They do, my old company was a really shitty company. Our last company meeting the CEO was asked about employee retention. His answer was he hoped people can leave the company having learned something that will help them with future endeavors. They do give out raises, but they made it quite clear they wanted cheap labor.
@scottagibson, of course companies want to pay less, that doesn’t mean there is some effort to repress wage growth as a whole. The fact is that jobs where there are shortages, wages go up.
Did anyone ask him about his raise or other compensation increases?
There is in fact some effort to repress wage growth as a whole. The entire history of capitalism is a history of owners / managers trying to suppress labor costs and labor trying to claw back a larger share of value for their labor. It’s not like that suddenly ended.
Wage freezes are an effort to suppress wage growth. Forced unpaid overtime for salaried employees is an effort to suppress wage growth. Arbitrary budget targets with cuts taken almost entirely from labor costs are an effort to suppress wage growth. Sending work overseas is an effort to suppress wage growth. Relocating offices to cheaper labor markets is an effort to suppress wage growth. Automation is an effort to suppress wage growth. Interest rate hikes are an effort to suppress wage growth. A minimum wage currently set at 1970 levels is an effort to suppress wage growth. Laws and court decisions designed to cripple unions is an effort to suppress wage growth. Regulatory hostility to unions and refusal to enforce laws against repressing union efforts are an effort to suppress wage growth.
Whoa whoa whoa. I’m agreeing with the thrust of the rest of your post, but this is a pretty extraordinary claim. Are you saying that the Fed is purposely suppressing wage growth? Not inadvertently or as a side effect of their policies, but actually the unstated/obfuscated goal of it?
If you really think that, I’d truly like you to elaborate.
Edit: Meanwhile, the part about C-levels sitting around suppressing wage growth in their own companies, that is the least surprising thing I’ve read all day. Our current implementation of a capitalist economy basically demands it.
The Fed considers an unemployment rate below 4% ‘too low’ and will act to counter it, which of course must suppress wage growth. Is that deliberate? Well, the target is deliberate, and the effect is predictable.
It considers an inflation rate above 2% ‘too high’ and will act to counter that, too. Higher inflation is good for people who owe (it erodes the value of debt) but of course bad for people who are owed or who hold wealth, so what the Fed is doing in that case is protecting capital.
I’ll note that these targets seem to have been established in the mid to late seventies, after which we’ve seen decades of worker wage stagnation and growing concentration of wealth at the top. It doesn’t seem like a coincidence to me.
Do you have any source for this? I thought the Fed targets “Maximum sustainable employment” but I’ve never seen anything like what you said. Maybe it’s a moot point because inflation generally would start to rise under 4% unemployment and then the inflation target kicks in, but I’m interested if you have a source anyways.
I think it’s an interesting position that Fed policy suppresses wage growth. I can definitely see an argument for that. What I see as a much more difficult to make argument is that is explicitly one of their goals (even if they hide it). If you have any evidence of that, I’d still like to see it too.
The language used is what the maximum employment is without causing a raise in prices. Of course, the prices would raise because the wages have to be raised, which I think is what @scottagibson was getting at.
I missed the stable prices part before. The Feds website isn’t awesome. Stable prices is another way of saying low inflation though, so I don’t think it’s explicitly saying they’re suppressing under 4% but rather that you could expect them to be dealing with inflation at that point.
Sure, but even if it’s exactly as Scott describes, I think you’d have to admit that they’d never in a million years come out and say “We have a policy of wage suppression”, even if ultimately that’s exactly what it is. :) You’re never going to find language where they explicitly state that.
Sure, but implying that is their explicit goal, not just an outcome of their other goals, whether or not they actually say it is, is still an extraordinary claim.
I think it’s fair to say that the Fed doesn’t want wages to increase too rapidly. But since they target an inflation rate of 2%, you would expect modest wage growth over time.
The other problem with blaming the Fed is that wage stagnation is a global problem, which suggests that the root causes are not specific to the US.
If you think the Fed has done anything but serve a neoliberal view of capital uber alles for the last half century, you should really take a look at this lovely bridge I have for sale.
I should probably get a little more clear. I agree that the outcome of their policy does to some extent suppress wage growth, but
I’m not sure if the recessions that one would expect pre-Fed policy wouldn’t do a better job of that anyways
Imagining a room of Fed chairmen and executives with cigar smoke and whatnot where they discuss keeping down the wages of the common man is basically conspiracy theory bullshit
Edit: conspiracy theories do sometimes turn out to be real, but extraordinary claims require extraordinary evidence
Edit 2: I’m not at all sure why I just formatted the post the way I just did
The intent is to maximize market value.
The actions to do so happen to correlate to lower wage growth
See how the market reacts to news about increased wage growth. Stocks immediately drop when that news occurs. High inflation causes downward pressure on investments, and lowers the return of many market instruments.
Fed policy feeds into this as a knock on effect of their charter. They don’t have to explicitly have a policy to suppress wage growth and the value of labor, but their directives to keep inflation low and pursue policies to maximize capital growth happen to nearly perfectly match outcomes that generate those results. If strong wage growth causes stocks and investments to drop, and fed policy is to prioritize stock growth, then ipso facto their policy is one that will pursue keeping wage growth low.
It doesn’t matter if their explicit policy is such, their goals ensure that this is a deliberate outcome.
I have a stronger view: If you want to know what an established system is designed or intended to to, simply look at what it does. It isn’t an unintended consequence if it goes on for decades; it’s the intent.
I see it as a cart-horse situation. The original goal was maximize stock growth. Wage growth is contra to that. Ergo wage growth is bad for their goal, and they pursue policy to minimize that.
The desired outcome isn’t lower wage growth intrinsically, but their desired outcome requires lower wage growth. So they do pursue policy to keep wage growth low, as a means of achieving their actual goal.
