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.
Which is why the South won the Civil War.
It is how Bobby Fisher got into trouble.
Huh? Calif has lovely roads. Visit Eastern Mass some time if you want to see crap roadways...
Quote: I simply can't understand who industry expects to buy their products or government expects to pay their taxes with all the jobs being exported and H1B's being brought in. We're slitting our throats and every job that is lost by an American is another drop of blood that's being lost from America.
Very simple to answer. The CEO's own jobs are not affected by outsourcing and thye don't care about their fellow citizens.
Also They are now getting short term high profits because of sending jobs to cheap labor china and when the sh*t hits the fan due to high unemployment in this country they can resign with their golden parachute (Carla Fionni (sic) of Hewlett Packard got $22 million after she was FIRED)and retire comfortably in their gated community among like minded people.
In a nutshell "They Don't Care" They have theirs and screw everyone else.
"I suspect that among the democratic countries the most free is India."
Last I heard, it was Australia, New Zealand, and Hong Kong...
It's tough to find a good steak in India... :)
How can people afford the huge real estate bubbled prices? Over extending?
Globalisation is Marxism.
Hell lets fire all salaried employees and start using slave labor.
We live in the richest society that has ever existed, irrespective of what this article says.
Some of the best steaks are in Argentina.
Globalisation is Marxism.
Really? Where?
BTW, I lived on the Cape in my youth. Eastern Mass has crap roadways....
The thing about economies is demand isn't static. When things become cheaper because of immigrants or automation, people simply demand more. Its a never ending cycle, which is why regardless of how efficient we get, how many immigrants we let in, or how much we buy things from China, there is still jobs if we want them.
Cognitive dissonance on your part. What you described is a defacto fall in real wages.
No, Luxemburg is richer and there are some others. Also in median income there are several countries ahead.
Hwy 17 ! ;-)
What we have is a usury based economy. We produce nothing increasingly for nothing.
Well, we live in the richest time for America.
Huh? California has the worst roads in the West.
And there is no excuse either. They pay 10-20x as much per mile per year on Interstates as surrounding states for crappier highways. Any way you measure it, California wastes extraordinary amounts of money on its roads. Of course, the problem is that the grossly overpaid CalTrans unions use the state government like their bitch, and having worked with CalTrans on occasion I can say they are the laziest, most corrupt, and most grossly inefficient government bureaucracy I have ever had the displeasure of working with.
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