How are wages moving in Wisconsin, relative to the cost of living (as measured by the CPI)? It’s hard to tell.
Category Archives: labor market
Real Wages through November
If current nowcasts are accurate, we see erosion in some real wages, but not even those for hospitality and leisure. That’s not true for total private NFP using the PCE deflator. [italics denote correction 12/5]
Consumer Confidence, Inflation and Unemployment
There’s a lot of discussion regarding the negative impact of inflation on consumer sentiment. That’s definitely there – but unemployment also has a negative impact. And there is a (at least short run) tradeoff between the two. Relevantly, what would unemployment be in the absence of the American Recovery Plan, the CARES Act, and expansionary monetary policies of the Fed?
Are Low Wage Wages Keeping Up with Inflation
If accommodation and food service wages evolve in October in the same way the have covaried with overall leisure and hospitality service wages, then the answer is yes, for a variety of price indexes.
Five Measures of Real Average Hourly Earnings in Accommodation & Food Services
Still likely rising. We’re awaiting October CPI numbers, and October wages for accommodation and food services, but using nowcasts and extrapolations, we can show what real wages look like through October.
Some Trends in Real Wages
An argument increasingly being made is that inflation is being built into wage demands in a context of really tight labor markets, and this would induce a wage-price spiral. This outcome is plausible, but I think it’s useful to compare wages against CPI to see if wages are really abnormally high, and are starting to rise in tandem with inflation. [text corrected 8/13]
Bram, Karahan & Moore: “Minimum Wage Impacts along the New York-Pennsylvania Border”
From conclusion to the Liberty Street post:
In gauging the effects of New York’s escalating minimum wage on two sizable low-wage industry sectors, one growing and the other shrinking, we find that it appears to have had a positive effect on average wages but no discernible effect on employment. It is possible that there was some negative effect on weekly hours worked, though that would imply an even stronger upward effect on hourly wages. However, longer-term effects, if any, remain to be seen. It is certainly conceivable that minimum-wage differentials may affect decisions on firm location, business investment, lease renewal, and the like over a longer time horizon. Moreover, as currently scheduled, the phasing in of the higher minimum wage across upstate New York still has a long way to go. Thus, we will continue to monitor local trends in both employment and wages—particularly in these lower-wage sectors.
The Effect of Proposed Minimum Wage Legislation
Here’s a time series of the real minimum wage, under the Sanders proposal.
Labor Market Monopsony Estimated
Azar, Marinescu, Steinbaum (2018) as SSRN [NBER WP version] [preprint at J.Human Resource]:
Addendum, 2/8 8am Pacific:
And here is a very recent survey of labor market monopsony: Manning, ILR (2021).
A Review of Minimum Wage Effects
From Alan Manning, in Journal of Economic Perspectives (a journal of the American Economic Association), “The Elusive Employment Effect of the Minimum Wage”: