Why aren't wages rising faster?

[cronewitch]

news.yahoo.com/why-arent-wages-rising-faster-204004291.html

I remember getting raises as much as 10-27% but other years zero or very tiny raises. Now averages don't go up much at all what reason do you see?

I see a surplus of educated entry level people who don't expect to make much so pay them $15 and they compare to friends making $10 and think they did good. Some are those of us boomers who retired making top dollar are replaced by someone 40 years younger who needs to grow into higher pay. Some are young people and SAHP who have no education entering the work force part time making very low pay pulling down averages few offered 40 hours a week that was common when I was young. Some seems to be expectations so if you are making 30K you don't think you will get much increase ever so don't even ask for more and those waiting for jobs will take it for less so demanding more isn't reasonable.

[Deleted]

I think much of salary increases is going to increased health insurance cost in many cases.

[mroped]

Wages SHOULD rise faster!
It is necessary, it is a must given today's prices on anything from bread and milk to vehicles and housing.

In our area- central Pa- minimum wages are paid just in a few places. I believe even WalMart pays more than that. Nonetheless not enough, not in step with the prices, with the increases that had occurred in the last 15-20 years.

When the fuel prices started jumping in the early 2000, all prices in stores and such, just skyrocketed. Everybody blamed it on the fuel prices.
Now, fuel prices are low but I'm yet to see a price decrease!

Minimum wage should not be "the wage" as in this is all you are getting. It should be paid only for a short period like training or probation period and would be acceptable to kids/teenagers for a summer job.
Minimum wage also should be enough to cover the basics for ones existence. Unfortunately it is not and the guilt/fault lies with both sides: employer and employee.
The employer seeks higher profits, the employee doesn't care typically about his/her job.
The employers have gotten ever so greedy while the employees lost all self respect and have no concept of self worth or pride.

The general thought that the employee has nowadays about his job is "why should I care? They aren't gonna pay me any better! I'll put in my hours and go home."
 
Ofcourse this is a generalization and is not valid for each individual. Some individual try hard, do their job correctly and constantly but once they are overlooked and not encouraged, they lose faith and fall in the same pattern with everybody else: not care!

It is a vicious circle and I could keep ranting forever about it.

You stated that are so many college graduates that work for low wages. Maybe they do that because they can't find a job in their field of expertise or maybe they barely graduated and nobody would hire a 2.01 GPA

For our area, an appropriate minimum wage based on COL should be somewhere arround $12/hr provided that health coverage is available at no expense. Also that would be based on an average of 2000hr a year or 40 hrs a week.

My schedule, given the nature of my business allows for about 13-1400 hrs a year.
If I hire someone in the spring it is almost guaranteed that the winter will be covered by unemployment. Some don't like the idea so they keep on looking until they find something for less money but year round.
Sometimes, lower wages are a choice not a necessity. Rarely but it does happen.

[Deleted]

Everywhere I have worked prior to my current company they kept yearly merit reviews slightly lower than inflation and were also bringing in entry level people at as close to the bottom of the wage scale for the position as possible.  It is very difficult to get real wage growth unless you job hop to a different company, even promotions at your current company you are likely to get short changed.  Like Oped said I do think health insurance increases are a big part of the equation along with offshoring of production and technology lowering the demand for employees.

With all the doom and gloom it is still very possible to go into a company at an entry level position and to wow them to rise quickly through the professional ranks.

[NastyWoman]

Feb 10, 2016 18:56:28 GMT -5 oped said:

I think much of salary increases is going to increased health insurance cost in many cases.

I think that is what companies love to blame. However, I can read and do some basic math so I recognize during the annual enrollment period that while the cost of healthcare has gone up the percentage of employer contributions has gone significantly down...

[Deleted]

Feb 10, 2016 19:26:21 GMT -5 NastyWoman said:

Feb 10, 2016 18:56:28 GMT -5 oped said:

I think much of salary increases is going to increased health insurance cost in many cases.

I think that is what companies love to blame. However, I can read and do some basic math so I recognize during the annual enrollment period that while the cost of healthcare has gone up the percentage of employer contributions has gone significantly down...

That could also be possible. I think keeping health insurance tied to employment helps keep these things confusing.

[phil5185]

A major cultural shift from manufacturing jobs to service jobs has a big effect.  Years ago, a big part of the workforce was manufacturing - machinists, punch-press operators, lathes, milling machines, metal forming machines, castings, etc.  Those jobs are gone, replaced by service/retail jobs.   Most of us don't even know a machinist these days, or an apprentice machinist. In inflation adjusted numbers, those jobs paid $40/hour. The service/retail jobs pay about half that.

The service jobs cannot be off-shored, they stayed in the US.   But many (most?) of the manufacturing jobs can be off-shored.  The Unions were a big part of driving the manufacturing jobs away. The steel mills went first, then mining,  autos, and so on. The strikes and the demands made US Labor too expensive.

[wvugurl26]

You know I used to think unions drove up prices, etc. And then WV just became a right to work state. Major immediate change at construction sites and not a good one. Safety violations out the wazoo. I doubt that building is still standing in 50 years.

[Ryan]

Big businesses getting bigger and corporate profits of those big businesses are growing, meaning current workers and workers that lost their jobs to outsourcing getting schlonged.

[Deleted]

People don't get raises as much because we live in a culture where we fetishize business owners  and describe greed as good.  If some business owner gets rich paying his workers crap wages, we as a culture admire him and talk about the workers as crap because they can't demand better.

[gregintenn]

If owning a business makes you rich, and assuming you guys want to be rich, why don't you work for yourselves?

[Deleted]

Feb 10, 2016 21:48:43 GMT -5 gregintenn said:

If owning a business makes you rich, and assuming you guys want to be rich, why don't you work for yourselves?

How many billionaires do you think got rich without specific laws that helped them get rich that are not free market laws?  Trump had eminent domain laws.  Mark Cuban had tax money buying his sports arena as did every other billionaire who owns a sports team. Buffet got businesses who owed him money bailed out by government. So we taxpayers covered his ass when he lost.

[gregintenn]

Feb 10, 2016 21:53:57 GMT -5 @hickle said:

Feb 10, 2016 21:48:43 GMT -5 gregintenn said:

If owning a business makes you rich, and assuming you guys want to be rich, why don't you work for yourselves?

How many billionaires do you think got rich without specific laws that helped them get rich that are not free market laws?  Trump had eminent domain laws.  Mark Cuban had tax money buying his sports arena as did every other billionaire who owns a sports team. Buffet got businesses who owed him money bailed out by government. So we taxpayers covered his ass when he lost.

Why couldn't someone else do the same things instead of complaining about the ones who did?

I honestly don't give a damn about becoming a billionaire myself.

[Deleted]

Feb 10, 2016 21:56:17 GMT -5 gregintenn said:

Feb 10, 2016 21:53:57 GMT -5 @hickle said:

How many billionaires do you think got rich without specific laws that helped them get rich that are not free market laws?  Trump had eminent domain laws.  Mark Cuban had tax money buying his sports arena as did every other billionaire who owns a sports team. Buffet got businesses who owed him money bailed out by government. So we taxpayers covered his ass when he lost.

Why couldn't someone else do the same things instead of complaining about the ones who did?

I honestly don't give a damn about becoming a billionaire myself.

because the ones who did it are thieves.

[gregintenn]

Feb 10, 2016 22:00:31 GMT -5 @hickle said:

Feb 10, 2016 21:56:17 GMT -5 gregintenn said:

Why couldn't someone else do the same things instead of complaining about the ones who did?

I honestly don't give a damn about becoming a billionaire myself.

because the ones who did it are thieves.

...but it was legal thievery, no?

Guess who gets a cut of that.....that's right, politicians! There's another get rich quick scheme nobody bitches about very much.

[Wisconsin Beth]

I think some companies regard their workers as easily replaced. Dh has been watching his company hire people straight out of college, at a low salary (not hourly) wage. They get some experience, figure out they going to get small raises and go elsewhere after a couple of years. I don't blame them.

[beergut]

Feb 10, 2016 21:53:57 GMT -5 @hickle said:

Feb 10, 2016 21:48:43 GMT -5 gregintenn said:

If owning a business makes you rich, and assuming you guys want to be rich, why don't you work for yourselves?

How many billionaires do you think got rich without specific laws that helped them get rich that are not free market laws?  Trump had eminent domain laws.  Mark Cuban had tax money buying his sports arena as did every other billionaire who owns a sports team. Buffet got businesses who owed him money bailed out by government. So we taxpayers covered his ass when he lost.

 You can bitch about the others, but you're dead wrong about Mark Cuban. The city of Dallas and taxpayers helped fund the AA Center, that is true, but that deal was made by Ross Perot, Jr, who bought the Mavericks expressly for the purpose of doing the real estate deal that would become the new arena. 

Cuban made his money by figuring out the technology to broadcast the radio (specifically sports media, like basketball and football games) live over the internet, then selling his company (broadcast.com) to Yahoo. He paid $285 million to buy the Mavs, and people made jokes about scalping being illegal in Dallas, because they thought Perot ripped him off. 

The money the city provided for the new arena came from taxes on hotels and car rentals, so mainly tourists. Cost overruns on the arena were paid for by Cuban. 

Since 2001, the first season of the AAC, the Mavs have a sellout streak over 600 games long, including playoffs. Cuban worked to make the team exciting to watch, and spent money to build a winner. Mav fans were rewarded with an NBA championship in 2011. Fans have rewarded Cuban by constantly showing up to games.

The team Cuban bought for $285 million in 2001 is now worth an estimated $1.4 billion, so they've almost quintupled in value in 15 years. 

Mark Cuban isn't a thief, he's just a smart person who figured out a way to build a better mousetrap, made a fortune selling it, and now has fun running a sports franchise. 

As long as you convince yourself that the 'evil rich' made their money through 'thievery', you don't have to question why you haven't done better for yourself. 

[Deleted]

Feb 10, 2016 22:37:51 GMT -5 beergut said:

As long as you convince yourself that the 'evil rich' made their money through 'thievery', you don't have to question why you haven't done better for yourself. 

Not everyone who dislike the evil rich are jealous.  When I question why I haven't done better, the rich never are part of that answer.  I have made my fair share of poor choices in life and have been gifted more then I have deserved.  I count myself very fortunate when it comes to money and many other things in my life. 

None of that has anything to do with billionaires stealing money. And Mark Cuban aside, most stadiums are built so that  billionaire sports owners have a place for their business to do business.

[Shooby]

  There are no jobs.  Carrier (hvac, ac, heating) just announced they are sending 1400 jobs to Mexico.  I don't see anyone's income rising.  I see a lot of UNDER employed people.  People who are part time or less than 40 hrs who aren't getting benefits, etc and struggling to get by.  Obama can spin his numbers from the White House and pretend but we can all see our own economies.  
  As for businesses, what about TPP and NAFTA and all the other ways our own leaders have slit the throat of this country?  Why do business here when you can do it China for next to nothing?
  And, btw, Capitalism without Judeo/Christian underpinnings of morality has become a bankrupt system, though it is still the only real, honest system of economy.  But, there used to be some notion that if the company was doing well, that its employees would be doing well too.  McD's makes a ton of money, but you don't fare any better to work for them for years.
  We need to make it attractive for companies to stay on our soil.  And, we need to heavily penalize countries that are unfair to us or stop doing business with them.

[marvholly]

Employers have NO incentive to give raises/offer higher wages. There is still a decent size pool of the unemployed/underemployed out there. Why should any employer pay more than the absolute minimum needed to get a qualified person for any job?

[Shooby]

And, yet we are opening the floodgates to more workers we dont NEED!  What the hell sense does that make?

[phil5185]

Why aren't wages rising faster?

Low inflation.
Consider - SHOULD they be rising faster?  Inflation has been almost nil for a few years.  Labor is a commodity, a cost - it should track inflation.  Most raises come from advancement/promotion.  Eg, if a fresh-out engineer gets $40,000,  new engineer #2 next year would get $40,400. (1% inflation). But engineer #1 (from last year) might get $44,000 (due to increased performance/skill).

[Gardening Grandma]

Feb 11, 2016 7:02:45 GMT -5 marvholly said:

Employers have NO incentive to give raises/offer higher wages. There is still a decent size pool of the unemployed/underemployed out there. Why should any employer pay more than the absolute minimum needed to get a qualified person for any job?

This.
Plus the decline of union jobs. 
And I agree with phil's point about low inflation.  High inflation used to be a major driver of raises in pay.

[resolution]

Feb 10, 2016 19:54:56 GMT -5 phil5185 said:

The service jobs cannot be off-shored, they stayed in the US.   But many (most?) of the manufacturing jobs can be off-shored.  The Unions were a big part of driving the manufacturing jobs away. The steel mills went first, then mining,  autos, and so on. The strikes and the demands made US Labor too expensive.

It is popular to blame the unions for offshoring, but the current wave of offshoring and H1B is IT professionals, who have never been unionized. It was just easier to move manufacturing first because there were fewer issues with languages and appropriate skill/training.

[cronewitch]

The thing is wages are nearly flat for the last 30 years. I was a bookkeeper with a two year degree working for a CPA for 8 years making about 30K in 1986. In 1994 I made 34K with a 4 year degree then 28K at a new job. Now a bookkeeper with experience and a two year degree might not make much more than I did 30 years ago, house prices are up about 4 times as much as they were then, food is more and gas is more.
Granted my 30K included overtime I was making 10.25 an hour but working hundreds of hours of overtime a year. My wages more than doubled from 1978 to 1984 with high inflation but for new hires with the same skills they wouldn't have doubled again from 1986-2016.

Employers will never pay more than it takes to get the people they need so if you are willing to take $25 an hour you won't get more and if you aren't someone else will take the job. I have seen people get huge raises and bonuses only because the employer wanted them to not quit and knew they would. My last job I got paid a lot of money to not quit and when I said I was retiring was asked what it would take to keep me. We gave one guy a 50K bonus to work another year when we didn't want him to retire after 45 years on the job and plant superintendent.

[tskeeter]

Feb 11, 2016 11:26:34 GMT -5 @tbird said:

Feb 11, 2016 7:02:45 GMT -5 marvholly said:

Employers have NO incentive to give raises/offer higher wages. There is still a decent size pool of the unemployed/underemployed out there. Why should any employer pay more than the absolute minimum needed to get a qualified person for any job?

Yeah.

History shows that many are willing to let those working for them live in poverty, work in dangerous conditions, etc. Whilst they get rich off the business. Hence, unions, labor laws, etc.

Currently, the disparity in pay to those at the top and those at the bottom have never been greater. That needs to be addressed in some fashion, or the stagnation/deflation of average joes wages will continue while the top levels continue to climb.

Part of the reason for the expanding gap between the top and the bottom is that there is plenty of people available to do the low skill work.  Some may be under employed, high skilled labor, some may be new graduates, and some may be immigrants.  Supply and demand dictates what goods and services can be sold for.  Today, the supply of labor willing to do low skill jobs at low wages keeps wages from increasing.  After all, which of us makes a habit of paying more than the requested price for what we purchase?

[Deleted]

Also social services provide adequate buying power to the mass of low income consumers so that wages do not have to be relied upon in order to fuel the economy. Thus employers don't need to increase wages but still have a large consumer base for their products and services.

[gregintenn]

Feb 13, 2016 10:34:58 GMT -5 oped said:

Also social services provide adequate buying power to the mass of low income consumers so that wages do not have to be relied upon in order to fuel the economy. Thus employers don't need to increase wages but still have a large consumer base for their products and services.

How much longer can the gov continue to print money to sustain this?

[mroped]

Feb 13, 2016 13:08:54 GMT -5 gregintenn said:

Feb 13, 2016 10:34:58 GMT -5 oped said:

Also social services provide adequate buying power to the mass of low income consumers so that wages do not have to be relied upon in order to fuel the economy. Thus employers don't need to increase wages but still have a large consumer base for their products and services.

How much longer can the gov continue to print money to sustain this?

For as long as the wages are low, thus forcing the government to support those that even with a full time job, can't cover their basic needs because the wages are low.

Someone mentioned business moving out of the country?
No problem! Just tax their product when it's enteing USA and they will either come back or raise their prices which will automatically price them above those that stay and conduct their manufacturing in US.
Win-win!

[wanttofire]

Automation plays a bit part. Technology advances. We can do more work with less people, we are asking people to increase their output.
Tell me it if makes sense that today mostly everyone can own a smartphone. Decades ago it would have been only the rich.