The NYTimes runs an article claiming that the labor market is tight, and has proof that year/year growth of Wage Labor below management level was 2.8%. Tyler Cowan has hopes of finally attaining labor market equilibrium. The growth of Wages is real, but still behind the productivity gains. Tyler also provides a link which should be studied. Do such Wage gains replace the huge losses sustained by American labor from American Corporate shedding of side benefits programs? Recovery from that Shedding would seem impossible to estimate, but probably requires a Pay increase overall in excess of 8%.
Tim Worstall weighs in with links to his previous Posts, which basically states Wages will not rise rapidly when Productivity is increasing, and Wages are gaining now because Productivity is falling. Not entirely the whole Answer. Wage increases must drag behind Productivity because Profits must be registered, evaluated, and Wage Demands must be examined for force (Business managers do not provide Wage raises gratuitously). They examine how tight the labor market actually is, how much Workers are actually pressured by Price increases, and what Wage mix they could endure with the extended Wage raises if the economy turned sour.
The tight labor market, itself, is more Urban Legend than reality. Retailers hire for the Christmas crowd, and most often offer as Wage only what they have to present to get the labor. This labor is expected to be Laid-Off or offered greater Pay by mid-February at the latest. Now We must talk about Immigration flows. A probable quarter-million to One million Mexicans employed in this Country plan to return to Mexico for Christmas. Immigration (legal and illegal) from Mexico traditionally declines during the Christmas season. We have lost many Entrants into the American labor market, though the BLS reports an increase in Those looking for Work (I imagine some native U.S. citizens are attempting to reenter the American labor market at a time of high viability). lgl
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