Wage Stagnation: Solutions

Prelude: Finding the Money
 

Increase Price Paid U.S. Workers

Increase Value of U.S. Workers

Recent Political Solutions

Good News

      Return to Current Political Economy Issues  
Updated 12/11/18      
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Prelude: Finding the Money
3 Choices
Higher US Product Price
 Limiting Foreign Imports Provides Funds
 Consumer Pays the Bill

Change Distribution of Factor Cost
Choices: Wages, Reasonable Profit, Excess Profit
To Date: Excess Profits Up, Constant Real Wages Constant,
Making Reasonable Profit Not Easy

Historically: Wages vs. Excess Profit Caused Much Turmoil
See Post WW1 Red Scare Anxiety

Government Redistribute of Income
Lower Taxes Fostering Economic Growth
Chosen by Trump
 Ronald Reagan, Bush 2 and Trump chose #3
With RR Took a While, Then Tax Cut Paid for Itself
Bush 2 Wars and Great Recession Limited Effect
Trump Too Early but Still Need to Answer #2
Under Reagan #2 Growth Went to Excess Profit
 

 

 

 

 

2. Increase Value of U.S. Workers

1. Invest in Appropriate Education

2. Drop Failed Programs

3. Better Program Redirection

4. Lower Cost

5. Academics Not Always the Answer

1. Invest in Appropriate Education

High Value Added Jobs Pay More But
Require More Student Time, Money, Ability, and Sacrifice
Most Students, Parents, Educators and Politicians
Avoid This Solution

Please Share
 

 

By Definition, High Debt Means Inappropriate Education

 

2. Drop Poor Programs

Mandatory Work Programs Are Costly,
Have Limited Long-Term Impact

 

The Job Training Charade
 

GED Doesn't Affect Employment and Earnings
 

Apprenticeship Programs Help
some but they have not worked well in US
 and actual need is relatively small.
 

Suggestion: A Returning President First Budget Should Use 
CBO Prepared Zero-Based Budge for Safety Net Programs

 

3. Better Program Redirection

Local Community Prioritize Goals
U
sing a
Laboratories of Democracy Approach
 

Make Use of Leader Educational Advise
 

Basic Truths Needed
Example
Ten Commandments of Education

 

4. Lower Cost

Exam Schools
make little academic difference
 

First 2-years locally attending a public school living at home
 

Top Coding Boot Camps vs. College
Note: Any Open Enrollment for Profit Education Programs
 should be Questioned
 

Accelerator companied requiring Nanodegree
will
replace bachelor degrees.

Suggestion: Investigate Corporate Financial Help.
Example: Pharmacy employee seeking health field education
should check with all companies supplying their employer.

Only wealthy and very academic students
 will spend many years in college.

See No Benefits Challenges of New Contract Workforce

 

 

                       
5. Restructure Academic Education
About 25% of Jobs Will Require a Bachelor's or More

Existing and Future Entry Level Jobs by Education and Training
Life Skills Often a Good Alternative
 

 

2014 Employment

       
Typical entry-level education Employment Need Rank

Number in millions

 

Percent distribution

Expected  Created Jobs
2014-2024  millions
%
OF JOBS
   

High school diploma or equivalent

1

55

 

36

20   46%  

No formal educational credential

2

41

 

27

11   25%  

Postsecondary no degree award

4

9

 

6

5   11%  

Bachelor's degree

3

32

 

21

7   16% 98%

Doctoral or professional degree

5

4

 

2

few 43   few

Master's degree

6

2

 

2

few     few

Some college, no degree

7

4

 

4

few     few

Associate's degree

8

3

 

2

few     few

Total, all occupations

NA

151

 

100.0

NA      
Footnotes:   1 

Data are from the Occupational Employment Statistics program, U.S. Bureau of Labor Statistics.
Note: The occupational employment and growth rates shown in this table include projected growth in all jobs from 2014–24, not just entry-level jobs. Entry-level education reflects 2014 requirements—BLS does not project educational requirements. Source: Employment Projections program, U.S. Bureau of Labor Statistics

Editor's Note:

Don't be surprised in Masters degrees drop as being half an expert is not enough. Especially given some of the easy programs and few skills of participants. My guess is many of the CC certificate programs will become associate degrees as professionals try to limit competition.

 

 

 
Employment, wages, and projected change in employment
by typical entry-level education
(Employment in thousands)

 

Typical entry-level education

Employment Need Rank

2014 Employment

Employment change, 2014–24 (percent)

Median annual wage, 2015(1)

Number in millions

Percent distribution

High school diploma or equivalent

1

55

36

35

$36

No formal educational credential

2

41

27

8

$21

Bachelor's degree

3

32

21

8

$70

Postsecondary no degree award

4

9

6

13

$36

Doctoral or professional degree

5

4

2

12

$100

Master's degree

6

2

2

14

$66

Some college, no degree

7

4

4

1

$34

Associate's degree

8

3

2

9

$50

Total, all occupations

 

151

100.0

6

$36

Footnotes:
  1 Data are from the Occupational Employment Statistics program, U.S. Bureau of Labor Statistics.

Note: The occupational employment and growth rates shown in this table include projected growth in all jobs from 2014–24, not just entry-level jobs. Entry-level education reflects 2014 requirements—BLS does not project educational requirements

Source: Employment Projections program, U.S. Bureau of Labor Statistics

6. Recent Political Proposed Solutions

Hillary C Wants Workforce Skills and Job Training
Every American should be able to learn the skills they need to compete and succeed.
Source


She Missed the trade problem and is missing the Education problem

Donald T Wants
1. Renegotiate Free Trade
To Bring Back Assembly Jobs from China, Mexico, Japan and elsewhere.

Problem: How will this help?
More Low Paying Jobs?
Higher Pay Jobs Mean Higher Product Price or Less to Owners and Managers.
Years ago Detroit solved this problem with Less Quality,
Fewer Workers, and Union Acquiescence.

See Free Trade Solution or Problem?

  Immigration of high-skilled workers .

2. Fewer foreign workers will help.

Sanders Wants Free College


Like Trump, he is trying to ride a populist waive to the US Presidency.

 

 

 

 

Good News

Well-Being is More Important Than Income 

1) Our society's stability has allowed U.S. productivity consistently increased which is a key to individual well-being. Think how the public safety net has increased since the 1930's and the success of the federal children's bureau. Who wants to give up SS and Medicare? Why do some always want to cut the other guys government benefits. Think economic distress in Russia, Europe, and even Japan and Germany.
2) Scientific achievements have continuously added to citizen well-being. Think public health, smart phones, streaming audio-video, Gillette Stadium ... See Health Problems Solved
3) Personal Income which is a function of nature and nurture has increased continuously if not always rapidly. Think Russia, China, and Europe's really slow recovery from the Great Recession. 
Source Is The Country In Trouble?

See
This is the Greatest Period in World History/
Ten Reasons to be Bullish on U.S. Economy

Where Has All the Income Gone by the Minneapolis FED disputes the stagnation of income theories believing the medium household compensation is the appropriate measure. It calculates an increase in median compensation of between 44 add 62% depending on household type. 

Editor's Note: Were it not for advancements made over the last 100 years the problem of no jobs would rank with those created by the great farm migration to the cities that began 150 years ago.

 

   

 

 

Other available formats: (XLSX)

Editor's Note: We Have a No Jobs Problem!
"...the idea that you can just have better training and then there are all these jobs, all these places where there are shortages and we just need the trained people is fundamentally an evasion."  " The core problem is that there aren't enough jobs. If you help some people, you could help them get the jobs, but then someone else won't get the jobs. " Lawrence Summers, The Future of Work (2015)

 

Recent Salary Data

In it's most recent survey, the National Association of Colleges and Employers found that for 10 broad degree categories ranging from engineering to communications, 2016 graduates are projected to have an average salary of $50,556. That’s up 5% from 2014, when new grads earned an average of $48,127

Mid Career Salaries by Major