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louis c

(8,652 posts)
Thu Aug 2, 2018, 11:06 AM Aug 2018

Fed Chair Powell "Puzzled" by Lack of Wage Growth

<snip>Federal Reserve chairman Jerome Powell holds a news conference after a Federal Open Market Committee meeting, in Washington on June 13, 2018. The Fed Reserve raised a key interest rate by a quarter point, for the second time this year and seventh hike since 2015.

Halfway through a news conference Wednesday, the head of the world's most powerful central bank was asked a question weighing on the minds — and the checking accounts — of Americans everywhere:

When will people finally start getting meaningful pay raises?

Jerome Powell, the chairman of the Federal Reserve, had no satisfactory answer.

He called it a "puzzle." And then, as if measuring his words, he said he wasn't prepared to call it a "mystery."

Puzzle or mystery, the source of the consternation is this: The U.S. unemployment rate has dropped to a multi-decade low of 3.8 percent. A shortage of qualified people to hire has frustrated many employers who have complained that they can't fill job openings.<snip>

I know the answer to the puzzle. The Republicans have fucked workers by removing unions from the equation.

Link:
http://www.chicagotribune.com/business/ct-biz-weak-wage-growth-powell-fed-20180614-story.html

29 replies = new reply since forum marked as read
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Fed Chair Powell "Puzzled" by Lack of Wage Growth (Original Post) louis c Aug 2018 OP
It's due to the decline of unions Fullduplexxx Aug 2018 #1
He should tell the truth...it's not a bug; it's a feature. N/T lapucelle Aug 2018 #2
Why don't we try, I dunno, another tax cut for the wealthy? gratuitous Aug 2018 #3
Beat me to it - wage growth for the wealthy packman Aug 2018 #6
Exactly. shockey80 Aug 2018 #4
If you were born after 1980, all you've ever heard is that unions are bad. CrispyQ Aug 2018 #5
I have a T-shirt that says that. shockey80 Aug 2018 #7
It's one of the great mysteries of the universe dalton99a Aug 2018 #8
Just like the tide - 'the tide comes in, the tide COLGATE4 Aug 2018 #13
How about an "enigma"? brooklynite Aug 2018 #9
A great enigma eluding economists throughout the ages dalton99a Aug 2018 #11
Not just busting unions. Lobbying: bribing, cheating--Rich Republicans librechik Aug 2018 #10
With the lack of any organized pressure to increase wages.... Adrahil Aug 2018 #15
That's odd RhodeIslandOne Aug 2018 #12
Exactly. It's not a puzzle. Adrahil Aug 2018 #14
I would argue the stock market plays the largest role mythology Aug 2018 #16
Unions have been declining for decades NewJeffCT Aug 2018 #17
As you can see by the chart, you are not correct louis c Aug 2018 #20
also from the BLS NewJeffCT Aug 2018 #22
Thank you for making my point louis c Aug 2018 #24
Health care premium increases are probably eating up a lot of it. Ron Obvious Aug 2018 #18
If we ever adopt policies that address GREED ooky Aug 2018 #19
How About We Look RobinA Aug 2018 #21
Fire Him ProfessorGAC Aug 2018 #23
He is Betsy Devos incompetent. He is just playing dumb. applegrove Aug 2018 #27
Unions and the minimum wage... Wounded Bear Aug 2018 #25
When workers fight inflation by not getting raises, rich people don't have to with a tight money pol applegrove Aug 2018 #26
Age old corporate promotion of labor oversupply to drive down wages empedocles Aug 2018 #28
When there Are No Unions There Are Few Good Paying Jobs dlk Aug 2018 #29

gratuitous

(82,849 posts)
3. Why don't we try, I dunno, another tax cut for the wealthy?
Thu Aug 2, 2018, 11:08 AM
Aug 2018

See if that makes any improvement in wage growth.

CrispyQ

(36,499 posts)
5. If you were born after 1980, all you've ever heard is that unions are bad.
Thu Aug 2, 2018, 11:18 AM
Aug 2018

A bumper sticker I saw once:

The Labor Movement: The folks who brought you the weekend.



As to the "shortage of qualified people," in tech, they list every fucking skill set possible & want to pay $18 an hour. You'd have to have 30 years experience to have all those skills, but if you actually have 30 years experience, you're too fucking old to even get an interview. $18 an hour isn't even $40k a year. American companies don't want to pay for talent. That's the problem & why they don't want unionized labor.

librechik

(30,676 posts)
10. Not just busting unions. Lobbying: bribing, cheating--Rich Republicans
Thu Aug 2, 2018, 11:39 AM
Aug 2018

have spent billions over the last century to avoid paying workers and trying to turn the US back to a plantation economy.

They are Traitors and despicable people in general.

 

Adrahil

(13,340 posts)
15. With the lack of any organized pressure to increase wages....
Thu Aug 2, 2018, 12:19 PM
Aug 2018

Corporations will resist doing so....

Some salaries will increase.... but in my experience, many companies would rather run short-handed than increase wages significantly. to make the hires they need. For example, there is a factory close to me that wanted to hire master welders for $14/HR. That's crazy. They got a few takers, but they rand WAY short-handed for a year before raising the wage to $19/hr. And even that is WAY below what the going rate. But the goal is to reduce the going rate, even for a skilled worker, like a master welder.

 

Adrahil

(13,340 posts)
14. Exactly. It's not a puzzle.
Thu Aug 2, 2018, 12:05 PM
Aug 2018

Republicans and their dupes have sought to systematically dismantle organized labor. Their reasoning was that unions result in unrealistically high wages and benefits and that this was/is leading to the failure of businesses.

It seems obvious to anyone looking on that the their goal, then, was to suppress wages and benefits. And it has worked! Cpmanies are profitable. In the absence of any organized effort to direct some of those profits to the pockets of workers, the profits have, as they are wont to do, found their way to the pockets of CEO's and share holders.

It's not a bug, it's a feature!

Democrats need to start LOUDLY asking why wages are not going up.... and then provide the answer: Because this is always what the GOP intended with its anti-labor efforts.

 

mythology

(9,527 posts)
16. I would argue the stock market plays the largest role
Thu Aug 2, 2018, 12:42 PM
Aug 2018

Companies feel like they have to maximize this quarter's earnings and only think short term. Instead of investing in their employees as a long term resource, it's about how cheaply they can operate today. Or how much illegal things they can get away with like Enron or more recently Wells Fargo.

NewJeffCT

(56,828 posts)
17. Unions have been declining for decades
Thu Aug 2, 2018, 01:11 PM
Aug 2018

with the biggest drop being in the 80s with Reagan and then Bush Sr.

However, household incomes at almost all levels rose under both Reagan in the 1980s and Clinton in the 1990s. They flattened under both Bush Jr and Obama, though ticked up a bit at the end of the Obama administration.

If the decline in unions was the driving force behind poor wage growth, it would have affected things more in the 80s and into the 90s than in the late 90s and into the 2000s.

The biggest problem in wage growth is that we have done nothing major for infrastructure in the country since before Reagan. Early in the Bush Jr years, economists reported that the US need somewhere in the neighborhood of $3 trillion in infrastructure improvements/upgrades to get the US economy ready for the 21st century. Several years later, we get the stimulus package from Obama that had maybe 1/10 or 1/8 of that recommended amount for infrastructure.

If we had put the recommended money towards infrastructure, it would have created several million well paying blue collar and middle class jobs in construction, building & repairing bridges, roads, railways, airports, dams, etc as well as improving our electrical grid, water supplies, etc. And, these programs don't have overnight - they take years to complete them all, so people would have had steady jobs for 6, 8 or 10 years or more.

 

louis c

(8,652 posts)
20. As you can see by the chart, you are not correct
Thu Aug 2, 2018, 02:10 PM
Aug 2018

The number of people in unions in 1983 was 2 and half times the number in 2016.

The linked chart shows a steady decline through the years, but the wages were healthier when there were more unions than when there were less.

Average, non-college educated workers can not bargain individually. In order to have good wages, family sustaining benefits and a seat at the table in their work place, only unions and collective bargaining can achieve that. Any other smoke screen bullshit just gets people to lose sight of the ball. Generally, every state with strong unions have better living wages and benefits than those without. That's just a fact

Link;
https://www.bls.gov/opub/ted/2017/union-membership-rate-10-point-7-percent-in-2016.htm

NewJeffCT

(56,828 posts)
22. also from the BLS
Thu Aug 2, 2018, 03:02 PM
Aug 2018
union membership declined from 17.7 million in 1983 to 14.6 million in 2010.

A decline yes, but not a huge one. There was a huge dropoff in the first few years of Reagan, though (81 and 82) that preceded the decline

https://www.bls.gov/news.release/union2.nr0.htm

And, you can see from this chart, the income in the middle increased right at the beginning (late 60s), then was flat in the 70s, increased a little bit in the 80s, then had a bump in the mid to late 90s under Clinton, decreased under W and was flat for Obama until the last few years.



https://www.advisorperspectives.com/dshort/updates/2017/09/19/u-s-household-incomes-a-50-year-perspective


 

louis c

(8,652 posts)
24. Thank you for making my point
Thu Aug 2, 2018, 07:52 PM
Aug 2018

As unions decreased in density, the middle class shrunk. A small bump during years in which the remaining unions got a favorable Labor Board and friendly administration under Clinton, but still suffered under a Republican controlled congress on legislation. Decreased again under Bush and small bump under Obama and Dem congress for 2 years. But, the trajectory of wages for middle class and low wage earners, as you have shown here, is downward as unions decreased in density.

It's really is not that complicated. Strong unions, strong middle class. Weak unions, weak middle class.

I live in Massachusetts. Strong Unions, Strong middle Class. See, quite simple.

 

Ron Obvious

(6,261 posts)
18. Health care premium increases are probably eating up a lot of it.
Thu Aug 2, 2018, 01:33 PM
Aug 2018

Same was true during the internet boom times of the nineties as well, btw. Incredibly low unemployment rates, but virtually no wage growth.

ooky

(8,926 posts)
19. If we ever adopt policies that address GREED
Thu Aug 2, 2018, 01:59 PM
Aug 2018

we might start to move the needle on wage growth. Not exactly a mystery. Nor part of the Republican platform.

RobinA

(9,894 posts)
21. How About We Look
Thu Aug 2, 2018, 02:10 PM
Aug 2018

at how many under employed people we have rather than just assuming that the low unemployment means no one’s looking for a job and needs incentives to move.

As far no no qualified people... I’m not buying it. Job hunting today means meeting 25 requirements that a potential employer has decided are essential in order to hire a person that requires no training whatsoever. Most entry level jobs today could be taught to a high school graduate.

ProfessorGAC

(65,138 posts)
23. Fire Him
Thu Aug 2, 2018, 03:24 PM
Aug 2018

He clearly does not have the expertise required to understand the already analyzed data regarding the overall cost of off-shoring jobs.

He doesn't have to do any work. He has access to databases full of peer reviewed econometric papers.

If this is a "puzzle", he's incompetent.

Wounded Bear

(58,692 posts)
25. Unions and the minimum wage...
Thu Aug 2, 2018, 07:54 PM
Aug 2018

We used to get MW increases about 8-9 times per decade. Shit was pretty good back then. We've had what, two increases this century?

empedocles

(15,751 posts)
28. Age old corporate promotion of labor oversupply to drive down wages
Thu Aug 2, 2018, 08:03 PM
Aug 2018

think old Robber Baron political control, child labor, wide open immigration, industrial 'automation'

Now, corporate political control, promotion of automation, many green cards, back door immigration, etc.

dlk

(11,575 posts)
29. When there Are No Unions There Are Few Good Paying Jobs
Thu Aug 2, 2018, 08:45 PM
Aug 2018

Corporations and Business owners won’t raise wages unless they have to; one of the many reasons strong unions are critical for a thriving middle class.

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