Quarterly Increase in U.S. Worker Pay Smallest on Record

[marmar]

(Bloomberg) Wages and salaries in the U.S. rose in the second quarter at the slowest pace on record, dashing projections that an improving labor market would boost pay.

The 0.2 percent advance was the smallest since records began in 1982 and followed a 0.7 percent increase in the first quarter, the Labor Department said Friday. The agency’s employment cost index, which also includes benefits, also rose 0.2 percent in the second quarter from the prior three months.

Federal Reserve Chair Janet Yellen and her colleagues are counting on rising wages to boost the economy and bring inflation closer to their 2 percent goal. The setback may prompt some officials to call for a delay in raising interest rates for the first time since 2006.

“You’re really not building up the tightness that everyone says,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York, who projected the overall ECI would rise 0.5 percent, among the lowest estimates. “For the people who were saying the Fed’s got to raise rates in September, this is a shock,” ..................(more)

http://www.bloomberg.com/news/articles/2015-07-31/worker-pay-in-u-s-rises-0-2-smallest-gain-in-records-to-1982

[djean111]

1. To be expected when Wall Street demands quarterly profit increases. nt

[Warpy]

2. Then they wonder why demand is decreasing and growth is flat

This country is being run by a bunch of Rand addled fucking idiots.

[eridani]

3. Robert Reich comments

http://readersupportednews.org/opinion2/277-75/31605-worker-pay-is-rising-at-the-slowest-rate-ever-recorded

Worker pay is rising at the slowest pace ever recorded. But it's worse than that because the new data include everyone who's paid -- including top CEOs and Wall Street moguls. The fact is, most people's pay is stagnant or dropping when adjusted for the costs of living, including rents that are going through the stratosphere.

Conservative Republicans like this. They've long said that Americans are living beyond their means and that the best way to revive the economy is for pay to drop. That's why they don't want to raise the minimum wage, why they advocate so-called "right-to-work" laws that destroy unions, why they're in favor of outsourcing jobs abroad through "free trade" policies like the Trans Pacific Partnership, and why they're happy for companies to shift from hiring people full time to relying on independent contractors and part-time workers.

But Republicans have it completely backwards. When pay stagnates or declines, people don't have the money to buy beyond necessities -- which causes the economy to slow, as it's been doing (the latest report showed the U.S. economy grew at an annual rate of 2.3 percent in the latest quarter, but the Commerce Department also marked down its growth numbers for prior years). Add to this the record share of workers who don't know how much they'll earn from week to week or even from day to day, because of the increasing reliance on part-time and independent contract work. That uncertainty is also holding back spending, which, in turn, retards the economy.