You will often hear in liberal circles, especially by the very liberal Economic Policy Institute, that “the median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation”, but upon further research, you see that this is in fact not the case (surprised? I’m not!).
Economist Russell Roberts dug into the data and found the exact opposite.
“What these numbers show is that for every year since the recession of 2001, real hourly compensation has actually increased. It’s up since 2003 as well. And this year it’s up quite dramatically.” More here .
The full article goes on to debunk other myths promulgated by liberal think tanks, it can be found here. Economist Don Boudreaux has other myth busters here. Other economists weigh in here and here.
A link would be nice.
I left the link in the last paragraph, it can be found here too.
Oops. Didn’t see the link. Sorry.
OK, I’ve looked at the article you referenced. There are two issues here:
1. Roberts is using mean data, while the reference in the NY Times specifically states median income. They are not the same.
2. As Roberts himself points out, he has included worker benefits, whereas he assumes that the Economic Policy Institute has not.
So… My conclusion is that Mr. Russel’s data is indeed interesting, but it should not be considered a “debunking” of the EPI data. It seems fair to assume that wages have either increased or decreased very slightly in the last five or so years. Not good news for workers, but not devastating news either.
For those who are interested in the left side of this debate, Obsidian Wings has accumulated a set of economic data for Labor Day at:
http://obsidianwings.blogs.com/obsidian_wings/2006/09/labor_day_now_w.html
(HP, I hope you don’t mind if I include a link to their blog here. If that’s bad etiquette on your blog, just feel free to erase it.)
Hey LaurenceB,
Nope, don’t mind at all. I am all about fair and balanced around here, you know, like Fox News.
Btw, I don’t agree with this statement,
It seems fair to assume that wages have either increased or decreased very slightly in the last five or so years. Not good news for workers, but not devastating news either.
On the contrary, economist Russell Roberts shows that wages have increased dramatically, for example, showing a 4.7% increase just in one quarter alone.
With that said, here is yet another critique of the EPI findings by someone who specializes in this type of study - the critique can be found here.
Ummm, what about inflation? If the annual inflation rate is somewhere around 4 percent, and wages increase less than that annually, isn’t that a net loss? Maybe the actual pay increases, but people would be losing purchasing power.
Oops. sorry, I didn’t read the whole thing. Now, I see the point. that’ll teach me to look at things quickly at work!