TPM Cafe: Whither Go Real Wages?

[marmar]

Whither Go Real Wages?
By Jared Bernstein


Here’s a graph at which we should all take a close look. It’s just a few data points bouncing around a chart, but it explains a lot, I think, about why so many people are unsettled by developments in the current economy.

The data are the inflation-adjusted, average weekly earnings of a representative group of workers—those who are non-managers in the service sector and blue-collar workers in manufacturing. So we’re talking about the bottom 80% of workforce.

Adjusting for the growth of prices and looking back of the past few years, their weekly earnings rose significantly in just two months: September and October of last year. Before and since, earnings have been flat (these data leave out fringe benefits, which have also been falling for most workers).

So what was so special about those two months?

Simple: inflation was really low, actually falling for both months, obviously an unusual occurrence. In fact, those months saw the largest two-month decline in inflation since the late 1940s.

The point—and I grant you it’s a no-brainer—is that for all the talk about tame inflation, in most months, when it comes to the buying power of our paychecks, most of us been treading water. In last months’ dollars, weekly earnings are up a whole five-spot (that’s $5) since January 2004. .....(more)

The complete piece is at: http://www.tpmcafe.com/blog/coffeehouse/2007/nov/15/whither_go_real_wages

[EV_Ares]

1. What would happen if they start tying the price of oil in to Euros instead

of dollars as it is now?

[bbinacan]

2. The dollar would fall

in value.

[EV_Ares]

3. Right and we would be paying even more for gas. The cartell is looking

at this right now as they are saying they are getting hurt by the falling dollar. Things are not looking too bright are they. I don't envy who inherits this WH no matter who it is.

[marmar]

4. "I don't envy who inherits this WH no matter who it is."

No sh*t. Who in their right mind wants that job!?!

[Tierra_y_Libertad]

8. The answer to your question is a bit frightening in it's implications.

And, all too obvious.

[bbinacan]

5. And we would have to

convert dollars into Euros where it would take more dollars/euro. We NEED alternative fuels.

[EV_Ares]

6. Yes we do and they need to really get on GM, Ford and the rest on the

gas mileage issue which they have not made them do. They have gotten better but there is a lot more to do. When the cartel goes to euros from dollars, it is not going to be good. T. Boone Pickens was visiting in the broadcaster booth of the OK State & KS game the other week and he agreed with CNBC that in 3 to 4 years gas will be at least $10 a gallon.

[bbinacan]

7. I think good ole T. Boone is using

a little salesmanship here. IIRC, he's investing heavily in wind farms.

[EV_Ares]

9. Yeah, you are right, he mentioned the wind farms while he was talking

to Musberger at the game.