WEBVTT - Episode 3: Will You Get a Raise This Year? 0:00:00.160 --> 0:00:05.000 Okay, let's shake it um. Will Americans get a raise 0:00:05.080 --> 0:00:17.440 this year? Oh God? Welcome back to the Bloomberg Benchmark podcast. 0:00:17.560 --> 0:00:21.040 I'm your host, Tory Stillwell and economics reporter with Bloomberg 0:00:21.040 --> 0:00:24.560 News in DC, and I am joined by my colleagues 0:00:24.600 --> 0:00:27.800 and co hosts Dan Moss, who is our executive editor 0:00:27.920 --> 0:00:32.120 in d C, and Ako, our editor for Benchmark, who's 0:00:32.159 --> 0:00:37.520 been upgrooded to a co hot Yeah, and she's visiting DC, 0:00:37.720 --> 0:00:41.519 so we're all in one room. Okay. For those of 0:00:41.560 --> 0:00:44.159 you tuning in for the first time, Benchmark is a 0:00:44.200 --> 0:00:47.839 podcast about numbers, but much more about the ideas that 0:00:47.960 --> 0:00:51.560 drive the global economy. Told you in the least boring 0:00:51.600 --> 0:00:55.000 way possible. Be sure to check out our inaugural episode 0:00:55.000 --> 0:00:59.560 we released last week, the US economy Silent Menace about 0:00:59.600 --> 0:01:03.080 the slow down in productivity, and our bonus show on 0:01:03.120 --> 0:01:05.959 the market to malt in China that we released just 0:01:06.120 --> 0:01:10.119 the other day. We are recording this on Wednesday, September six, 0:01:10.640 --> 0:01:14.679 which is the day before probably the most important Federal 0:01:14.720 --> 0:01:19.240 Reserve announcement in years? Dan, is that an exaggeration? I 0:01:19.280 --> 0:01:22.600 don't think it's an exaggeration. At least half the economists 0:01:22.600 --> 0:01:25.600 we've surveyed predict an interest rate increase that will be 0:01:25.640 --> 0:01:28.920 the first in almost a decade. Yeah, so they're saying 0:01:28.920 --> 0:01:32.720 we're predicting it at you know, the one plus economists 0:01:32.760 --> 0:01:36.119 that we've surveyed at Bloomberg are very evenly split on this, 0:01:36.240 --> 0:01:41.080 with a slight lean toward the Fed not hiking interest rates. So, Toria, 0:01:41.120 --> 0:01:43.839 would you care to give us a prediction? Um, Because 0:01:43.880 --> 0:01:47.000 by the time our listeners here this podcast, we will 0:01:47.040 --> 0:01:50.440 all know whether the Fed did or didn't do it, right, 0:01:50.560 --> 0:01:53.640 So I think we're kind of well versed on why. 0:01:53.720 --> 0:01:56.200 It's a pretty close call. You know, the labor market 0:01:56.200 --> 0:02:00.120 has been getting better, but inflation is sort of not 0:02:00.200 --> 0:02:03.400 anywhere close to the Fed's target. Um. And you've got 0:02:03.480 --> 0:02:06.920 all this market up. All right, Tori, stop past there 0:02:07.080 --> 0:02:10.520 is your answer my call. I think that they will 0:02:10.560 --> 0:02:14.280 not go all right? What about you? Then? Well, in 0:02:14.320 --> 0:02:18.000 the don't column, we have financial markets, which some have 0:02:18.080 --> 0:02:22.200 described as volatile recently. We've got the global economy. We've 0:02:22.240 --> 0:02:25.680 got inflation which is nowhere near their target, and inflation 0:02:25.880 --> 0:02:30.480 expectations which are drifting down, and a thing called the 0:02:30.520 --> 0:02:34.000 balance of risks. They say that data dependent, but that 0:02:34.080 --> 0:02:37.440 could also mean, what is the risk to the outlook 0:02:37.600 --> 0:02:41.520 for the data? So what's your call, Tory, You've got 0:02:41.560 --> 0:02:48.359 something there in front of you. Your call first, Okay, 0:02:48.400 --> 0:02:50.600 for our listeners out there, my call is that the 0:02:50.600 --> 0:02:55.120 FED will go. So it's pretty close and we're thinking 0:02:55.160 --> 0:02:58.520 about this, like, how can we get a definitive answer? Um. 0:02:58.560 --> 0:03:00.519 I don't know if any of you are out there 0:03:00.560 --> 0:03:04.000 ever had a magic eight ball as kids, but I did, 0:03:04.240 --> 0:03:07.760 and it's how I solved all of my problems basically. 0:03:08.040 --> 0:03:12.160 So we ran out, made a target run yesterday after 0:03:12.200 --> 0:03:15.600 work and got a magic eight ball. We're going to 0:03:15.680 --> 0:03:18.040 shake in and find out. Yeah, all right, let's do it. 0:03:18.639 --> 0:03:22.680 Will the FED raise interest rates? And it's September gathering? 0:03:23.320 --> 0:03:30.280 The answer is, oh, oh tell us. My sources say no. Wow. 0:03:30.800 --> 0:03:33.919 All right, well, you know we look forward to actually 0:03:34.000 --> 0:03:38.400 getting the answer to that. Onto today's Business run. Yeah yeah, yeah, 0:03:38.440 --> 0:03:41.960 it's pretty related. Yeah. Um, we're gonna be talking about 0:03:42.120 --> 0:03:46.720 something very related about paychecks, which also is one of 0:03:46.760 --> 0:03:50.000 my favorite topics because I like getting paid. Um, we'll 0:03:50.040 --> 0:03:53.320 be talking about my paycheck and your paycheck and everyone's 0:03:53.360 --> 0:03:56.720 paycheck in America. What's been happening to it and what 0:03:56.800 --> 0:03:59.880 will happen to it over the next few years. For 0:04:00.000 --> 0:04:03.720 our listeners out there. Dan is a bazillion levels above 0:04:04.880 --> 0:04:07.520 me and Tori, so you might have some special insight 0:04:07.560 --> 0:04:10.360 into my specific paycheck. So let's just say I would 0:04:10.360 --> 0:04:13.400 absolutely love a raise. Yeah, this won't be awkward at all. 0:04:16.960 --> 0:04:21.240 Dan is smiling, he's not comment he's not touching this 0:04:22.760 --> 0:04:27.400 white for the year end. Hopefully I will get a raise. Um, 0:04:27.480 --> 0:04:30.320 let's let's get to it. Tori set the stage for 0:04:30.400 --> 0:04:34.680 us here. What's been happening to paychecks in America? So 0:04:34.720 --> 0:04:37.680 I think just as ascinctly as possible, we can say 0:04:37.800 --> 0:04:41.479 paychecks don't look great right now. You know, we're in 0:04:41.520 --> 0:04:46.280 our seventh year of economic recovery and wages are stagnant. 0:04:46.680 --> 0:04:49.599 They aren't really improving, especially at the rate that you 0:04:49.600 --> 0:04:53.159 would expect with a decent clip of payroll growth that 0:04:53.200 --> 0:04:56.680 we've been seeing, you know, with people getting jobs, with 0:04:56.800 --> 0:04:59.840 things just generally improving, with sectors of the economy coming back, 0:05:00.000 --> 0:05:02.359 would expect people's paychecks about back to and that's just 0:05:02.480 --> 0:05:06.200 not happening. So well, when you say they're not moving, 0:05:06.320 --> 0:05:09.080 I mean, are you really saying this that the numbers 0:05:09.120 --> 0:05:11.600 when they come out every month and every quarter are 0:05:11.640 --> 0:05:14.720 saying zero zero, zero zero. What do you mean by that? Well, 0:05:14.800 --> 0:05:16.440 let me let me break down the numbers for you. 0:05:16.800 --> 0:05:20.279 So we look at and I would say most economists 0:05:20.320 --> 0:05:24.240 look at the average hourly earnings figures from the Labor Department. 0:05:24.400 --> 0:05:27.360 This comes out every month right right with the employment report. 0:05:27.600 --> 0:05:31.520 It's probably the most widely watched gauge that tells us 0:05:31.520 --> 0:05:35.760 that in August hourly earnings grew two point two percent 0:05:35.920 --> 0:05:40.000 from the year before. So the average for the entire recovery, 0:05:40.040 --> 0:05:43.320 which started in June two thousand nine, is two percent. 0:05:43.560 --> 0:05:47.760 So we're right there with the average. There's been basically 0:05:47.800 --> 0:05:51.359 no pick up at all. And what normal is economists 0:05:51.400 --> 0:05:55.080 have indicated is somewhere around three to four percent the 0:05:55.279 --> 0:05:59.320 historical norm, right exactly. So we're not anywhere close where 0:05:59.360 --> 0:06:01.920 we used to be. That's what. Let me just pull 0:06:01.960 --> 0:06:04.400 you up on that one. I mean, the economy has 0:06:04.440 --> 0:06:08.000 been growing on average between two to three for that 0:06:08.120 --> 0:06:11.440 period of time. So does the figure that you're describing 0:06:11.640 --> 0:06:14.839 really seen that out of whack? Now? Granted, you know, 0:06:14.960 --> 0:06:18.880 compared with the nineties or the early odds, it's certainly 0:06:18.880 --> 0:06:22.680 not up there, but the expansion is not up there 0:06:22.720 --> 0:06:25.120 with the nineties or the early odds either, So it 0:06:25.160 --> 0:06:29.320 was really that bad. Well, let me give you more data, 0:06:29.520 --> 0:06:32.560 and this is coming from the Census Bureaus Report on 0:06:32.640 --> 0:06:36.320 Income and Poverty, which just came out this morning. Basically, 0:06:36.400 --> 0:06:39.240 what that told us is that median household income is 0:06:39.279 --> 0:06:42.880 still six point five percent lower than in two thousand 0:06:42.880 --> 0:06:44.719 and seven. So with GDP, if you just take the 0:06:44.760 --> 0:06:47.240 overall level of GDP, that number keeps going up and 0:06:47.279 --> 0:06:50.279 not enough. Right, the percent change may be different, but 0:06:50.320 --> 0:06:53.120 the level goes up. You would sort of expect income 0:06:53.160 --> 0:06:55.640 to do the same thing. Over time, our center a 0:06:55.839 --> 0:06:59.159 living increases, but that hasn't really been the case. We're 0:06:59.160 --> 0:07:01.520 still sort of following our way out of this hole 0:07:01.880 --> 0:07:05.880 that was created during the recession, and things just aren't 0:07:05.880 --> 0:07:07.919 as good as people would like them. So this is 0:07:07.960 --> 0:07:11.440 not just a sort of a feeling perception thing you're saying. 0:07:11.520 --> 0:07:15.000 This is grounded in real data exactly, And I think 0:07:15.000 --> 0:07:16.840 it's probably one of the reasons that people have felt 0:07:16.840 --> 0:07:22.280 like the recovery has been so lackbuster, pretty depressing stuff. So, 0:07:22.560 --> 0:07:24.800 you know, you said, this is a big mystery as 0:07:24.840 --> 0:07:27.440 to why this is happening. You know, the job markets 0:07:27.480 --> 0:07:31.160 doing pretty well now, but wages still aren't picking up. 0:07:32.920 --> 0:07:36.680 Give us a couple of theories as to why economists 0:07:36.720 --> 0:07:41.160 think this uh mystery exists. I mean, he said, used 0:07:41.160 --> 0:07:43.600 to be a reporter for the San Francisco FED. So 0:07:44.120 --> 0:07:46.240 the theory that's come out of that shop is I 0:07:46.280 --> 0:07:49.240 think one of the most intriguing, and I think you 0:07:49.320 --> 0:07:52.080 know that. Yeah. So it's called the pent up wage 0:07:52.120 --> 0:07:56.160 deflation theory, and it means, you know, back in the recession, 0:07:56.440 --> 0:08:00.520 the economy got really bad, so what companies really wanted 0:08:00.560 --> 0:08:04.200 to do was cut the wages of their existing employees. 0:08:04.320 --> 0:08:07.560 But there's kind of this like psychological barrier among employers 0:08:07.600 --> 0:08:10.600 as to actually dropping people's wages. They think it's like 0:08:10.640 --> 0:08:13.920 a big insult to actually cut someone's salary. So instead, 0:08:13.960 --> 0:08:15.840 what a lot of companies did was they kept it 0:08:15.880 --> 0:08:21.480 at zero um or a very small positive rate, and 0:08:21.520 --> 0:08:24.880 then instead waited and waited and waited and kept it 0:08:24.920 --> 0:08:28.960 at that very very low level until finally the economy 0:08:29.160 --> 0:08:32.080 caught up to the point where they can start um 0:08:32.120 --> 0:08:36.760 accelerating people's races. And one theory is that that point 0:08:36.840 --> 0:08:39.640 just hasn't come yet, that that demand hasn't picked up 0:08:39.760 --> 0:08:43.360 enough to get there, right, So there's still maybe a 0:08:43.400 --> 0:08:46.440 decent amount of slack out there that perhaps isn't being 0:08:46.480 --> 0:08:49.120 picked up by the unemployment rate, which is pretty low. 0:08:49.120 --> 0:08:51.520 It's at five point one percent, within the range that 0:08:51.640 --> 0:08:55.120 federal was there a policymakers consider full employment. But you know, 0:08:55.200 --> 0:08:57.520 we do have We've seen surveys when from the ft 0:08:57.600 --> 0:09:01.040 itself that show people are willing to work more hours 0:09:01.080 --> 0:09:03.760 at the same wage. They wouldn't even ask for a race. 0:09:03.800 --> 0:09:06.400 So that's a that's an example of slack. Maybe there 0:09:06.400 --> 0:09:08.520 are these people out there who are just willing to 0:09:08.559 --> 0:09:10.960 take jobs at whatever price they can get. Well, the 0:09:10.960 --> 0:09:14.040 economy has been growing since two thousand and nine. That 0:09:14.760 --> 0:09:20.040 may surprise many people, but nevertheless that's a fact act 0:09:20.280 --> 0:09:24.720 if not now when well we're waiting, Dan, I'm waiting, 0:09:27.559 --> 0:09:30.079 I am waiting. I mean. One of the other theories 0:09:30.080 --> 0:09:32.640 out there is that, you know, if our listeners have 0:09:32.760 --> 0:09:35.560 listened to our very first episode, they will know that 0:09:35.640 --> 0:09:39.000 productivity growth in the US has been very low. So 0:09:39.920 --> 0:09:42.400 that's right over the past few years. So you know, 0:09:42.440 --> 0:09:45.920 it could be that workers just don't quote unquote deserve 0:09:46.120 --> 0:09:49.440 a raise just because they haven't been adding as much 0:09:49.520 --> 0:09:52.520 value to the economy. And then there's also the theory 0:09:52.600 --> 0:09:59.520 that companies are substituting perks like unlimited vacation paid vacation Dan, 0:10:00.760 --> 0:10:05.320 please keep paid. Um, there's substituting those types of things 0:10:05.360 --> 0:10:09.360 for actual pay increases. So you know, people maybe getting 0:10:09.360 --> 0:10:13.000 these sorts of bonuses, but their actual salary may not 0:10:13.120 --> 0:10:17.439 be going up, right. So basically the truth is everyone's 0:10:17.480 --> 0:10:20.040 pretty stumped on this one. You know, econ when one 0:10:20.080 --> 0:10:23.080 tells you that as a supply of workers goes down, 0:10:23.160 --> 0:10:26.840 the price they can command should go up, that's not happening. 0:10:26.880 --> 0:10:29.920 It's one of the many ways that real life unfortunately 0:10:30.000 --> 0:10:33.640 doesn't adhere to our tidy theories in the economy. But 0:10:33.720 --> 0:10:37.240 you know, we started this episode with a very big question, 0:10:37.520 --> 0:10:40.720 will you get a raised this year? Tor? What's the answer? 0:10:41.200 --> 0:10:45.160 It's so disappointing. I would say the best answer is 0:10:45.320 --> 0:10:49.520 it depends And that's a frustrating answer for many people, 0:10:49.640 --> 0:10:52.960 but it really does. So one big thing that it 0:10:53.000 --> 0:10:55.320 depends on is your industry. And I think that this 0:10:55.360 --> 0:10:59.760 has been the case for wages wherever. It always depends 0:10:59.800 --> 0:11:03.319 on a specific job that you have. Exactly there's this 0:11:03.360 --> 0:11:08.320 thing called the Jolt survey, and that is Economics reporter 0:11:08.360 --> 0:11:12.040 shorthand for the Job Openings and Labor Turnover Survey produced 0:11:12.080 --> 0:11:14.760 by the Labor Department. Now this might sound like a 0:11:14.840 --> 0:11:18.200 pretty obscure number. I mean, it sounds like something that 0:11:18.280 --> 0:11:21.760 happens when Magnus Outproducers sticks his fingers into the a 0:11:21.880 --> 0:11:27.880 pala socket. Tell us about this and why fed chair 0:11:28.040 --> 0:11:31.840 Yelling follows it so we can see, you know, how 0:11:31.840 --> 0:11:34.360 many people are quitting their jobs. We can see how 0:11:34.360 --> 0:11:37.800 many job openings there are. We can see what industries 0:11:37.800 --> 0:11:41.880 those openings are in, so we can see layoffs, other discharges. 0:11:42.000 --> 0:11:44.120 It's a it's a pretty important survey and it's one 0:11:44.160 --> 0:11:47.320 that fed chair Young follows closely. As you noted Dan. 0:11:47.640 --> 0:11:50.559 By the way, how many does she follow? A lot? Yeah, 0:11:50.640 --> 0:11:55.160 she's got a whole dashboard, tons, fall suitcase of them. 0:11:55.320 --> 0:11:57.959 So we looked at this survey to get an idea 0:11:58.080 --> 0:12:02.400 of how many unemployed aid workers are competing for each 0:12:02.559 --> 0:12:06.760 job opening in an industry. The idea is that if 0:12:06.800 --> 0:12:10.400 you've got fewer people out there that are competing for jobs, 0:12:10.440 --> 0:12:13.800 you know, employers have fewer people to pull from. They're 0:12:13.800 --> 0:12:15.920 going to have to start bidding up wages so they 0:12:15.920 --> 0:12:19.240 can either poach people or they can attract the best 0:12:19.240 --> 0:12:23.240 and brightest. So shall we dig in all right? So 0:12:23.320 --> 0:12:26.199 for the US, this ratio the number of unemployed people 0:12:26.280 --> 0:12:32.080 per opening is one point. For let's run through the industries. 0:12:32.640 --> 0:12:36.120 How do you get full tents of a person of 0:12:36.240 --> 0:12:41.559 these workers that are walking around the toulso does halfway? 0:12:42.400 --> 0:12:45.880 So looking at this is about the real world, not 0:12:45.960 --> 0:12:48.199 about numbers. But you're getting to the point getting and 0:12:48.360 --> 0:12:52.080 getting there. So looking at the industries and there you 0:12:52.080 --> 0:12:57.000 know associated ratios will go in order from the smallest largest. 0:12:57.080 --> 0:13:00.960 So with the smallest ratio we have financial activities, it's 0:13:01.000 --> 0:13:04.559 point six, and then from there we have professional business services, 0:13:05.080 --> 0:13:11.400 education and health services, information, retail and wholesale trade, and 0:13:12.120 --> 0:13:16.960 leisure and hospitality. All of these industries have ratios that 0:13:17.000 --> 0:13:20.079 are smaller than the US is overall. So these are 0:13:20.120 --> 0:13:22.800 the good industries to be in, right, if you want 0:13:22.840 --> 0:13:25.760 your wages to go up? Right, These industries are tighter 0:13:25.800 --> 0:13:28.319 than the overall US labor market, so there's going to 0:13:28.400 --> 0:13:32.000 be a little bit more competition in terms of employers 0:13:32.000 --> 0:13:34.760 and who they have to pick from and higher from. 0:13:34.800 --> 0:13:37.000 And then for those that have a little more slack, 0:13:37.200 --> 0:13:41.960 we have transportation and utilities, manufacturing and construction. So you 0:13:42.240 --> 0:13:44.760 is that these are all three of these are you know, 0:13:44.840 --> 0:13:48.360 really cyclical industries. They all got hurt pretty badly during 0:13:48.360 --> 0:13:51.080 the recession and they're all still trying to recover. So 0:13:51.120 --> 0:13:54.559 there are you know, companies have more people to choose from, 0:13:54.600 --> 0:13:58.359 So people who are in those industries have poor prospects 0:13:58.400 --> 0:14:01.480 for getting a raise this year relative to the others. Yeah, 0:14:01.520 --> 0:14:04.640 we'll hold on a second. What about the US manufacturing 0:14:04.720 --> 0:14:08.840 renaissance some of us have heard about. How come manufacturing 0:14:08.920 --> 0:14:11.640 really doesn't face you strongly here? I don't know about that. 0:14:11.679 --> 0:14:16.120 The manufacturing data has been pretty shaky lately. You know, 0:14:16.200 --> 0:14:21.120 the the US dollar has been appreciating and global growth 0:14:21.200 --> 0:14:25.000 hasn't been stellar either, So manufacturing and manufacturers in the 0:14:25.040 --> 0:14:28.760 US have been having a pretty hard time. So that 0:14:28.880 --> 0:14:30.600 we have something to do with it as well. Our 0:14:30.640 --> 0:14:34.480 colleagues show moved this really interesting story back a couple 0:14:34.480 --> 0:14:38.400 of weeks ago, based on report from the staffing firm 0:14:38.680 --> 0:14:42.840 UM Robert half and that showed that white collar workers 0:14:42.960 --> 0:14:45.400 are probably going to get a very big bit pay 0:14:45.440 --> 0:14:50.440 boost next year. UM they looked at starting salaries and 0:14:50.480 --> 0:14:53.560 they found that the numbers should be the best in 0:14:54.000 --> 0:14:56.640 eight years or something like that. So that's pretty exciting. 0:14:56.720 --> 0:14:59.640 If um, you have a professional job, you know, the 0:14:59.680 --> 0:15:03.120 best industry to be in right now is uh Surprise 0:15:03.160 --> 0:15:06.640 Surprise technology. So you know a lot of my friends 0:15:06.640 --> 0:15:09.080 in San Francisco will be very happy to hear this. 0:15:09.400 --> 0:15:13.000 For example, if you are a big data engineer, you 0:15:13.000 --> 0:15:16.600 could probably snag a starting pay of between a nine 0:15:16.640 --> 0:15:21.280 thousand and a half dollars to a hundred and eighty 0:15:21.360 --> 0:15:26.520 three thousand dollars, So that's a nine percent jump from 0:15:26.600 --> 0:15:30.640 That's a lot of money. And also if you're you know, 0:15:30.720 --> 0:15:34.840 an app developer or like a security analyst or like 0:15:34.880 --> 0:15:37.800 a ux specialist, you know, those are really good jobs 0:15:37.800 --> 0:15:40.960 to be in. Two so once again a great time 0:15:40.960 --> 0:15:43.920 to be in tech and also a pretty good time 0:15:43.960 --> 0:15:47.760 to be in very specialized roles like that. Well, that's 0:15:47.880 --> 0:15:50.800 very encouraging for those folks. I wonder if we ought 0:15:50.880 --> 0:15:54.680 to take a step back and you know, ask ourselves 0:15:54.720 --> 0:15:59.280 a different question. We've been asking why, why, why, why 0:15:59.320 --> 0:16:01.680 hasn't this up and why is this perception that it 0:16:01.720 --> 0:16:06.600 hasn't kicked in? Maybe we should be asking ourselves why not. 0:16:07.360 --> 0:16:11.080 Perhaps the answer lies in the absence of any real 0:16:11.120 --> 0:16:15.360 inflationary precious tour. You wrote about this just today. Yeah, 0:16:15.400 --> 0:16:18.360 I mean, I'm inclined to think that inflation provides a 0:16:18.480 --> 0:16:22.280 little bit of a silver lining here because inflation has 0:16:22.320 --> 0:16:25.920 been really subdued for a lot of the recovery. So 0:16:26.000 --> 0:16:28.760 that means that, you know, paychecks aren't going up a 0:16:28.760 --> 0:16:33.040 ton um, but at least inflation isn't either, So it's 0:16:33.080 --> 0:16:36.200 not like your entire paycheck, your entire race, i should say, 0:16:36.280 --> 0:16:39.840 is being eaten up by inflation. But you're right, if 0:16:39.880 --> 0:16:42.920 there's if there's lack of inflation in the US economy 0:16:43.040 --> 0:16:46.040 right now, you know, employers aren't sitting there being like, gosh, 0:16:46.160 --> 0:16:48.680 prices are rising so much, my employers are or my 0:16:48.720 --> 0:16:51.560 employees are about to revolt if I don't give them 0:16:51.600 --> 0:16:54.840 a race. So I don't have to. And in this 0:16:54.920 --> 0:16:59.400 story you published today, Cold Fed can thank Amazon Cuba 0:17:00.000 --> 0:17:04.200 a streak of inflation misses, you're actually posing the question 0:17:04.960 --> 0:17:09.920 of whether the technology that just praised as a potential 0:17:11.000 --> 0:17:14.200 raise bearer, if that's the word or the phrase to use, 0:17:15.000 --> 0:17:17.639 could it be working the other way as well, Aki, 0:17:17.760 --> 0:17:22.080 in terms of holding inflation down so some employers can site. Look, 0:17:22.840 --> 0:17:27.399 inflation is one one and a half percent, Why the 0:17:27.480 --> 0:17:30.560 heck do you need a rise? Right exactly? And I 0:17:30.600 --> 0:17:33.800 think this is really important to the whole wages are 0:17:33.920 --> 0:17:37.320 not growing idea in the sense that for many people, 0:17:37.520 --> 0:17:40.480 especially coming out of the recovery, which is driven by 0:17:40.520 --> 0:17:44.639 a credit boom and bust, they're making their spending decisions 0:17:44.720 --> 0:17:48.199 on what their paycheck looks like. No, Americans haven't been 0:17:48.240 --> 0:17:50.520 taking out a ton of debt in the wake of 0:17:50.560 --> 0:17:53.080 the recession. It seems like they sort of learned their lesson. 0:17:53.200 --> 0:17:56.240 They got badly burned, and now they're working on paying 0:17:56.280 --> 0:17:59.800 that debt down and acquiring new debt really slowly. So 0:18:00.400 --> 0:18:03.480 it's got huge implications for our economy because what they 0:18:03.520 --> 0:18:05.959 can spend is based on what they make, and if 0:18:05.960 --> 0:18:08.720 they're not making a lot more, they're probably not going 0:18:08.760 --> 0:18:11.239 to be able to spend a lot more, right right, right, 0:18:11.560 --> 0:18:14.679 And we should also, you know, note this other caveat that, 0:18:14.760 --> 0:18:17.159 although you know, when you look at the average or 0:18:17.200 --> 0:18:19.960 the media and people's wages haven't been growing that much, 0:18:20.240 --> 0:18:23.879 when you actually look at the very top percentiles, the 0:18:24.000 --> 0:18:27.639 really rich people, their wages have been actually going up 0:18:27.680 --> 0:18:30.480 a lot. And when you look at the bottom percentiles, 0:18:30.520 --> 0:18:34.040 their wages have been, you know, sometimes going down exactly. 0:18:34.720 --> 0:18:37.560 So just for some context, I think this is good 0:18:37.600 --> 0:18:39.919 because it's it's nice to sort of get a figure. 0:18:40.000 --> 0:18:42.360 Well okay, well, so guys are talking about wages. How 0:18:42.440 --> 0:18:46.560 much does a family make them? So the census data 0:18:46.800 --> 0:18:50.800 out this morning, like we mentioned, said that the overall 0:18:51.200 --> 0:18:56.000 median household income was fifty three thousand, six hundred and 0:18:56.040 --> 0:19:01.520 fifty seven dollars. So that wasn't a statistically different change 0:19:01.560 --> 0:19:05.199 from last year. Once you adjust for inflation, and you 0:19:05.240 --> 0:19:09.320 know there hasn't been a statistically significant change over the 0:19:09.400 --> 0:19:13.399 last three years. That's pretty depressing. Yeah, yeah, you know. 0:19:13.440 --> 0:19:17.080 We started this episode by asking will you see a 0:19:17.200 --> 0:19:19.960 raise this year? And Torrey and Dan, all you gave 0:19:20.080 --> 0:19:24.040 us was hedged answers. Come on, that's not entirely true. 0:19:24.840 --> 0:19:27.359 I would say, you know, what we know from econ 0:19:27.440 --> 0:19:29.920 one on one, as you said, says yes, we should 0:19:30.080 --> 0:19:32.320 be getting raises soon, but it's just not happening, and 0:19:32.359 --> 0:19:34.359 it's not happening for the past six years. So well, 0:19:34.400 --> 0:19:38.960 I know the perfect solution to this, the magic eight. Yeah, okay, 0:19:39.000 --> 0:19:43.960 let's shake it. Will Americans get a raise this year? 0:19:45.280 --> 0:19:49.879 A big race, a big race statistically significant. Right yeah, right, 0:19:49.960 --> 0:19:57.120 all right? Oh god, what is it the most depressing 0:19:57.200 --> 0:20:01.280 magic eight ball of all time? The answer is very doubtful. 0:20:02.720 --> 0:20:06.120 On that note, thanks so much for joining us again 0:20:06.160 --> 0:20:09.359 today and listening to the Bloomberg Bench our podcast. We 0:20:09.480 --> 0:20:12.000 will be back next week and until then, you can 0:20:12.000 --> 0:20:14.480 find us on the Bloomberg terminal as well as Bloomberg 0:20:14.520 --> 0:20:18.320 dot com. We are also on iTunes and pocket casts. 0:20:18.480 --> 0:20:22.680 And while you're there, please take a minute to subscribe, rate, 0:20:22.720 --> 0:20:25.800 and review so that more people can find us. You know, 0:20:25.880 --> 0:20:28.800 we've had some amazing feedback over the past weeks since 0:20:28.840 --> 0:20:32.520 we launched, and we're really excited to be reaching more people. UM, 0:20:32.560 --> 0:20:34.920 so let us know what you thought of the show. Um. 0:20:34.960 --> 0:20:37.040 You can talk to us and follow us on Twitter 0:20:37.240 --> 0:20:41.080 at at Akio seven, at Tory Stillwell with one L 0:20:41.119 --> 0:20:43.920 in the middle, and at Dan Moss d C.