Wage growth surges, just in time for the Trump presidency

See blog

Readers' comments

The Economist welcomes your views. Please stay on topic and be respectful of other readers. Review our comments policy.

Sort:

guest-ajljlsaw

The only reason that we see a current bump in the economy is the projection that Trump will reduce taxes and remove unnecessary regulatory burdens.

It is time for TE to realize that the progressives are destroying the civilized world. From social to economic issues, the progressive have become a blight on the planet. Their policies have failed and their morality is a joke. People need to wake up and throw all of them out of office before it is too late.
http://logonama.com/

guest-ajljlsaw

Health Insurance, the cost is increasing at double digits with many younger people not getting insurance as they know the they are getting ripped off. The financial crisis was a success if you think stealing about a trillion dollars and having not a single one of the people who did it go to jail was a success. On race relations, he was a race baiter as was his justice department, race baiting on a daily basis was and is his motto. I voted for the guy twice so it is not as if I was expecting that behavior, I expected the opposite and got stabbed in the back. The republicans offered up such rotten candidates that I could not stomach them and per his promises I thought we could have a better future, instead we got a worse one with 90 million permanently unemployed americans and muslim terrorists blowing us up or shooting us up worldwide.
http://logonama.com/

SpectreOfChange

It's inevitable that whenever one points out the falling unemployment numbers a conservative will whip out "labor participation" as a counterpoint. What they don't seem grasp, or accept, is that labor participation is MEANINGLESS. People have no innate need to work, and the economy has no innate need for them to work. A job fills an economic function for a worker, and a worker fills an economic function for a job. If a "prime age worker" is married to someone capable of supporting them both at the level they're happy with, they have no need to work. If a "prime age worker" can afford to pursue a college education, they have no need to work. If a "prime age worker" invested well and can retire early, they have no need to work. It's incredible to me how much modern "conservative" rhetoric on the economy is based on the utterly flawed and archaic notion that every person should work, whether they need to or not.

vWETbdcFLU

I am not a US citizen and I know little about the US, apart from what I read in the paper. So I am puzzled by the number of vitriolic comments against President Obama.
From outsider's perspective, his accomplishments appear to exceed several of your last presidents. Notably, his administration got your enemy number one Bin Laden. It also took admirable steps towards sorting your Health insurance mess. It steered you through Financial Crisis.
I suspect that the Test of Time will judge him far more favourably then current comments.

mbee11 in reply to vWETbdcFLU

Maybe if you read up on the US a bit more you would understand why many think he is slime. slime mold to be exact. Consider his foreign policy in the middle east. he supported the terrorists who murdered the president of Libya, a country which was helping stem the terrorists and is now a hell hole of terrorist who cut off people heads. In Syria he sent arms and money to the terrorists and said nothing when Saudi Arabia did the same. Where do you think the ISIS got its arms and money from, a rabbit? If you look at Syria and Iraq a million people are dead as a result. You mention Bin Laden, that was a photo op. He needed one for the elections. Health Insurance, the cost is increasing at double digits with many younger people not getting insurance as they know the they are getting ripped off. The financial crisis was a success if you think stealing about a trillion dollars and having not a single one of the people who did it go to jail was a success. On race relations, he was a race baiter as was his justice department, race baiting on a daily basis was and is his motto. I voted for the guy twice so it is not as if I was expecting that behavior, I expected the opposite and got stabbed in the back. The republicans offered up such rotten candidates that I could not stomach them and per his promises I thought we could have a better future, instead we got a worse one with 90 million permanently unemployed americans and muslim terrorists blowing us up or shooting us up worldwide.

Bluhorizons

Have you ever noticed you read all the government statistics about how good things are, how high employment is, how much money the average American makes--and then you read Atlantic surveys that tell us almost half the people can't come up with a lousy $2 grand, many are enraged by illegals taking jobs 40% of the young have to live with their parents until almost middle age and then, oh yes, so many people were dissatisfied with the way things are going that they elected Donald Trump?
 
Kind of makes you wonder if we are getting the strait scoop from the government.

SpectreOfChange in reply to Bluhorizons

and yet, there have been a number of polls and studies that show clearly that people's own economic circumstances rarely match up with how they believe the economy is doing as a whole. The "my life is good, but the country is shit" mode of thinking is an absolute product of right-wing contrarian media rhetoric and nothing more.

Peace Love and Understanding

You all keep pointing to wage growth like this is a statistic that means anything.

It really, really doesn't.

The people who vote will just plain know whether the economy is working in their life or not from their lived experience. They will be satisfied or unsatisfied with their experience. These measures only matter to economists and they are flawed measures at best.

What sank Obama is that he could not sell people on this economy as a tenable thing. I very much doubt Trump sell people on it any better. If wage growth ticks up a point but inflation ticks up a point in kind, workers have gotten nowhere.

The problems our economy faces are well beyond the power of presidents to fix (or at least, presidents alone, without a great deal of cooperation we don't seem to be in the mood for).

I didn't realize Obama was sunk. He came in working with a recession that bordered on a depression. Now the economy is vastly improved. Economists' numbers are flawed or course, but they are not entirely meaningless.

True the lived experience of many says different. But that's Trump Campaign Talk, isn't it?

Let's see what the lived experience of the same folks will be at in 2020.

Simple. Remember to call back.

Bluhorizons in reply to guest-ajwsjeaa

Obama certainly got plenty of resistance from the republicans but the money he was allocated to speed the recovery was not well spent, the programs were poorly implemented and the money did not do the job intended.

Of course we also blame the president, any president, for the economy and expect things from him that are actually beyond the ability of any president.

Still Obama gets a C- for his part of the recovery.

Rockford the 1st in reply to Bluhorizons

Not well spent. Poorly implemented. Money did not job intended. No evidence nor standard of any of this. Compared to a Bush 2 F Obama B+. More could have been done but with such a corrupt obstructionist republican congress I'm impressed much was done at all.

"Well beyond the power of presidents to fix" - with or without cooperation. We've crossed a threshold in technology that virtually no one here appears willing to recognize. We desperately need some tenable solutions - but it's impossible to come up with such solutions when most don't even understand the problem.

I didn't say Obama was to blame for the economic circumstances of his tenure. I am actually an Obama supporter.

Obama's party lost this election to Donald Trump because the economy is not actually very good for most Americans. On virtually every other issue the Democrats were winning. They lost on the economy.

Many of these economic numbers are utilized to be purposefully misleading to those who do not understand what they mean (and I would be happy to systematically go through and tear them to shreds with you if you'd like, I've spent a long time doing that here) to try to paint a picture that is not true to people.

The problem with that strategy of attempting to mislead through cherry picked statistics is no matter how hard you try to lie and mislead, the people still know it is not true because their lived experience says the economy is not well for them. Thus it is ineffectual to try to convince them reality is not reality.

Obama/the Democrats were forced into an unenviable position of having to defend the American economy post-Great Recession.

Which is pretty much an indefensible thing. For anyone. Including Trump.

And now Trump must defend it. Which I don't think he can do any better at doing. In fact I think he will do a much worse job of it than Obama did.

I suspect there will be a lot more lying through misleading statistics though!

I don't think the primary barrier here is that we do not understand what the problem is or that we can't come up with solutions. People know what the problem is: They don't have jobs that can provide for a family and prepare viable offspring for a competitive labor market. I think people understand that REALLY WELL.

And there are plenty of solutions on the table too.

I have spent a great deal of time outlining proposed solutions here. The problem is many of those solutions involve redistribution of some sort which is (shortsightedly) judged by the rich and powerful to be outside of their self-interest. The minute I raise any hint of a suggestion involving correcting the massive inequities in our society to stabilize social disruption is where the people who have the power to change anything here pretty much just stop listening.

Ultimately, this is a self-defeating position to assume for them. These populist revolts are a direct result of their refusal to take up real solutions.

Apparently, they are suicidal though.

I agree that some redistribution method is (or will be) required. The problem is I don't believe any such method will work without offering a level of aspiration to the recipients and I've yet to see anyone offer proposals for that. If you have, I've missed them and I apologize and I'd urge you to push them more aggressively.

guest-ajalease

Obama is responsible for the worst economic recovery in U.S. history, with the lowest labor participation rate than ever before (95 million not participating), and more people on welfare than ever before. The only reason the unemployment rate is low is because people have taken low wage jobs, because there are no others, and many have fallen off of the unemployment roles (If you stop looking for work, they consider you employed).

The only reason that we see a current bump in the economy is the projection that Trump will reduce taxes and remove unnecessary regulatory burdens.

It is time for TE to realize that the progressives are destroying the civilized world. From social to economic issues, the progressive have become a blight on the planet. Their policies have failed and their morality is a joke. People need to wake up and throw all of them out of office before it is too late.

From nonsense to more nonsense. Bush Jr was a economic nightmare or have you forgotten 2007/8? Progressives certainly have issues and are not perfect but neocons are not only stupid but incompetent to boot. They bitch and moan and do the wrong thing like torture all the time. Iraq a success? It's time that readers of TE not take your arguments seriously. Oh wait they already do that.

Ed Zimmer

What a bunch of wishful thinking here. The jobs we've lost are NOT coming back. The $25/hr spot welder has been replaced by the robot spot welder costing $8/hr (taking into account all costs over a 5-year period) and that cost is virtually certain to drop to less than $2/hr over the next few years. That's characteristic of all manufacturing work worldwide and, if anything, the trend is accelerating. The automation of manufacturing is already a dead issue. Today's issue is the automation of white-collar and professional work. If you're under 40, it's highly likely you'll be automated out of your position before retirement - and if you're under 30, it's virtually certain. (Guess what's going to happen to those college debts your children are piling up!) How will you (and all those others who lose their job) sustain a livelihood? I've yet to hear a rational answer here (from the magazine or commenters).

International Norm in reply to Ed Zimmer

Eventually it will be cheaper to just give people paychecks to not work than to deliberately make production less efficient by accommodating human workers. We will then be forced closer to having to adopt a universal guaranteed basic income to everyone to preserve society.

There are good arguments in even adopting this now but it would only work if everyone is willing to give up all entitlement programs currently in place. However there will always be some group that will lobby that they are special and need even more largesse than everyone else and the universal income idea will inevitably become unsustainable.

Bluhorizons in reply to Ed Zimmer

Yours is the glass half empty philosophy of the New Left. Relax and enjoy the slide down the tubes. Your attitude is the heart of the reason why Trump was elected.
 
 
For every dollar of employee salary paid, statistics show that $1.40 is spent on peripheral services, like plumbing, outside repairs, janitorial services, packaging, advertising, even restaurants making lunch. When a business comes back to the US, its positive impact radiates outward from the company that returned and spreads thru the community.
 
Many of those outside jobs are middle class and with those assembly plants comes the ability to require American parts in their products.
 
Conversely, when a plant goes offshore, it is like an atomic bomb, radiating demise like shock waves. What happens to a man who stitched bags for 40 years and is unemployed? Answer, he goes on the dole and people hate him for being on it and he hates himself.

Ed Zimmer in reply to International Norm

If you look at the reality of what we're facing (FAR too few jobs for the population. aka, NO jobs for most people - worldwide), a UBI is clearly in our future. It's not a decision we must (or can) make - our choice is only UBI or revolution (ie, mass killings). The central problem is how to deliver HOPE along with the UBI - because if we can't figure out how to do that, the end result can ONLY be revolution.

Ed Zimmer in reply to Bluhorizons

Try raising your understanding into the 2000s! Do you have ANY understanding of technology? Of what's happening in this world outside of what politicians keep feeding you? That "slide down the tubes" you wish us to enjoy is DEATH - and while that's a reality for me in too few years, that's what today's young will be facing (whether you choose to realize it or not) - and being involuntary, I can assure you they will NOT enjoy it.

Vox_Market_Vox_Dei in reply to Ed Zimmer

Recommend looking up David Autor's Ted talk on the topic. He uses the farming industry's 1900s cross-roads as a parallel. And just to reinforce that this is not anecdotal cherry-picking...40% of US workforce was agricultural a little more than a century ago. Currently, it's 2%.

So, your projection of jobs being automated is highly probable, but your assumption that neither training nor new labor markets will take their place is unduly bearish.

guest-ajlwmnnm

For some the increase will be welcomed, but for the 10s of millions on minimum wages, AND 29hrs a week, and for the 10s of millions who are on food stamps,and the 96 million Citizens of working age who cant get a job........this huge section of US society wont be pleased

bunker1969

One month number doesn't amount to a trend and with record numbers outside the work force and population growth exceeding new jobs created since 2009 the picture is not so bright after all.

Harmen Breedeveld in reply to bunker1969

Does 75 months of job growth amount to a trend? Does an acceleration of wage growth since 2015 amount to a trend? ;-)

The picture is not perfect, but the trend is encouraging.

And, compare the US situation with that of Europe. Suddenly, the US becomes a superstar.

bunker1969 in reply to Harmen Breedeveld

When the job growth doesn't keep up with the population growth, the trend is a down trend, ECON 101 again. Look at the millions out of the work force, record numbers. Dec 2015's great number doesn't constitute a trend. Europe is a VERY low bar, except for Germany, The Netherlands and a few other (export economies)EU has been in a quasi recession for several years. The US has the potential for 4% real GDP growth annually, this is what the new Admin. is aiming at, we'll see.

That is what your government wants you to Believe......here are the true figures.........which can also be seen on USA debt site........

USA,official unemployed 7780455, but the actual unemployed is 15159622, and the actual number of adults not in the labour force is 94620000, full time workers 124300000, partime workers 27800000, median income $30543, living in poverty 43 mn, those on food stamps 43200000, and the total of Americans receiving benefits is 162833000

4horseman

The significant contribution of this blog is not who gets credit for what but the important point that political choices of one economic policy over another make much less difference than they once did. Much more important are demographic trends, technological developments (automation), that determine productivity. The reaction to this inability of politicians to manipulate the economy is a grasping at straws by voters taking a chance on outsiders, Brexit, etc. These are efforts to gain control over an economy that increasingly eludes control. However, if voters can't get what they seek, this poses a problem for democratic institutions. The trend is toward an economy in which corporations curry favor with the government, which in turn bestows tax favors upon them. If one looks up a definition of a Fascist economy one will note a resemblance.

mbee11

https://www.bls.gov/news.release/empsit.nr0.htm contains the actual numbers.

guest-ajlwmnnm in reply to mbee11

That site is specially for you guys who cant figure out things for yourselves..........this is amore reliable source of information......www.USdebtclock

USA,official unemployed 7780455, but the actual unemployed is 15159622, and the actual number of adults not in the labour force is 94620000, full time workers 124300000, partime workers 27800000, median income $30543, living in poverty 43 mn, those on food stamps 43200000, and the total of Americans receiving benefits is 162833000

mandinka1

Trump will claim credit...Really!! Barak has taken credit for anything good that happened during his term and blamed W for 8 years anytime something bad happened

Coeur de Lion

It is often necessary to supplement relevant facts to articles written by Obama's bootlicks at the Ecommunist, to gain a more balanced and intellectually honest picture of reality:
More jobs were created in 2015 than in 2016, and more jobs were created in 2014 than in 2015. In other words, job growth has been decelerating; not a healthy trend. Also, the U6 unemployment numbers which include the underemployed workforce remain stubbornly high. This reflects the fact that many of the jobs created during this totally underwhelming recovery have been unsatisfactory part-time positions.

MagicMoneyFrog in reply to Coeur de Lion

"Also, the U6 unemployment numbers which include the underemployed workforce remain stubbornly high."

How do you figure? The numbers declined from 14.2% in January 2009 to 9.3% in November 2016. There is a clear downward trend and our numbers are better than the majority of other developed nations.

The last time we had supposedly "full employment," the U6 went as low as 6.9% and for the purposes of this article it is really not relevant where our numbers are in relation to other nations. Also, the labor force participation rate remains stuck at historic lows and there are a record 94,708,000 Americans who are not in the labor force. When President Obama took office in January 2009, 80,529,000 Americans were not participating in the labor force. QED

"Also, the labor force participation rate remains stuck at historic lows"

Our labor force participation rate is back down to 1970s levels and substantially higher than they were during the 1950s and 1960s. Back then the issue was that many women did not work. Today the issues are essentially (1) The median age is increasing and a larger proportion of our population is retired; (2) College enrollment is up and people enter the labor force later because they are attaining higher education or they are going back to school; (3) some jobs are becoming obsolete or economically non-viable so some people are losing their jobs and some of these people (especially older ones) never find new employment.

"for the purposes of this article it is really not relevant where our numbers are in relation to other nations."

Then leave the article aside. All developed nations are going through similar issues as I described above. Our relatively decent labor participation rate means we aren't doing a bad job of dealing with these issues.

No, the contemporary numbers of countries going through the same issues as the USA (aging work force, global competition and technology making some older jobs obsolete, and adults spending more years in school) creates a reasonable standard by which the USA's numbers can be judged. Comparing our current numbers to our numbers in past time periods when we were facing different challenges is unreasonable.

Coeur de Lion in reply to MagicMoneyFrog

Spinning for Obama until you're dizzy? What a thankless task. Sure, let's leave the article aside and also note that median household income decreased 7.3% from $56k to $51k under Obama. Let's also note that there has been a 32% increase in food stamp recipients under Obama. Let's also note that college student loan default rates have gone up under Obama. Let's also note that the national debt has gone up by almost 10 trillion dollars under Obama. Finally, the most recent Ecommunist/YouGov poll shows that only 26% of Americans feel we are on the right track versus 60% who say wrong track for a whopping differential of -34. But hey, we aren't doing a bad job eh Kermit?

Spinning for Trump making you dizzy Lion? You'd be a lot more persuasive without the smug cheap shots. You lost the argument for comparing reasonable comic standards as frog pointed out. Many countries are experiencing the same forces of automation and demographics that are truly driving these numbers. Consequently the numbers you put out without context are not helpful EXCEPT to dump on Obama (and why not include congressional Republicans who have done nothing except bitch and moan during the same governance period?) Anyways Trump will be no different. Those numbers you quoted will continue to be negative and Americans will feel a lot more negative about the direction of the country in about a year. America is where hope goes to die.

Econo-1964

The unemployment numbers or so poorly expressed through official calculations that it's easy to feel things are better than they actually are. Wages have been so low for so long that motivation to participate in the labor force is actually collapsing.

The reality is that at the lowest pay levels there is not value for labor. When that changes, large numbers of people will reenter the workforce.

The unemployment level may be around 5% but the, non-employment and under-employment, level is around 50% and that level is directly proportional to opportunity, and a fair livable wage, the lack of both crates the current weakness in the economy. The current unemployment numbers are so vastly disconnected from the reality of the current economy they have little value, and actually may harm the political process to deal with problems of minimum-wage, and import taxes.

Macrol in reply to Econo-1964

The two largest reasons for the non-employment and under-employment are education and people aging. Baby boomers are moving out of the work force and people need more education to enter the work force. Education is also getting more expensive so part time jobs are needed to pay for a four year degree which may now take 6-7 years.

Advertisement

KAL draws: Economics A-Z

Latest updates »
More latest updates »

Advertisement

Economist blogs
Products and events


Take our weekly news quiz to stay on top of the headlines


Visit The Economist e-store and you’ll find a range of carefully selected products for business and pleasure, Economist books and diaries, and much more

Advertisement