This wage pattern is the main reason that I don't believe the unemployment rate of 5.4% means that we are near full employment. By wage trends, this smells like an economy with a lot more slack:
Posted by DeLong at October 29, 2004 01:19 PM | TrackBackMaxSpeak, You Listen!: THE WAGELESS RECOVERY: The Prez says the economy is strong and getting stronger. By the evidence of the labor market, however, it is weak and getting weaker. My colleague and labor market genius Jared Bernstein shows that from the third quarter of last year to this year, the wage and salary component of the Employment Cost Index increased by 2.4 percent, relative to inflation of 2.7. The does not mean that total compensation in these terms is less, since these figures do not reflect fringe benefits, but it does mean that for workers this recovery stinks. Faster employment growth and better jobs would put upward pressure on money wages.
O - U -T
(say it again)
S - O - U
(sigh, it's hopeless; no economist is listening)
R - C - I - N - G
Posted by: Cassius Chaerea at October 29, 2004 01:52 PMStill like your comment per the natural rate of the employment-population ratio being near 64.0%.
Posted by: pgl at October 29, 2004 03:13 PMWhat's the difference between the natural rate of welfare and the natural rate of unemployment?
Posted by: wkwillis at October 29, 2004 03:58 PMOutsourcing hurts, but so does the loss of unions. I don't think it's an accident that the massive growth in executive salary, steady decline in the purchasing power of the average worker and deterioration of working conditions and benefits has developed in tandem with a steady decline in American unionism.
American workers aren't getting benefits from this recovery because there's no one to pressure their employers to share. And if market forces start to drive wages up anyway, the company just ships the jobs off to the Third World.
Posted by: William Davis at October 30, 2004 08:14 AM.
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Posted by: Ralph at November 19, 2004 03:16 PM