> millions of Americans are hurting from years of rising prices...
...and very little corresponding increase in income. The last time the US minimum wage was raised was 15 years ago, almost to the day! Spend some time talking to people and you'll discover their actual wages, not inflation-adjusted wages, but actual wages, haven't appreciated much in the past 15 years. But boy oh boy have prices increased! As have corporate profits! Makes it rather obvious where the money is going, doesn't it?
Nominal wages have been increasing slower than inflation for quite some time. 2022 just made it obvious to everybody what's been going on for some time since the inflation was higher.
> The number of people making federal minimum wage is tiny, around 0.1% of all workers:
This is largely meaningless. My first job in high school paid $6.51/hr. The minimum wage at the time was $6.50/hr. I would not be part of the 0.1% earning minimum wage - but in practice I wouldn't be any better off than them either.
I suspect a lot of employers play this game so they can claim "pays above minimum wage" in their job posting (that's what my employer did).
In 2014, 1.7% of workers were paid the minimum, and the 10th percentile hourly wage was $8.62, which you could reasonably say was barely more than the minimum. So there were a lot of people making minimum wage or fairly close to it:
and the number of people making exactly minimum wage has shrunk dramatically, from ~1.7% to ~0.1%. So it seems reasonable to say that the number of people making close to minimum wage is now quite small.
Would it be fair to say our minimum wage is now so low as to be basically non-existent, in that its effect on the jobs market is negligible? Or is there still some effect of having it there despite the fact that so few jobs actually hit that floor?
it shows that the companies are not competing with each other for talent, one reason is that due to immigration & international learning centers Oxbridge provide a stream of (white collar) skilled workers needing a visa willing to work for lower ball offers
Most people that claim they cannot pay the bills make more than enough to pay the bills and save but get stuck into a loop of overspending and buying things without thinking. This seems to be a very specific American issue.
I grew up in a country where the average monthly income is half of here in the US even though groceries and rent is probably about the same. What you see is people go out of their way to buy cheap groceries, and think hard before buying stuff they don't need. What I see here in the US is that even the poorest people seem to be on a spending spree, or have a hard time to lower their standards to something sustainable. There seems to be a bigger shame in the US to try to be frugal and not spend a lot of money. We need to teach people how to live with 3000$ per month, that is still a lot of money.
Yea, the strength and excess of the US consumer is both blessing and curse.
It to a certain extent increases our standard of living and makes stimulus really move through the economy, unlike a lot of more frugal countries / cultures that just save it all, but of course it makes us more precarious.
However, it's also a systemic regulatory issue where companies are able to essentially scam customers, offer deals that are too good to be true, etc. which further extracts money from our working class.
There's an unhappy medium between European-style consumer protections and many countries where the lack of regulation makes everyone very savvy to how everyone from big companies to street merchants are likely trying to scam them.
It’s hard to generalize. Americans from different parts of the country have different relationships with frugality and entitlement.
Lower income people in high COL places like NY typically know how to survive through frugality. They’re more like the rest of the world.
Lower income people in less competitive places tend to find it harder and expectations and the level of hustle are different.
For instance, I was a former international student and used to live in a 400 sq ft apartment. This to me was a ton of space, an amazing upgrade from the 100 sq ft room that I used to rent. To most (non-New Yorker) Americans, this makes them feel claustrophobic. They need more space. And a house with a yard. I’m in my 40s and currently live in a 600 sq ft apartment and it’s more than enough space.
As a former international student, schools would often publish guidelines on living expenses — food, rent, entertainment. It was always surprising to me how much they think a student needed to budget for entertainment. But it was based off the average American budget for entertainment. Most poor international students could live off much less — I almost never ate out, never went to the movies. Instead I borrowed books and DVDs from the library. There are free things to do in every city. And shopping at ethnic groceries and cooking cuts your food bill by up to 30%.
It should be pointed out that just inflation decreasing still means there is inflation. That means prices would still be higher and that is what expectations should be when there is inflation.
22 comments
[ 4.1 ms ] story [ 59.0 ms ] thread...and very little corresponding increase in income. The last time the US minimum wage was raised was 15 years ago, almost to the day! Spend some time talking to people and you'll discover their actual wages, not inflation-adjusted wages, but actual wages, haven't appreciated much in the past 15 years. But boy oh boy have prices increased! As have corporate profits! Makes it rather obvious where the money is going, doesn't it?
https://www.stlouisfed.org/on-the-economy/2023/feb/nominal-w...
The number of people making federal minimum wage is tiny, around 0.1% of all workers:
https://www.bls.gov/opub/reports/minimum-wage/2023/home.htm
This is largely meaningless. My first job in high school paid $6.51/hr. The minimum wage at the time was $6.50/hr. I would not be part of the 0.1% earning minimum wage - but in practice I wouldn't be any better off than them either.
I suspect a lot of employers play this game so they can claim "pays above minimum wage" in their job posting (that's what my employer did).
https://www.epi.org/publication/stagnant-wages-in-2014/
However, 10th percentile wages are now $14/hour, which is almost double the minimum:
https://www.bls.gov/news.release/pdf/ecec.pdf
and the number of people making exactly minimum wage has shrunk dramatically, from ~1.7% to ~0.1%. So it seems reasonable to say that the number of people making close to minimum wage is now quite small.
Given that minimum wage is a leave school asap, don't bother learning anything, then just push a broom round a shop.
You used to get 50% more of that by working hard at school, spending years on you career, and getting a median income.
Now you get 30% more.
Increasing minimum wage just means you're reducing the relative wage of those who set their goals a little higher.
Most people that claim they cannot pay the bills make more than enough to pay the bills and save but get stuck into a loop of overspending and buying things without thinking. This seems to be a very specific American issue.
I grew up in a country where the average monthly income is half of here in the US even though groceries and rent is probably about the same. What you see is people go out of their way to buy cheap groceries, and think hard before buying stuff they don't need. What I see here in the US is that even the poorest people seem to be on a spending spree, or have a hard time to lower their standards to something sustainable. There seems to be a bigger shame in the US to try to be frugal and not spend a lot of money. We need to teach people how to live with 3000$ per month, that is still a lot of money.
It to a certain extent increases our standard of living and makes stimulus really move through the economy, unlike a lot of more frugal countries / cultures that just save it all, but of course it makes us more precarious.
However, it's also a systemic regulatory issue where companies are able to essentially scam customers, offer deals that are too good to be true, etc. which further extracts money from our working class.
There's an unhappy medium between European-style consumer protections and many countries where the lack of regulation makes everyone very savvy to how everyone from big companies to street merchants are likely trying to scam them.
Lower income people in high COL places like NY typically know how to survive through frugality. They’re more like the rest of the world.
Lower income people in less competitive places tend to find it harder and expectations and the level of hustle are different.
For instance, I was a former international student and used to live in a 400 sq ft apartment. This to me was a ton of space, an amazing upgrade from the 100 sq ft room that I used to rent. To most (non-New Yorker) Americans, this makes them feel claustrophobic. They need more space. And a house with a yard. I’m in my 40s and currently live in a 600 sq ft apartment and it’s more than enough space.
As a former international student, schools would often publish guidelines on living expenses — food, rent, entertainment. It was always surprising to me how much they think a student needed to budget for entertainment. But it was based off the average American budget for entertainment. Most poor international students could live off much less — I almost never ate out, never went to the movies. Instead I borrowed books and DVDs from the library. There are free things to do in every city. And shopping at ethnic groceries and cooking cuts your food bill by up to 30%.
Prices for these, prices are raising much faster than inflation and their wages, so yes. My only surprise is 39% seems a bit low.
Slowly returning to normal, not particularly marked savings. If I were to sell now I'd be roughly even
Deflation is when prices go down.
https://www.wolframalpha.com/input?i=combined+net+income+of+...