Above the Fold

Are Americans Finally Getting the Wage Increases We Deserve?

For the last four decades, up until early 2020, the average American worker had seen their wages hardly budge, relative to inflation. Wage increases were also unequal and lumpy. According to a study by the Economic Policy Institute back in February of 2020, wage growth was consistent for only 10 of the last 40 prior years. Over that period, only the highest earning 5% of workers saw their incomes dramatically increase, further away from the typical middle- and low-wage worker. Without the exceptionally low unemployment periods of the late 1990s and the period between 2014 and 2020, wages, in real terms, would actually have been lower than they were 40 years ago!

While it’s true that the coronavirus has spurred stress, chaos and inflation (among other things) around the world, it added a much-needed boost to the average wage. Average hourly private industry earnings were nearly 5% higher in November compared with a year ago, while some sectors, like leisure and hospitality and transportation/warehousing, saw their wages leap 13.7% and 8.9%, respectively. Experts see those big gains moderating over the coming quarters, but it’s likely that the increases workers have experienced thus far, even though driven by unwanted inflation, are here to stay. What’s different today is that workers are more willing to walk away from corporate cushy jobs to take a risk in the gig economy or as an entrepreneur. In the short term, that is forcing many employers to incentivize with better salaries or benefits. Longer term, we could certainly see technology taking the place of unwilling workers in some sectors — a bad thing if the economy is not doing well. 

Three Things 

1. Got Milk, Pay Up – California’s dairy farmers, who produce the most milk of any state (41.3 billion pounds in 2020), are facing serious adversity. Soaring costs, increasingly restrictive environmental regulations and a shortage of water (made worse by the current, historic drought) could all trigger massive shifts in the state’s milk production as it’s simply becoming unsustainable for many. At minimum, prices are expected to rise; but some farmers may opt to shut down operations completely. One milk-producing cow can drink up to 50 gallons of water a day. 
2. Clues to Apple’s Next “Big Thing” – According to several sources, Apple is expected to release a head-mounted device (think smart glasses) that could be a game-changer in terms of revenue, rivaling its flagship iPhone devices. As interest and investments in AR (augmented reality) grow, Apple could be on to something big; especially given its existing hardware ecosystem. That said, tech rivals like Google and Snap have had a tough time getting the broad market to widely adopt their AR glasses and other devices. 
3. Bitcoin Once Again Amplifies Market Volatility – While equity markets offered their fair share of volatility last week, Bitcoin didn’t want to be outdone. The popular digital currency dropped more than 20% over the weekend to $42,000, before rebounding to just over $49k on Sunday. Bitcoin and its less-popular brethren like Ether, Solana and Dogecoin all have a tendency to oscillate wildly. Market watchers believe that Omicron and even the unwinding of leveraged crypto-derivative trades may have played a role in the weekend’s wild movements. 

Did You Know? 

What Workers Did 100 Years Ago

With World War I behind us and as the Roaring 20s built up steam, the most important jobs revolved around food, retail and servant type positions. The U.S. Census Bureau’s 1920 census revealed that nearly 6.3 Americans were food and stock farmers, with a heavy emphasis on dairy. Back then there were no child-labor laws, so many of these workers were still kids. Another 4 million workers were counted as laborers on dairy farms, food farms and stock farms, making them the second most popular job type in 1920. Store clerks, retail dealers and servants (including butlers, bell boys and cooks) rounded out the top five most popular occupations 100 years ago.