The Wages of Growth

by Dr. Earl Evleth, PhD

December 26, 2006; Page A12
The latest reports on wages and income have been rolling in, and with
them we can discount one more canard about the current economic
expansion -- namely, that wages are stagnant and workers are doing far
more poorly than they did in that second Age of Pericles known as the
1990s.

Over the past year, the real average wage for non-supervisory employees
has risen 2.8%. That equates to about a $1,200 increase in purchasing
power for the typical household this year. Last year, real median
household income was also up 1.1% after inflation. This rise in
take-home pay helps to explain how Americans have had the disposable
income this Christmas shopping season to pay $600 for Play Station 3
computer games and $150 for the Kid-Tough Digital Camera for
three-year-olds.

It is true that income and wages are still about 2% below the peak they
hit in 2000 before the dot-com bust and recession. But a new Treasury
Department analysis finds that, measuring from the start of the peak of
each expansion, wages so far in this decade's cycle are running ahead
of the recovery pace during the 1990s. Thus the "stagnant wages" story
can join the "jobless recovery," the "outsourcing" crisis and the
runaway budget deficit as other tales of woe that have all turned out
to be evanescent.

Why are wages finally starting to show smart gains for workers? First,
the labor market is tight with very low unemployment (4.5% nationwide),
giving workers more bargaining power. Second, the big spike in energy
prices in recent years raised the cost of living and offset nominal pay
hikes, but energy costs have declined since Labor Day and those lower
costs translate into higher real wage gains. Third, the surge in
business capital spending that began in 2003 with the passage of the
investment tax cuts has increased the capital to labor ratio that is a
major driver of wage increases over time.

Contrary to popular myth, worker benefits have also been rising, not
falling. Yes, many companies are changing to more sustainable 401(k)s
from traditional pensions, and most are passing along some of the costs
of rising health insurance to workers in co-pays and higher premiums.
But the Labor Department measures employer pay packages and finds that
fringe benefits paid to workers have risen 39% since 2000, or nearly
twice the 22% rate of increase in nominal wages.

Take-home pay would be rising even faster if the cost of health benefit
plans hadn't climbed by 65% since 2000. Health insurance now costs the
average employer $2 an hour per employee -- money that could otherwise
be paid in wages. But that $2 still goes toward benefits, not into
corporate profits.

All told, the pattern of wage growth this decade isn't all that
different from that of the 1990s. Wage increases always lag behind
economic growth, corporate profits and productivity gains. In the 1990s
in fact, workers didn't enjoy really big paycheck gains until 1997.
This isn't to disparage the 1990s, but only to point out that those who
assail this decade's gains either have short memories or political
agendas.

We certainly agree with those who'd like to do more to lift worker
paychecks, so here are two ideas. First, make the Bush tax cuts
permanent. If Congress lets them expire in 2010, as many Democrats are
urging, the average family will suffer the equivalent of a $2,000 a
year pay cut.

Second, slash the corporate income tax. A recent study for the American
Enterprise Institute by economists Kevin Hassett and Aparna Mathur
examined 72 nations over 22 years and found that "wages are
significantly responsive to corporate taxation." In today's global
economy, capital migrates across national borders away from high-tax
nations to places where tax systems are less punitive. Workers suffer
when capital flees, and job and wage growth slow.

Many political leaders have adapted to this reality, which is why the
average corporate tax rate across the globe has fallen over the past 25
years to an average of about 30% from 50%. The AEI study finds that, if
the U.S. were to cut its 35% corporate tax to the OECD average of 30%,
American manufacturing workers would gain nearly a 10% pay raise
dividend within five years, which is the equivalent of roughly a $3,500
a year pay boost.

Some on the political left have other ideas for raising wages, such as
more and easier unionization, more trade and tariff barriers, or a
government takeover of employer health care. But all of these would
make the U.S. more like Old Europe, where job growth is far slower than
it is here. Now as ever, policies that keep the economy growing and
employers hiring will lift wages for everyone.

On 26/12/06 17:07, in article
, "Earl Evleth"
wrote:

by Dr. XXXXXXXXX


Another forging using my name as the author of an article,
and mailer of the item. I was not.

The author of this piece of Wall Street Journal (op ed page)
is spouting nonsense.

The highest inflation corrected hourly wages in the US were reached
in the early 1970s.

US government sources, http://www.bls.gov/webapps/legacy/cesbtab4.htm

In January of 1973 the constant (1982 dollar) average hourly rates
hit $9.08/hr, the most recent Nov 2006 peaks is a $8.34/hr. 30 years
of no progress.

Your name has no copyright and we have no authority to verify your claim.
Moreover, we are not even interested !
If you weren't what you are then all this would not have happened.
Get a life, walk the dog !

"Earl Evleth" a écrit dans le message de news:
...
On 26/12/06 17:07, in article
, "Earl Evleth"
wrote:

by Dr. XXXXXXXXX


Another forging using my name as the author of an article,
and mailer of the item. I was not.

The author of this piece of Wall Street Journal (op ed page)
is spouting nonsense.

The highest inflation corrected hourly wages in the US were reached
in the early 1970s.

US government sources, http://www.bls.gov/webapps/legacy/cesbtab4.htm

In January of 1973 the constant (1982 dollar) average hourly rates
hit $9.08/hr, the most recent Nov 2006 peaks is a $8.34/hr. 30 years
of no progress.

scRunge wrote:

Your name has no copyright and we have no authority
to verify your claim.


There ARE laws against forgery, you know, scRunge...

It would behoove you to review them...


Moreover, we are not even interested !
If you weren't what you are then all this would not have happened.
Get a life, walk the dog !


Somebody should put a leash on y - o - u, scRunge...

Although in all probability you'd make a terrible pet, so the dogcatcher
would have to be called :-)

--
Best
Greg


"Earl Evleth" a écrit dans le message de news:
...
On 26/12/06 17:07, in article
, "Earl Evleth"
wrote:

by Dr. XXXXXXXXX


Another forging using my name as the author of an article,
and mailer of the item. I was not.

The author of this piece of Wall Street Journal (op ed page)
is spouting nonsense.

The highest inflation corrected hourly wages in the US were reached
in the early 1970s.

US government sources, http://www.bls.gov/webapps/legacy/cesbtab4.htm

In January of 1973 the constant (1982 dollar) average hourly rates
hit $9.08/hr, the most recent Nov 2006 peaks is a $8.34/hr. 30 years
of no progress.

It matters not if a 'peasant' is paid a penny an hour or £50 an hour
he/she is still a peasant and has no control over the financial
system.

On Tue, 26 Dec 2006 23:46:14 GMT, "archierob"
wrote:

It matters not if a 'peasant' is paid a penny an hour or £50 an hour
he/she is still a peasant and has no control over the financial
system.

I imagine it matters quite a bit to the peasant, who probably
doesn't care one whit if it matters to you.

--
************* DAVE HATUNEN ) *************
* Tucson Arizona, out where the cacti grow *
* My typos & mispellings are intentional copyright traps *

This rise in take-home pay helps to explain how Americans have had the
disposable income this Christmas shopping season to pay $600 for Play
Station 3 computer games and $150 for the Kid-Tough Digital Camera for
three-year-olds.

Wow, great PhD analysis. Problem is, you're talking about people that
actually have the money to buy this ****. A family of three with household
income of $20,000 a year isn't going to have new Playstations or Xbox 360s
under the tree for their kids, unless they break into somebody's home.
Your post is just a worthless gloss-over supported by false figures from
the elitist propaganda machine.
Why even post this nonsense? Since the Iraq war started, the smartest
move would have been to invest in energy stocks, if one had the money to
invest.
I heard Tom Brokaw lie about the job market and economy on the David
Letterman show the other night. He said that no American would work for $14
an hour or less in the construction industry and that's why we needed the
illegal aliens to fill those positions. There are people living here in
Central Ohio that would dig ditches for minimum wage in a heartbeat and
there are no help wanted ads in the local newspapers.

Yawn

"Gregory Morrow" et a
écrit dans le message de news:
t...

scRunge wrote:

Your name has no copyright and we have no authority
to verify your claim.


There ARE laws against forgery, you know, scRunge...

It would behoove you to review them...


Moreover, we are not even interested !
If you weren't what you are then all this would not have happened.
Get a life, walk the dog !


Somebody should put a leash on y - o - u, scRunge...

Although in all probability you'd make a terrible pet, so the dogcatcher
would have to be called :-)

--
Best
Greg


"Earl Evleth" a écrit dans le message de news:
...
On 26/12/06 17:07, in article
, "Earl Evleth"
wrote:

by Dr. XXXXXXXXX


Another forging using my name as the author of an article,
and mailer of the item. I was not.

The author of this piece of Wall Street Journal (op ed page)
is spouting nonsense.

The highest inflation corrected hourly wages in the US were reached
in the early 1970s.

US government sources, http://www.bls.gov/webapps/legacy/cesbtab4.htm

In January of 1973 the constant (1982 dollar) average hourly rates
hit $9.08/hr, the most recent Nov 2006 peaks is a $8.34/hr. 30 years
of no progress.

On 26/12/06 22:51, in article
t, "Gregory Morrow"
et wrote:

scRunge wrote:

Your name has no copyright and we have no authority
to verify your claim.

As far as I know I am the only person with my name on earth.
If I were a "Sam Jones" or even a "Greg Morrow" (probably several
thousand of the latter around), that is different. Professionally
I used the name "EM Evleth" which if you google comes up with
mostly professional stuff (790 times), starting with
"The Rydberg Photophysics and Photochemistry of Amines".

So in that sense I am copyrighted, my articles are and you
have to pay to get full access to them.

There ARE laws against forgery, you know, scRunge...

Slander too.

It would behoove you to review them...

He ignores some fine details.


Moreover, we are not even interested !
If you weren't what you are then all this would not have happened.
Get a life, walk the dog !

Somebody should put a leash on y - o - u, scRunge...

Most kill file him. However you keep us informed as to his excesses,
he does not appear on my screen unless go and google him up. He
has no Rydberg's associated with his name, nor are we certain that
is his real name. Mine is.

From: "Ronald Cooper"
Newsgroups: alt.activism.death-penalty,rec.travel.europe
Date: Tue, 26 Dec 2006 20:32:16 -0800
Subject: The Wages of Growth

This rise in take-home pay helps to explain how Americans have had the
disposable income this Christmas shopping season to pay $600 for Play
Station 3 computer games and $150 for the Kid-Tough Digital Camera for
three-year-olds.

Wow, great PhD analysis. Problem is, you're talking about people that
actually have the money to buy this ****. A family of three with household
income of $20,000 a year isn't going to have new Playstations or Xbox 360s
under the tree for their kids, unless they break into somebody's home.
Your post is just a worthless gloss-over supported by false figures from
the elitist propaganda machine.
Why even post this nonsense? Since the Iraq war started, the smartest
move would have been to invest in energy stocks, if one had the money to
invest.


This post is a forgery. If you look at the header, you will note the
"yahoo" address. Earl Evleth does not have a yahoo address. Earl Evleth
posts as . The man who posted this forgery in Earl's name
is an Internet stalker who has posted over a hundred such postings.

Donna Evleth