Stagnant Wages? Made in USA

[RedEarth]

Stagnant Wages? Made in USA
by Robert Kuttner

As Congress grapples with immigration policy, most experts agree that wide-open immigration slightly depresses wages, especially among unskilled workers. But the main reason for static wages has more do with policies made in the United States.

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However, it is worth leaving the immigration debate to explore the deeper causes of stagnant living standards that make so many Americans fearful of immigrants. In the current recovery, for the first time since the government has kept such statistics, median household income has lagged behind inflation in a recovery for five straight years. Census data show median household income fell 3.8 percent or $1,700, from 1999 to 2004, according to economist Jared Bernstein of the Economic Policy Institute (on whose board I serve.) And this drop occurred during a period when average productivity rose three percent per year.

Moreover, as economist Jeff Madrick has observed in his book ''Why Economies Grow," , the reality is worse because prices of commodities that make us middle class are rising much faster than inflation generally: housing, college education, health care, and also child care. These very rapid price increases are offset by falling costs of consumer electronics, basic food, and clothing, creating misleadingly low inflation measures.

According to economist Bernstein, whose study covers the years 1991-2002, households in the middle fifth of the economy increased their incomes (not adjusted for inflation) by 41 percent. Inflation during that period, as measured by the government's Consumer Price Index, went up 33 percent. That implies real living standards rose by a not very impressive 8 percent during more than a decade.

But hold on. During the same period, housing, healthcare, education, and child care went up 46 percent, or more than incomes. We cannot afford the big things we need and comfort ourselves with gadgets. The cheaper laptop, plasma TV, and GPS screen in your car make it appear statistically that living standards are not falling as much as they are.

http://www.commondreams.org/views06/0401-20.htm

[Crazy Dave]

1. And in my case...

My salary is about $3k a year less than in 1999, my health and homeowner's insurance has gone up to almost $600 a month (combined), the coverage is less and the deductibles are higher. Five years ago it (insurance) was around $225 looking at my old checkbook ledgers. I was doing some research about two weeks ago so the numbers are still fresh in my head.

[madrchsod]

2. in 1979 i made about 10-12 dollars an hour

today 9-10 per hour. nice isn`t it?

[FloridaPat]

3. Don't forget the price of gas - up 200% in the last 3 years.