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CNBC’s Jim Cramer lamented the lack of wage growth across the U.S. economy Friday, putting the blame on the changing nature of work.
“I do think there is this gig economy that shafts people,” Cramer said on “Squawk on the Street.” “You don’t do as well.”
The jobless rate dropped 0.2 percentage points to 3.5% in September, marking a new 50-year low, the Labor Department reported Friday.
However, average hourly earnings hardly changed over the month and are up just 2.9% for the year, the lowest annualized increase since July 2018.
As fewer and fewer people need jobs, economists traditionally expect wage growth to pick up because companies raise compensation to attract talent from a shrinking labor pool.
“I was surprised that wages didn’t advance that much,” Cramer said. “I mean, it’s incredible.”
More than 60 million Americans are now part of the so-called gig economy, CNBC reported last year. While temporary or contract work is not a new concept, technology platforms have helped fuel its growth. By 2027, more than half of the country’s workers are expected to be working independently.
The widespread adoption of technology across the economy is defying conventional wisdom and keeping wages down, Cramer argued.
“Automation, digitization. That’s doing it,” Cramer said, arguing that it’s not just entry-level positions in the service sector being replaced, but also people who make between $80,000 and $120,000. “That’s what’s happening.”
Cramer’s comments come on the heels of a report issued last month by the Federal Reserve Bank of San Francisco that analyzed the impact of automation in the U.S. economy.
“The steady decline in the relative prices of robots and automation equipment over the past few decades have made it increasingly profitable to automate,” researchers wrote. “In this environment, workers may be reluctant to ask for significant pay raises out of fear that an employer will replace their jobs with robots.”