Transcript for Five Years of Weak Wages
Okay. It's Tuesday August 19 the financial markets in New York are open -- -- big number zero point 5%. That is how good. Wages for Americans have gone up since 2009 is the weakest growth since World War II it is barely keeping up with inflation. But when I'm -- -- -- in New York here's the test breakdown that big number which is obviously not -- on this Tuesday morning long list for -- -- joining us. -- this. A little depressing as -- -- -- for another day of work right I mean half a percent. I now I'm sorry that we keep having these depressing to at a point about how main street is doing that this is yet another one day. Aides say it's a new look -- -- some -- then. They -- and we've known about Bloomberg at crunch the numbers from the Bureau of Labor Statistics which is who brings us as monthly job reports that we talk so much about. And found that wage growth has has recovered from -- recession it's just such a snail's pace. As he said suggest rising point 5% and if you compare this to past recoveries could you -- it's been the worst since World War II. And past recoveries by this point -- -- wage growth of nine point 2% so just such a dramatic difference from. From past recessions and recoveries and part of the problem Dan is that the labor market has too much of what Janet Yellen a fed chair would calls slack. Which is an economic term which is basically means -- are still too many workers available for the jobs that are available which means. That there's just no pressure on employers to raise wages they don't need to do that there's still a glut of labor. So -- until the labor market tightening until. That the supply of workers is not so great compared to the demand for jobs. A lot of economists believe that we're just not gonna see the wage growth that Americans need in order to. Feel good to spend money to help -- economy because of course consumer spending it's a big part of the economy. So really this is -- major part of the picture that's missing in this recovery since then most recent recession. And so either one of two things has to happen either people have to stop looking for work or more jobs to be -- essentially -- to -- -- up. Let me ask you this this is the worse -- since the Great Recession credit where where does that stand -- when you look at -- sort of half percentage of wage increases. -- -- when you're talking about Friday you know one of the things that the economy is based on any US is credit expansion which is kind of you know you wouldn't -- he may -- think that on the server -- that's how an economy should run. But it really is the case -- -- is during that leading up to the recession consumers were so indebted. So it were relying on consumers to increase their debt more that's -- problem because they already were still indebted and and we have the recession so in many ways consumers have had to be. Deleveraging. Paying down their debt and Walt credit has the entire eight that's certainly hurts small business is in and people that rely on on credit in order to grow their businesses but in many ways consumers had been so indebted. And still hiding out from that that they are unable to take on more debt even if they were able to -- five story is as I mentioned credits and tight so. You know this is another aspect kind of the conundrum. You know when you talk about something like housing. Housing is driven by people taking out mortgages getting mortgage debt and and there's a question that if people -- have that. The -- is to eat and get -- house. Then you're not even worrying about the fact that they can't qualify for -- -- -- gotten -- one can't afford a house you know so that those are some of the issues that this touches upon. And -- at the same time we're look at this half percent increase. Not. Everyone has been affected the same way right I mean there are some socioeconomic groups. That actually have done better than others in -- -- a take a look at this beautiful screen at their top 1% of US household income of 8000 us a year. From 20082012. So clearly this is not an across the board. Pain. Now it's not and this is the part of that it inequality debate. That we've been having so broadly in this country -- we've seen in -- -- rise in this statistic really hammered that home when you see the top 20% in gaining 8000 dollars at an average -- -- coming you see the bottom 20%. Losing 275. Dollars a year on average so you really see -- -- to to associate economic group sent. Part of the reason for that is that higher income groups and there are -- more of their income comes from investments from. I exposure to global market and we've seen -- that the stock market. Really recover from the recession in and be at all time highs and last year an S&P gaining more than 30% the beneficiaries of that -- -- -- that high income groups in this country. Whereas the bottom 20% and really the bottom 80% are much more reliant on wage is on their job on the paychecks if they get. And those having grown -- be as he said and they've only -- point 5% when adjusted for inflation and if you look at this a different way another think tank came out with numbers this week showing -- If you average all occupation ends. Though wage growth the median wage growth has actually been negative. Close to three and a half percent so really mean wages have all -- Since the recession so it just show is how difficult it's -- for most of the country. And yet we keep on keeping on Lauren blister from Yahoo! -- Lauren what do these days -- and have a positives where there -- to talk about the morning I'm right. Yes yes -- commented -- I'm and a final enforce tomorrow morning I would antley got an eight people now that they are not so bleak in there there is that there is arraigned on the horizon -- -- and Yahoo! finance on this Tuesday morning when I thank you so much appreciated as always. Thanks and -- pushing keep over the latest headlines right here on abcnews.com. People watching the big number I'm Dan that's -- York.
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