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.
I'd say take it out of congress's pension fund, but that would be mean spirited. A larger weathier tax base means more federal tax receipts. The 40 or 50 billion the federal the loses from suspending the gas tax would be made up in new taxpaying jobs created.
And we need to look at the federal budget as a whole. We lose tens of billions of dollars a year in medicare and medicaid fraud. The vast majority of money spent in D.C. goes to bureaucratic costs. The money is most likely already there. But the politicians don't have the will to get it done.
Union thugs can work a day for free for a change.
That does it, we are doomed.
Let's fire the union workers and use welfare recipients.
Yep gas prices are starting to take their toll......Good thing the Dems have blocked every energy initiative during the last 10 years. Another mess to clean up.
Misleading article. IIRC, the wage calculation used doesn't include or undervalues many benefits, commissions, and other non-standard forms of compensation.
Or NAFTA, GATT, and the WTO.
Nothing to see here. Please remain calm and go about your business.
Yep.
Come visit California and see what our tax $$$'s don't do....
Don't trust any article about the American economy or the American anything that spells labor that way.
Um-hmm. Note that the entire wage structure is being degraded. That's the result of sending our jobs to China, India, and elsewhere. It's also a consequence of permitting excessive immigration, both legal and otherwise, as well as H1B and L1 visas.
So when YOUR wages get cut, be sure to give a free traitor an appropriate gesture.
Sorry, It really bugs me when people insinuate that money for roads comes from general taxes. The insinuation that roads are also a "form of socialism" is also quite faulty, roads are built and maintained by capitalists. Roads are built with Highway Bonds, a capitalist instrument that pays interest. The bonds and maintenance are paid for through road taxes, registration fees, and gas taxes, ALL USER SUPPORTED. If anything you ever bought came to you on a truck, somewhere a tax was paid specifically on the roads in the price. For more info see here:
http://www.fhwa.dot.gov/policy/ohim/hs02/pdf/hf10.pdf
"Nothing to see here. Please remain calm and go about your business."
But you forgot the part of "And just pay your taxes"
And modeling the birth/death of businesses doesn't accurately measure job creation/loss?
Measuring annd modeling are two different things.
"As will cutting all federal regultations. And suspending the gas tax is a good move."
I'll be waiting for that.
Well I know I can thank Capital One for eliminating a boatload of really high paying jobs in the IT sector for these last couple of quarters.
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