American Wages Are Dropping – Again

Member Group : Jerry Shenk

In what has become an embarrassingly common occurrence, another federal agency has revised — w-a-y downward — earlier, rosier, administration economic propaganda.

Months ago, the Bureau of Labor Statistics reported that 2016 first quarter wages grew 4.2 percent year-over-year. In June, President Barack Obama cited the report, boasted that the economy was helping ordinary Americans, and urged "Let’s get wages rising faster."

But average wages have actually been dropping. Buried in an August revision, the BLS admitted it erred by more than eleven times: [First quarter] "[r]eal hourly compensation decreased 0.4 percent…rather than the previously-published increase of 4.2 percent." In addition, the BLS confessed that compensation also fell another 1.4 percent in the second quarter (Presumably subject to similar revision).

Among elected Democrats, such results are known only as "bad luck." In fact, they result from bad policies not entirely unlike those on which Democrats are trying to double down by raising the minimum wage.

Wages haven’t declined because the minimum wage is too low. In robust, expanding economies, jobs are created, employers compete for employees and wages rise. Wages have stagnated because government economic, tax, regulatory and health-care policies have stifled growth and, accordingly, there are too few well-paying full-time jobs.

Another cause of declining wages is the government’s policy of importing about 2 million guest-workers annually who compete for work against the four million or so young native-born Americans entering the job market. Together, normalizing illegal immigrants — a Democratic priority — and guest-worker policy artificially increase labor competition, create worker surpluses and suppress wages.

The Washington Post recently featured a new economic study commissioned by the city of Seattle to score results of the city’s minimum wage hike to $11.14/hour. The results were educational.

The report said that some workers whose pay would have gone up with experience and tenure weren’t helped at all. Then it got ugly: "Although workers were earning more, fewer of them had a job than would have without an increase…Those who did work had fewer hours than they would have without the wage hike."

The Post concluded that "Increasing the minimum wage increases the costs of hiring workers. As a result, employers must accept reduced margins or customers must pay steeper prices. If employers cannot stay in business while paying their staff more, they will either hire fewer people or give their workers fewer hours. As a result, even if wages per hour increase, workers’ total earning could decline."

Fewer jobs, fewer hours, lower earnings. A minimum wage increase is a plank of the Democrats’ national platform, so Seattle’s experience could happen nationwide,

Who suffers most? As reported both by Republicans and by the progressive left, predominately, young blacks have been disadvantaged by Obama’s economy and policies. Indeed, President Obama, Hillary Clinton and Democrats are vocal advocates of minimum wage hikes, immigration and economic policies that have had a demonstrably disproportionate negative impact on America’s black youth, a reliable Democratic voting bloc.

Ironic, huh?