Marketplace Report: U.S. Wages Slumping
MADELEINE BRAND, host:
Back now with DAY TO DAY. President Bush hasn't received a lot of credit for the country's economic growth, and here's the reason why: wage increases have not kept up with inflation. That's the conclusion of a report out today. MARKETPLACE New York Bureau chief Bob Moon joins us with more. And Bob, previous numbers showed that incomes did stay just ahead of inflation. This one says the opposite. Tell us more.
BOB MOON reporting:
Well, you're right, Madeleine. Indeed, there are government numbers that indicate the median income level is staying just ahead of rising prices. But the Bloomberg News Service has been comparing different numbers from various sources, and this report today suggests that it's not just a matter of keeping up with the Jones's for most Americans these days. It's tough just to keep up with the cost of living, period. According to this report, the vast majority of Americans are seeing their wage gains evaporate because of accelerating inflation. In the latest example, Bloomberg points to the new Labor Department figures that were out just last week. They show wages adjusted for inflation actually fell last month by almost three quarters of a percentage point. In fact, Bloomberg says pay has been flat or has declined in more than half of the 65 months since President Bush took office in January of 2001.
BRAND: And critics are also complaining that the wealthiest Americans are the ones who are benefiting the most.
MOON: Yeah, that's the disparity in these numbers. Just last month, the jobless rate was back down to just 4.6 percent. That's the lowest level since July of 2001. But for some time, Bush's critics have been complaining about the quality of the new jobs being created. And these numbers that Bloomberg has put together do suggest that the rich are getting richer while most of the rest are falling behind. If you can follow along with a little of the math behind this, figures from the Federal Reserve show that median incomes adjusted for inflation actually fell half a percent over the same period that they were increasing for the richest 10 percent of Americans. Well, that skewed the overall number higher, if you will. It was enough to show that the median income level for quote/unquote "all families" stayed ahead of inflation.
BRAND: I see. So any indication that - other indications of an improving economy, lower unemployment, things like that - having any affect on the president's approval ratings?
MOON: Well, good question. There wasn't much sign of that in an Associated Press IPSO's poll a couple of weeks ago. Seventy percent of those surveyed said the country was on the wrong track, and that included 60 percent who said that they disapproved of the way that President Bush has been handling the economy, that even though the jobless rate is down - and a survey by the business group, The Conference Board, shows that most American consumers don't expect their incomes to be rising before the end of the year.
Today in the MARKETPLACE newsroom, we're crunching the financial numbers on soccer's World Cup.
BRAND: Thank you, Bob. Bob Moon of public radio's daily business show, MARKETPLACE. It's produced by American Public Media.