By Ezra
Gotta love economic data. So my LA Times op-ed today is pegged to the growth numbers from last week, which the Wall Street Journal sold with the headline, "Economy Leaps, but Wages Stagnate." And they were right: growth was 4.8%, wage growth .7%, compensation growth .5%. Unimpressive stuff. "Economists," the article said, "are puzzled by the failure of wages to rise as the unemployment rate has fallen," while the low compensation costs were because "companies have shifted health-care costs to employees and trimmed pension contributions."
Sound good?
So today, the April payroll data came out. Job growth slowed, but compensation quickened, with hourly earnings jumping up .5%. "[T]he 0.5% rise in average hourly earnings last month." said the Journal, "and 3.8% annual rise [was] the fastest annual gain since August 2001."
Two reactions: First, it's good that earnings hopped up in April. But they didn't jump all that fast, so let's not get ahead of ourselves. Second, the reason the WSJ can be touting the best annual earnings rise since 2001 while simultaneously lamenting the stagnant wage growth last quarter is that growth in earnings have been terrible for the past four years (basically the point of my op-ed). Median weekly earnings in April 2000, which was a recessionary period, were .9% above the median weekly earnings in April 2005, which came after four years of expansion. Further, one of the most startling statistics I use in the piece is that the median family was exactly as likely to see their income grow during the recession of 1990-91 as the expansion of 2003-04. Of course, in 1990-91, we all recognized that the economy wasn't working; in 2003-04, the media, at least, keeps trying to convince us that the economy is terrific, and remains totally baffled by the public's unwillingness to believe. Maybe if they read my op-ed, they'd get a clue...
