A late-breaking New York Times story on August 28 said the median hourly wage since 2003 has declined by 2 percent after factoring in inflation. Despite an ongoing increase in productivity, a slowing economy could make this the first period of economic growth since World War II that did not result in a "prolonged increase in real wages."
The question among Republicans and Democrats is the extent to which this phenomenon will affect voter behavior in November. One concern among Republicans is that this period is being called the "the golden era of profitability" as corporate profits are higher than at any time since the 1960s. At the same time, the increased worker productivity means wages and salaries make up the smallest percentage of the gross domestic product since the government began collecting these records in 1947.
And as wage deflation is made more intense by reduced employee benefits, Republicans are worried about a backlash while Democrats are hoping for increased anger toward the current administration.
As usual, opinions differ. Charles Cook, who publishes a non-partisan political newsletter, said "'It’s a dangerous time for any party to have control of the federal government — the presidency, the Senate and the House. It all feeds into ‘it’s a time for a change’ sentiment. It’s a highly combustible mixture.'" On the other hand, Richard Curtain, director of the University of Michan's consumer surveys thinks that national economic issues are the stuff of presidential, not mid-term campaigns.
This confusion exists within the context of an attitude toward Congress that rivals the horrible scores from the public seen in the summer of 1994, when the Congress switched from Democrat to Republican. According to an August 8 Pew Research Center report, 45% of registered voters said Congress had accomplished less than usual, higher than the 38% who felt the same way in 1994. And one of the issues that people expect Congress to be addressing — but isn't — is the economy.
Article comments
— go to most recent comments1 - Dave Nalle
Good lord the Times is slick. I used to think accusations of partisanship against them were overstated, but this really puts an end to that gullibility.
The truth is that they've picked a year and a month with the highest adjusted hourly wage and compared it with the least good month of the current year. And even then the wage decline is barely over 1%.
The real trick is the arbitrary choice of 2003 when the boost to the economy from the Bush tax cuts was the strongest. I wonder why they didn't compare the start of the Bush administration in 2001 with the lastest numbers. Oh, I know why - then they'd have wages increasing by a bit over 1% instead. Or hell, they could compare Clinton's midterm wage level with Bush's midterm wage level, but that wouldn't do at all, since that would show a wage increase of almost 8% after adjusting for inflation.
What a crock of partisan bullshit.
And if you want to check the figures yourself they are at the BLS.
Dave
2 - Mark Schannon
Dave, you numbers junkie you. O.k., then you have to explain "wages and salaries make up the smallest percentage of the gross domestic product since the government began collecting these records in 1947," and that corporate profits are the highest since the 60s.
You really don't want to admit that the rich are raking it in while the middle class and the poor are getting shafted. Baaaaaad libertarian.
In Jameson Veritas
3 - Dave Nalle
Mark, I've got an article in the works which is going to knock you on your lefty ass.
This entire viewpoint that the rich are getting richer at the expense of the poor is entirely the result of the inclination of the left to look at people as groups rather than individuals.
They see the top income group getting richer and they assume that means that the rich are getting richer, when what it actually means is that massive numbers of the middle class have moved up to greater wealth.
As for corporate profits, why are they a problem? What do you think happens to corporate profits? They aren't turned into lead by a magic gnome. They get paid back to stockholders, and stock ownership is at the highest level ever, and spreads deeper into the middle class than ever before through 401Ks, IRAs and Mutual Funds.
Face up to it, Mark. Americans making money is a GOOD thing, and wealth generated anywhere in the economy benefits everyone. Even if all the money goes into the pockets of the welthiest people in the nation, that money doesn't get stuck in a mattress. It goes into investments and is used to capitalize new ventures, make new fortunes, raise up entrepreneurs to wealth, and employ hundreds of thousands of additional workers.
Dave
4 - Nancy
Poor Dave; he still believes with all his shrivelled, scroogy little right wing heart that trickle-down economics works....
5 - Clavos
Because it DOES, Nancy...
Do you think that the wealthy just stuff their money under a matress?
They go out and buy 3 or 4 condos to flip and make still more money (construction jobs), they buy a Bentley or two (car salesmen, mechanics), buy a yacht (yacht salesmen, crew members, repair yards and their workers), all of the workers involved then go out and buy THEIR cars and houses, groceries, clothing, etc.
I sell VERY high end luxury items (yachts), and believe me, the wealthy SPEND, and big time. Thousands of people down here make very good livings just on their yachts alone--it's a multi billion dollar business, and only one aspect of what the wealthy do with their money.
They also like to make more money, so they invest in the stock market, provide venture capital for entrepreneurs, etc.; result: still more jobs created.
It's economics 101, Nancy.
6 - Ruvy in Jerusalem
You're not wrong, Clavos. But there are major problems in the American economy that concern me. Your country is in debt up to its eyes. If the folks who have the notes call on them, your whole country goes right down the toilet in one big flush of economic collapse - and we follow because a lot of our economy is dependent on yours.
Real estate prices are starting to fall, old homes are not selling as well. Every time I see the signs of bubbles bursting, I get nervous. The real wage decline is just a tiny symptom of the bigger picture...
7 - Clavos
Ruvy, you raise some real alarms there, no question.
Your example of how the Israeli economy is so closely tied to the US is, I think, a two-sided coin; its good side is that the economic relationship between Israel and the US is illustrative of how the world's economies are growing increasingly interdependent.
As they do so, the probability of everyone holding US debt calling it in simultaneously goes down, if for no other reason than that would run counter to the debt-holders' self interest. That's a bit simplistic, I know, but I think has some validity in an Ayn Randian sense.
The real estate market HAS begun to level off, and in many markets, decline; but that's been predicted for months. I think that some of that effect has already been discounted by the market, and the decline shouldn't be particularly steep or long lasting, except in a few specific markets where.
Of concern to me as well is the situation in your part of the world, because of the uncertainty it is creating in the world's markets. I'm already starting to see nervousness about it on the part of some of my clients, and it takes a LOT to shake some of those guys up. What do you think?
8 - Peter J
So,
I guess the poor wouldn't spend the shit out of new found wealth in the form of fair wages thus stimulating my all time favorite theory of economics where EVERYONE is happy, it's called
'trickle UP economics' and I think the name speaks for itself.
The best part is that it leaves no one who is willing to work behind or waiting for something to come trickling down some corporate billionaire's leg.
People who aren't used to luxury items such as new cars, washers and dryers in their homes, a piece of the rock in the form of a condo, aren't going to simply invest and wait for money to climb back to the top (although it will), they will spend on tangibles immediately, stimulate growth, production, and sales immediately sending higher profits right back up to those poor, poor millionaires who may have had to change their way of thinking and not get so un-nerved when people who are barely getting by (I like to think of them as modern day slaves, hell, they get a roof over their head, some food to eat, and maybe even an old clunker to get them back and forth to work when it's running) suddenly have enough money to enjoy a bit more of whqt this world has to offer. Not everyone can be a Dr., Lawyer, CEO, but where will we be when garbage men no longer pick up our swill, dirch diggers no longer dig?
Why does everyone in upper middle to upper class begrudge these people a taste of life?
My favorite words; no empathy!
What is wrong in this world?
Are we so fucked up that we look disdainfully upon those of lesser means?
And please, don't give me that's the natural pecking order! We are not fucking birds!
There's plenty to go around and let lower income families enjoy a piece of the pie.
9 - Ruvy in Jerusalem
Clavos,
Your clients are very likely the executives of reinsurers, and that sort, and they have been nervous lately. The bird flu has them nervous because there is no known cure, and reinsurers. The buck stops with them.
Then there is the possibility of somebody shooting off missiles. The North Koreans are sitting on a little nest egg of them waiting for someone to come up with enough cash to make it worth their while. Whle they are ideologically inclined to destroy us and would be more than happy to do so for the appropriate price, business is business. Have you noticed the price of gold lately?
Then there are those danged hizzicanes or whatever those cyclonic storms get called these days. Again, the reinsurer takes the hit after everybody else gets his insurance check...
That's on the American side of the deal. The truth of the matter is that a lot of this country's economy and governmental structure was severely damaged by HizbAllah. But the shekel has gone up in value, indicating that the dollar is in more trouble in spite of all that...
By a few gold coins, Clavos. Maybe more than a few. You need a hedge against real economic collapse... I wish I could follow my own advice. I'm too broke.
10 - Mark Schannon
Dave, bring on yer article...and make sure to bring a pillow...never mind, my left ass is fat enough.
Take your own data. From mid-Clinton to mid-Bush is, roughly, give or take a few years, 8 years, right? Real wages up 8%. Now follow me here. That's one percent per year. I don't care what kind of fancy scmancy libertarian neocon thermonuclear analysis you're going to do, but I'll bet my right ass that real wages for the top 25% went up a lot more than 1% a year over the past 8 years.
Trying swallowing that three times without saying uncle.
I understand corporate profits, having worked in the corporate sector for thirty years, mostly in corporate. I also understand how corporations are paying their top people at an unheard of rate, restating options year after year in the face of falling stock prices so the highest ranking execs don't lose out, how they're cutting health care and pension benefits, laying off millions of people in the 50+ age range to avoid the pension gap they've created as well as cut costs....
Sorry, Dave, I can say a lot of good things about corporate America, and I'm proud of my time there, but they do some things that are immoral and despicable--and I've gotten into trouble more than once for saying that directly to CEOs and others.
Trickle down theory is a great name...trickle. Or crumbs off the table.
And that's the truth...as I see it.
In Jameson Veritas.
Hey is anyone else getting soft porn--chicks in thongs -- below their comment screen. Whew. BC is getting a little risque.
11 - Jet in Columbus
Theres a reason I used to be a republican.
I was up there with the upper middle class with my penthouse, Sebbring Convertible and big bank account.
But "I've looked at life from both sides now."
Dave until you fall down where I am now, you'll never ever understand. It's a concept you have to experience.
Our republican president and congress are heartlessly offering solutions to our economic problems... but most their "helpful" solutions don't fully take effect until their "help" is too late.
A minimum wage hike that doesn't take effect right away, but takes years to be "phased in"
A "Spend now and pay later" plan that leaves our country paying millions/billions on a national debt that they don't seem to care that the next ten generations will have to clean up instead of the current congress.
Meanwhile in the same bills, corporate tax cuts and those for the rich take effect immediately.
Back in the late ninties we all said we'd be happy to chip in some extra tax money to pay down the national debt.
Now the catch-phrase seems to be Democrats are all "tax and spend" freaks.
All we have to do is remember what the budget deficit was when Bush took office vs what it is now.
All we have to do is remember what the national debt was when Bush took office vs what it is now.
All we have to do is remember that Osama bin Laden is still out there, while Bush went after Saddam instead to avenge his father's failures.
Bush's folly is costing us trillions on a war that'll leave Iraq no better off than it was, and in some cases worse in a war we can no longer financially afford, in a war that's uselessly cost thousands of American lives just so Bush can smirk and stammer at the camera and brag about how he's saved us from the "terrorists" following us back here.
News buletin... They're here and biding their time. Bush's Homeland Security is a joke, as is proven by the student bring home dynamite and bomb making materials on a plane recently
Trickle down economics was described by Bush's own father as "Voodoo economics"
He was right.
The rich have the voodoo doll and the rest of us are the ones getting stuck.
12 - Nancy
Having worked with the rich during 8+ years with the IRS, I learned to despise them utterly for the selfish, greedy, cowardly pigs they are. No matter how much they have, they never have enough: they always want the poor mans' last crumb as well. Their arrogance and sense of entitlement are mind-boggling, and until, as Jet says, one has been the target of it, it really can't be appreciated. If I had my druthers, every single one of them - AND their wives, kids, grandkids, etc to the nth generation - would be sent to a 're-education' camp a la those of the late Mao for the overprivileged gentry of China. I am constantly astounded by the docility of the average American in the face of the obscene overcompensation packages paid to CEOs, in which the CEO frequently makes 1,000 - 5,000 times what his average workers do. All I can say is, there must be something the government is putting in the water to keep everyone dull & biddable, like cattle. We should be up & brandishing our pitchforks....
13 - Dave Nalle
=Real estate prices are starting to fall, old homes are not selling as well. Every time I see the signs of bubbles bursting, I get nervous. The real wage decline is just a tiny symptom of the bigger picture...
Real Estate prices were massively inflated. It's a sign of how strong the economy is that instead of the bubble bursting, we're getting a gradual weakening, a sort of mild deflation of the bubble. That's a real break for homeowners who are holding property for the long term. Not so good for speculators, but not nearly as bad as it could have been.
Dave
14 - Nancy
I don't think too many people are crying for the speculators, anyway. Certainly not me, and actually I don't mind at all watching the two I know take their lumps and then some. One has been weeping on my unsympathetic shoulder for weeks now: he's got houses and he can't sell....boo hoo hooo....
15 - Jet in Columbus
Dave one of the few ways out of my financial disaster depends on how much my father's house can be sold for by the estate. Now that the housing market is sagging, it's just one more problem for me.
It seems to me that there was a good reason why the "80s" were known as the "me" generation. Republicans ruled the white house and all they cared about was "them"
Until you've been touched by the problem, you'll never understand the resentment and the feeling of hopelessness.
I didn't when I was well off, but now that I'm not a well-off republican, I'm a democrat down in the trenches.
I used to scoff at people like me and say "Why don't you get off your ass and do something for yourself" but now that I've seen all the roadblocks I understand.
I'm not talking about the intentionally non-working poor. I'm talking about people like me who have no safety net, and beuracracy seems to be designed to make me go completely broke before any kind of help would be given.
Why should the republicans worry if the economy is going soft. IT'S NOT GOING SOFT for the wealthy or well-off. It's going soft for people like me who it makes a difference if the company that helps me buy my insulin just doubled my co-pay from $15 tp $30. To a rich texan republican you could be shocked that that'd make any difference, but I'm rolling pennies and nickles just to put gas in the car!!!!
The difference of .05 a gallon could throw a monkey wrench into whether to by groceries or an uncovered medical supply like insulin needles, because some place covers the insulin but not the needles to inject it with.
Until you lived it Dave I promise you'll never understand. I'm not putting you down, I'm just saying that I've been there and shook my head at people that panicked at not having enough for gas to get back and forth to work, I've laughed at people bitching about gas going up a nickle a gallon because that usually only means about $1 per tank more... but I do now, boy do I ever.
Dave you'll never understand, and I pray to God that you never do.
but if you could make an effort, I wish you'd try
Jet
16 - Nancy
Well said, Jet. My above comment was not directed to honest sellers like yourself, but those who 'flip' properties like pancakes.
17 - Peter J
Do you know why average American workers who are earning $30,000. a year or less will never earn an equitable wage in this country? It's because every greedy prick in America begrudges them an honest equitable pay. To say it is not the fault of major corporations or CEOs is the biggest crock of shit since slavery.
Slaves were kept housed on a plantation or farm, Average American workers make just enough to house themselves in a very modest fashion.
Slaves were fed, kept nutritionally fit, not out of kindness but to protect the labor investment. If a slave became malnourished he or she could not work up to capacity.
American workers are paid enough to feed themselves nutritionally, in order to keep up production.
Slaves were reprimanded when they did not work up to par.
Average American workers are punished, incentives witheld, or even terminated for missing quotas.
Slaves got medical attention if they were incapacitated.
These days, workers are fortunate if they get medical attention and medicine that they can
afford if they don't have a good health ins. program.These days the cost of a good health plan is out of reach financially for most.
Some workers with children are actually driven to take a job with lesser earning capacity just so they are covered for when the children get sick, which in this day is not uncommon as the rate of children with asthma has more than trippled in the past 2 decades.
Talk about the 'concept ' of freedom all you care to but who sounds like they had the better deal?
PLEASE, don't come at me with a bunch of stupid bullshit about the other factors of freedom vs slavery, this is not my point and I'm sure that no one is stupid enough to confuse the 2 issues. I know "Nobody knows the trouble I've seen" and would never be so bold as to denigrate the horrible issues of slavery.
This is strictly about financial security and my point is that most American workers are no better off than the slaves of the south.
If you don't get it then read it twice, I know sometime having too much money clogs up the space between your ears.
And if you STILL don't get it then go back and read #8 back to back with this one.
Will some one PLEASE say they get it? Or at least tell me why not (aside from that tired old trickle the fuck down issue!
18 - Mark Schannon
Peter, a little extreme way to make your point, but I tend to agree with you a lot more than those who think the economy and people are doing just fine.
In Decaf Veritas
19 - Martin Lav
As for corporate profits, why are they a problem? What do you think happens to corporate profits? They aren't turned into lead by a magic gnome. They get paid back to stockholders, and stock ownership is at the highest level ever, and spreads deeper into the middle class than ever before through 401Ks, IRAs and Mutual Funds.
Dave,
It's a problem because those profits are gleaned more and more off of the workers backs. The 401k's you cite are nothing more than corporations offing their pension responsiblities off on the workers that don't generally have a clue nor the time to play the market. In fact a helluva lot of workers lost a lot of money in their 401k's when the market tanked. Meanwhile...since the corportations got the benefit of eliminating pensions expense from their P&L's along with wage tax reductions, they are showing more profit.
But CLAVOS the CEO's and exec. management can no go out and buy a Yacht and benefit more workers to support this purchase? yacht salesmen, crew members, repair yards and their workers). How about maids and landscapers and more low wage workers that can sneak up across the border, it's good for them too right?
You all can't be serious.....
20 - Jet in Columbus
I was Martin, I was.
Apparently I wasn't taken seriously though.
21 - Matthew T. Sussman
Why don't we just all project the economy's outlook as a function of our individual fiscal profiles?
Ready ... go.
22 - Bliffle
Dave:
I tried going to your BLS link but it said: "Sorry, survey does not exist. If you need to contact someone about the program or its data, please send a message to the data questions e-mail address below or call the phone number below."
23 - Bliffle
Clavos:
"...It's economics 101,..."
Did you actually take Econ101? I did, as well as Econ102,103 and some other upper division Econ courses.
What, in particular, are you referring to from Econ101?
24 - Martin Lav
NeoCon 101
25 - pleasexcusetheinterruption12
Clavos, no doubt the rich are big spenders, but the real question is what percent of it do they spend? I would guess a poor man would spend a much higher percent of his money than a rich man. So if your sole objective is to get people to buy stuff to provide jobs, give it to the poor, they'll spend every penny you give them.