Monday, August 3, 2015

A Record: American Wage Growth Near Zero

According to the Bureau of Labor Statistics, wages only grew by 2-tenths of a percent in the second quarter of this year.  A record low in the 33 years that this report has been generated.  For an average household making $52,000, that's just 29 cents extra per day (based on their quarterly pay).  Even lower after paying FICA and state and federal taxes. Probably, not enough to cover the higher prices for food in the last 3 months.

I don't think it is any coincidence that this record low growth in wages has happened in the same year that the employer mandate of ObamaCare took effect; forcing tens of thousands of employers to offer health insurance or pay a fine.  Nor, is it any coincidence that 29 states now have a minimum wage that is higher than that of the federal minimum.  A fact that was supposed to increase wage growth; not slow it.

Simply, companies don't have some secret stash of money they can use to cover increased expenditures being imposed on them by government.  As a result, in order to keep prices down and remain competitive, they must back off on wage increases.  This report clearly reflects this reality.


Quarterly Increase in U.S. Worker Pay Smallest on Record:

Consumer prices rise for fifth straight month as avian flu boosts egg costs:

Obamacare and the Employer Mandate: Cutting Jobs and Wages:

State Minimum Wages | 2015 Minimum Wage by State:

No comments: