Nominal wages are rising, but after adjusting for inflation, real wages are flat or declining. Meanwhile, corporate profits are growing significantly even in real terms. Workers’ purchasing power is stagnant, while businesses are thriving. Thoughts?
by EclecticCollective
13 Comments
Your graph shows that real wages are up, the exact opposite of your title.
Not as much as corporate profits, but still up.
In August wages rose over 4% and inflation was at 2 5 or numbers close to that. Wages have been out pacing inflation for a year or two now.
I know this is unpopular but I am glad corporate profits are up. Seems like a recession is looming and I don’t think mass layoffs will come with this type of graph.
You didn’t bother to suppress the obvious outlier during the Covid lockdowns (when higher earning remote workers kept working and were the only ones included in the weekly wage statistics creating an artifact) and then claim real wages are somehow declining? Bad methodology, friend.
I’ll be that guy.
What has happened to this sub? A few years ago we had these really cool exhibits people populated that were well designed.
Now, we have an Excel graph with 70% of the y-axis simply being white space, not to mention a labeling issue because “**monthly** wages” are clearly not $22.50.
What is beautiful about this?
Wages are up but I think we need to push this higher by having an actually tight labor market. Prime age EPOP can and should go higher.
But I think the markets answer here is that we still have a shortage of jobs, we need more full employment and that’s what we haven’t seen in decades.
Before anyone say 4% or under, unemployment was 3.4% in April 2022 and is 4.1% now but 5.5 million jobs were added between the two points so 7 million joined the labor force. We need to slowly get jobs higher and push long term full employment.
Also we should lower the prices of things not be as worried about wages, the government IMO is more likely to lower costs than raise wages without costs increasing. Going YIMBY and lowering housing costs, drug pricing like they did for insulin and healthcare stuff, transportation by adding more YIMBY housing near transit etc.
wdym “thoughts?” you said it all
How is corporate defined?
I think your Y axis should be even wider
End stock buy backs and somehow incentivize (force?) Companies to direct a percentage of their profits to employee wages/bonuses.
Corporate profits are up because they set the margins. The margins stay relatively the same but since money is worth less, they “make more”.
And corporations got the PPP loans
Real wages have been rising for decades, especially in the last decade:
https://fred.stlouisfed.org/series/LES1252881600Q