Wednesday, July 18, 2018

WAGES - 2018

I can understand the plight of the white male wage earner;  They feel that the Democratic Party shows too much favoritism to women, minorities, and gays so they shifted to the Republican Party even though they know that the Republican Party feels they are overpaid.

They have tried to take over the Republican Party with which they are more emotionally attuned, but their leader - Donald Trump - has said on at least two occasions that he feels the American worker is overpaid.  They are capable of feeling he didn't mean it.

The results are, however, that the average hourly wage growth is poor (see figure)r and is eaten up by inflation, though inflation is unusually low.  It is true that the white laborer shifted long before the economic Armageddon of 2008-2009, strangely they didn't blame the Republican Party for the steep decline in their wage gains from it.

Though the Democratic Party emphasis is on women, minorities, and gays (who feel that the Democratic Party hasn't done enough for them.), the white male laborer would have still benefitted from the increase in the minimum wage the Democratic Party would have instituted if they were in power that would have sent a ripple of increasing wages up the scale.  As it was, wages began a climb again in 2013 and got above 2% in 2014 and have averaged 2.6% since (not adjusted for inflation).*

Democrats would also have given a higher priority to an infrastructure program.
And of course, Democrats offered an infrastructure program as did Trump.  The white workers should have known that their best hope for such a program would be with the Democrats because Republicans haven't been for that type of thing.  Sure enough, infrastructure came in third priority in the Trump programs and probably will never be gotten to.  An infrastructure program now would generate good wages because of the low unemployment.  The white male worker opted to vote against their economic best interests.**

Perhaps lastly, workers wages have declined with the decrease in unionization.  For all the faults of unions, they are the only hope for workers in negotiations on wages.***

It seems to me that workers who were so mad about things prior to the 2016 election, now are remarkably understanding and things are probably going to get even worse as tariffs ease in.  Interviews I've heard on TV show people saing they understand why they have to be laid off.

(Click on figure to enlarge)

Worker pay in the second quarter dropped nearly one percent below its first-quarter level, according to the PayScale Index, one measure of worker pay. When accounting for inflation, the drop is even steeper. Year-over-year, rising prices have eaten up still-modest pay gains for many workers, with the result that real wages fell 1.4 percent from the prior year, according to PayScale. The drop was broad, with 80 percent of industries and two-thirds of metro areas affected.****
.................................................................
The answer is, largely, in the companies' coffers. Businesses are spending nearly $700 billion on repurchasing their own stock so far this year, according to research from TrimTabs. Corporations set a record in Q2, announcing $433 billion worth of buybacks — nearly doubling the previous record, which was set in Q1. ****
Complacency is not with the white working class alone.  Farmers, for example, are feeling the bite from President Trump's tariff war, but even though many farmers admit to greatly decreased profits (e.g. soybeans), they still say they will vote Republican. (https://www.cnbc.com/2018/07/18/trump-tariff-policy-affects-pennsylvania-amid-house-midterm-elections.html)

*https://www.marketwatch.com/story/whats-the-matter-with-wages-2018-05-09
** http://stopcontinentaldrift.blogspot.com/2017/09/doing-something-for-fears-and-concerns.html
*** https://www.huffingtonpost.com/2013/09/18/union-membership-middle-class-income_n_3948543.html
**** https://www.cbsnews.com/news/worker-wages-drop-while-companies-spend-billions-to-boost-stocks/
https://www.washingtonpost.com/opinions/wages-arent-rising-these-theories-could-explain-why/2018/07/11/eeb938f4-8529-11e8-8f6c-46cb43e3f306_story.html?utm_term=.8df7340df90a

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