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.Powered by Sidelines