Posted on 05/10/2005 2:39:12 PM PDT by nickcarraway
Real wages in the US are falling at their fastest rate in 14 years, according to data surveyed by the Financial Times.
Inflation rose 3.1 per cent in the year to March but salaries climbed just 2.4 per cent, according to the Employment Cost Index. In the final three months of 2004, real wages fell by 0.9 per cent.
The last time salaries fell this steeply was at the start of 1991, when real wages declined by 1.1 per cent.
Stingy pay rises mean many Americans will have to work longer hours to keep up with the cost of living, and they could ultimately undermine consumer spending and economic growth.
Many economists believe that in spite of the unexpectedly large rise in job creation of 274,000 in April, the uneven revival in the labour market since the 2001 recession has made it hard for workers to negotiate real improvements in living standards.
Even after last month's bumper gain in employment, there are 22,000 fewer private sector jobs than when the recession began in March 2001, a 0.02 per cent fall. At the same point in the recovery from the recession of the early 1990s, private sector employment was up 4.7 per cent.
Stagnant salaries push more families towards the breadline
A surfeit of workers and the threat of off-shoring are allowing companies to call the shots on wages.
Go there
“There is still little evidence that workers are gaining much traction in their negotiations,” said Paul Ashworth, US analyst at Capital Economics, the consultancy. “If this does not pick up, it raises the prospect of a sharper slowdown in consumer spending than we have been expecting.”
Economists are divided over the best source for measuring pay increases in the US, since the government releases three main measures. A gauge of average hourly earnings is released with the employment report. This rose by 0.3 per cent in both March and April and 0.1 per cent in February. Even with a slight rise in the hours employees are working, from 33.7 to 33.9, this suggests wages are struggling to keep pace with inflation. The gauge covers non-supervisory workers, about 80 per cent of the workforce.
The Bureau of Economic Analysis figures for personal income showed wages rising at close to 6 per cent in 2004 but slowing down since. This measure also showed wages rising by just 0.3 per cent in each of the past 2 months. This is a broader gauge and includes small businesses and professional partnerships, but it measures total corporate wage bill rather than wages per person.
The Employment Cost Index, seen by some as the most reliable measure, excludes overtime and professional partnerships.
The conservative base might be fed up, but it's not because of issues raised in this bogus financial times article.
Most people realize that the economy is doing just fine. In fact it is booming in most parts of the country, with many companies and industries barely able to keep up with orders and demand.
I don't know how wage statistics are kept and measured, but I would venture to say this article is bogus in that it fails to measure small and middle sized businesses.
For example, one of my adult kids just traveled to California to see about setting up roots.
He applied for a job online ??monster.com?? and has been literally inundated with offers.
Yes he is college educated as an industrial engineer, but both he and I were stunned at the number of good quality offers he received, ranging from $55k per year up to $100k/year.
His roommates (non college grads) likewise are working at various ventures, raking in pretty good money.
One of his buds started a musical recording studio and already is booked up with clients willing to pay big fees to make music.
Bottom line: All this talk about a bad economy with falling wages is claptrap from people who appearantly go around looking for bad news.
Even my knuckleheaded in-laws, who are literally dumb as stumps, seem to be raking in the dough in their business ventures, which is asphalt and paving.
I guess the FT failed to mentioned, that most of the increases in prices are due to a spike in energy prices.
Also, if you really look at it, prices are actually catching up with wages. Wages for the most part have been going up faster than prices since the mid to late 90s.
Fool. Do you really believe they use the gas tax money for that purpose?????
Come on, you can't be that ignorant?
It would be interesting to find out how many illegals entered the workforce since Bush took office.
I work in systems admin, and there is pressure put it seems to be leveling off.
I agree with you 110%. The economy is doing well, very well and the MSM is talking it down. Sure people are not getting 10% raises like they did in the 90's...but if you want a job--you can get one.
Of course they do, but they are not the sole contributor to success or failure in life.
The decisions of a soviet peasant also affected his life. Does that mean the soviet union was a free country?
I think Bovard spends a couple of pages on this subject in "Terrorism and Tyranny".
He notes that in some areas, some countries have more freedom than we do. For example, the US lags behind others in freedom of the press.
I expect the US to come out on top when all freedoms are averaged together. No, I haven't done a comprehensive comparision. I'd be interested in seeing one though.
Very true.
I'm just waiting for some statist fool to come along and tell you that there is "no Constitutional freedom to travel" and so on....
The first thing you need to do is eliminate the word unemployed in describing your situation and start referring to yourself as a Consultant while you follow the current FR advice du jour and become self employed ;-)
I am beginning to think that all Republicans who are beholden to the party for fundraising are RINOs. I wonder if party allegiance doesn't come with too many strings these days.
The man I admire is Dr. Tom Coburn in Oklahoma. We should clone him. Even if he came up with the occasional wacky position on some issue, one of the other clones would surely argue with him on it! It's part of the Dr. Tom DNA, and that's a good thing.
Not quite but almost. Just recently, former Michigan Governor and current American Manufacturers Association President Engler, in a speech this week said that there are about 15 million workers in manufacturing. I would presume that figure includes all the white collar management and administrative personnel, which means there aren't too many manual labor jobs if the skilled trades are factored out.
Since agriculture is also becoming highly mechanized and manual labor needs are decreasing, where in the h*ll are all these millions of illegals finding jobs? Are there really that many lawncare, room service and construction jobs going begging to absorb the millions crossing our borders each year?
From personal experience, wage growth at the company I work for has consistently been below inflation for the past 4 years. A quarter point here and a half point there, but it adds up. This year was the exception. But in the three previous, our 'cost of living' raise was less than inflation. At the same time, the company closed it's U.S. manufacturing and shipped it to Mexico. Now they are offshoring from Mexico to Asia. THe comapny has been growing at around 10% per year, but it doesn't reach the employees.
I could have just as easily used religious pluralism and the political rights enjoyed by religious minorities-including the right to proselytize unimpeded by government interference-as an index by which to assess how "free" both countries are, relative to one another.
India would be found wanting in that area as well.
In India many private individuals own guns legally. They just need to acquire the permit/licence. How is it different from USA?
With the actual offers or with the letters from the desperate recruiters/head hunters?
No it's not. And what do the 14 million manufacturing workers manufacture?
Ahh, that American can do spirit.
I suspect that among the democratic countries the most free is India and the least free is Sweden. And I would rather live in Sweden than in India. (But I prefer to live in US, and my second choice would be Poland, before Sweden).
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