Forget wage inflation, and while this might make macroeconomists happy, it’s bad news for American workers who face erosion of their purchasing power from even modest overall higher price levels. According to PayScale, the Seattle-based firm that tracks compensation trends, second-quarter wages were down nationally compared with the same period in 2010. “Wages have stayed flat, with the national median pay actually dropping 0.1 percent compared to last year at this time,” said Al Lee, director of quantitative analysis at PayScale.”
Of the 20 metropolitan areas surveyed, Seattle wages increased 0.8 percent, the best of the bunch. Four other metros saw increases of greater than 0.5 percent: Dallas (0.7 percent), Boston (0.6 percent), Houston (0.6 percent), and Phoenix (0.6 percent). Elsewhere, wages typically fell 0.2 percent. The others lagged the national average. Over the past year, consumer prices have increased 3.6 percent. Executive compensation is back into record highs.
“The last six months have seen the unemployment rate stay stubbornly high,” Lee said, “with this ‘oversupply’ of workers, employees are not in a position to demand more pay.” And these are the lucky ones who have jobs, not the 14 million who are unemployed.
Add this with a fascinating analysis of the consumer spending bust in the New York Times, and you understand yet more factors behind the non-recovery recovery.
Today’s Econ Haiku:
Bears and PIGS rampage
Set the PIGS free to default
Let bankers eat it