December 8, 2006


Long a Laggard, Wages Start to Outpace Prices (JEREMY W. PETERS and DAVID LEONHARDT, 12/08/06, NY Times)

With energy prices now sharply lower than a few months ago and the improving job market forcing employers to offer higher raises, the buying power of American workers is now rising at the fastest rate since the economic boom of the late 1990s.

The average hourly wage for workers below management level — everyone from school bus drivers to stockbrokers — rose 2.8 percent from October 2005 to October of this year, after being adjusted for inflation, according to the Bureau of Labor Statistics. Only a year ago, it was falling by 1.5 percent.

In recent years, many Americans grew anxious about the future and economists questioned whether the recovery from the 2001 recession would ever produce genuine gains for ordinary workers.

The fall in unemployment to 4.4 percent and the recent surge in wages, however, raise the prospect that the job market could be on the brink of another strong run, much like the one that lifted incomes in the late 1990s.

Leave it to the Times to whip up hysteria and then be curious at the hysterics.

Posted by Orrin Judd at December 8, 2006 8:42 AM

The 'strong run' may well happen, but not in the media. So articles like this will be few and far between. The NYT stock is down to around $23.00 and it looks like the sale of the Boston Globe is not such a slam dunk after all (see Ellisblog, the sometimes blog of John Ellis, business writer and President Bush's cousin).

Meanwhile, the thought that wages fell last year is ridiculous. But, that's the media for you.

Posted by: jim hamlen at December 8, 2006 10:47 AM

Someone better tell Lou "War on the Middle Class" Dobbs.

Posted by: BJW at December 8, 2006 11:30 AM

Lou Dobbs is a bigger idiot than Paul Krugman.

Posted by: ratbert at December 8, 2006 12:31 PM
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