor with racial identity politics.

Because of this, I'm going to pay waaaay too much for my house, the workers will be paid too little, the house will take too long, will be built somewhat poorly, and the suits running the building company will make a ton.

wmil• 9 years ago

Farmers in Alabama are fretting that crops may rot in the ground for a lack of workers to bring in the harvest.

This is a constant claim, but it's not really true.

Some of the crop will always rot in the field since all plants don't ripen at exactly the same time and it's only economical to do a certain number of harvests.

Farmers could always use cheaper labour, so they'll always complain about the price. But there's no real disaster.

The pilot problem is real, but it's entirely a result of airlines paying low salaries for the past 15 years or so.

BearGoesChirp• 9 years ago

Farmers in Alabama are fretting that crops may rot in the ground for a lack of workers to bring in the harvest.

Aren't they just investing? Not exactly like normal investments, but if they let some crops rot, they can use it as a corner stone for an attempt to keep their normal cheap labor flowing, which ends up earning them more money than just paying Americans enough to harvest the crops.

mdpopescu• 9 years ago

In economics, "demand" isn't just a word for "something I'd like". It's a technical term, meaning "what actually gets bought".

Farmers in Alabama fretting does not mean demand. Farmers in Alabama paying workers means demand.

To put it another way, me looking at a Ferrari in a store doesn't create demand for Ferraris. Me going to the store and buying one does.

Lagged2Death• 9 years ago

Wage stagnation began at the same time the number of women in the workplace started to grow ... The rate of the growing female workforce itself started to stagnant around the 90s and 2000s...

Have a look over here:

https://www.dol.gov/wb/stats/facts_over_time.htm

The US ratio of female/male employment experienced a strong long-term upward trend during and after WWII (1940s), and the absolute number of women working jobs in the US has climbed steadily right to the present day.

The modern era of wage stagnation relative to productivity started in the 1970s, somewhat before the strongest growth in the female/male employment ratio, and continuing even after that ratio flattened out.

http://www.epi.org/files/2013/ib388-figurea.jpg.538 http://www.epi.org/publication/charting-wage-stagnation/

...a corresponding increase in demand with the supply of workers would have kept incomes moving upward...

Or it could send jobs overseas to poor countries with low wages and little in the way of labor or environmental regulation.

autokad• 9 years ago

i think a large part is that companies are hoarding money and wealth goes there to die. if we stepped up pressure on companies to spend their money (one way or another), i think more jobs and higher wages would follow.

marcosdumay6• 9 years ago

The US has a government running a big deficit and a population increasing it's net credit. Someone has to hoard those debits.

Large companies are a bad place to concentrate money, but your entire government is working towards it.

kerbalspacepro2• 9 years ago

How does this answer the question the author brings up in the first paragraph?

An airline canceled flights because it couldn’t find enough pilots to steer them. Despite high demand, homebuilders in Colorado are throttling back activity because they can’t find the workers to erect frames. Farmers in Alabama are fretting that crops may rot in the ground for a lack of workers to bring in the harvest.

Robots can't do all those jobs, and yet the wages for those jobs haven't increased enough.

randomdata13• 9 years ago

Economics says that demand is a consumer's desire and willingness to pay a price for a specific good or service. Offering a job at a price below what someone is willing to do it for is not demand at all. It has no impact on price, which is a function of supply and demand.

The mistake the article makes is counting these jobs as demand, when they really are not demanding labour. They are no more jobs than me asking you to come clean my house for free. It's a serious offer: I will be quite happy to come have you clean my house for free. But, for all meaningful purposes of the phrase, I don't think anyone considers that a real job.

zelon88• 9 years ago

Lets not forget that most companies have improved their cost savings to the point where they are trying to keep wages down. Executives are immune though. I wouldn't be surprised to discover that most companies spend 90% of their payroll on 10% of their workforce.

DiNovi• 9 years ago

This is completely incorrect and I'm amazed you think any of this is accurate.

YPCrumble• 9 years ago

Sales is a science. The writer is doing a great job of categorizing "objections" to the sale. That's terminology that any trained salesperson should understand.

This categorization helps the salesperson do two things: - De-prioritize leads whose objections they're unlikely to overcome - Craft responses to objections they are likely to overcome and prioritize these leads

In this particular case they're unlikely to convince a soon-to-retire or luddite vet -- they should de-prioritize these, maybe put them in the CRM to ping in six months to see if anything has changed. They should also be aware that their target market doesn't include these vets, so if the proportion is high enough they might want to find a different market.

For the others, it seems they're already crafting responses to the objections - presumably they'll get a sale fairly soon if the market is big enough.

nulagrithom• 9 years ago

Wrong article?

MrFantastic3• 9 years ago

When healthcare premiums are rising double digits annually, there is no money to increase salary.

We have to decide a basic level of healthcare every Citizen is entitled too and if you want more, the individual pays for it.

Cutting taxes on the already wealthy isn't a stimulus, but putting $18k ( avg annual HC premium ) back into pockets the middles classes will stimulate the economy because they will spend it all.

Cutting taxes on the wealthy just slows the Velocity of Money.

djrogers2• 9 years ago

That sounds great on the surface (putting $18k “back” into middle class pockets), but where will that money come from?

Every example of universal healthcare I’ve seen so far pays for it with huge payroll and income taxes. Payroll taxes have a direct and demonstrable effect on wages and hiring, and income taxes would just wipe out the benefit.

The problem with your idea is that it doesn’t actually do anything to contain healthcare insurance costs. Those costs have risen dramatically faster under the ACA than before, and they were already going up quickly.

I’m not opposed to universal healthcare at all, but you can’t just hand-wave and make it ‘free’, and with those costs I don’t think you’ll see the benefits to wages you’re looking for.

jdavis7033• 9 years ago

You could try to implement a Piketty-style tax on capital. Of course, this would mean that the middle class gets lower retirement savings, but if we're living healthier and longer we can keep working longer. This, of course, assumes the bulk of the middle class wants to live healthier and longer, even if it means having to work harder.

wfo2• 9 years ago

Sure there are subtle implementation details, but let's not put the cart before the horse. The political and moral will to do it comes first, the details of how to work it out happens later. If we get to the point where the actual ruling class (not just the vast majority of Americans when polled) is willing to give in to the citizenry and give them universal healthcare and starts saying healthcare should be provided as a right to all Americans, there will be no issue getting the financial details worked out. They have an easy job; it's inherently more efficient (larger risk pool, no middleman), implementing even the expensive policies being proposed right now lead to savings of trillions. Though those savings are concentrated among the poor and middle class for whom health costs are huge and taxes are smaller, not senior vice presidents of health insurance companies . As it turns out in aggregate, it's not only already "free", it saves money.

MrFantastic3• 9 years ago

Costs are contained by limiting treatment options and have a limited formulary.

e.g. If you don't have the money a 75 y.o. doesn't get a heart transplant.

IMO if you don't have the money you aren't entitled to the best care but this discussion needs to happen and be debated.

Our current system encourages good money to be spent on lost causes.

tmaly2• 9 years ago

You have to also consider the money supply and creation of commercial credit in the system. If the currency was a true stable store of value, the savers would be rewarded. Over time, the value of their money would purchase more due to innovation and reductions in price.

Historically, before the Gold Reserve Act of 1933, the one ounce double eagle gold coins were valued at $20. You could buy a good suit with just one of those coins. Fast forward to the present, if you take a current double eagle one ounce gold coin that is produced today, you can still buy a good suit with it.

djrogers2• 9 years ago

I don’t know what kind of suit you could buy but I 1933 for $20, but I know that today 1200 is far more than you’d need for a ‘nice suit’ due to price reduction and globalization.

tmaly2• 9 years ago

my point was that you could buy a suit for the $20 prior to 1933 and with the same coin today still buy a suit. The currency was stable, so it protected a person's savings.

You hear all these horrible stories of elderly people having to choose between food and medicine. Prices keep escalating, and these elderly people live on fixed incomes.

louprado• 9 years ago

Perhaps the phrase "six-figure salary" has caused wage stagnation.

Once a manager, for example, hits their personal goal of "six-figures", they feel they have hit an important milestone. So they are content year after year to privately make $100,001 but publicly/subconsciously use the misleading phrase of "six-figures". A manager's salary is implicitly the upper bound of their subordinates' pay so the whole work-force suffers.

If the goal is inspire a higher paid workforce, let's stop with the "six-figures" vagueness and use concrete income milestones (e.g., $250k a year, $10k a week, etc.) instead.

jdavis7033• 9 years ago

I don't know anyone who's content to just make the same amount of money (at least those earning say less than $200k). That money usually starts going to things like a bigger house, fancier vacations, better schools for the children, nicer cars etc.

wfo2• 9 years ago

I've never heard of a manager who is content with $100,000 and does not immediately wish for the position a couple rungs up up on the ladder where they can make $150,000 or $200,000. Nobody is content with stagnant wages, management or labor, especially when costs are constantly increasing.

shams93• 9 years ago

A lot of employers try to offer so little for unskilled jobs that it costs more to commute to the job than you could make. Those jobs will go unfilled because no rational human is going to pay someone to be their employee even if they dropped out of high school most people can do enough basic math to know whether a job will cost more to commute to than they can make.

matt_wulfeck2• 9 years ago

That may explain unskilled labor, but what about "skilled" labor, such as plumbers and electricians? Huge shortage of these workers and they pay very well.

prostoalex3• 9 years ago

They track "average hourly earnings" which leaves out a number of non-monetary benefits, such as

* health + dental + vision insurance

* 401(k) matching

* ESPP

* other stock-based compensation, such as options

* number and flexibility of vacation days (i.e. if someone didn't get a raise, but got 5 extra vacation days, it certainly has value for them)

* free food, massage, yoga on premises, etc.

Tracking average hourly earnings also means that $1 annual salary CEOs such as Mark Zuckerberg or Larry Page are dragging down averages quite a bit. Every startup that pays sub-market salary in exchange for a generous options package is also dragging such average down.

s73ver10• 9 years ago

The vast majority of startups paying sub-market salaries are either going to fail, or be acquired in such a way that the workers don't see anything meaningful from their "generous options package".

And this article is about the broader labor market in general. Not just startups. And a lot of workers won't see any of those benefits that you listed.

davidf183• 9 years ago

The author has a degree in history. Perhaps it would be helpful to have an economist write an article about economics. I am not one, but at least have training in jobs that require analysis and not dogma.

1. Wages are just part of the overall benefit package per worker. Healthcare costs to firms have been rising dramatically and these higher healthcare costs (even as employers are having workers pay more out-of-pocket) have resulted in a flat overall wage payout.

2. What should be focused on is overall standard of living and not wages. In cities such as my own, NYC, but also SF, LA, SD, Boston, DC, the price of housing and commercial real estate (an increasing cost to businesses which can result in lower wages paid out) is caused because of "rent-seeking" that causes an artificial scarcity of land through politics that limit zoning density with the resultant higher proportion of income going towards housing costs. The rent-seeking benefits special interests which in this case are wealthy landlords such as Donald Trump.

3. Importing illegal immigrants holds down wage costs among the working class. Except for Trump, almost all Democratic and Republican Presidential candidates wanted to import illegal immigrants.

4. Exporting factory jobs to China and Mexico have also kept wage rates low.

5. The abuse of H1-B Visas have helped to keep wages lower among STEM workers. H1-B Visas are supposed to be used only in the case where there is no American with the skill set to fill the job. Many Democrats and some Republicans actually want to increase the number of H1-B Visas to further depress STEM wages. Trump campaigned against H1-B Visa abuse and spoke against Disney replacing 250 American IT workers with H1-B from India, a clear abuse of H1-B. Clinton did not speak out against H1-B Visa abuse.

6. Raising minimum wage by law to $15 per hour as the author suggested demonstrates to me that he wants to take this simplistic solution which ends up with higher costs to poor people who have to buy goods and services.

In summary, instead of focusing on wages alone, focus on standard of living much of which is poor because of rent-seeking which benefits wealthy landlords to the cost of everyone else. When focusing on wages, deal with the structural issues which are 1) increasing costs of healthcare and other benefits 2) increasing real-estate costs to businesses, 3) eliminating illegal immigrants 4) eliminating H1-B Visa abuse and decreasing the number of H1-B Visas.

Raising the minimum wage through law simply lowers the standard of living to the poor such as retirees on fixed incomes as the grocery store costs and other costs increase.

Terr_2• 9 years ago

Just watch what Trump does with H2-Bs, that's where he hires foreign dishwashers, gardeners, and waiters for his resorts.

If Trump is largely using the presidency as a stature and money making scheme without truly divesting from his private companies, I expect you'll see a big difference depending on whether a particular piece of policy affects his own wallet.

davidf183• 9 years ago

By far the greatest part of Trump's wealth comes from the "rent-seeking" that I mentioned. The sources are all political: 1) zoning density restrictions, 2) overregulation (e.g. in a city with mass transit and Uber, parking spaces, and lots of red tape to increase time of construction) and 3) overuse of historic landmark status. This rent-seeking is all implemented by cities run by Democrats.

Thus, it is Democrats who are most responsible for making Trump far, far wealthier than he would be without their assistance. This while adding to inequality and making rents for even small apartments very expensive.

Incidentally, in Japan in 2001 or so they passed a federal law which overruled local zoning density restrictions. The result is that in 2014 140,000 housing units were built in Tokyo compared with less than 90,000 for all of California and 20,000 for NYC.

jernfrost• 9 years ago

I think this is part of the equation about illegal immigrants which nobody in the US seem to talk about. They dont talk about all the companies exploiting illegal workers. We had a situation in Norway with exploited Polish workers. It was when Norwegian unions started targetting polish workers when things turned around. With polish info about workers rights, salaries and conditions improved. If you get unions more actively involved in the US you might not need big walls. Businesses are not going to hire mexicans if they cant pay them shitty salaries. If salaries and conditions are better americans are going to take those jobs instead.

Mankhool• 9 years ago

Not just America. In Canada too salaries have been flat forever. I work at one of our big three telcos and we were told last year that nobody is getting a raise for at least the next 3 years. Like, none of my costs of living are going to go up in the next three years either?

http://globalnews.ca/news/3531614/average-hourly-wage-canada...

philcyr• 9 years ago

In the industry I work in it's a skills gap. I work for an Industrial Electrical Contractor. We cannot find enough skilled electricians out there. The good ones have jobs and don't seem to look to change. We've had to start our own 5 year apprentice program because of lack of qualified candidates. A real problem is too many school counselors and society in general tell people you can't make a living doing skilled blue collar work.

TheAdamAndChe• 9 years ago

Well given the fact that many of those skilled blue collar jobs have either been outsourced or supplanted by illegal immigrants, and given the fact that their wages have either been stagnant or on the decline since the 70's, it makes sense that the schools would push the kids into careers resistant to those forces.

flatfilefan3• 9 years ago

No new markets where to expand. Since Russia got re-grouped with Putin, the Russian (and former USSR) markets started to close for US exports. Chinese had their own dynamics. The labor participation rate is at the 70-ties rate again. Go for the maiximal time period here to see the dynamics. https://tradingeconomics.com/united-states/labor-force-parti... Also check who's getting all the gold recently https://tradingeconomics.com/russia/gold-reserves

randyrand• 9 years ago

wow and slate has no understanding of basic economics.

take a macro class sometime.

justforFranz• 9 years ago

Labor has no pricing power in the USA and it's partially responsible for the candidacy of Donald Trump & Bernie Sanders - for what it's worth.

All the spigots for cheap labor in the USA are turned on full blast and have been increasingly so since the late 1970's when labor power was at its zenith. Those spigots are: free-trade agreements with other countries, automation, anti-union actions, flow of illegal labor, flow of legal immigrant labor, globalization.

It's the cause of social turmoil, but that's not much of a concern (in fact it's something to be harnessed and consumed) for the ruling (and chattering) classes.

Why Can’t Americans Get a Raise?

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