Tag Archives: Real Wages

Three Strikes, You’re Out! By Bill Bonner

Workers of the world are getting poorer in real terms (purchasing power after inflation) for the first time this century. From Bill Bonner at bonnerprivateresearch.com:

More on the government’s middle class massacre…


Bill Bonner, reckoning today from Baltimore, Maryland…

It looks like the post-Thanksgiving shopping binge was not nearly as successful as hoped. Here’s The Wall Street Journal:

Sales at bricks-and-mortar stores over Thanksgiving weekend fell short of prepandemic levels and were behind last year’s totals, another sign that Black Friday is losing its status as the crucial kickoff to the holiday-shopping season.

“It used to be people would wait in line from midnight for the stores to open at 4 or 5 a.m….”

What happened? 

Hot off the press is a report from the UN’s International Labor Organization. It tells us that for the first time this century, workers of the world are getting poorer:

This year’s ILO Global Wage Report… shows that, for the first time this century, global real wage growth has become negative while real productivity has continued to grow. Indeed, 2022 shows the largest gap recorded since 1999 between real labour productivity growth and real wage growth in high income countries. While the erosion of real wages affects all wage earners, it is having a greater impact on low-income households which spend a higher proportion of their disposable incomes on essential goods and services, the prices of which are increasing faster than those for non-essential items in most countries. 

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It Ain’t So, Alan! Why Greenspanian Central Banking Is the Mortal Enemy of Capitalist Prosperity, by David Stockman

By David Stockman’s calculations, US unemployment is 40 percent. From Stockman at davidstockmanscontracorner.com via lewrockwell.com:

We can thank bubblevision and the Maestro himself for a splendid reminder today that Greenspanian central banking is the greatest menace to capitalist prosperity ever invented. This was made abundantly clear by his pronouncement on CNBC regarding the current labor market:

Tightest labor market I’ve ever seen.” – Greenspan on @CNBC

As an empirical matter, of course, that’s rank nonsense – and is among the stupidest quips the Maestro has ever uttered. That’s because the law of supply and demand dictates that if the labor market is actually the tightest since Greenspan began his career in the 1950s, wage rates should also be rising at the highest rate ever.

In fact, at 2.8% year-year-over year for September 2018, nominal wage growth (red line) is the lowest it’s been since the late 1960s; and in real terms, the story is even worse.

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A Tale Of Two Graphs——Why Bubble Finance Will Fail, by David Stockman

From David Stockman, at davidstockmanscontracorner.com:

On Friday the BLS reported, among other things, that full-time employment in April had dropped by 252,000 from the prior month and that the weekly earnings of production workers had risen by the grand sum of 67 cents (0.1%) before inflation and taxes. But why should still another confirmation that the main street job market is dead in the water stop the robo-traders from another romp higher?

In fact, this incongruous spectacle of dead wages and soaring financial assets has been going on for several decades now——a transparently obvious trend obfuscated by the unrelenting recency bias of the MSM and the authorized Wall Street/Washington narrative. So let Friday’s incongruous stock market rip serve as a portal into the ugly interior history of how central bank bubble finance has fostered an existential crisis in what remains of American capitalism.

On the main street side, this isn’t a matter of sluggish recovery from a mysterious financial crisis that arrived, apparently, on a comet from deep space in September 2008. Alas, for three decades running now, the constant dollar weekly wages of full-time workers have been flat as a pancake.

And let’s be clear. We are not talking here about after school jobs held by quasi-perpetual students, the meager pay of moonlighting moms or the episodic work gigs of society’s tens of million of loosely attached drifters.

To be sure, the ranks of these marginal job holders have become immense according to the Social Security Administration’s most recent authoritative data—– and it is “authoritative” compared to most of Washington’s statistical mill flotsam because its based on the payroll records of millions of employers who generally do not withhold taxes from ghosts. To wit, there were about 50 million low wage job holders (under $15k/year) who as a group earned an average gross pay of just $6,000 in 2013. So unless there is wholesale violation of the minimum wage laws, upwards of one-third of the US labor force of 155 million is working about 15 hours per week at the lowest lawful pay rate per hour.


To continue reading: A Tale of Two Graphs

See also “Crisis Progress Report (7)-Carry On!” SLL, 5/12/13