Real wages are falling faster than ever

Real wages are falling faster than ever

Be afraid. Be very afraid. If Trump’s trade wars heat up inflation, real wages could plummet.

Here is an article from Harvard Business Review which examines the long-term trends in the real wage decline, with explanations and nuances. See the comments section for additional insights.

6 thoughts on “Real wages are falling faster than ever

  1. Bob, while that may (or may not) be true in high-wage industries like tech and banking, in the low-wage agriculture and construction industries, it isn’t.

  2. And if his immigration policies work to limit influx of lower wage workers, they could go up. Right?

    1. OK…let’s follow that through:
      1. low-wage workers go away
      2. The jobs they held still need to be done (landscaping, picking produce, etc)
      3. Those jobs go empty until wages are increased (probably a lot…these are arduous jobs!) to attract other workers
      4. Increased costs are passed along to consumers
      5. Prices go up
      6. Inflation increases

      1. So we should be happy that wages are declining long-term? After all:
        1) lower cost cab passed on to consumers as price cuts
        2) prices go down
        3) inflation decreases

        Or do we accept a relatively small bump in inflation that is spread across entire economy rather than concentrate the wage decline at the lowest income levels?

        1. Nothing personal, Ron, but … you appear to be suffering from some sort of conservative fantastical delusion, i.e. “passed on to consumers as price cuts.”

          Perhaps that happened once, perhaps even in my lifetime. But not recently – at least not on a large scale within western economies. Those “savings” are, almost, exclusively passed to shareholders now, in the form of buybacks, dividend increases, or similar. It’s only almost because if they aren’t passed along to shareholders, they are pocketed by the board and it’s membership.

          Please explain how share buybacks and increased dividend payments benefit any but the owners of the company in question?

  3. Here is a great article from Harvard Review from Oct 2017 explaining the real reason wages are what they are. It has been a gradual decline for 40 years! It also affects the uneducated more than the educated when you see that the 4 year degree people has seen their wages go through the roof!

    Easy to make statistics meaningless!

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