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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHow the American economy conspires to keep wages down
When unemployment goes down, wages are supposed to go up. Thats just supply and demand. Quite puzzlingly, though, this mechanism seems not to be working today. Unemployment stands at a modest 4%, but paychecks arent growing. Although todays is the best-educated workforce in history, employers just insist that workers need more training.
In other words, theyre gaslighting us. Meanwhile, over decades, employers have built and maintained a massive collective political apparatus to hold down wages. To call it a conspiracy would be only slight embellishment.
The symptoms of the problem are not hard to miss. In February, for example, the American economy posted its biggest one-month jobs gain in a couple years, but wage growth stayed stalled out. For months, economists and financial journalists have been puzzling over the question, as Bloomberg put it, of why the economy grows but your paycheck doesnt.
Economists will tell you that wages generally increase with productivity that youre paid in line with the value of what you do. This was credible from the end of the second world war to the 1970s, when productivity and hourly wages rose almost perfectly in sync. But according to research by the Economic Policy Institute, from the early 1970s to 2016 productivity went up 73.7%, and wages only 12.3%.
https://www.theguardian.com/commentisfree/2018/apr/13/american-economy-wage-suppression-how-it-works
greymattermom
(5,754 posts)How about plumbers, electricians, for example?
Hoyt
(54,770 posts)productivity increases are not so much dependent on workers/labor improving their skills/abilities anymore, but investment in productivity improving machinery, hardware/software, larger efficient operations, etc.
Fact is, the 50 - 70s are over. Bad political decisions don't help, but that's not the sole reason for this.
I don't know the answer, but part of it is increased taxes to pick up some of the slack with better healthcare, Social Security, etc. We are in for a rough ride, even when Democrats are in control. But, it will be a smoother ride with Democrats steering.
Ohiogal
(32,036 posts)And income inequality is a big problem in this country. That will have to be addressed, too.
Anon-C
(3,430 posts)Exactly this.