{"id":28460,"date":"2014-12-27T11:44:21","date_gmt":"2014-12-27T19:44:21","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=28460"},"modified":"2023-04-21T14:02:51","modified_gmt":"2023-04-21T21:02:51","slug":"black-coffee-americans-stagnant-and-exploding-wage-problems","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id28460-black-coffee-americans-stagnant-and-exploding-wage-problems.html","title":{"rendered":"Black Coffee: Americans’ Stagnant (and Exploding) Wage Problems"},"content":{"rendered":"

\"\"<\/a>It’s time to sit back, relax and enjoy a little joe<\/em> …<\/p>\n

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.<\/p>\n

I hope everybody had a wonderful Christmas. I know I did!<\/p>\n

Okay, off we go …<\/p>\n

Credits and Debits<\/strong><\/p>\n

Credit:<\/strong><\/span> Is America a great country, or what? After all, where else can policemen earn more than $300,000<\/a> annually? If you don’t believe me, just ask one of those eight New York Port Authority officers who did this year.<\/p>\n

Debit:<\/strong><\/span> Surprised? You shouldn’t be — why do you think it costs $14 to cross a bridge<\/a> into the Big Apple?<\/p>\n

Debit:<\/strong><\/span> By the way, those paychecks are a prime example of government excess: $300,000 is significantly more than the average medical doctor<\/a> earns in a single year.<\/p>\n

Credit:<\/strong><\/span> Truth be told, paying even $200,000 — overtime included — for any<\/em> job with an almost-unlimited pool of potential applicants is senseless.<\/p>\n

Debit:<\/strong><\/span> And, yes, those humongous police paychecks help level-set the cops’ taxpayer-provided pensions<\/a> too. Of course, to earn that much, they have to work upwards of 100 hours almost every week<\/em>. Really?<\/p>\n

Debit:<\/strong><\/span> How effective can anybody be working 100 hours week after week? Even working over seven-days, that leaves less than 10 hours per day for family, errands, commuting, sleep<\/a>, and everything else. Well … assuming they aren’t sleeping on the job<\/a>. Just sayin’.<\/p>\n

Credit:<\/strong><\/span> Did you see this? According to Politico’s Michael Grunwald, the US economy is “awesome<\/a>” too. Yes, “awesome!” I bet there are at least eight New York Port Authority cops who are nodding their heads in agreement right now.<\/p>\n

Credit:<\/strong><\/span> Mr. Grunwald makes his case using November’s job numbers, the soaring stock market<\/a>, falling oil prices, and the latest GDP print, which was revised upwards to 5%<\/a> — the highest rate in more than 10 years. Hooray!<\/p>\n

Debit:<\/strong><\/span> Sadly, in the same way a child believes that he really did see a magician cut his on-stage assistant in half with a saw, Mr. Grunwald takes the economic data he’s presented with at face value, while dismissing us party-poopers who dare to reveal the statistical sleight-of-hand<\/a>. To Mr. Grunwald, guys like me are just “Chicken Littles.” No, no … it’s okay; I’ll find a way to carry on. Somehow.<\/p>\n

Credit:<\/strong><\/span> The truth is, crashing oil prices<\/a> are not<\/em> indicative of an expanding economy — especially one as large as the United States that is, supposedly, growing at the frenzied pace of 5%.<\/p>\n

Debit:<\/strong><\/span> You can believe America’s GDP ran at a 5% clip last quarter — but please, please<\/em>, explain how that’s possible in the face of declining consumer spending<\/a> and persistently stagnant wages<\/a> — the Port Authority police notwithstanding. Lord knows economic cheerleaders like Mr. Grunwald aren’t.<\/p>\n

Debit:<\/strong><\/span> As Zero Hedge points out, in reality, that revised 5% GDP figure is largely due to unabashed accounting gimmickry<\/a>: In fact, roughly half of last quarter’s growth was attributed to previous consumer spending on — get this — those outrageously expensive Obamacare premiums. Forward!<\/p>\n

Debit:<\/strong><\/span> As for that misleadingly “low” 5.8% unemployment figure … It doesn’t account for the US labor participation rate being at its lowest point since 1978; it also fails to highlight that, despite a growing population, fewer US-born Americans have jobs today than in 2007<\/a>.<\/p>\n

Credit:<\/strong><\/span> Then there’s the biggest “tell” of all<\/a>: the Fed’s outright refusal to end its dollar-killing zero-interest rate policy — which has been running for five years now. If the American economy truly is<\/em> as rosy as the GDP — and mainstream pundits like Mr. Grunwald — suggest, then interest rates should be rising. Sharply.<\/p>\n

Debit:<\/span><\/strong> Yes, your 401k balance may be as flush as ever, but it’s only because of the Fed’s reckless easy-money policy. As Bull & Bear Mash notes<\/a>, the S&P 500 is now so completely detached from the commodities market that a collapse is all but inevitable.<\/p>\n

Debit:<\/span><\/strong> As Charles Hugh Smith rightly observes: “If the Fed can’t raise interest rates even a quarter-point without threatening to collapse the unstable pyramid<\/a> of debt-based affluence and consumption, then what does that say about the fragility of (US) ‘growth’ and ‘prosperity’?”<\/em><\/p>\n

Credit:<\/strong><\/span> It’s a simple question. I just wish mainstream economic cheerleaders like Mr. Grunwald would help out us Chicken Littles by answering it. Now that<\/em> would be awesome.<\/p>\n

By the Numbers<\/strong><\/p>\n

Like most anything else in the economic world, wages are generally a function of supply and demand. Last year, the annual mean US wage was $46,440. Here are the annual mean wages for the ten largest occupations in America (from 1 to 10):<\/p>\n

$25,370 <\/strong><\/span><\/span>Retail salespersons<\/p>\n

$20,420 <\/strong><\/span><\/span>Cashiers<\/p>\n

$18,880 <\/strong><\/span><\/span>Fast food and other food prep workers<\/p>\n

$29,990 <\/strong><\/span><\/span>Office clerks<\/p>\n

$68,910 <\/strong><\/span><\/span>Registered nurses<\/p>\n

$20,880 <\/strong><\/span><\/span>Waiters and waitresses<\/p>\n

$33,370 <\/strong><\/span><\/span>Customer service reps<\/p>\n

$26,690 <\/strong><\/span><\/span>Laborers and freight\/stock movers<\/p>\n

$34,000 <\/strong><\/span><\/span>Secretaries and administrative assistants<\/p>\n

$25,140 <\/strong><\/span><\/span>Janitors<\/p>\n

Source: Bureau of Labor<\/a><\/em><\/p>\n

Other Useless News<\/strong><\/p>\n

Here are the top 5 articles viewed by my 6203<\/strong> RSS feed and weekly email subscribers over the past 30 days (excluding Black Coffee posts):<\/p>\n

    \n
  1. 10 Things That Today’s Middle Class Can No Longer Afford<\/a><\/li>\n
  2. 10 Essential Negotiating Tactics Everyone Should Know<\/li>\n
  3. How to Quickly Tell If Your Grocer’s Produce Is Genetically Modified<\/a><\/li>\n
  4. 3 Reasons to Have an Emergency Fund That We Don’t Talk About<\/li>\n
  5. 8 Reasons Why My Favorite Charity Is Me<\/a><\/li>\n<\/ol>\n

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    4. Consider becoming a Len Penzo dot Com Insider<\/a>! Thank you.<\/p>\n

    The Question of the Week<\/strong><\/p>\n

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    Last Week’s Poll Results<\/strong><\/p>\n

    Have you ever flown on a jumbo passenger jet with twin-aisles?<\/p>\n