Reader JohnH confidently asserts:
Real average hourly earnings are back down to where they were before the pandemic—$11.03 now compared to $11.02 in February 2020. Real wages will almost certainly continue to decline in coming months.
This might be true. He doesn’t identify what deflator he is using, whether he is using total employees or just production/nonsup, or anything else about the source of the data. All I know is if I use the data I can download easily from FRED (about 20 seconds), and put into a program to graph, I get the following (using official CPI – all urban numbers):
Figure 1: Average hourly earnings (production/non-sup) in private industry, deflated by CPI (all-urban 1982-84) (black), and 2020M02 average (red). Source: BLS via FRED (series AHETPI and CPIAUCSL), and author’s calculations.
For comparison’s sake, I note what has happened to wages typically construed to be at the lower end of the earnings spectrum
Figure 2: Average hourly earnings (production/non-sup) in leisure and hospitality services, deflated by CPI (all-urban 1982-84) (black), and 2020M02 average (red). Source: BLS via FRED, and author’s calculations.
Reminder: Earlier JohnH also confidently asserted that BLS was hiding median wage data. Conclusion: There is an inverse relationship between commentator confidence and accuracy, on average.
Most of his comments of late start with something of this tone: Strangely, some prominent “very serious pundits”
Of course any truly serious person would bother to get the data correct before insulting everyone’s intelligence but JohnH refuses to be a serious person so he continues to right things that are just not true only to tell the rest of us are stupid or whatever because we don’t share his warped view of reality.
Case in point – his insistence that the prices of washing machines did not fully pass through those tariffs. His evidence for this bozo claim – a total misreading of his own link and a complete denial of the excellent analyzes from those very serious people.
Look – if you think he is ever going to end this parade of nonsense, he was doing for years over at EconomistView.
What is a very serous pundit?
Real earnings have risen since 2017 and 2020, more so for production and nonsupervisory workers than all workers. I am however bothered by a decline in real earnings for manufacturing workers, as well as by minimal productivity gains in manufacturing:
https://fred.stlouisfed.org/graph/?g=twAi
January 15, 2018
Real Average Hourly Earnings of All Private Workers, 2017-2022
(Indexed to 2017)
https://fred.stlouisfed.org/graph/?g=u84y
January 15, 2018
Real Average Hourly Earnings, * 2017-2022
* Production and nonsupervisory workers accounting for approximately four-fifths of the total employment on private nonfarm payrolls
(Indexed to 2017)
https://fred.stlouisfed.org/graph/?g=KH4x
January 4, 2018
Real Average Hourly Earnings of All Employees in Manufacturing, 2017-2022
(Indexed to 2017)
https://fred.stlouisfed.org/graph/?g=MfvN
January 15, 2018
Real Average Hourly Earnings in Manufacturing, * 2017-2022
* Production and nonsupervisory workers
(Indexed to 2017)
https://fred.stlouisfed.org/graph/?g=mMNp
January 4, 2018
Manufacturing and Nonfarm Business Productivity, * 2007-2021
* Output per hour of all persons
(Indexed to 2007)
https://fred.stlouisfed.org/graph/?g=m2mB
January 30, 2018
Manufacturing Productivity, * 1988-2021
* Output per hour of all persons
(Indexed to 1988)
So if Mushy puts error bars on his FRED-enabled chartcrime, can he say with any confidence that real wages are higher than February 2020?
Also, why doesn’t Macrofluff try asking all questions, if he thinks it’s so easy?
https://news.cgtn.com/news/2022-04-14/China-s-central-bank-vows-to-use-monetary-policy-tools-in-timely-way-19epEKpCMpi/index.html
April 14, 2022
China’s central bank vows to use monetary policy tools in timely way
In line with the requirements of a State Council meeting held a day before, China’s central bank said on Thursday that it will use monetary policy measures, including reduction in reserve requirement ratio (RRR) – the amount of cash banks must hold in reserves – in a timely manner to support the real economy.
The People’s Bank of China (PBOC) will keep liquidity reasonably ample, Sun Guofeng, head of the monetary policy department, said at a media briefing on Thursday, noting that the Chinese economy is under increasing downward pressure.
He also said the PBOC will speed up the creation of two new lending programs to fund banks for lending to technology businesses and the elderly care sector.
Due to the weakening demand, Zou Lan, head of the financial markets department, said that banks in more than 100 Chinese cities have lowered mortgage rates by 20 to 60 basis points since March.
BLS is the source of the data:
https://www.bls.gov/news.release/realer.t01.htm
https://www.bls.gov/opub/ted/2021/real-average-hourly-earnings-down-1-9-percent-from-november-2020-to-november-2021.htm
Of course other manipulations of the data could possibly yield more favorable results.
JohnH: Well, your second link pertains to Nov. 2021. Your first link says nothing about how the real rates compare to Feb 2020.
Hence, I *still* have no idea what you are talking about.
Ask Simon Wren Lewis how often JohnH misapplied ONS data to make the very false claim that Cameron’s fiscal austerity raised UK real wages.
I provided the links to the ONS data and even quoted directly from them, but pgl insisted on moving the goal posts to make a political statement…typical distortion from the faux progressive growth liberal.
At first you denied you made this false claim but now you justify your blatant misrepresentation of the facts by claiming you provided the links? Whoopie! And moving the goal posts? No troll – this is not a rugby match.
What don’t you get? Under the “chart data” BLS provides data going back to2008. It clearly shows February, 2000 real average hourly earnings at $11.02.
They don’t seem to make the historical table readily available, so I saved it when I had the chance. Perhaps you have a back door link to it that you can share?
JohnH: I think you mean February 2020…in your last comment. Well, your data is pertaining to all employees rather than production and non-sup — that would’ve been useful to know. Your measure is much more affected by compositional effects. The one I’m using is AHETPI in FRED, and gets a mnemonic because that’s the one that is more often referred to when analyzing the impact on blue collar workers.
The “back door” is just to use FRED. All the series that have been discussed here are on FRED. There is *no* excuse that it’s hard to get the data.
Yes, the headline refers to Nov 2021…but the data provided under “chart data” goes back not just to February 2020 but all the way back to 2008.
I wish more people would provide data tables with their graphs.
I stand corrected. It should have readFebruary 2020, as in my original comment
Looks like those compositional effects have been wiped out. If not, real wages are headed back towards Obama presidency territory, which will be devastating for Democrats.
JohnH: Compositional effects wiped out?
Compositional effects wiped out…real wages in the more volatile series are back to where they were in February 2020.
If compositional distortions not worked out, and more low wage people are yet to enter the work force, then real average earnings will continue to drop towards Obama era levels.
No – you do not get it. But hey – what’s new?
Yes, the headline refers to Nov 2021…but the data provided under “chart data” goes back not just to February 2020 but all the way back to 2008.
I wish more people would provide data tables with their graphs.
JohnH: But not up to March 2022, which is what you were referring to.
I provided two tables. One for March 2022, the other for 2008 thru November, 2021. Both represent BLS data for Real average hourly earnings, in 1982–84 dollars.
What is the confusion about? If you can find the data in a single table, please provide the link. As I said earlier, I could not find it.
Ah JohnH – your 2nd link has this little title:
Real average hourly earnings down 1.9 percent from November 2020 to November 2021
Well we all know that. But you said real average hourly earnings in Feb. 2020 where higher than they were as of Nov. 2021. Do you need us to buy you a working calendar?
Yes, you need to go beyond the headline an look for “chart data. It has data back to 2008…but pgl can’t be bothered with reading.
I did look at the data. Your original claim was false. You could have corrected that in one comment but you have gone on and on and on trying to defend your utter BS. But that is what you always do.
“Of course other manipulations of the data could possibly yield more favorable results.”
You should know about manipulations of data the way you abused ONS reporting to tell us UK real wage rose when they actually fell a lot.
BLS reports that nominal wages rose form $28.56/hour as of Feb. 2020 to $31.64 as of Feb. 2022 – which is a 10.64% nominal increase.
Over the same period the consumer price index rose by 9.68%.
Yes – I checked BLS for these series as your links are just incoherent as usual.
Now ask your preK teacher – which is larger 9.68% or 10.64%. And then tell her real wages fell during this period. She will have to hang her head in shame having utterly failed to teach you the basics.
Why don’t you just use the Real average hourly earnings, in 1982–84 dollars that I used? It’s official BLS data.
Let’s not obfuscate and mislead by recalculating nominal wages to real wages when BLS already did that for you.
Do you have the slightest clue how BLS calculates real wages. Try nominal wages divided by consumer prices, which is what I did. And you accuse me of misleading people? WTF? How stupid are you?
With proper margins of error, can you say anything confidently about real wages? What is the non-response rate on these wage surveys? How much gets paid under the table?
A simple issue that JohnH does not understand and neither do you. SHUT UP troll.
The flipside of JohnH’s claims are the angry denunciations of the Fed for putting a halt to the growth of wages at the bottom. Seems like inflation has done a very good job of that already.
That was exactly my point when I started commenting on Real average hourly earnings last summer. Where they were headed then, now they have arrived. And the Fed is about to take away the punch bowl, which will wipe out a significant portion of the 6.8% real wage gains of the Trump era. Like it or not, credit Trump or not, Republicans will capitalize—“Are you better off than you were four years ago?”
Now we get why you have wasted so much of our time? You bought a MAGA hat and are campaigning to be Trump’s economic advisor. Well he did hire the Village Idiot Lawrence Kudlow so you’d be perfect for the job!
I don’t have any conspiracy theories having to do with the BLS, though. And when I talk about atrocities, it’s because I think they’re horrible and I have sympathy for the victims and their families and anger for the perpetrators, not because others’ hypocrisy makes me feel superior.
Reminder: Menzie gets off on creating new blog posts to call out the comments of others. Despite not penning new posts to call out his own errors. Recall he asserted the following back in July: “a measure that focuses on infrequently changed prices — the sticky price CPI — has declined, suggesting easing pressures.” And he asserted the following back in June: “However, my view is that the 7% y/y inflation forecasted by for instance former CEA Chair Kevin Hassett is not particularly plausible.” Conclusion: There is an inverse relationship between a blogger’s ego and their dip[edited -MDC] blog posts, on average at Econbrowser.
Oh, you, the worst dipshit on this site is back the with your personalistic slimes of Menzie again, Econned. A lot of us incorrectly thought last year that the inflation rate would come down sooner than it has. I for one always find it annoying to have to admit that Larry Summers might have been right about something I disagree with him on, but indeed a lot of us who disagreed with his forecasts last year have had to admit he proved correct, although he has been proven right for reasons he did not forecast, mostly outbreaks of now three subsequent new Covid-19 variants as well as an invasion of Ukraine by V.V. Putin, all of which have seriously aggravated the supply side problems in the global economy. To the extent US inflation is higher than elsewhere due to policies here, that looks to amount to maybe about 2 percent or more compared to the Eurozone anyway.
Menzie is poking at JohnH who has taken to being one of the most egregious of defenders of that invasion of Ukraine. And now you want to smear Menzie with one of your patented whiney slams when he points out JohnH making a mess of things. Do you want to join JohH as an apologist for Putin’s war crimes? That would really be typical of you, Econned, really typical. That is you all over morally, a defender of war crimes. You are just totally beneath contempt, you worthless effing slime.
Barkley is mad. Hahahaha
I am mad about the ongoing and worsening war crimes of Putin and at anybody attempting to justify them and those who defend those attempting to justify them. So, JohnH is attempting to justify Putin’s war crimes and you are attempting to defend him. So, yes, I am mad at you, worthless slime.
As it is, your history here is to very rarely make a substantive comment on anything. It is almost always to engage in personalistic attacks, with your ones on Menzie especially outrageous. He is a good guy who is very professional. Your smears of him are completely out of line and worthless, like you are.
Barkley is mad because because he thinks I am defending an internet commenter. But I’m not. But to make things even more ridiculous, Barkley some how suggests that my (non existent) defending of an internet commenter as being correlated to a totally unrelated issue. And Barkley Rosser is an academic??? The logical fallacies from this mad man’s mind are almost too much to believe. It’s unreal.
Barkley is mad at an internet commenter. Hahahaha.
war crimes are adjudicated by the winners.
ya alls’ are premature.
in the day we called weatherman attacks criminal
who won that one?
Anonymous: Let me get this straight. So because the Allies won, the Nuremburg trials were invalid? Is that what you are asserting. Inquiring minds want to know (and have a hard time given your impenetrable prose).
Menzie at April 16, 2022 at 1:53 pm
Great question. Would you pose somewhat similar to “Barkley Rosser”?
Example… he seems to think if individual X defends individual Y on topic A (let’s ignore the instances where “Barkley Rosser” is too ignorant to differentiate between defending individual Y on topic A with calling out individual Z’s approach to questioning individual Y on topic A), this somehow means that individual X must also be defending individual Y on topic B. Of which topic B and topic A are unrelated.
Let us all know.
Anonymous,
Your comment about the Weathermen reconfirms that you are sitting in Moscow or some other Russian location to do your Putin bot trolling and really know little about the US. Nobody has gone and declared the crimes of the Weathermen not to be crimes, nobody.
What may have you and your propaganda gang there confused is that some of them served time in jail for their crimes and then got out and reentered society to become more or less productive citizens. But those who did that in fact admitted they committed crimes and regretted what they did. They were not readmitted to society because people somehow decided what they did was great. It was just the opposite. They admitted what they did was wrong and got forgiven.
You are really doing a lousy job of trying to justify Putin’s war crimes here, getting more and more ridiculous.
Another totally pointless piece of whining. That is your forte.
Please dont use profanity econned.
dip[edited -MDC]
Somehow I skipped over this on my first read of his otherwise worthless rant. Funny Barkley wrote the same word and it was not edited. Poor little Econned – the nursery school teacher is not allowing him to curse at all the other kiddies!
It’s been my experience that Menzie is actually more allowing of borderline vulgarity and vitriolic words when it is directed at himself than between commenters. In other words, more protecting of commenters than himself. But he’s saved me from myself a few times, so maybe I’m biased.
I will admit I was wrong on inflation. But I also think it’s utterly ridiculous for a windbag stealing time on Louis Rukeyser’s goodwill/memory to say he was “right” on inflation when he was flatly saying that inflation would be caused by government spending. The inflation was NOT caused by government spending, it was caused by supply chain problems which Summers said nothing about, prior to the time the supply chains issue was apparent to everyone outside of Peter Navarro’s schizophrenia therapist.
“The inflation was NOT caused by government spending”
I find that hard to believe, after almost $5T of spending in two years. Given the kind of models economists use to understand inflation, this level of spending will almost certainly contribute to inflation. Inflation is the interaction of both supply and demand. It’s up to the Fed to be on the ball. Just because they can’t control supply issues doesn’t mean they can’t do anything.
“JohnH
April 14, 2022 at 4:23 pm
Yes, the headline refers to Nov 2021…but the data provided under “chart data” goes back not just to February 2020 but all the way back to 2008.
I wish more people would provide data tables with their graphs.”
Seriously? Most people do tell readers the source of the data along with tables with their graphs. Had you bothered to do so in our original comment, then this total waste of time you have put us through could have been avoided. Come on Johnny boy – before lecturing everyone else try practicing what you preach.