Employment might be up, but wages (except for executives) have been stagnant for well over a decade. Retailers have been squeezing suppliers in order to maintain low prices (hello Costco, Walmart!). Discretionary spending is low due to under-employment in many sectors.
BTW: the "unemployment" figures fail to take into account people who are no longer looking for work and even worse, the masses of underemployed, people who can barely make ends meet.
This is strictly true -- the one measure called "unemployment" does not capture these.
However, the official unemployment figure is one of six "alternative measures of labor underutilization" published by BLS [0], which while they have different numbers tend to follow the same overall trend, and those measures do track things like discouraged workers, underemployment (at least, in some forms), etc.
[0] see, e.g., http://www.bls.gov/news.release/empsit.t15.htm
the best kind of true.
[1] http://www.bls.gov/news.release/empsit.toc.htm
[2] http://www.bls.gov/webapps/legacy/cpsatab15.htm
[3] http://www.bls.gov/news.release/empsit.t15.htm
[4] https://en.wikipedia.org/wiki/Discouraged_worker
[5] http://www.bls.gov/news.release/empsit.t16.htm
edit: wow - a lot of people posted essentially the same thing.
Now they need a new model, probably one or more extra variable in the existing one. However we are at macro-economic level, that's not obvious how to put parent observation in a number.
But the Bank of Japan former director is more or less saying something like that: not all money is equal, money from saving does not trigger the same boost to the economy as money from wage. Or maybe it is just a moral stuff like they suggest too - inflation is a measure of optimism - pessimistic player money just drive inflation down.
[1] http://libertystreeteconomics.newyorkfed.org/2014/09/forecas... [2] https://github.com/FRBNY-DSGE/DSGE.jl
[1] https://en.wikipedia.org/wiki/Unemployment#United_States_Bur...
[2] https://en.wikipedia.org/wiki/Unemployment#/media/File:US_Un...
Ever-expanding lifespans and a demographic bulge hitting retirement age naturally combine to make labor force participation historically low.
My question is: how do we encourage wage growth when it doesn't appear to respond to the cost of living? Has free trade undermined the American worker's ability to negotiate a more favorable salary?
Are we living in 'take what you can get' economy?
The more customer value a worker creates, the more an employer can pay them. Trying to increase wages without increasing the value created leads to unstable employment conditions and eventually unemployment if the situation is not profitable for the business on a risk-adjusted basis.
"It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages." - Henry Ford
Which brings us to where we are today, the lack of need for any cashier, please tell me you've used a You-Scan before. What do the wages look like for the cashiers who have been replaced by robot and self-service?
This is just an application of the general principal that if the most valuable skills you can bring to a job are trivially replaced by an inexpensive self-service kiosk, you have terrible wage prospects. I don't see any reasonable way around that.
Raise the minimum wage and you'll see a lot more robots and kiosks.
Good. Humans have no business doing what robots can do anyway.
The question remains: How do we adapt the humans who lost their jobs? And before you write them off as 'unskilled,' remember that your job could just as easily be next.
In that way, they can use the skills and effort they have to a productive end, even if no one will bid the minimum wage rate for those services.
If the job I'm doing now is "next" (I don't think the job is "mine" in any possessive sense), I would have to step back and figure out what my next best option is. I'm quite sure that absent the utter collapse of civilization, that I'll figure something out and be fine.
Productivity is not the problem, productivity is one metric the US economy has been doing great on.