NY Mag - Most Americans' Wages Have Actually Declined Over the Past Year

Can you have a great economy when workers' real wages are not merely stagnant, but somehow are falling even though unemployment is allegedly low. Put another way, if you have low unemployment, this should cause wages to rise, since it is should be difficult to hire. Perhaps Trump's unemployment numbers are as accurate as his estimates of crowd size or Puerto Rican hurricane deaths?

http://nymag.com/daily/intelligencer/2018/06/most-americans-wages-have-declined-over-the-past-year.html

On the other hand, Americans are deeply indebted, many are stuck with part-time jobs, and wage gains have been so disappointing, their weakness has challenged fundamental premises of mainstream economics: Simply put, you aren’t supposed to be able to pay workers this little when the unemployment rate is this low.

And on Tuesday, the big picture on Americans’ paychecks grew even darker: In May, U.S. inflation accelerated to its fastest pace in more than six years — and wiped out what little wage growth the typical American worker had seen over the past 12 months in the process.

The consumer price index was 2.8 percent higher this past pay May than it was the same month one year ago; that increase leaves real average hourly earnings for production and nonsupervisory workers (a.k.a. the vast majority of workers) 0.1 percent lower than they were 12 months ago.

Notably, while wage growth was infamously tepid during the Obama years, the low-inflation environment of 2015 and 2016 did allow ordinary workers to secure real raises. Part of the uptick in inflation this year is a product of rising oil prices, a phenomenon over which the American president has little control. But some of it is likely attributable to the deficit expansion that Trump used to finance his regressive tax cuts. (To the extent that is the case, ordinary workers are effectively paying for the price for the Koch brothers’ big payday).