Thursday, August 31, 2006

Rising wages?

I was prepared to eat my own words about wage stagnation when I started reading this article: Household income posts first gain in 6 years. But the article quickly provides an alternate explanation:

Although real household income was up, wages and salaries lost ground. Wages for men fell 1.8 percent to $41,386; wages for women fell 1.3 percent to $31,858.

The difference between rising household income and falling wages and salaries may be traced to two factors, according to David S. Johnson, the chief of the Census Bureau's Housing and Household Economic Statistics Division: Household income can include other sources of income, such as from stock dividends. And some households may have added low-income workers - they would raise the income of the household, but at the same time bring down the median wage.

That could explain why consumer confidence is at a 9-month low. Extra family members are taking odd jobs or returning to the workforce as underemployed, artificially boosting the employment numbers that Bush is so happy about. But consumers aren't buying it. There's a strong sense that something isn't right with our economy. The wealthy are proclaiming the benefits of tax reductions, businesses are showing record earnings again, and government tax receipts are increasing. But most Americans aren't so ebullient, and the talking points from this administration are more broadly distrusted.

Lastly, I wanted to point to an interesting post on a new blog I like, Job's Anger. The post discusses a trial balloon that Republicans are floating to test a way to turn the economic weakness against Democrats. From the Dallas Morning News:
But economic experts say the biggest reason for a six-year slump in median household income has been the migration of more low-income people into the region.
This is a classic (and cynically brilliant) Rove strategy of projecting his candidates' weaknesses as faults of the opposition. It insinuates that the "liberal" approach to immigration is behind the wage decline, so they are trying to turn this issue around on Democrats and attack on two fronts at once. It's clever, but nasty and counterproductive to our nation's pressing issues by associating the two issues when they've been unable to fix either.

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