"The same influx of immigrant workers that helped fill job openings also dampened wage pressures across the affected industries and states. At the industry level, sectors with some of the highest immigrant workforce growth, such as construction and manufacturing, saw the sharpest deceleration in wage growth (specifically, average hourly earnings) from 2021 to 2023."
Maybe I should expand it to say it sounds like they're under a mandate to keep people more-or-less economically stuck.
They need to keep employment high and keep prices stable. Their main lever for controlling these two things is the prime interest rate. They kept that rate low for a long time. Capital now thinks that being able to get money for cheap is the norm. If it can't get money for cheap, well, that's a problem, because capital's mandate is to get more capital.
If you're being incentivized to keep prices low and employment high by this institution, while also trying to accumulate capital for yourself, you are more likely to employ people at lower wages in order to keep prices low instead of taking the hit in reduced capital accumulation to employ people at higher wages while keeping prices low. Furthermore, any sort of sane prime interest rate now seems high to capital, so that additional cost is also factored in as why costs must rise and wages must drop to keep the accumulation rate of capital as high as possible.
Is there anything wrong with accumulation of capital? In and of itself, no, but when you have people with net worths in the hundreds of billions of dollars making the decisions on how to allocate resources for their own continued benefit, well, you get a reduction in economic returns for the rest of the economy.
ceejayoz|5 months ago
The Fed calls workers being able to push for significantly increased salaries an "overheated labor market".
https://www.kansascityfed.org/research/economic-bulletin/ris...
"The same influx of immigrant workers that helped fill job openings also dampened wage pressures across the affected industries and states. At the industry level, sectors with some of the highest immigrant workforce growth, such as construction and manufacturing, saw the sharpest deceleration in wage growth (specifically, average hourly earnings) from 2021 to 2023."
lenerdenator|5 months ago
They need to keep employment high and keep prices stable. Their main lever for controlling these two things is the prime interest rate. They kept that rate low for a long time. Capital now thinks that being able to get money for cheap is the norm. If it can't get money for cheap, well, that's a problem, because capital's mandate is to get more capital.
If you're being incentivized to keep prices low and employment high by this institution, while also trying to accumulate capital for yourself, you are more likely to employ people at lower wages in order to keep prices low instead of taking the hit in reduced capital accumulation to employ people at higher wages while keeping prices low. Furthermore, any sort of sane prime interest rate now seems high to capital, so that additional cost is also factored in as why costs must rise and wages must drop to keep the accumulation rate of capital as high as possible.
Is there anything wrong with accumulation of capital? In and of itself, no, but when you have people with net worths in the hundreds of billions of dollars making the decisions on how to allocate resources for their own continued benefit, well, you get a reduction in economic returns for the rest of the economy.