A Lead Story Looks at Wage Gains Through a Liberal Prism
The Times leads with a story suggesting the lack of consistent wage gains by workers will hurt Republicans this fall. But a little Economics 101 may be in order.
Posted by: Clay Waters
8/29/2006 1:15:12 PM
Monday's lead story by union reporter Steven Greenhouse and economics reporter David Leonhardt, "Real Wages Fail To Match A Rise In Productivity -- Political Fallout Is Seen -- Pay as Share of Economic Reaches Low Point -- Inflation Takes Toll" has a liberally stacked deck of headlines to accompany a story that looks at the economy through an equally misleading liberal prism.
"With the economy beginning to slow, the current expansion has a chance to become the first sustained period of economic growth since World War II that fails to offer a prolonged increase in real wages for most workers.
"That situation is adding to fears among Republicans that the economy will hurt vulnerable incumbents in this year’s midterm elections even though overall growth has been healthy for much of the last five years.
"The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity -- the amount that an average worker produces in an hour and the basic wellspring of a nation’s living standards -- has risen steadily over the same period."
But Russell Roberts at Cafe Hayek asks: "Why would you use a measure of compensation that ignores benefits, an increasingly important form of compensation? Why would you use 2003 as your starting point when the recession ended in November of 2001?"
Greenhouse and Leonhardt continue: "As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960's. UBS, the investment bank, recently described the current period as 'the golden era of profitability.'"
The Times glances over the issue of non-salary compensation: "Until the last year, stagnating wages were somewhat offset by the rising value of benefits, especially health insurance, which caused overall compensation for most Americans to continue increasing. Since last summer, however, the value of workers’ benefits has also failed to keep pace with inflation, according to government data."
And check out where the Times is getting its story hook: "But in recent years, the productivity gains have continued while the pay increases have not kept up. Worker productivity rose 16.6 percent from 2000 to 2005, while total compensation for the median worker rose 7.2 percent, according to Labor Department statistics analyzed by the Economic Policy Institute, a liberal research group. Benefits accounted for most of the increase.
"'If I had to sum it up,' said Jared Bernstein, a senior economist at the institute, 'it comes down to bargaining power and the lack of ability of many in the work force to claim their fair share of growth.'"
Good for the Times for at least mentioning that EPI is liberal, something it generally fails to do. But why is the only economist cited in the story from the liberal EPI?
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