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Wages Are Growing Faster Than You Think
Wall Street Journal ^ | September 20, 2018 | David R. Henderson

Posted on 09/21/2018 6:22:19 AM PDT by reaganaut1

Standard wage data show that between the spring of 2017 and the spring of 2018, real wages in the U.S. increased only 0.1%. But there are three major problems with these data. First, they don’t account for fringe benefits, which are an increasing proportion of employee pay. Second, standard wage data use an index that overstates the inflation rate. Third, each year the composition of the workforce changes, as older, higher-paid workers retire and young, lower-paid workers enter the workforce.

A study released this month by the White House Council of Economic Advisers addresses these three biases and concludes that real wages grew by 1% in 2017-18, not the measly 0.1% reported in the wage data.

• Fringe benefits. Because benefits have become an increasing proportion of employee compensation over time, growth in real wages has been understated. The CEA estimates that including benefits would add 0.2 percentage point to the 2017-18 figure.

• Inflation. An ideal measure would cover a very large percent of what workers buy, would account for the tendency to buy less of goods and services whose relative prices have risen and more of goods and services those whose prices have fallen, and would somehow correct for the improvements in quality of almost everything sold in the private market. As Stanford’s Michael Boskin has pointed out, the usual measure of inflation, the consumer-price index, doesn’t do this very well. An alternate measure of inflation, the personal- consumption-expenditures price index, while also imperfect, is a better measure of inflation. Economists at the Federal Reserve prefer the PCEPI to the CPI. Using the PCEPI adds 0.5 percentage point to the 2017-18 growth of real wages.

• Change in the labor force. As baby boomers retire, they are replaced by younger workers.

(Excerpt) Read more at wsj.com ...


TOPICS: Business/Economy
KEYWORDS: jobs; wages
When they economy is strong, non-working people are drawn back into the labor force, and their wages start out lower than the average. The wages of people who have been continuously employed are growing faster than the reported 0.1%.
1 posted on 09/21/2018 6:22:19 AM PDT by reaganaut1
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To: reaganaut1
Wages Are Growing Faster Than You Think

Some sectors I'm sure, but not for health care professionals & workers. My own profession is seeing wages fall to about 2004 levels.
2 posted on 09/21/2018 6:27:00 AM PDT by akalinin
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To: reaganaut1

So much winning! Trump read a list of it last night.

While the Democrats are preoccupied with a guy’s sex act forty years ago.

Now who’s out of touch with the American people?


3 posted on 09/21/2018 6:27:33 AM PDT by goldstategop (I In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: reaganaut1

This makes globalists and Free Traitors™ very unhappy. They will claim a “labor shortage” and demand a never ending supply of imported cheap labor and foreign made goods. They will request an increase in H-1b visas. They will demand more h-2 visas. Rising wages are an anathema to them. I hate them all.


4 posted on 09/21/2018 6:32:40 AM PDT by central_va (I won't be reconstructed and I do not give a damn)
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To: goldstategop

OK you’ve been told a 1000 times there was no sex act you keep calling it a rape now sex act. You know if you’re doing a need to knock it off.


5 posted on 09/21/2018 6:41:36 AM PDT by snarkytart
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To: reaganaut1

Bookmark


6 posted on 09/21/2018 7:27:07 AM PDT by Mase (Save me from the people who would save me from myself!)
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To: reaganaut1

Why would anyone in their right mind want to switch horses in 2020?


7 posted on 09/21/2018 7:55:31 AM PDT by Lurkinanloomin (Natural Born Citizen Means Born Here of Citizen Parents__Know Islam, No Peace - No Islam, Know Peace)
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To: reaganaut1

The punchline was below the “subscribe” cutoff for my browser settings.

What is the adjusted growth rate they estimate?


8 posted on 09/21/2018 9:07:51 AM PDT by BeauBo
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