I enjoy reading about the hardships of Citigroup and Bank of America as much as anyone, but when the real wages of ordinary workers are soaring, it should merit at least some small bit of attention from the media. Since nominal wages have continued to increase in recent months, even as prices have plummeted, the real wage of workers lucky enough to keep their jobs has soared. Over the last three months, the average hourly wage for production and non-supervisory workers has risen at an incredible 23.4 percent annual rate. This is an important story. If the stimulus can sustain demand so higher unemployment does not weaken the labor market too much and force down nominal wages, then we will have seen a substantial downward redistribution of income as result of this crash. Of course, the other key factor in the distribution of income will be the efforts of the financial sector to grab taxpayer dollars through the TARP and other mechanisms. The government may act as it has in the past to offset the effect of market forces and push income upwards.
--Dean Baker
