Re:Americans are spending less on clothing
by TheAdamAndChe on Wednesday February 07, 2018 @01:19PM
(#16326692)
If wage growth is constrained to such a small portion of the economy, then how could it lead to runaway inflation like they fear? Couldn't they just push those jobs to areas of the country that haven't been experiencing the growth?
Re:Americans are spending less on clothing
by PeterisP on Wednesday February 07, 2018 @01:37PM
(#16326845)
In short term wage growth, only a minority notices it. In long term wage growth, it's not the same minority every year, so a much larger part (though not all) experience it.
In essence, if the aggregate growth looks like "Yay 2%! Yay 2%! Ugh -2%! Yay 2%! Yay 2%! Yay 2%! Yay 2%!" as having growth almost every year, then the median individual would see the exact same environment as "Nothing :( Yay 10%! Nothing :( Ugh -10% :( Nothing :( Nothing :( Yay 10%!" as having growth very rarely - and connected (and attributed!) to something meaningful they did, not the overall growth.
In essence, if there's a 2% growth in average real wages (which would be a major change), then it generally would happen with, say, 80% of people experiencing no change or even a decrease (i.e. nominal growth slower than inflation), and a 20% minority, usually disproportionally concentrated in particular industries and locations, experiencing a significant (e.g. 10%) growth. And, this growth often is associated with a change in position, level or industry - most of the impact is not by the same job paying more, but by slightly less people working the low-paying job and by slightly more people working the high paying job.
So no matter if real growth is happening or not, personal evidence of the majority would not, could not show it unless it's on a very long timescale or the growth is sudden and rapid - you have to look at the aggregates to see if it's happening.