UBS On-Air: Paul Donovan Daily Audio 'Earnings, wages, and costs'

US employment report Friday means it is time for the monthly reminder that average hourly earnings are not wages, and are definitely not wage costs. If wages are stable and the number of low-paid workers in the economy increases, average earnings fall. At a time of structural upheaval, the composition of the workforce is likely to change. The distinction is important because (real) wages matter to consumer spending power, and wage costs matter to profit margins and potentially inflation.