I was fiddling around with some numbers this afternoon and came up with something interesting.
As you know, the BLS reports earnings for all employees and for non-managerial employees, who make up about 80% of the workforce. This makes it easy to also calculate earnings for the managerial workforce. Right now, for example, wages for the managerial workforce average about $53 per hour ($106,000 per year) while non-managerial workers average about $29 per hour ($58,000 per year). This assumes full-time work.
Of course, you can also easily calculate the total number of managerial and non-managerial workers. Here it is:
Managerial positions fell only slightly during the pandemic and quickly caught up to their previous level. Non-managerial positions dropped dramatically and have only recently made back those losses.
In other words, US companies have plenty of managers but they've had a hard time attracting worker bees. Here's what that means for wages:
The 2020 spike is a bit artificial, so ignore that. The bigger point is that from the start of the pandemic to now, the average wage for all employees has been close to flat. But that hides a big difference. Non-managers have seen their wages rise about 3%. Managers have seen their wages fall about 3%.
I don't have any big insights to offer about what this means except that it might be part of the answer to why people are sour on the economy. Managers are sour because their earnings have plummeted since 2021. Non-managers are sour because their earnings have been flat since 2021. I don't know if this explains a lot, but it might explain a little bit.
IMHO, Noah Smith is right, and it is all the "vibe narrative." People are sour because they're told everyone is sour. And the MAGAs are loud and hateful.
It’s not just the MAGAs, until this week most of the mainstream “liberal” media has hyped any negative facts about the economy, convinced that the economists who declared that we had to have a recession to get rid of inflation were right. Good news about the economy was downplayed. When gas prices spiked it was big news but when those prices later dropped quickly most of the media ignored that good news, choosing instead to focus on the price of eggs. Those prices spiked because of bird flu but the media used it to “prove” just how out of control inflation really was.
When surveys showed that people were saying that the economy was bad showed that most people were also saying that they were personally doing well, the media ignored that second fact and claimed people were really struggling because of inflation. It didn’t occur to them that maybe their constant harping on bad economic news might be responsible for the public’s misperception. It makes me wonder why they bother to be in the media if they believe they don’t affect the public understanding of the facts. The NY Times pitchbot is not exaggerating.
One contributing factor to the disparate growth in managerial and non-managerial jobs could be the deliberate mis-classification of non-managerial jobs as managerial in order to circumvent rules for paying overtime to non-managerial workers.
That points us to a possible reason for the bad vibes - the people with more ability to shape media narratives actually are getting hammered.
KD has said multiple times that the economy is good for workers despite inflation because wages have risen to compensate. There might be sticker shock at the grocery store but that's misremembering, or not realizing that salaries have kept pace.
How does that square with the 3% wage increase shown here when prices have risen much more than that?
Something doesn't fit. What am I missing?
That chart is adjusted for inflation, so wages went up to match inflation, and then up another 3%.
Adjusted for inflation? What a surprise for Kevin to do that! Is this something he just started?
(Thanks)
anecdotally, with the shift to remote work, my employer is hiring more non-managers outside of US while retaining lots of the existing US managers.
Ive seen other analysis (?) making the case that much of the recent decline in managerial income is due to stock options. Given the very, very, very wide range of 'managerial' jobs and income levels its possible that average manager earnings and median manager earnings look very different.
It may be the case that most managers are doing quite well, but a few at the top of the reporting structure have seen a decline in their yearly bonuses and it drags the overall average down.
This would also explain the bad economic vibes....if 9 out 10 managers are happy, but the 1 manager who sets the official vibe of the organization is unhappy....we all have bad vibes. Or at least we only hear about bad vibes.
What everybody hears is Trump and other Republicans and the right-wing media lying about the real state of the economy. Some people are only tuned in to right-wing media and only hear this. The MSM tend to give the usual bothsiderism: "some people say the economy is good and some say it is bad".
What about the miss-assignment of people to management job titles with no management duties?
In other words, they're just not classified as non-management so they have have their hours and job roles messed with.