Some more data has just come out from the government on how much Americans have been making at the workplace lately, and if you work with them with a little intelligence, you can see what a lousy economic recovery the middle and working classes have experienced. P.S. Do you think that at least some in their ranks might be supporting Republican presidential front-runner Donald Trump?
The statistics come from the Labor Department’s series on total employee compensation. They’re not adjusted for inflation, but they include everything from wages and salaries to benefits to the monetary cost of paid leave, vacations, and the like.
For the broadest groups examined – like “all private sector workers” – the numbers provide some support for widespread claims that low recent jobless rates are finally tightening the labor market enough to drive up pay strongly. For example, although overall compensation between the fourth quarters of 2014 and 2015 rose by a mediocre 1.21 percent, the two previous comparable annual increases of 2.63 percent and 5.70 percent respectively. These average out to advances that are quite respectable by historical standards. (The data, though, only go back to 2004.) They certainly represent a faster advance than that for the three years before – 1.20 percent, 2.95 percent, and 1.05 percent respectively.
For the manufacturing sector, the results have been even better. Following four years of painfully sluggish growth in pay, total compensation jumped by 4.83 percent in 2013, 4.52 percent in 2014, and 4.82 percent last year. (All figures, again, are fourth-quarter-to-fourth-quarter.) In fact, it looks like potentially dangerous “wage” inflation is starting to take hold, doesn’t it?
Not exactly. And here’s why. These employee compensation figures don’t separate management and executives on the one hand from non-supervisory workers on the other, either for the entire private sector or for manufacturing. But they do provide economy-wide statistics for those employed in two good proxy categories: production occupations; and installation, maintenance, and repair occupations.
Workers in the former category have actually seen their total compensation fall slightly for the last two years, after good 2.81 percent and 3.32 percent gains. Workers in the latter category have recently been on a roller coaster. Their total compensation increased by 2.38 percent in 2013, surged by 4.28 percent in 2014, and then plunged by 1.55 percent last year.
The gap between these blue-collar workers and the rest of the American labor force becomes much clearer upon examining cumulative compensation increases since the current economic recovery began, in the second quarter of 2009. During that period, here are the total compensation gains for major groups of U.S. employees:
All private sector workers: +15.61 percent
All management, business, and financial occupations: +21.76 percent
All manufacturing workers: +20.12 percent
All production workers: +8.96 percent
All installation, repair, and repair workers: +8.14 percent
When looking at those last two categories in particular, please keep in mind that these represent the trends over nearly seven years. Please also keep in mind that, although inflation rates have been weak judging by the official figures, prices for housing, health-care, and higher education have been rising at much faster rates.
In other words, once they figure out a serious response to the Trump insurgency (and, in many respects, to the success of Democratic presidential challenger Bernie Sanders), America’s political, chattering, and policy classes will be entitled to scorn and bemoan and bewail and condemn the success of populist, outsider political candidates. But not one moment before.