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Black Worker Wages Rise The Most On Record

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Who says there is no wage growth? Certainly not the Labor Department, and certainly not African American workers.

 

In a release on Thursday, the DOL reported that seven years after the "end" of the recession, median wages for full-time black workers jumped by 9.8% in the Q3 - the biggest quarterly jump since record began in 2000.

 

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According to WSJ calculations, the recent wage gains means that blacks are the one racial group with the highest cumulative increase in their wages since since the recession ended in mid-2009, clocking in at 15.7%, and outpacing the gain for whites, 13.3%, Asians, 11.1% and Latinos, 15.5%.

 

However, in what will likely become a political talking point to be paraded over the last few weeks of the presidential campaign, the bulk of the improvement for blacks and Latinos has occurred in the past two years, ever since Obama's push for raising minimum wages across the country, which have indeed resulted in higher median wages for many workers, however - as the infamous Stabucks example showed - at the expense of declining total works hours and/or a cut back in benefits.

 

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Despite the alleged rapid growth rate in black wages, the spread with white workers remains substantial. Median weekly pay for blacks in the third quarter was $624, versus $829 for whites. Latinos had it the worst, at $602 per week. As the WSJ notes, "the data is consistent with the argument put forth by some economists that wage gains for minority groups tend to be most pronounced when the economy is near full employment. The unemployment rate, 5% last month, has held near that historically low mark for the past year."

 

Of course, an economy being near full employment in an economy that is hardly growing and where profits have been stagnant, means that either corporate earnings are set to decline even more as labor costs eat into margins, or corporations will be forced to start laying off many more workers; one outcome leads to a recession, the other to stagflation, both are equally unpleasant for a Fed that is set on hiking rates in an economy with crashing productivity like that of the US.

 

On implication from this alleged wage improvement would be for Federal Reserve policy makers considering whether the economy is strong enough to absorb an increase in the central bank’s benchmark interest rate. Such increases are generally intended to keep the economy from overheating. “The Fed should perhaps hold off on an interest-rate increase because the groups that benefit most late in a recovery are just now starting to see those gains materialize,” said Valerie Wilson, an economist at the left-leaning Economic Policy Institute think tank. “We need to allow these types of gains to continue as long as possible so people can experience a full recovery.”

 

Also, note we said "alleged", for a simple reason: while the BLS, based on its arcane statistical sampling and seasonal adjustment models is confident wages for blacks are rising, the Bloomberg consumer comfort level of blacks in America has gone exactly nowhere in the past 4 years...

 

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... making one wonder if this is not simply just another data point meant to boost reflexive support for an administration that supposedly has helped grow the wages of all your minority peers... if not actually yours.

 

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