Friday, July 31, 2015

Low salary, health-care increases mean workers deserve more

It's a relatively small report, but I think it told a relatively large story that won't get the notice that it may deserve. Today, the Bureau of Labor Statistics released the quarterly unit labor costs, and it set a new record for the 33 years that report has been in existence ....and not in a way that helps most people.
Labor costs in the United States recorded their smallest increase in 33 years during the second quarter as workers were paid less in commissions and bonuses. The tiny gain appeared to be a temporary wage growth setback against the backdrop of diminishing labor market slack.

The employment cost index, the broadest measure of labor costs, edged up 0.2 percent in the quarter, the Labor Department said on Friday. That was the smallest gain since the series began in the second quarter of 1982. The index rose 0.7 percent in the first quarter.
If you dig inside the numbers from the BLS, you'll see that both wages and benefit costs have been largely held in check.
Wages and salaries (which make up about 70 percent of compensation costs) was also little changed at 0.2 percent, and benefits (which make up the remaining 30 percent of compensation) was little changed at 0.1 percent....

Civilian Workers
Compensation costs for civilian workers increased 2.0 percent for the 12-month period ending June 2015, unchanged from the 12-month period ending June 2014. Wages and salaries increased 2.1 percent for the current 12-month period. In June 2014 the change was 1.8 percent. Benefit costs increased 1.8 percent for the 12-month period ending June 2015. In June 2014 the increase was 2.5 percent.
So despite the fact that the country's unemployment rate keeps falling, that does not seem to be reflected in upward pressure on wages, which should happen in a tightening labor market. But instead, business owners seem to be taking the extra output and putting it in their pockets or buying equipment instead of giving raises to the workers that helped to make it happen. More evidence that the "trickle-down" of growth simply does not happen in 2010s America, and instead has to be demanded.

Also, it sure seems like Obamacare isn't exactly being an expensive job-killer, as the BLS notes that the increase in employer cost for their employees';health care benefits is also small. Before Obamacare was passed in 2010, there had not been a year-long increase in health care costs-per-hour of less than 3% since 1998, and it was 5.0% in the 2nd and 4th Quarters of 2010. Take a look at what has happened in the last 4 years, as Obamacare has been fully implemented.

12-month change in cost of employer health benefits
Q2 2012 2.4%
Q2 2013 2.6%
Q2 2014 2.7%
Q2 2015 2.8%

You think any of the GOP candidates will bring up this fact as they have their absurdity of a debate next week? Yeah, I'll think they'll leave that inconvenient truth out. On the flip side, the fact that health care and other benefit costs are being managed should make you wonder why workers aren't getting a payoff with higher wages, since employers should have more funds freed up to pay them.

It tells me that the final piece on the Obama Recovery has yet to be realized, which is real 1990s-style wage growth that truly raises the middle and working classes. GOP governors like Scott Walker doing everything in their power to limit those wages even further shows that these guys don't know how to solve this problem...and they likely don't want to. This is because the ultimate end game for corporatist politicians and the oligarchs that donate to them is to make the other 99% that aren't in the "inner circle" to be serfs to the rich and connected, who squeeze all the profit out of workers, take their disproportionate cut, and then tell the worker that "you'll enjoy the pittance of any increase we decide to give you."

Shouldn't we demand more?

No comments:

Post a Comment