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Wednesday, September 10, 2008

"Wages are Falling for Just about Everybody"

This is the type of issue the election should be about. The conversation has been steered elsewhere, the focus is no longer on the economy, and that's to the detriment of those who need help, especially if the connection between the economic policies of the Bush administration, policies that will continue under McCain-Palin, and the economic outcomes people have experienced are not fully recognized:

Wages are falling for just about everybody, by Kathy G.:

Chart from the Wall Street Journal

Today, the Wall Street Journal reports the sobering news that, since 2000, real wages have fallen for every educational group in America except folks with professional degrees (doctors, lawyers, and the like). All other groups, even those with master's degrees and Ph.D.'s, saw declining wages over this period. The WSJ piece is based on recently released Census data (you can find the most recent Census Bureau report on income and earnings here).

In recent years, the college earnings premium has decreased substantially. As the Journal points out:

In 1975, for instance, workers with college degrees earned 60% more per year on average than workers with high-school diplomas only, according to the 2006 Economic Report of the President.

Workers with a college degree saw their earnings premium grow steadily over the next quarter century, and by 2000 their average earnings were roughly double what workers with a high-school diploma made. Over the next four years the trend reversed: By 2004, workers with a college diploma only were earning about 80% more than high-school grads, on average.

The Journal article identifies globalization (including the outsourcing of both blue- and white-collar jobs) and rising health costs as possible causes for the decline in wages. One reason workers' wages aren't keeping up with inflation is that health care costs have risen dramatically in recent years, so employers are shelling out more for health coverage, and less in wages.

For most Americans, these data paint a fairly bleak picture of their economic prospects. About the only good thing I can say about this is that, given this economic climate, I find it almost impossible to believe that the Republicans triumph this November. The seven-year period during which wages have been in freefall just happen to be seven years in which a Republican was president and Republicans, for the most part, controlled Congress. There's no way in hell that the Republicans should be able to get away with this. If, in spite of everything, they end up winning this fall, it will be the con job of the century.

I'm guilty of this too with recent side trips to discuss elitism and other cultural issues, but can we steer the conversation back to the issues that are important? Can the press and everyone else stop fanning the flames of side issues that are nothing but a distraction from what matters to struggling households? It's time to change to conversation, to go on the offensive with these kinds of issues, but how? My opinion is that there's only so much we can do, it's up to the campaigns to set the national conversation, and right now the Democrats are in response mode - playing defense - rather than setting the conversation by aggressive attacks on Republican economic policy, attacks that make it clear how those policies have worked to the detriment or simply ignored the needs of typical households. You can win playing defense, especially if you are already way ahead, but most of the time it's offense that scores the big points.

    Posted by on Wednesday, September 10, 2008 at 12:42 PM in Economics, Unemployment | Permalink  TrackBack (0)  Comments (149)


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