U.S. workers’ wages are going nowhere fast.

from David Ruccio

U.S. workers’ wages are going nowhere fast.

Black Friday madness

from David Ruccio

Black Friday has apparently become a spectator sport for the leisure class, who look forward to watching videos of shoppers brawling for discounted items from the safety of their own homes. A reality-show Hunger Games, if you will.

Inflation hawks: The job killers at the Fed

from Dean Baker

Discussions of inflation and Federal Reserve Board policy take place primarily in the business media. That’s unfortunate, because these discussions can have more impact on the jobs and wages of most workers than almost any other policy imaginable.

The context of these discussions is that many economists, including some in policy making positions at the Fed, claim that the labor market is getting too tight. They argue this is leading to more rapid wage growth, which will cause more inflation and that this would be really bad news for the economy. Therefore they want the Fed to raise interest rates.

The part of this story that few people seem to grasp is that point of raising interest is to kill jobs. If that sounds like a bizarre accusation to make against responsible people in public life then you need to pick up an introductory economics text.

The story line there is that we get inflation if too many people are employed. There are all sorts of ways of making the story more complicated, and many people get PhDs in economics doing just that, but the basic point is a simple one: at lower rates of unemployment workers have more bargaining power and are therefore able to push up their wages.

85 people versus 3.5 billion people – the OXFAM report

from Edward Fullbrook

In the run-up to the annual Davos get-together of the world’s hyper-rich and their most-favoured agents, OXFAM has issued a report titled “Working For The Few”.  Commenting on it, today’s Guardian notes that

. . . if they fancied a change of scene then the richest 85 people on the globe – who between them control as much wealth as the poorest half of the global population put together – could squeeze onto a single double-decker.

The OXFAM report emphasizes how democracies round the world are increasingly under threat due their subversion by the ultra-rich. Here is a key passage from the report. 

Two charts from the Wall Street Journal

from David Ruccio

As the Wall Street Journal explains,

US wages and productivity 1968 – 2012 (minimum, average and The 1%)

from David Ruccio

US minimum wage: Who decided workers should fall behind?

from Dean Baker

It was encouraging to see President Obama propose an increase in the minimum wage in his State of the Union Address, even if the $9.00 target did not seem especially ambitious. If the $9.00 minimum wage were in effect this year, the inflation-adjusted value of the minimum wage would still be more than 2.0 percent lower than it had been in the late 1960s. And this proposed target would not even be reached until 2015, when inflation is predicted to lower the value by another 6 percent.

While giving a raise worth more than $3,000 a year to the country’s lowest paid workers is definitely a good thing, it is hard to get too excited about a situation in which these workers will still be earning less than their counterparts did almost 50 years ago.

Income redistribution in the United States 1913-2011 (2 graphs)

from David Ruccio