Wage Decline Continues

[unlawflcombatnt]

July's inflation-adjusted hourly wages declined 0.1%. This certainly isn't a sign of a "healthy" job market or economy. There are still almost 8 million Americans who are unemployed. However, this administration has manipulated the labor force participation rate to reduce the calculated unemployment rate to 5.0%. If the same labor force participation rate was used today that was used from 1996 through December 2000, the calculated unemployment rate would be 7%, not 5%.

The decline in wages verifies this statistical manipulation. Wages would rise if the demand for labor was truly rising. But wages are not rising, because the number of those truly unemployed is much higher than the Bush corporatocracy claims. As a result, the actual supply of labor is much higher than would be suggested from the manipulated unemployment statistics.

An increased supply of anything decreases the price. In this case, the increase is in supply of workers, and the price is worker wages. This puts constant downward pressure on wages, and is responsible for the decline in wages.

Inflation-adjusted wages are now 0.6% lower than they were in January. This puts the annual rate of wage decline at 1.0% This information can be found at the United States Bureau of Labor Statistics at:

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=CES0500000049

Wages, when adjusted for inflation, are now 1.5% less than they were in November of 2003. Wages have been on a constant downward path since November of 2003. The only aspects of the economy that are increasing are corporate profits and housing prices.

The lowered "official" unemployment statistics are the result of statistical manipulation. If jobs were truly increasing, and labor demand was truly increasing, hourly wages would also be increasing. This is simple supply-and-demand dynamics. The fact that wages have NOT increased discredits current claims that the job market is "improving."

unlawflcombatnt

[wli]

1. I wonder how it breaks down by deciles or quartiles

e.g. what does the decline of the bottom quartile look like?

[unlawflcombatnt]

4. Hah!

They're never going to give out that kind of information. That's just too much truth for Bushites to ever reveal.

unlawflcombatnt

[wli]

5. well, I've seen top 1% vs. bottom 99%

The bottom 99% was pretty flat since 1950 and then started tanking hard during Bushler's Reich. The top 1% was in a perpetual explosion over time.

[unlawflcombatnt]

6. The extremes

I've seen some statistics posted at certain sites that may or may not have been reliable. But there is no doubt the top earners have increased their incomes more than the lower income earners. There might be some information on that at the Economic Policy Institute, at http://www.epinet.org/

Increased income for the top earners does nothing to help the economy. The only addition they could make is increased investment. At present, markets are glutted with capital. There is no need for more investment capital. There is more need for investment opportunities. Those opportunities are created by consumer demand for production, not increased availability of capital. That consumer demand is limited by income, which limits consumer spending.

Our economy would do much better if income was increasing on the lower end of the spectrum, rather than the uppper end.

[applegrove]

2. Means the rich can have the stock market roaring still - and the under=

employment fights Oil inflation.

What exactly are the rich sacrificing in all this?

[1932]

3. Northwest just said they're not having a problem finding scab mechanics

because there are so many unemployed automechanics.

Nothing that Bush has done to America the last five years has been an accident.