Four Full Years Into Recovery Still No Overall Wage Gains

[Clara T]

December 15, 2005

CPI dip boosts November wages, but still no overall gains four full years into recovery

Hourly wages, adjusted for inflation, were up 1.0% in November, according to today's Real Earnings release from the Bureau of Labor Statistics, the largest monthly increase in hourly wages in over 30 years.  Despite a decline in weekly hours last month, real weekly earnings were also up, by 0.6%.

These real wage gains were largely driven by the 8.0% decline in energy costs last month, leading the consumer price index (CPI) down 0.6% in November, the biggest monthly drop in over 50 years. 

Despite these monthly gains in November, both hourly and weekly earnings are lower, in real terms, compared to the same month one year ago.  In fact, on a yearly basis, real hourly wages are down in all but two of the last 19 months.  For real weekly earnings, 13 of the last 14 months show yearly declines.

With today's release, we have a full four years of real wage data over the recovery that began in November 2001.  The real hourly earnings of non-managers in services and blue-collar workers in manufacturing (the sample covered by this survey) are down slightly over this period, as shown in the chart. 

Thus, after four years of solid GDP growth and impressive productivity growth, the average hourly wage of workers in these occupations is down by five cents.  Even the large monthly spike last month only replaces the real value lost a few months ago (see chart)



http://www.epi.org/content.cfm/webfeat_econindicators_wages_20051215

[applegrove]

1. Didn't you know? This is how inflation will be fought. As prices for

goods go down (China) so too will wages. And that will fight off the inflation that would kill the market because of the price of oil rising.

Also too - fewer jobs in industry will mean America is less reliant on oil and sells intelligence (nanotechnology, biotech, health, computers) across the world. By license. That saves on fuel too.

Isn't it nice to know what an important role you play in the economy?

Problem is -what the hell are the rich sacrificing for the country? So that they get to have markets that roar?

What exactly are they doing? How are they going boldly into this new milenium with sacrifice and hope? What are they giving up?

[Democrats_win]

3. Wouldn´t this suggest we all commit suicide to really help the economy?

Of course suicide is much worse than the economicide of the bu$h administration.

Then again, if only the rich committed suicide, the world would be a much better place and millions of poor people could consume the products that just one rich man gives up.

[applegrove]

5. I wouldn't advize talking that way. My point is that as wages fall -

so too do the costs of goods. And the cost of goods is falling. So there is a balance there - though all the work and loss (and of course loosing a good job and having to open your own small business and 1/2 the pay is a horror).

The point is that in 40 years when oil is $1000 a barrel what do you want the USA to be producing? Becuase any firm using oil in production will go under. And your kids - do you want them to study science or not? So they can have long careers instead of short ones.

It isn't pretty. But the ugly part is that the rich sacrifice nothing as we head into this dark, dark century.

I'm not agreeing with Bush policy. I am saying they should be making schools excellent and upping the price of oil so that alternative energy markets start booming. And that the rich should be paying taxes so that the great schools come into play within a decade.

[ChairmanAgnostic]

2. but but but the GOP keeps telling us the economy is BOOMING!

this can't be true.

Actually, most everyone I know is feeling the pinch. I see that gas prices just popped up 20 cents overnight.
and I cannot wait for the natural gas bill this month.

[spinbaby]

4. I haven't had a raise in five years

But my company tells me that, because they haven't raised health-insurance costs, I'm ahead.

[Angry Girl]

6. Well, I haven't had a JOB in five years....

And health insurance, well, in this house it's called Don't Get Sick!

[ProfessorGAC]

7. More Disinformation

There is no recovery. The economy, (GDP, MHI, TP, UE, Savings Per Capita, Debt per capita, % of GDP as GS, and a few others) have all been statistically flat for 4 years. If one adjusts the performance of these critical outcomes to accomodate the increase in population, the economy is, per capita, inferior to any year since 1960, other than 1990 and 1979.

So, this article is loaded with errors.
The Professor