Monday, April 11, 2005


The L.A. Times reports on another accomplishment for the Bush White House:

For the first time in 14 years, the American workforce has in effect gotten an across-the-board pay cut.

The growth in wages in 2004 and the first two months of this year trailed inflation, compounding the squeeze from higher housing, energy and other costs....

This is the first time that salaries have increased more slowly than prices since the 1990-91 recession....

Hmmm -- and what was the name of the president during 1990 and '91? Let me think....

Of course, not everyone's suffering:

The effective 0.2-percentage-point erosion in workers' living standards occurred while the economy expanded at a healthy 4%, better than the 3% historical average.

Meanwhile, corporate profits hit record highs as companies got more productivity out of workers while keeping pay increases down....

Nice for them.

Ah, but it could all change soon, right?

Historically, periods when wage growth is outpaced by inflation rarely last more than 18 months. That's partly because businesses don't want their employees' living standards to fall, as that injures morale, said Trewman Bewley, a Yale University economist who has studied wage activity during economic downturns.

Many economists figure it's only a matter of time until workers can pry more money out of their employers to catch up to inflation again. If economic growth remains robust, as many forecasters predict, workers may gain greater leverage to negotiate wage hikes.

"Chances are that those workers that have problems getting by because of higher fuel prices will probably tell their employers, 'I can't make it,' " said John Lonski, chief economist at Moody's Investors Service.

Excuse me? A sane, rational human being, referring to the contemporary United States, uses the words "workers" and "leverage" in the same sentence? I just got back from vacation and I'm a bit discombobulated -- is it April Fool's Day?

Oh -- here's the clarification:

That hasn't played out for Brian Chartier.

Imagine my amazement.

The 29-year-old Glendale resident handles inventory for a Los Angeles manufacturing company. No one there, he said, has gotten a raise in two years.

"They're able to do this and I haven't quit, because where am I going to go?" he said. "There are no jobs."

But there are corporate profits, Bunky, and big tax cuts for the folks who get those profits, and that's all that really matters, right?

Boom boom boom!

(Story also available at Yahoo News.)

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