Current Events > Labor markets are hot, so why aren't wages going up?

(+) Yeah! (+)

https://www.bloomberg.com/news/articles/2018-08-22/what-s-holding-back-wages-in-america

Unemployment has plummeted to 3.9 percent, the lowest level since the early 2000s. Earnings calls are replete with chief executive officers bemoaning employee shortages. Small businesses are also feeling the pinch. In a July survey by the National Federation of Independent Business, 37 percent of owners reported at least one vacancy, and more than half said there were few or no qualified candidates for the job.

Despite this, wages are creeping higher rather than making the robust gains a hot labor market ought to produce. Accounting for inflation, paychecks actually shrank in July. The disconnect has surprised Wall Street economists and Federal Reserve policymakers alike.

To shed some light on what may be holding down pay, Bloomberg News reporters interviewed employers in three industries in which wages remain low despite persistent reports of worker shortagesconstruction, long-haul trucking, and child care.

What they found is that the impediments keeping wages from taking off are diverse, and in some cases seem unlikely to change quickly. Still, there are glimmers of hope that a tight labor market might be on the cusp of pushing earnings higher.

In Tennessee, one trucking company is having success in recruiting drivers with higher pay, hinting at a turning point in an industry where wage gains have lagged. Atlantas construction market, on the other hand, shows that raises cant help alleviate a shortage if theres a dearth of qualified workers. The experience of a child-care center in Minnesota illustrates that slow wage gains in other industries can put a structural ceiling on pay in service-sector jobs.

hmmm, almost like labor in america has little to no bargaining power for some reason
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Automation
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Need to use all that money to buy more money via stock buybacks. Sorry proletariat, we need profit.

hmmm, almost like labor in america has little to no bargaining power for some reason

Yes. You you have solved the puzzle.
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We need to stop demonizing blue collar. A labor shortage due to a lack of qualified workers isn't fixed through collective bargaining.
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Still, employers are holding annual raises to about 3 percent, which is just tracking inflation, preparing for the moment when labor shortages will force them to pay higher salaries. Starting pay in the Atlanta area is about $15 an hour, almost double the federal minimum, and some in the industry say theres no point in raising it too quickly. Higher wages would largely draw unskilled laborers when the main demand is for skilled positionspainters, roofers, electricians, carpenters, and bricklayersand would elevate house prices, says Brown, whose JWB Properties in Smyrna, Ga., specializes in high-end homes. Construction work is not easy, he says. Most people wont work that hard.

Labor is a commodity, just like everything else. You don't voluntarily pay more for a tomato when expecting a future shortage.

I don't have a "clever" analogy for the second bolded bit.

s0nicfan posted...

We need to stop demonizing blue collar. A labor shortage due to a lack of qualified workers isn't fixed through collective bargaining.

This. We need to find a way to destimatize vocational training.
Increased wages just seem to attract highschool dropouts who can't really do anything but push a mop, when businesses wouldn't mind hiring a highschool dropout who competently can do wiring or masonry.