This is, of course, before the usual revisions. Which generally fail to capture as much public attention as the flash number that was reported today. Regardless, good news if you’re looking for work or perhaps looking to change jobs. Curious, but in spite of several months of positive news on the jobs front, why aren’t wages changing?
Turns out they are, and its very interesting. The two charts below annual changes in wages by education. The first chart clearly shows those holding an advanced degree (i.e., Masters or higher) or a Bachelors degree are seeing NO change in wages.
The second chart shows wage growth for high school graduates or those either with some college or an Associates degree. Here we are seeing changes in wages — UP.
Very curious, but what does it mean? The most reasonable explanation is the economy is creating a large number of lower paid jobs (which is consistent with a lack of overall wage growth), while undergoing some erosion of better paid, higher skilled jobs. Net / net — lots of jobs created, no wage pressure at all, decomposing wage pressure we see declines at the top end, AND a solid number of lower skilled, lower paid jobs being created.
Are you still cheering?
I’ll be looking deeper in the jobs creation puzzle as time and detailed releases of data from The Bureau of Labor Statistics permits.
Something odd here, to be sure. Oh! The TPP won’t help, and, in fact, will pressure wages, pretty much across the board, down. Big Business, on the other hand, supports TPP. Cheaper labour, larger profits, not really a surprise there, now is it?