There has been several months of solid hiring yet wages
haven’t increased. Reportedly the Federal Reserve wonders why. Actually the
explanation is simple; there is surplus labor in the U.S.A.
Labor supply and demand still works even in an era where fiscal
reality for the Federal government seems sketchy.
After 2008-9 when the economy crashed mildly and millions
lost jobs the Federal Reserve and U.S. administrative leadership through
reality to the winds and bailed out big banks, gave zero-interest loans to them
too, and they bought up surplus housing. President Obama got as many as
possible to retire or collect social security as he could and otherwise get rid
of surplus labor artificially. That help lower the unemployment rate, in
addition to creative accounting that found new ways to exclude people from
being counted.
President Trump has continued a steady hiring pace that
began with President Obama’s last year. He also inherited the Obama fake
accounting news system for recognizing the unemployed. The percent of American
adults working is still just 67%. Before 2008 it was about 70%. Those unemployed yet not counted Americans will seek to return to find jobs as demand increases. Unfortunately Hurricane Harvey may increase the long-term unemployed. And if Hurricane Irma makes it to the Gulf Cast redoubling damage the costs including unemployment will go up further.
White American male wages have stagnated since the
1970s.There are a number of reasons for their experience yet the basic cause
was surplus labor. Following contraceptives and abortions women demanded equal
work and pay with men bring a larger work force and creating labor surplus. At
the same time automation and then robotic arrived further reducing white male
work exclusivity.
Following that was the end of the cold war that brought a
huge, global labor pool from former communist countries including China. Global
transportation and communications made foreign production a fact of life.
Finally there was the insourcing of tens of millions of illegal foreign workers
from Mexico. Those factors have worked to stagnate white male wages, destroy
labor unions and to presently effect the value of American labor generally
including the newer laboring classes. Without labor shortage and there isn’t
one, or without increased labor skill with that skill in increased demand,
wages don’t rise. Illegal workers may be the only ones that should experience
increased wages as the demand for them increases while the supply decreases.
