Inflation hits six year high, erasing wage gains by average workers

[136or142]

Powell has largely hued to Yellen's benchmark rate raising schedule, so I struggle to think of how she would have improved this situation.

The real central question to this article is buried halfway in and receives little coverage. Why are wages more or less stagnant when unemployment is hovering around 4%? Inflationary concerns would be more muted were wage gains outpacing inflationary pressure, but as it stands, that isn't presently the case. Possible that it's due to fewer entrepreneurial businesses being created as opposed to historical averages? Possible that it's due to decline in union membership? Possible also that productivity growth has lagged compared to past recoveries?

And really, from a policymaking perspective, we should be more interested in which sectors are experiencing wage growth in excess of inflation.

The newest argument to explain this is that monopsony is a much bigger factor than anybody previously realized.  The Brookings Institute has done some interesting research into this. 

[136or142]

From the article, the tariffs have had a lot to do with the rise in inflation.  Not much that the Federal Reserve should do about that at this point.  Hopefully the tariffs won't cause a persistent rise in prices (which is actually the technical definition of 'inflation') but once they've worked through the economy, they won't cause ongoing price increases.

If it's just a one time increase in prices, the Federal Reserve would be wise to not act.

[136or142]

Powell has largely hued to Yellen's benchmark rate raising schedule, so I struggle to think of how she would have improved this situation.

The real central question to this article is buried halfway in and receives little coverage. Why are wages more or less stagnant when unemployment is hovering around 4%? Inflationary concerns would be more muted were wage gains outpacing inflationary pressure, but as it stands, that isn't presently the case. Possible that it's due to fewer entrepreneurial businesses being created as opposed to historical averages? Possible that it's due to decline in union membership? Possible also that productivity growth has lagged compared to past recoveries?

And really, from a policymaking perspective, we should be more interested in which sectors are experiencing wage growth in excess of inflation.

The newest argument to explain this is that monopsony is a much bigger factor than anybody previously realized.  The Brookings Institute has done some interesting research into this.  

This is a great point and the Brookings brief was excellent. To my understanding, the fundamental gist is that, because of monopsonic power, we're seeing fewer new entrants to the markets and, because those firms had historically been wage growth drivers, we're presently seeing stagnant wages. The policy prescription to this, I would think, is to decrease regulatory capture that's made it more challenging for newer businesses to compete against the established entities.

Edit:I would also add to this that the severe decline in robust antitrust enforcement also impacts the barriers to entry for new firms and causes the new firms that DO spring up to be purchased by the larger firms, snuffing out the potential for competition and, thus, wage growth

I gather the 'non-compete' agreements when a person leaves an employer are also a surprisingly large factor as well, as they prevent a person from using their position to bid for a higher paying job.  I believe the lack of smaller firms in different states where these 'non-compete' agreements wouldn't take effect are the problem.

In addition to anti-trust, I think these 'non-compete' agreements need much more thorough scrutiny as they are essentially a form of restraint of trade, as well as completely tilting the negotiating field to the employer.

[136or142]

Powell has largely hued to Yellen's benchmark rate raising schedule, so I struggle to think of how she would have improved this situation.

The real central question to this article is buried halfway in and receives little coverage. Why are wages more or less stagnant when unemployment is hovering around 4%? Inflationary concerns would be more muted were wage gains outpacing inflationary pressure, but as it stands, that isn't presently the case. Possible that it's due to fewer entrepreneurial businesses being created as opposed to historical averages? Possible that it's due to decline in union membership? Possible also that productivity growth has lagged compared to past recoveries?

And really, from a policymaking perspective, we should be more interested in which sectors are experiencing wage growth in excess of inflation.

The newest argument to explain this is that monopsony is a much bigger factor than anybody previously realized.  The Brookings Institute has done some interesting research into this.  

This is a great point and the Brookings brief was excellent. To my understanding, the fundamental gist is that, because of monopsonic power, we're seeing fewer new entrants to the markets and, because those firms had historically been wage growth drivers, we're presently seeing stagnant wages. The policy prescription to this, I would think, is to decrease regulatory capture that's made it more challenging for newer businesses to compete against the established entities.

Edit:I would also add to this that the severe decline in robust antitrust enforcement also impacts the barriers to entry for new firms and causes the new firms that DO spring up to be purchased by the larger firms, snuffing out the potential for competition and, thus, wage growth

I gather the 'non-compete' agreements when a person leaves an employer are also a surprisingly large factor as well, as they prevent a person from using their position to bid for a higher paying job.  I believe the lack of smaller firms in different states where these 'non-compete' agreements wouldn't take effect are the problem.

In addition to anti-trust, I think these 'non-compete' agreements need much more thorough scrutiny as they are essentially a form of restraint of trade, as well as completely tilting the negotiating field to the employer.

Non-compete are non-enforceable outside of a very large muted set of circumstances.

I'm familiar this is the case in Canada, I'm not certain it's the case in the United States.  Outside of that, as was written, I'm not certain that people in the U.S who sign these non-compete agreements are aware they aren't enforceable, and even if they aren't enforceable legally, the main problem is having the previous employer bring down the very high priced lawyers in to the situation.   So, they may not be enforceable legally, but, in most cases, they are likely completely enforceable as a practical matter.