Jul 9, 2019

The good news and bad news about wage growth

Fast-food workers, cashiers, cooks, delivery people and their supporters held a rally outside New York City Hall in 2017. Photo: Erik McGregor/Pacific Press/LightRocket via Getty Images

Having largely been left out of the U.S. recovery over the past decade, low-wage workers are starting to see their incomes rise meaningfully and are pushing for more.

Why it matters: With a tight labor market wherein the number of job openings exceeded the number of unemployed by the largest margin on record, businesses are having to make more concessions to keep low-wage workers and find new ones.

What's happening: Even though Amazon raised its minimum pay for all workers to $15 an hour last year, employees at its Shakopee, Minn., fulfillment center are planning a Prime Day work stoppage to protest productivity quotas and poor working conditions, according to CBS News.

By the numbers: After trailing higher-paid workers for years after the financial crisis, earnings for the bottom 25% of workers have been growing at a rate over 4% since July 2018, while the national average has been stuck near 3%, data from the Atlanta Fed shows.

  • Weekly earnings for the bottom 10% of full-time workers have grown even faster, far outpacing workers at the median.

What they're saying: Research analysts at Goldman Sachs see a "lack of investor concern" about rising wages, they said in a Tuesday morning note to clients. However, the bank's survey data indicates "a record level of corporate concern regarding labor costs."

  • Due to a combination of negative forces, including "tariffs, already-rising inputs costs, and weak economic activity, profit margins are unlikely to rebound in the near future," analysts said.

Reality check: Only the top 10% of U.S. households have fully recovered the wealth they lost in the financial crisis, and company earnings growth has been rising much faster than wages.

The intrigue: Interested parties, including Walmart and Amazon, are lobbying the government to raise the federal minimum wage to $15 an hour, which the CBO said in a report Monday would increase wages for 27 million Americans, but also cost 1.3 million jobs and "reduce total real (inflation-adjusted) family income in 2025 by $9 billion, or 0.1 percent."

Go deeper: A case for large wage hikes

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House votes to raise federal minimum wage to $15 an hour

Photo: Congressional Quarterly/Getty Images

In a long-sought victory for the left, the House on Thursday approved a measure to raise the hourly federal minimum wage to $15 by 2025.

By the numbers: The bill would increase the federal minimum wage, which currently rests at $7.25 an hour, nearly $15,000 a year for those working a 40-hour work week. Just 3 Republicans voted in favor, while 6 Democrats opposed the measure. The federal minimum wage has not been raised since 2009.

Go deeperArrowJul 18, 2019

Jobs only seem hot, and that's why wages are sluggish

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The hottest months on record have been the backdrop for what, on the surface, has seemed to be an equally red-hot U.S. labor market, with the lowest joblessness in a half century, rising wages, and bettering prospects for the least advantaged people.

Quick take: But, at odds with classic textbook lessons, experts now cite evidence that the economy may actually only be warm, with millions of people still wishing to get hired, to turn part-time or gig work into full-time employment, and to earn more money.

Go deeperArrowAug 3, 2019

Fast food's digital revolution is bringing all-time high stock prices

Illustration: Sarah Grillo/Axios

Investors are scrambling to get their hands on next-generation meatless and agrifood technology companies, but the past couple of years have proven very lucrative for old-fashioned fast-food chains.

Why it matters: While legacy brands like Kraft Heinz and Campbell's are losing market share as consumers' tastes and shopping habits change, fast-food legacy names like McDonald's and KFC/Taco Bell owner YUM! Brands are seeing all-time high stock prices.

Go deeperArrowJul 30, 2019