The new wage numbers came out today, and they disappointed again.



Economists had projected a 3.2% rate of increase in productivity and a 0.3% rise in labour costs.

Versus a year-ago, productivity was 1.5% higher and labour costs 0.7% lower.

In parallel, hourly compensation was only up by 0.8% and down by 1.1% when adjusted for changes in the price level.

November recorded the slowest pace of wage growth in the past three years.



Year after year economists admit to how "puzzled" they are by stagnant wages. It's a real "mystery" to them. Then they go ahead and predict that wages are about to shoot higher, just like they predicted the year before, and the year before that.

They are consistently wrong because their paychecks depend on not understanding their jobs.

For instance, economists and politicians are unanimous in declaring free trade as a universal good. Any worker with more than two functioning brain cells can tell you it isn't.



Efforts to renegotiate NAFTA have so far mostly ignored the paramount issue — the outsourcing of industry and jobs to Mexico because of its very low wages and lack of labor rights.

...With wages around a dollar an hour, the U.S. “Big Three,” Japanese and German companies moved production to Mexico, with suppliers swarming in mass alongside. Low wages in Mexico are ingrained in a labor structure where workers have no rights. They labor under so-called protection agreements between the employer and a “union” attached to the government. There are thousands of these “agreements” often signed before there were any workers or without their participation or consent. Complaints by employees on working conditions were invariably thrown into a dark hole composed of labor boards controlled by the government or CTM and the hostile company. Industrial wages in Mexico in real-dollar terms have gone down in the 25 years of NAFTA, even as productivity has gone up 80 percent. A new $1 billion BMW plant recently opened shows this trend continuing — wages will range from $1.10 to $2.53 per hour according to a review from Bloomberg.

So far, there has been a broad failure to face up to this issue during the current negotiations to revamp NAFTA.

Wages are a reflection of leverage. More productivity doesn't mean increased wages anymore than more corporate profits turn into wages. When you take away power from workers, when you make them nothing but a collection of individuals, they are weak.

Lowering taxes and cutting regulations on corporations won't turn into better pay either. Despite the lies coming from Republican mouths.



Profit margins increased after the Great Recession and over the past 6 years have been above 9%. However in this timeframe wage growth has been around 2%. One of the reasons for the bounce back in margins and increased company profitability is due to wage growth being low. Just because a company were to make even more money shouldn’t change this trend.

Besides the ability of economists, politicians, and the news media to ignore this basic and indisputable fact, there is also selective amnesia.

That's why I enjoyed this letter to the editor.



During that meeting, we provided Smith and Walker with some studies and analysis, one of which was done by the Higgins Labor Studies Program, University of Notre Dame, public commentary, dated Jan. 3, 2012, titled “Right to Work Lowers Wages — And That’s a Fact,” written by Marty Wolfson.

We pointed out to them that there was quantitative data that showed that states that became right-to-work saw a corresponding reduction in wages for union and non-union workers alike of $1,500 per year, according to Notre Dame’s Higgins Institute. They both seemed to understand that going right-to-work would slow their constituents’ wage growth, but they saw that as a positive. They said it would make it more attractive for businesses to come to Indiana.

Let me repeat that. They chose to enhance corporate profits over the wages of their constituents. That means every year, hard-working Hoosiers will slowly fall further behind workers in non-right-to-work states, because the system has been rigged against them by this state’s Republican-controlled Legislature.

As I said, the slowed wage growth of Hoosiers is not a bug; it is a feature.

The next time you hear a politician, economist or pundit say something about the need to "be more competitive", it simply means cutting your wages. It's part of the plan.