Wages in U.S. Lag Inflation, May Blunt Bush Gains From New Jobs

[fearnobush]

Wages in U.S. Lag Inflation, May Blunt Bush Gains From New Jobs
2004-06-21 01:16 (New York)

Wages in U.S. Lag Inflation, May Blunt Bush Gains From New Jobs

By Art Pine
June 21 (Bloomberg) -- Companies including FedEx Corp. and
Procter & Gamble Co. have begun to raise prices as demand for
their products strengthens. U.S. workers aren't enjoying the same
ability to win pay increases.
A 2.2 percent rise in wages in the 12 months through May has
been more than offset by a 3.1 percent gain in consumer prices.
It's unlikely that employees will get raises that outpace
inflation over the next five to 10 years, said William A.
Niskanen, former acting chairman of the President's Council of
Economic Advisors during the Ronald Reagan administration.
``I don't see any substantial increase in average real wages
for some time,'' said Niskanen, who is now chairman of the Cato
Institute, a Washington research group. Niskanen and other
economists cite global competition, which forces companies to
keep costs down, shrinking union clout and continuing slack in a
labor market with an unemployment rate of 5.6 percent, up from
4.2 percent when the last recession began in March 2001.
The disparity between pay and prices may keep President
George W. Bush from fully capitalizing on the economy's addition
of 1.2 million jobs this year, the best five months of job growth
since 2000, as he runs for re-election, said political analysts
including Thomas Mann of the Brookings Institution in Washington.
``The stagnation in wages leaves open a big target'' for
Democratic challenger John Kerry, Mann said. In terms of pay, ``a
lot of Americans have been left behind,'' he said. ``Kerry now
has an opportunity to ask, `Are you better off now than you were
four years ago?'''

More

<http://quote.bloomberg.com/apps/news?pid=nifea&&sid=anZ.kYpKOIzw>

[fearnobush]

1. May be this is why Kerry laughs when the pukes call him a flip-flopper.

Rockton machinist Maurer agrees. ``Bush could have had my vote in 2003, but he's not going to get it now,'' he said, citing not only his small boost in wages but the administration's handling of the war in Iraq. ``Kerry's a flip-flopper, but I don't see any alternative. I don't think Bush has been honest with the American people.''

[Barkley]

2. Real wages are falling, not 'stagnant'.

If the CPI went up (3.1%) and nominial wages rose only (2.2%) then real wages fell (0.9%).

So workers are falling behind.

Employers are getting a windfall by selling products at a higher price level without fully adjusting for their costs (e.g.wages).

Falling gas prices won't reverse the CPI trend immediately, since prices are 'stick downward'(they rise fast, fall slow).

But I don't think this situation will last.

Workers will eventually demand (and receive) higher wages to match (and possibly exceed) inflationary expectations; especially if the labor market continues to add new jobs.

This circumstance could re-produce the inflationary spirals we experienced in the 1970s.

[Doctor Smith]

7. I don't think real wages will rise.

I think they will continue to fall.

There is too much labor competition in the form of high levels of immigration, outsourcing and cheap imports, and there is nothing on the horizon that will change this in the near future.

[Wright Patman]

9. Workers

will not do a damn thing but continue to bend over as their jobs are shipped (or the threat is issued to do same)elsewhere. That's why this situation is not like the 1970s. There was no such word as "outsourcing" and the globalists' trade agreements were not in place. GHW Bush's New World Order is here and his worthless son is our slavemaster.

[markses]

3. No shit, Bloomberg

Tell us again about the economic miracle...:eyes:

[ElsewheresDaughter]

4. jobs??? jobs??? jobs???.....here they are...iiii i mean there they go....

[Yavin4]

5. If You Depend On Selling Your Labor To Survive And You Vote For Bush,

you're a deluded fool.

[sandnsea]

6. but..but...wages make prices go up

How does this make any sense? Prices are going up and wages aren't? :shrug:

Fedex says "we'll keep raising prices as high as we can and to hell with our employees who can't afford to ship anything or a place to live to have stuff shipped to."

[dbt]

8. Prosthetic Kick!

:evilgrin:
dbt

[NewYorkerfromMass]

10. This is a big story.

It's a huge challenge for whoever will be President.

[uptown ruler]

11. we are in for a hard "adjustment" at some point...

Spreading The Word
The Irony Curtain Shop