How much will $0.08 get you?

Yogi Berra once commented that the value of “a nickel ain’t worth a dime anymore,” but what about a nickel and three pennies?  After some serious number crunching here at Atlas, we’ve come to the conclusion that $0.08 is worth a lot, especially when you multiply it enough times.  Our economy is dominated by consumption, and if enough people have an extra $0.08 in their hourly pay, many more goods and services can be afforded.

The mathematical product of $0.08 and the number of workers in America is large.  As of April, our economy employed 141,059,000 nonfarm workers according to the Bureau of Labor Statistics (BLS).  Multiply this figure by the $0.08 per hour wage increase the average worker received in May, and the hourly income for those already employed grew by $11,284,720 every sixty minutes.  Of course, this does not include the additional 280,000 net new workers that found jobs in May.  On average, this group now also earns $24.96 an hour or $6,988,000 each time the big hand passes 12 during their working day.   So in aggregate, $18,273,520 more is earned each hour because of the labor markets May 2015 improvements.  Further, since the average work week remained even at 34.5 hours, so $630,408,840 make its way into Americans’ income each week.  Over year, that is over $32.7 billion dollars!

After taxes are paid on the income, consumers can do two things with that money.  It can be spent or it can be saved, and Americans will do both.  In the weeks ahead, data on consumption will find its way into the press in the form of retail sales and the report on income and outlays.  Based on the earlier mentioned figures from the BLS, Atlas expects both to improve.
(by C. Cox)