Snow Job

While the recent April jobs report was great news, a reality check is in order. The Financial Times helps set the record straight.

Real wages in the US are falling at their fastest rate in 14 years, according to data surveyed by the Financial Times by the Economic Policy Institute.

Inflation rose 3.1 per cent in the year to March but salaries climbed just 2.4 per cent, according to the Employment Cost Index. In the final three months of 2004, real wages fell by 0.9 per cent.

The last time salaries fell this steeply was at the start of 1991, when real wages declined by 1.1 per cent.

Bob Herbert has more.

Over all, only workers 55 and up have done reasonably well over the past few years. "Younger workers," said Andrew Sum, [director of the Center for Labor Market Studies at Northeastern University in Boston], "have just been crushed."

Whatever the politicians and the business-booster types may be saying, the simple truth is that there are not nearly enough jobs available for the many millions of out-of-work or underworked men and women who need them. The wages of those who are employed are not even keeping up with inflation.

Workers have been so cowed by an environment in which they are so obviously dispensable that they have been afraid to ask for the raises they deserve, or for their share of the money derived from the remarkable increases in worker productivity over the past few years. And from one coast to the other, workers have swallowed draconian cuts in benefits with scarcely a whimper.

I dunno. My guess, which along with four bucks will get you a nice venti mocha, is that a real wages decline is due to a preponderance of these new jobs being entry-level. A couple hundred thousand WalMart jobs is definitely gonna skew the average. And if the majority of those jobs are going to seniors instead of teenagers (who are the only people who should be stuck in an entry-level job), that is not a recipe for long-term success.

Regardless, one good month in the face of multiple world events (which artificially skew things like job and stock markets) is cause for cautious optimism, not hysterical jubilation. The numbers take a little time to sort out. A good month is just that -- a good month, and absent real analysis, should be taken as such.

But I suppose that would detract from the constant cheerleading.