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[goodcow]

http://news.ft.com/cms/s/f269a8f4-c173-11d9-943f-00000e2511c8.html

Real wages fall at fastest rate in 14 years
By Christopher Swann in Washington
Published: May 10 2005 17:59 | Last updated: May 10 2005 17:59

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.

“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.

 

[Tommie Hu$tle]

Side effect of globlaization.

 

[AntoneM]

yep those tax cuts for the rich so that they could invest back into their corporations are really working! And they said trickle down economics didn't work [/sarcasm]

 

[Manders]

that's weird since i just graduated and i make 10% more than the people that were hired into my position one year ago. w00t

 

[goodcow]

that's weird since i just graduated and i make 10% more than the people that were hired into my position one year ago. w00t

What do you do?

 

[Manders]

financial analyst for an investments firm

 

[Pimpwerx]

yep those tax cuts for the rich so that they could invest back into their corporations are really working! And they said trickle down economics didn't work [/sarcasm]

Whatever man. I think this means there weren't big enough tax cuts. I vote for another round of billion dollar tax cuts. Who's with me? PEACE.

 

[marko]

I want to see the trend for supervisory (management) positions. Probably a totally different story.

 

[Chony]

Whatever man. I think this means there weren't big enough tax cuts. I vote for another round of billion dollar tax cuts. Who's with me? PEACE.

Make it a trillion.

In fact we should tax the poor more. Add a national sales tax, because middle class spends more on these products.

No taxes on products of 400,000.

These make sense.

 

[Loki]

financial analyst for an investments firm

:lol

Just goes to confirm my hypothesis that we're becoming a nation where only those involved directly in finance/business make any sort of money. A shame.

 

[way more]

Good old Voodoo Economics.

Thank you very much G.W.'s America.

 

[sprsk]

i have been making minimum wage for the past year. i might be getting a 15 cent raise at the end of the month!


yay!

 

[Chony]

i have been making minimum wage for the past year. i might be getting a 15 cent raise at the end of the month!


yay!

At McDonalds after 1 year of working there I got a 4 cent raise, no joke. (I was 16 at the time).

 

[Shin Johnpv]

most retail places or fast food places will only offer raises of UP TO 35 cents a year based on your evaluations so most people arent getting the full 35 cents

I'd like to see how benefits are doing (another thing that these tax cuts were supposedly going to help) I know a good amount of retail chains have recently cut their amount of full time employees and/or cut benefits too

it's funny how all these companies are getting huge tax breaks but scream theyre all going bankrupt paying employees the stank of bullshit is strong enough to knock some one out

 

[Phoenix]

I'm curious, who actually lobbies on behalf of the consumer/average joe because they seem to be sleep at the wheel - or are woefully underfunded. I always hear about lobbyists working for commercial special interest, but I very rarely hear about those looking out for the rest of us.

 

[midnightguy]

Thank you very much G.W.'s America.

you mean thank you very much NWO.

 

[SickBoy]

Lower wages are good for everybody! Read an economics textbook!