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Real wages fall at fastest rate in 14 years
Financial Times ^ | May 10 2005 | Christopher Swann

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.


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Front Page News; Government; Miscellaneous; News/Current Events; Politics/Elections; US: District of Columbia; US: New York
KEYWORDS: demographics; economy; proiductivity; wages
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To: NewRomeTacitus; Concentrate
The point of the cartoon was to show that nothing can compete with slavery.

Which is why the South won the Civil War.

161 posted on 05/11/2005 7:11:11 AM PDT by Toddsterpatriot (If you agree with Karl Marx, the AFL-CIO and E.P.I. please stop calling yourself a conservative!!)
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To: Mulder
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.

It is how Bobby Fisher got into trouble.

162 posted on 05/11/2005 7:11:16 AM PDT by A. Pole (Ukrainian proverb: "Iak buly moskali, buv khlib na stoli, a iak bude Ukraina, bude bida po kolina")
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To: freebilly

Huh? Calif has lovely roads. Visit Eastern Mass some time if you want to see crap roadways...


163 posted on 05/11/2005 7:14:04 AM PDT by rahbert
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To: America's Resolve

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.


164 posted on 05/11/2005 7:18:37 AM PDT by superiorslots
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To: A. Pole

"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... :)


165 posted on 05/11/2005 7:21:01 AM PDT by Blzbba (Let them hate us as long as they fear us - Caligula)
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To: BearWash

How can people afford the huge real estate bubbled prices? Over extending?


166 posted on 05/11/2005 7:24:57 AM PDT by Destro (Know your enemy! Help fight Islamic terrorism by visiting johnathangaltfilms.com and jihadwatch.org)
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To: bill1952; jb6
That is the whole point of globaliation - to even out the economies - our nation's leaders want wages to fall so we can compete with China, etc. and to redistribute wealth.

Globalisation is Marxism.

167 posted on 05/11/2005 7:26:56 AM PDT by Destro (Know your enemy! Help fight Islamic terrorism by visiting johnathangaltfilms.com and jihadwatch.org)
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To: jimfrommaine; Lazamataz

Hell lets fire all salaried employees and start using slave labor.


168 posted on 05/11/2005 7:30:31 AM PDT by Destro (Know your enemy! Help fight Islamic terrorism by visiting johnathangaltfilms.com and jihadwatch.org)
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To: nickcarraway

We live in the richest society that has ever existed, irrespective of what this article says.


169 posted on 05/11/2005 7:30:52 AM PDT by biblewonk (Socialism isn't all bad.)
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To: Blzbba
It's tough to find a good steak in India...

Some of the best steaks are in Argentina.

170 posted on 05/11/2005 7:31:45 AM PDT by A. Pole (Ukrainian proverb: "Iak buly moskali, buv khlib na stoli, a iak bude Ukraina, bude bida po kolina")
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To: mmercier
That is the whole point of globaliation - to even out the economies - our nation's leaders want wages to fall so we can compete with China, etc. and to redistribute wealth.

Globalisation is Marxism.

171 posted on 05/11/2005 7:31:59 AM PDT by Destro (Know your enemy! Help fight Islamic terrorism by visiting johnathangaltfilms.com and jihadwatch.org)
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To: rahbert
Calif has lovely roads

Really? Where?

172 posted on 05/11/2005 7:37:27 AM PDT by freebilly (Go Santa Cruz Baseball!)
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To: rahbert

BTW, I lived on the Cape in my youth. Eastern Mass has crap roadways....


173 posted on 05/11/2005 7:38:38 AM PDT by freebilly (Go Santa Cruz Baseball!)
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To: varon
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?

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.

174 posted on 05/11/2005 7:39:32 AM PDT by ran15
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To: Always Right
Wages were in fact up but they did not keep up with inflation for the first three months.

Cognitive dissonance on your part. What you described is a defacto fall in real wages.

175 posted on 05/11/2005 7:40:29 AM PDT by Destro (Know your enemy! Help fight Islamic terrorism by visiting johnathangaltfilms.com and jihadwatch.org)
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To: biblewonk
We live in the richest society that has ever existed, irrespective of what this article says.

No, Luxemburg is richer and there are some others. Also in median income there are several countries ahead.

176 posted on 05/11/2005 7:40:51 AM PDT by A. Pole (Ukrainian proverb: "Iak buly moskali, buv khlib na stoli, a iak bude Ukraina, bude bida po kolina")
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To: freebilly

Hwy 17 ! ;-)


177 posted on 05/11/2005 7:52:49 AM PDT by rahbert
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To: Mulder; A. Pole
The manufacturing and technological capacity of America has been raped by the politicians and CEOs. What remains is a finance-based economy. It won't last forever.

What we have is a usury based economy. We produce nothing increasingly for nothing.

178 posted on 05/11/2005 7:54:36 AM PDT by Destro (Know your enemy! Help fight Islamic terrorism by visiting johnathangaltfilms.com and jihadwatch.org)
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To: A. Pole

Well, we live in the richest time for America.


179 posted on 05/11/2005 7:59:29 AM PDT by biblewonk (Socialism isn't all bad.)
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To: rahbert
Huh? Calif has lovely roads.

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.

180 posted on 05/11/2005 8:17:39 AM PDT by tortoise (All these moments lost in time, like tears in the rain.)
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