29 thoughts on “Real Wage Growth, thru January 2024

  1. Macroduck

    Non-management workers (production and non-supervisory employees) are enjoying greater hourly pay gains than all workers, evidence of poor pay performance for management. We’ve know that for some time.

    A big drop in hours worked in January looks like a calendar distortion; we’ll see in the next month or two. For now, January’s hours drop leaves non-supervisory workers weekly income up y/y, while all workers are down slightly. This, too, implies tough sledding for managers.

    New Deal Democrat recently noted that good economic news is truer for job changers than for those who don’t change jobs. It seems a safe bet that non-supervisory workers change jobs more often.

    Quits, which are the first step in changing jobs, remain high, but are down from the historic peak earlier in the expansion. That suggests lots of opportunity to improve income faster than the rise in average weekly earnings.

    1. pgl


      You have been more diligent covering China’s economy than I have of late. Of course whenever you note certain issues for their economy Xi”s new cheerleader JohnH goes after you. Oh well. I was writing something on interest rates across nations and decided to check out China’s interest rates. An upward sloping yield curve with low long-term rates which tells me that China is trying to use expansionary monetary policy to avoid weak aggregate demand. A good thing I guess but didn’t Jonny boy tell us that was evil?

  2. pgl

    I get we are all tired of the stupid rants from JohnH in general and in particular his pro-Cameron garbage about how fiscal austerity and weak aggregate demand led to higher UK real wages even though real wages fell a lot at first and only partially recovered by 2015. Our host made a fool out of Jonny boy some 15 months ago but Jonny is BAAAACK this this flat out LYING about what Jeffrey Sachs said in 2015.

    But let’s set out what seems to be Jonny boy’s absurd “model” v. the standard macroeconomic model. Let’s call the Jonny boy one where nominal wages grow by 5% regardless of the state of the economy and regardless of expected inflation. In fact we will call this the Nikki Haley accountant model. After all Nikki is a two faced twit on the order of little Jonny boy. So Cameron inherits inflation above 5% and decides to let a large output gap persist for years succeeding finally in lowering inflation below 5%. So real wages fell a lot but partially recovered later. Now in Jonny’s model, the large output gap helped real wages by magically lowering inflation with no impact on nominal wage growth.

    Now such an idiotic view would get laughed out of any macroeconomic class. Paul Krugman and most economists would point out that high output gaps depress real wages but do eventually lower inflation. So why did the real wage decline stop in 2014. As our host pointed out – the output gap was basically eliminated by 2014. How did that happen you ask given the Cameron fiscal austerity? Oh yea – the BoE ran very expansionary monetary policies keeping interest rates near zero.

    Oh wait little Jonny boy can’t have any suggestion that low interest rates might be a good thing for an economy that starts off with depressed aggregate demand. In fact little Jonny boy finds a 2015 Jeffrey Sachs article that little Jonny boy claims supports his Nikki Haley accountant model. But anyone reading that 2015 article would realize that Sachs has a similar view on the economics here as Krugman or any other serious economist. Of course little Jonny boy is jealous that his fellow gold bugs like Stephen Moore and Judy Shelton were considered for the FED by Trump and he is hoping a President Nikki Haley will choose little Jonny boy as her chief economic advisor. What could go wrong?

    1. JohnH

      Whaat on earth is pgl talking about? Did he even read Sachs’ article?

      And pgl conveniently ignores the impact of high oil prices contribution to the inflation that eroded UK workers’ real wages in the early 2010s. And then, when oil prices dropped, causing inflation to drop to almost zero and allowing real wages to rise, Krugman starts whining about deflation “hurting workers,” when in fact workers were finally starting to do much better…low unemployment, high labor participation. And then, when oil prices and inflation rose again a couple years later, real wages struggled to keep up.

      pgl has this knee jerk need to blame Cameron, when Obama’s policies were very similar, as Sachs noted but denied by pgl.

      1. pgl

        “Did he even read Sachs’ article?”

        I did. You didn’t. His one difference with Krugman was that he thought the UK could get back to full employment using low interest rates rather than fiscal stimulus. Oh wait – little Jonny boy hates using expansionary monetaty policy.

        I laid what Jonny boy’s macroeconomic model (as stupid as it is). Sachs does not accept your insane view of macroeconomics no more than Krugman. I see you are totally incapable of even acknowledging that this is your “model”. Maybe you are so stupid that you have no effing clue what your ridiculous babble even is.

        But come Jonny boy – take the challenge. Write in paper form your advanced and new macroeconomic thinking on these matters. Send it to the editors of the American Economic Review. Maybe you will get published and receive a Nobel Prize? Or maybe the editors will fall on the floor that someone wrote something so incredibly dumb.

        But take the challenge little boy – we dare you.

      2. pgl

        “Obama’s policies were very similar, as Sachs noted but denied by pgl.”

        Such a stupid lie. I criticized the 2011 move to fiscal austerity in the US as premature. But here’s something little Jonny boy is afraid to admit. The low interest rate policy of the FED which Jonny boy argues was evil was the same as the low interest rate policies of the BoE which did eventually get the UK back to full employment – as noted by Dr. Chinn in Nov. 2022 takedown to your endless trash. But I guess little Jonny boy was too dumb to notice that either.

        BTW if Sachs was noting the benefits of a negative cost push shock (oil prices) he was on the same page as Krugman and most of the adults here. But again little Jonny boy is too stupid to notice that either.

        Dude – you are a moron. Everyone gets it. But please keep reminding us that you are the dumbest troll God ever created.

    1. Macroduck

      Another know-nothing Johnny-mumble.

      Two things drive changes in real wages, but Johnny is fixated on only one of them – inflation. Inflation is now back down toward the Fed’s 2% target, and monetary policy is still tight. Tight monetary policy is contractionary – it tends to weaken growth.

      The other thing that drives change in real wages is demand for labor. Real wages weaken in recession, then strengthen after periods of healthy growth in employment:


      Johnny insists on ignoring job growth, focusing only on inflation. And, by the way, job growth isn’t only good for workers because it drives wages higher. Job growth is also good for workers because more of them have jobs. No matter how many times I point that out, Johnny ignores it. Johnny ignores anything which doesn’t support his views.

      Like how he ignores Russia’s decision to invade Ukraine – somehow, the U.S. is to blame for all the death and suffering caused by Russia’s war? No. Russia is, but Johnny has never acknowledged Russia’s role in the war.

      1. JohnH

        Wow! Ducky actually acknowledged that a declining inflation rate is a big contributor to real wage growth! Until now the emphasis has been almost exclusively on the false premise that labor’s DEMANDING higher wages is what leads to higher wages. I am willing to accept the idea that tight labor markets have contributed to Corporate America’s deigning to grant their employees somewhat higher wages.

        1. pgl

          “the false premise that labor’s DEMANDING higher wages is what leads to higher wages. I am willing to accept the idea that tight labor markets have contributed to Corporate America’s deigning to grant their employees somewhat higher wages.”

          Can you be more idiotic. First you deny economics altogether and then you sort of concede the point you just denied. Now you could be spending your worthless stupidity writing up your little model for the AER. What has stopped you? Are you that much of a little coward?

          Oh wait – maybe you get that the editors would be laughing their rear end’s off at your draft paper.

  3. James

    In my view the Covid pandemic changed everything – especially work. So called front-line workers – construction, re-modelers, caregivers, food preparation, supply chain workers, nurses, assemblers, etc. – have become much more valuable. and increasingly “white collar” office jobs are being augmented/replaced with AI or have increased productivity. (I will also mention that women have made strong gains in the post-pandemic economy – https://www.americanprogress.org/article/fact-sheet-the-state-of-women-in-the-labor-market-in-2023/)
    The Biden administration recognizes these trends – hence policies and legislation like Infrastructure Investment and Jobs Act https://en.wikipedia.org/wiki/Infrastructure_Investment_and_Jobs_Act and providing widespread rural broadband: https://www.whitehouse.gov/briefing-room/statements-releases/2023/06/26/fact-sheet-biden-harris-administration-announces-over-40-billion-to-connect-everyone-in-america-to-affordable-reliable-high-speed-internet/ (BTW – I can’t find good comprehensive articles in media on this – so had to link to WH press release.) (and yes farmers need the Internet to help manage their operations.)
    Meanwhile the GOP wants to oppress women with a national abortion ban and restricting their travel https://digbysblog.net/2024/02/26/not-mincing-words/ and plans to deport millions of frontline workers if they get back the Presidency https://www.axios.com/2024/02/11/trump-promise-deport-millions-migrants-reality
    Also if you want responsible governance – do not vote for the GOP – for the fourth time this session the GOP is marching toward a govt shutdown https://www.msn.com/en-us/news/politics/deal-to-dodge-government-shutdown-appears-to-stall-amid-gop-policy-demands/ar-BB1iS26S
    (also take a look at the GOP policy demands – they don’t like that a person on SNAP had the audacity to use a little of their SNAP money to buy a few treats/candy.)

    1. James

      Menzie – I would like to add this article that I read today on “The economy is roaring. Immigration is a key reason.” https://www.washingtonpost.com/business/2024/02/27/economy-immigration-border-biden/ “Fresh estimates from the Congressional Budget Office this month said the U.S. labor force will have grown by 5.2 million people by 2033, thanks especially to net immigration. The economy is projected to grow by $7 trillion more over the next decade than it would have without new influxes of immigrants, according to the CBO.”

  4. JohnH

    Claudia Sahm has a great interview talking about the benefits of automatic stabilizers and the need to get them in place before the next recession.

    There has been a lot of jibber-jabber about how the next recession is nigh (crying wolf?), but very little discussion about how to prepare for it. Sahm characterizes the Great Recession and the COVID recession as fiscal policy Goldilocks scenarios, one too cold, one too hot. Applying lessons learned from those scenarios to make robust stabilizers automatic would represent good government at its best. Besides immediately helping those hurt most by recession, more robust automatic stabilizers would help the economy by maintaining aggregate demand.

    But so far, all I have seen here is commenters promoting rate cuts, which, as we all should acknowledge by now, immediately helps Wall Street, banksters and investors. As side benefit (heavily advertised), it may at some point in the distant future also trickle down to the unemployed and underemployed.

    1. Macroduck

      “…but very little discussion about how to prepare for it.”

      Utterly wrong. There is a gigantic literature on automatic stabilizers and counter-cyclical policy. Anyone who knows anything about economics knows that.

      “But so far, all I have seen here is commenters promoting rate cuts, which, as we all should acknowledge by now, immediately helps Wall Street, banksters and investors. As side benefit (heavily advertised), it may at some point in the distant future also trickle down to the unemployed and underemployed.”

      Another silly Johnny-mumble. Financial prices react to expectations, while real economic activity responds ove time to changed conditions, including changes in interest rates. The fact that fiancial prices respond first is a stupid objection to any economi policy. Johnny is confused – or more likely, wants to confuse others – about how the economy works. Arguing that gains in financial assets, which reflect an expectation of real economic gains, is a reason to keep interest rates higher than necessary is to argue against future employment an wage gains and growth, merely to avoid gais for investors. You want to avoid enriching the rich? Tax them.

      Johnny’s argument amounts to favoring lenders (the rich) over borrowers (everybody else) while restraining growth.

      1. pgl

        “There is a gigantic literature on automatic stabilizers and counter-cyclical policy.”

        There is indeed. Automatic stabilizers mitigate the harm from weak aggregate demand – not eliminate the harm. Everyone knows that except for my mentally retarded stalker.

        Now the form of counter-cyclical policy that Jeffrey Sachs wrote about in 2015 was low interest rates pursued by the Bank of England. Of course dumbass Jonny boy hates low interest rates and does not realize his boy Sachs strongly disagrees.

        1. JohnH

          ” There is a gigantic literature on automatic stabilizers and counter-cyclical policy.” There is also a gigantic literature on medieval religious doctrine. So what? What use is it if it molders on economists’ book shelves and is not brought into current political discussion. It is an election year, you know.

          Claudia Sahm should be applauded for calling attention to it and trying to promote it.

          So far all I see as a policy response to a potential recession is for the Fed to lower interest rates…and boost the value of the wealthy’s asset portfolios. If Ducky understood the transmission of monetary policy, he would know that the Wealth effect is a BIG factor. For someone to downplay its impact is circumstantial evidence of being a Wall Street shill.

          1. pgl

            “There is also a gigantic literature on medieval religious doctrine.”

            I guess you read that instead of economics. Dude – you have no effing clue what she said in that discussion. But that is usual for the dumbest troll God ever created.

          2. pgl

            ” If Ducky understood the transmission of monetary policy”

            Like you do. After all – you keep saying monetary policy has no effects. Never mind exchange rate effects etc. Oh wait – I’m doing economics which little Jonny boy thinks is 13th century religious doctrine.

          3. baffling

            ponzi johnny, you do nothing but whine as an attempt to bring your topic to attention. most of what you claim is not accurate, but you do not care. it is simply your excuse to bring a particular topic to print. you do nothing but criticize free market capitalism while indirectly promoting your communist views of the economy. you are anti-capitalist Johnny, but don’t have the guts to admit it online.

        2. pgl

          “So far all I see as a policy response to a potential recession is for the Fed to lower interest rates”

          Lord – you are a low life liar. Macroduck does not oppose fiscal stimulus to offset recessions. But Jonny boy has opposed fiscal stimulus in such situations. Now Jonny boy can discuss economics as it is all over his little pea brain so he responds with worthless and dishonest gotchas.

          Anyone this stupid, dishonest, and utterly worthless should be banned from any adult conversation.

      2. pgl

        During the last 3 minutes she noted the fiscal stimulus during the Great Recession should have been bigger – a point Krugman has often made. The same holds for fiscal policy in the UK after the Great Recession. But we see little Jonny boy telling us that the Cameron fiscal austerity was just grand. Another episode of Jonny boy not finishing his own damn links as it seems he forgot to listen to the last 3 minutes of her discussion.

        1. JohnH

          No, pgl. You’re lying again. I stated many times that I preferred Nicola Sturgeon precisely because she was the only candidate who advocated fiscal stimulus. And I support more robust automatic stabilizers for exactly the same reasons…something that pgl refuses to do, preferring interest cuts that creates a wealth effect boosts the value of asset portfolios of wealthy investors.

          1. pgl

            Nicola Sturgeon was running to be UK prime minister? Dude – you can’t even read a short comment. But – you are dumber than a retarded rock.

          2. pgl

            Nicola Ferguson Sturgeon (born 19 July 1970) is a Scottish politician who served as First Minister of Scotland and Leader of the Scottish National Party (SNP) from 2014 to 2023.

            OK! FYI – Scotland is only part of the UK. Fiscal austerity buff Cameron that Jonny boy adored was replaced by Tory Theresa May. Something tells me flip flopping Jonny boy has no clue what her fiscal stances were.

            Which has nothing to do with the discussion of fiscal policy from 2008 to 2015. But I guess Jonny boy had to change the subject since all the kiddies are already laughing at this incompetent clown.

    2. pgl

      I just listened to her entire 17 minutes. Something tells me you did not listen to the last 3 minutes. Three comments:

      (1) They want to call this “new” thinking but much of what she said was being said when I first stated taking some 50 years ago. Of course little Jonny boy has never taken a single course in economics so hey!

      (2) She did mention her own research as well as the events during COVID and the Great Recession which the adults here learned from but not little Jonny boy.

      (3) During the last 3 minutes she noted the fiscal stimulus should have been bigger – a point Krugman has often made. The same holds for the UK. Now I get your boy Sachs tried to deny this but her comments note why Krugman was right. But of course little Jonny boy once again failed to finish his own damn link. Not that little Jonny boy understood a damn thing she said.

  5. pgl

    Why does the Wall Street Journal write such transparent lies?

    Hotel Staff Shortages Threaten to Push Travel Costs Even Higher
    Room rates look poised to rise as owners pass on escalating wage costs


    ‘At the same time, hotels across the U.S. have held their daily room rates near all-time highs this winter, in part to offset the increase in wages to lure workers back. Hotels will collectively pay $123 billion in compensation this year, up more than 20% from 2019, according to the American Hotel & Lodging Association.’

    Wow! a 20% increase over a 5-year period when consumer prices have risen by about the same amount! And this WSJ source did not bother to do this in compensation per hour either. Kevin Drum who alerted us to this WSJ spin went to the BLS to at least show us hourly compensation in real terms over the past 2 years.

  6. pgl

    Macroduck provided something useful to counter the endless trash from Jonny boy – noting the obvious that higher demand for labor raises real wages and providing evidence to this effect. Actually Jonny’s position has also been the high output gaps (lower demand for labor) raises real wages as utterly as stupid as that is. Jonny protests that he has that UK under Cameron period where maintaining a high output gap magically raised UK real wages. Of course it has been repeatedly pointed out that real wages fell a lot while the output gap was maintained and only partially reversed this trend when lower UK interest rates finally closed this gap in 2014/5.

    But it become clear as can be that little Jonny either does not understand the data or is willing to lie about it for almost a decade. So permit me to offer two episodes that clearly make my and Macroduck’s point. High aggregate demand economies like the one we had from the beginning of 1963 to the end of 1973 (yes spurred by the US military Keynesian of the evil Vietnam War) had rising real wages even as high was high. Even though consumer prices rose by more than 50%, real wages rose by more than 16% as the high aggregate demand drove up nominal wages faster than consumer prices rose. This is well know economic history but little Jonny boy probably forgot just like he forgot to protest this war.

    OK let’s update this by talking about an evil war that Jonny celebrates on a daily basis. Putin’s war crimes into Ukraine have created a similar military Keynesianism driving up inflation. Of course Jonny boy celebrates the rise in real wages even as this MORON does not realize this episode also contradicts Jonny boy’s stupid economic model.

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