Wage inflation yet?

[Vision67]

Originally Posted by jnojr

To respond to OP, $65K for an EE sounds low. If they can't hire people they want to keep, and keep them; either they need to change, or they'll go under.

I think you are correct.

The last time this happened, sometime in the eighties, I remember that we adjusted all the salary curves upward by about 10% to make room to lift our offers to new grads to the market value.

But now, with Wall Street enforcing the "tyranny of the quarterly earnings", I have my doubts.

Personally, as a consultant who is paid a very handsome fee, it's not my problem. The longer they delay the more they will need me. However, at 68 I don't know how long I can keep this up.

[High Altitude]

What is funny is that mass wage inflation across the board would solve all this for the companies, but they won't do it.

Everyone is in the same situation, but no one wants to act.

Low wage employers are starting to get it. If you look at low wage positions you will see how Walmart decides to increase starting pay and their competitors follow suit, why? because they are all in the same bad position and all need to act to solve it.

Then they just all raise prices to pay for it. Problem solved and this is exactly how markets work.

By resisting the market when it comes to wages, companies are making this so much harder on themselves than they need to.

[East of the River]

The bottom seems to have some pressure not sure on the high end (not my deal) but the middle wages between say 35-100k a year seem to be awful stagnant. It's funny I read blogs and articles from several economists (conservative and left leaning) the all seem to be having an issue getting an exact reason for the slow wage growth when all the numbers that should force it higher are in place and have been for several years.

Some Theories are Monopsony- Where consolidation of employers has created down ward pressure on wages.
Salary price fixing- interestingly the silicon valley boys were actually doing this.
Employers functioning on group think have collectively decided they will avoid wage increases even if it hurts productivity etc.

I think it may be a mix of factors. I go to a trade group sometimes where they complain they can't get people to staff jobs in the industry. They try all kinds of creative education coops and internships etc to pull people in. The real problem is wages (which have been dead in the water for almost a decade) When you tell the business owners in the group that they all say the same thing "I couldn't afford to pay more then what I pay now there must be another solution"

Not sure how you fix it.

[bobsell]

As soon as we start seeing real wage inflation, the Federal Reserve will panic, raise interest rates sharply, and here comes the recession.

Cronies must be enriched, and wage stagnation does that nicely.