This year inflation is projected to be under 2 percent for the 5th straight year, which is very rare. This leads to the Real Wage increasing, people still get these raises and bonuses and instead of devaluing like they have in the past, the money can be stretched even further. All of this begs the question, is this good or bad? Many people would say good at face value, which I would agree with, but there's an argument circulating that we are measuring productivity incorrectly. Productivity is advancing at a slower rate than real wage, which is very odd considering that is how we value labor. What is also odd is that a lot of real wage growth comes between recessions, I still think that this is a good sign overall because it is our economy on the rise. Though the rise is fairly unbalanced sticking more to the top than the bottom of the wage spectrum, I think that this is something that will even out in the years to come assuming that real wage keeps increasing. With all this in mind, do you think that this increase good, bad, or we don't have enough data to really tell if it is good or bad? To me this is a good sign of our growth as an economy and a sign that our standard of living has increased, what do you think?
https://www.wsj.com/articles/real-wages-keep-powering-ahead-but-can-the-trend-last-1506265200
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ReplyDeleteReal wages increasing could be classified as good or bad. If I am a business owner, I want wages lower. If they continue to rise some businesses could make the argument that they need to reduce employees to compensate for the increases. On the other hand, the increase in wage could be great for the economy. The majority of consumers are not business owners, but the everyday workers. If they have more money they could spend it in the economy and spark more growth. However, it all depends on how the individual perceives it.
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