The hourly vs. salary wage gap
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What is the current state of the hourly vs. salary wage gap?
Hey, I need a good word to describe an economy that is slowing but where prices are rising. Anybody have any ideas? From American Public Media, this is Marketplace.
In Los Angeles, I'm Kyle Risdell. It is Friday today. This one is the 29th of May. Good as it always is, everybody, to have you along. All right. I was kidding. I know the word for a slowing economy where prices are rising. The question is whether stagflation is where we are. So let us discuss. Test my premise, if you will. Amara Mokwe is at Bloomberg. Sudeep Reddy is at MSNOW. Hey, you two. Hey, Kyle.
Hi.
Amari, you get to go first. Let's see. GDP comes in this week at 1.6%. The revision for the first quarter, annualized, of course. PCE, the Fed's preferred measure of inflation. I'm required by law to say that phrase. Comes in at 3.8%. It sounds like stagflation to me.
Yeah, it's not. I think it's not really.
You don't sound convinced. All right, go ahead.
How have hourly and salaried wages changed recently?
No, no, no. It's not really feeling great. But I mean, I think like when you look at the consumer spending data, and that's, I think, really important because we know that's a key driver of economic growth. You know, we still got, you know, inflation adjusted spending that was up, right? So it's, you know, that's, I think... And we saw the personal savings rate also fall to its lowest level since mid-2022. And some people were flagging that, like, is this a sign that the consumer is finally cracking? I think the reason why people are sort of hesitant to say, OK, yes, we definitely have stagflation is because one of the things we know about the consumer in recent years is that Americans have proven really resilient through a lot of different shocks, a lot of different twists and turns in the economy.
And so I think people are just, it's like feeling like it's maybe too soon to say. People want to see how this situation in Iran plays out. You know, it's really hard to get our arms around the situation because it seems like one day we're really close to a deal. And then the next day, maybe we don't have a deal at all. And so I think people are really sort of waiting for that time factor to figure out, okay, You know, is this going to wrap up soon or are we going to be dealing with a price shock that kind of endures? I think I mean, I think that's the big question.
You have stolen like the next three bullet points on my list of things I was going to talk to you guys about. But we're going to go there anyway. And Sadiq, you get this question and it's this and it goes to the consumers. Amara was talking about, you know, consumers are still spending, but the savings rate is down. Credit card debt and delinquencies are up. This is the first real hard data, other than the vibes of consumers are cranky, that we've seen that are maybe not great for consumers. Do you think we are cracking finally?
There are signs, like you're standing on that piece of glass and you see the tiny cracks in the corners of it, but it hasn't actually hit in a big way. There are delinquencies in credit cards, delinquencies in auto loans. Lower-end consumers are very clearly being hit harder, obviously because of gas prices in particular. There are just some signs here that are not good if they were to continue. We still have this looming question over whether these gas prices being so high are short-term effects or are they more durable. If this goes on, we used to think, oh, well, this is only going to be a few weeks, maybe a few months. Well, we're at a few months now, and you can actually see it starting to hurt.
What factors are contributing to the wage stagnation?
I just didn't think it was going to show up at numbers that look like they were 20 years ago during the financial crisis. Some of these numbers are bad. Yet, yet, jobless claims are very low. We are in a low-firing economy. Unemployment rate is not bad right now. So the overall picture is one of stability. But the cracks are there, and we've got to pay attention to them.
All right, Amara, let's do this. Let's look at no pun intended here as you hear what I'm about to say. Let's look at looking through the current dynamic.
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Chapters
8 chapters
1
What is the current state of the hourly vs. salary wage gap?
0:01–1:15
2
How have hourly and salaried wages changed recently?
1:15–3:34
3
What factors are contributing to the wage stagnation?
3:34–6:17
4
How does inflation affect real wages for workers?
6:17–8:13
5
What role do convenience stores play in the economy?
8:13–11:00
6
How are convenience stores evolving beyond gas stations?
11:00–13:19
7
What is the life of a travel nurse like on the road?
13:19–15:43
8
What challenges do travel nurses face with housing?
15:43–26:58