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Workers: The poor orphans of the US economic boom

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It is one of the contradictions of the US economic boom: the unemployment rate has fallen to the lowest level in six years, but workers’ wages have remained almost flat.

The anomaly is troubling enough that it has sparked questions about whether the economy’s rebound from the 2008-2009 recession is all that strong.

“Why is wage growth so slow?” the Federal Reserve’s San Francisco branch asked in a research study Monday, calling the stubbornness of wages amid surging growth “unusual behavior”, economically speaking.

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In theory, the sharp fall in the jobless rate from 10 percent in October 2009 to 5.8 percent today should have sparked firm rises in the pay for the average American worker. With the supply of available workers falling, they should be in the position of forcing employers to pay more.

But the reality is that paychecks have barely risen, measured against inflation.

“In real terms, wages have been about flat, growing less than labor productivity,” said Fed Chair Janet Yellen last August, and nothing has changed since then. In November the annual growth of wages was just 2.1 percent, compared to the 3.9 percent rise in 2007 before the crisis.

According to the San Francisco Fed study, some 15 percent of Americans saw no wage gain in the year to November 2014, compared to 12 percent in 2007.

Even while celebrating the fall in the jobless rate, the White House itself pointed to the problem in December.

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– Longstanding challenges –

“There is more work to be done to further boost wage growth and address longer-standing challenges around both the quality of jobs and the growth of wages,” it said.

Indeed, in constant dollars the average hourly salary of $20.67 is barely higher than the $19.18 of 1964.

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The problem is worse for those workers on the lower ends of the pay scale. Since 2000, the 10 percent of workers on the bottom of the scale have seen their weekly paychecks shrink 3.7 percent when measured against inflation, according to a recent study by the Pew Research Center.

Those at the top of the scale of wage workers saw gains of 9.7 percent.

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“For most US workers, real wages — that is, after inflation is taken into account — have been flat or even falling for decades,” said Pew’s Drew DeSilver.

The one comforting aspect is that inflation remains weak, not eating away more of workers’ household purchasing power.

According to a number of experts, the contradiction of economic growth and stagnant wages exposes certain flaws in the jobs market.

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“The labor market is much weaker than it appears to be just by looking at the unemployment rate,” said Kelly Ross, deputy director of the policy department at the AFL-CIO labor federation.

– Waning union power –

The market is not as tight as the official jobless rate suggests. The official jobless numbers do not include the rise of people stuck in temporary jobs and those who have dropped out of the jobs market in discouragement.

The Economic Policy Institute in Washington estimates those would add another 5.7 million Americans to the official unemployed number of 9.1 million.

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The rise in the power of finance and capital in the US economy and the weakness of workers’ unions has also contributed to the problem, according to Ross.

“With the decline of unions, we don’t have the ability to translate higher profits into higher growth in wages,” he said.

A rise in the official federal minimum wage rate, stuck at the current level since 2009, could help push paychecks higher.

But the administration of President Barack Obama has faced tough opposition to such a move in the Republican-dominated Congress.

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An increase “would have a limited effect given the low minimum wage rate,” Ioana Marinescu, an economist at the University of Chicago, told AFP.

But a spark to wages could come from the strength of the economy and the rising optimism of employers about the future. According to Careerbuilder, the online job search site, 82 percent of businesses expect to raise wages this year, compared to 73 percent last year.

“There is always a delay between the fall in unemployment and the rise in salaries, and it appears that this period of adjustment is near its end,” predicted Marinescu.


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Russia went looking for puppets in America — and they found Trump and the Republicans

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The Russians wasted decades infiltrating the left attempting to gain purchase in American political life. There was the Communist Party USA, of course. Established in 1919, the CPUSA grew through the 1930s and boasted a membership of about 100,000 at the beginning of World War II. A hundred thousand! Whoop-de-doo!

This article first appeared in Salon

Then there were the spinoff lefty parties like the Socialist Workers Party, the Progressive Labor Party, the Workers World Party, the Socialist Labor Party, the Progressive Labor Party — we could go on listing one splinter group after another with “socialist” or “labor” or “workers” in its title. They were tiny groups with memberships that were sometimes less than 100, and they would all deny being infiltrated by the Russkies, naturally. So would the “New Left” groups that came later, like SDS and The Weathermen. Nobody wanted to admit they were under Russian influence. Everything they were doing, from opposing the war in Vietnam to civil rights to fighting for free speech, was being done for completely pure reasons.

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2020 Election

William Barr made it clear this week that he’d sign off on a sham investigation into the Dems’ 2020 nominee

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Welcome to another edition of What Fresh Hell?, Raw Story’s roundup of news items that might have become controversies under another regime, but got buried – or were at least under-appreciated – due to the daily firehose of political pratfalls, unhinged tweet storms and other sundry embarrassments coming out of the current White House.

A perfect storm propelled New York's sleaziest real estate developer to an Electoral College victory in 2016 despite winning three million fewer votes than his opponent, but Nate Silver made a compelling argument that the letter James Comey sent to Congress just 11 days before Election Day announcing that the FBI was re-opening its probe into Hillary Clinton's emails was decisive.

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Bill Barr is serving notice to DOJ officials that he’ll ruin them if they investigate Trump: MSNBC host

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An MSNBC discussion about Bill Barr running interference within the Justice Department for Donald Trump ended with "AM Joy" host Joy Reid suggesting that the attorney general's very public "media blitz" over the so-called "Horowitz Report" is a warning shot to anyone in the DOJ who thinks about investigating the president.

As Reid explained it, "He did a whole TV blitz to basically say that his own agency, the FBI, was spying on the Trump campaign, something that the inspector general said did not happen."

Reid took that to its logical conclusion.

"Now he’s saying, ‘Well, I’ve got a different report that’s going to find the motivations’ that he’s basically saying are bad motivations by people in the FBI.  And if you’re that FBI agent and then you hear that Donald Trump may be again looking for foreign help and maybe again getting help from Russia or forcing help from Ukraine, what do you do?" she asked. "Would you then not be concerned that, should you go ahead and investigate foreign interference in our election, that William Barr may come after you?"

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