Why? It's all a bunch of "hypium."
The stark economic truth isn't found anywhere in those particular numbers. The simple truth is:
- the labor force participation rate is declining; and,
- wage growth is weak.
To wit: Inflation-adjusted wages between July 2009 and August 2014 rose a meager 1.4% during the President's so-called post-2009 "recovery" (or, .28%/year).
Has the changeum met the hypium of the hopium?
According to a Heritage Foundation study, these five years of wage stagnation can be due to a poor economy:
- The poor economy during the 2009-2014 period provided little incentive for business.
- The drop in demand for labor created a drop in price, which, in the case of labor, meant wages.
- While the demand for labor has improved recently and 2014 job openings continue to be at levels not seen since before the Great Recession (let's not forget the kind/types of jobs those are), wages have remained low.
This wage stagnation can also be due to the expiration at the end of 2013 of long-term unemployment benefits. The loss of this "entitlement" has caused the nation's labor supply to increase which, in turn, has exerted downward pressure on wages.
Or, gasp, could it possibly be that this wage stagnation is due to Obamacare?
- Obamacare has made hiring new workers more expensive (and some would say "prohibitive").
- To offset those costs, employers have reduced hours worked and wages.
The outcome? What used to be full-time, good-paying jobs have been transformed through market forces into part-time, low-paying jobs that are are available practically for the asking. There's plenty of jobs that plenty of people don't want.
While the Heritage Foundation study argues it will take more time and additional data before it is clear which of these three reasons is the primary culprit behind these five years of wage stagnation, The Motley Monk believes the answer is as obvious as is the nose on his face.
Let the discussion begin...
To read the Heritage Foundation study, click on the following link:
"Why Has Wage Growth Stagnated?"