A Recurring Theme: 252,000 New Jobs, but no Wage Growth

     What else is new? 

     U.S. stocks dropped on Friday as the December jobs report topped expectations but hourly earnings declined.

     "We had better-than-expected payrolls gains, a drop in unemployment, but we didn't see any wage growth," said David Kelly, chief market strategist at JPMorgan Funds.

     "The figures from the Labor Department had the U.S. economy adding 252,000 to payrolls last month, and prompted stock-index futures to reverse higher ahead of the open."

      "But the enthusiasm proved short lived."

      "Unfortunately, as great as the headline is, the wage data severely complicates matters," Dan Greenhaus, chief strategist, BTIG, emailed.

       "The simple fact is we cannot consider an employment report a success, no matter how healthy the headline may be, if wage data does not begin to accelerate," Greenhaus added.

     http://www.cnbc.com/id/102324827

     I do see that IBD Daily was right in calling this market in correction despite the rally the last few days. 

      The question is what to do about the stagnant wage growth? What's clear is that we have seen a lot of new jobs in 5 years but they have been mostly crummy, low paying ones. That's not nothing but it's not nearly enough. This has seemed to be a problem in the US economy that considerably predates the 2008 deep recession. 

      As usual the chance of agreement between Dems and Repubs is not good. In theory both sides might admit to the problem-the Dems certainly will but the GOP will argue that this is due to structural 'supply side' issues-they have, of course, now forced 'dynamic scoring' on the CBO

     http://nymag.com/daily/intelligencer/2015/01/congresss-first-act-was-to-declare-war-on-math.html

     However, the New Republic suggests liberals are overreacting to the GOP's immediate adoption of dynamic scoring. 

      http://www.newrepublic.com/article/120720/cbo-use-dynamic-scoring-democrats-overreact-gop-changes

      In any case, if the GOP does decide to make an issue of wage stagnation it will likely be via tax cuts for the wealthy and corporations-or as they put it 'the job creators'-or helping at these very same job creators by 'easing regulation'-ie, gutting the EPA and making it easier for employers to pay less to employees, ie, the opposite of what Dems will want. 

      One thing that Dems, most importantly at this point President Obama can do as he is at the present the undisputed most important Democrat is do executive action on overtime pay. This is something the President is looking to do. 

      http://www.nytimes.com/2014/03/12/us/politics/obama-will-seek-broad-expansion-of-overtime-pay.html?_r=0

      His work and push on the minimum wage has already borne some fruit as we see both more states and a number of companies raising their MW-that company that warned his employees not to vote for the President has now given everyone a raise. So this will be a start. 

      There are other issues like technology displacement. There just aren't that high a number of really good jobs like there was in the 90s. What to do about that is not yet clearly obvious. 

      http://www.economist.com/blogs/freeexchange/2011/11/technological-unemployment

     Still, some owrk on OT pay will be a big start. Obviously start with the low hanging fruit. 

      UPDATE: Jared Bernstein on wage stagnation

      http://prospect.org/article/it%E2%80%99s-not-skills-gap-that%E2%80%99s-holding-wages-down-its-weak-economy-among-other-things