Doug, yet how much of this increase in the average real wage is due to big gains by financial analysts?
>Every decile of the wage distribution
>is up, for both men and women.
Are you saying wages earned by person over a year are up or are you saying that hourly wages are up (and let's not forget off the book hours before we conclude hourly wages are up) or are you saying that unit labor and/or real unit labor costs are up?
Indeed neither Max nor you has cited any data that unit labor costs or real labor unit costs are increasing in this boom. American mfgs seem not to think so! Is it not possible in fact that with higher capacity utilization unit labor costs are in fact decreasing presently, explaining why mfg groups don't want Greenspan's rate hikes.
Also, as I mentioned, if workers are being equipped with more technology due to investment boom, they may be producing more surplus value and higher wages are quite a tolerable burden for business to encourage punctuality, effort and care needed to ensure amortization. If there is a threat of moral depreciation, overtime hours may be up as well.
There is a lot of anecdotal evidence of businesses facing a literal shortage of workers. Don't remember any data in the NYT or WSJ recently about how that shortage has pushed wages or unit labor costs or real unit labor costs up to the detriment of profits. A lot of anecdotal evidence of the pressure of oil price increases on profits, esp in the transportation industry. I don't have the hard data Max has challenged me on, but I would love to see it.
> TIght labor markets and
>a higher minimum wage do have an effect.
I don't know if the labor market is ever tight now with labor saving technical change, globalization of production, immigration and the culture of overwork as Kelley has outlined. What may explain wage increases is not tight labor market but investment boom from lower interest rates as foreign money floods into the US. As suggested above, employers tend to pay higher wages when workers are equipped with expensive machinery.
Yours, Rakesh