Falling U.S. Wages Threaten Consumer Spending

[Roland99]

Source: Bloomberg

Ninety-one percent of people in the U.S. labor force have a job. That may be the extent of the good news for these Americans, whose incomes tell a darker story.

Take-home pay, adjusted for prices, fell 0.3 percent in August, the third decrease in five months, and personal income dropped for the first time in two years, the Commerce Department reported last week. The declines followed news from the Census Bureau that median household income in 2010 fell to $49,445, the lowest in more than a decade, and the poverty rate jumped to 15.1 percent, a 17-year high.

...

While policy makers from Federal Reserve Chairman Ben S. Bernanke to President Barack Obama focus on cutting unemployment stuck near or above 9 percent since April 2009, the widespread stagnation in wages may offer a better explanation for the failure of economic growth to accelerate two years after the end of the recession. Workers’ ability to negotiate higher earnings won’t return until the job market strengthens, and flagging confidence has raised the risk that consumers may retrench.

Inflation-adjusted weekly earnings have fallen for six consecutive months, dropping 1.8 percent in August from a year earlier, a pace not seen since the 18-month economic slump ended in June 2009.

Read more: http://www.bloomberg.com/news/2011-10-02/falling-wages-threaten-u-s-rebound-as-consumers-may-retrench-on-spending.html

[ixion]

1. "Ninety-one percent of people in the U.S. labor force have a job."

Note to bloomberg.com: Using a blatant lie as an opening statement is no way to get people to give an article any credibility.

There is a jobs problem, and it will most certainly affect spending. But the problem is even more dire than they represent.

[liberalmike27]

5. Might be time

with our two tiered society to start working that "living-wage" thing again, you think?

Seriously though it's amazing how often they talk of consumer spending, but never mention the cuts in wages and benefits, even though they have a direct association.

It's a little like they don't mention unfair, one-sided, corporate and wealthy benefiting, union-manufacturing-exporting trade agreements, that only benefit the rich, in creating the huge unemployment we now have, even though it is the single most direct factor in creating the unemployment, and to a very large extent, they CHOSE to do this, on both sides of our very narrow political party structure.

I had a boss that once said whatever you do to the lower classes, it'll eventually come around and kick the rich in the ass. I guess it goes hand in hand with the saying "money is like manure. When it's all in one place, in a big pile it just stinks. But if you spread it around, it serves as fertilizer, making the economy grow."

[Bonhomme Richard]

2. Duh! Couldn't see that one coming. n/t

[wordpix]

3. and what percentage of the 91% has a full time job with benefits that pays for all basic needs?

:shrug: just wondering

[Harmony Blue]

4. Not even close to a third of that

I wonder, if Wal Mart decides to increase its pay for it workers, what effect would it have on the economy? It seems to that the rest of the industry would follow.

[defendandprotect]

10. 1 out of 3 Americans are working for Walmart wages -- !!

[Citizen Worker]

6. And the solution is to import shoppers to boost the economy. No discussion about declining wages.

Instead we'll import shoppers along with the consumer goods. It is impossible to make this stuff up.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x5013510

[Dragonfli]

8. well, over 80% of the US Chamber of Commerce "jobs plan" is being pushed by Obama, I was

Wondering when they would get to this part of the Chambers plan (increased tourism revenue), all that is really left now is for him to green light the pipeline like he promised them and he will have nearly their entire agenda well represented, he will still have to bargain away a few pieces of progressive window dressing (mostly centered on a progressive way to pay for it), but I am sure they will get everything they want in the end.

Check and see if there is other stuff they wanted that he or others in his employ have not endorsed (I think tax amnesty for overseas corporate tax cheats still has to be put into some form of legislation), I want to see if I missed anything
Link Tho COC "Jobs" demands: http://www.uschamber.com/sites/default/files/110905_jobs_letter.pdf

[defendandprotect]

11. 35% increase in productivity over last decades -- NO INCREASE IN WAGES ... !!

We need slow down and short/brief strikes to begin with --

[raccoon]

7. Imagine that! nt

[OhioChick]

9. That's a "no shit" headline n/t

[defendandprotect]

12. Why was this taken out of Late Breaking News?

[golfguru]

13. 91% have jobs is a bald faced lie

because it does NOT include people who have given up looking, people who are working part time for lack of full time jobs, and people who are working in jobs below their skill level for lack of jobs in their usual skill level category.

On top of that many people who HAVE jobs are scared shitless of getting laid off and their spending habits are seriously curtailed.

[Roland99]

14. Those who are no longer looking for work are not considered part of the work force

Look up "labor force participation rate"

[golfguru]

15. That is laughable because...

many of these people want to work but have given up since they tried like hell and came up empty. When and if economy improves, these people will be back in work force.

What does it matter how the government defines "work force"? I prefer the real life situation better.

[Roland99]

16. I didn't make up the LFPR. But, I agree with you.

Check out John Williams' Shadow Government Stats
http://www.shadowstats.com/

[CanonRay]

17. Things are going perfectly according to plan

Grover Norquist's plan, that is.

[Remember Me]

18. Just read the subject line --

Ya think??

LOL. What amazes me is that it took so long for someone in the press to notice.

[Kat45]

19. And wages won't go up until unemployment goes way down.

With so many out of work and looking for jobs, employers have zero incentive to increase wages.

[Art_from_Ark]

20. How true

The job/wage situation is reminiscent of the Reagan Recession of the early '80s.