Cross-Posted at
Political Moneyball
With all the talk of the GWOT, the mismanaged reconstruction of both Iraq and Katrina, and the slow descent into anarchy that's taking place in the middle east, it was nice to read something up-lifting this morning.
Real Wages Fail to Meet a Rise in Productivity There are just too many great points to this article, but I'll pull a few of the juiciest and, forgive me, channel bonddad this morning.
Real Wages are the overall effectiveness of your income. They represent your income from wages adjusted for inflation.
The authors of the article note that the rise in productivity - a good thing by any standard - has not been coupled with an increase in real wages. In other words, American workers are making more money for their company, and making less money for themselves.
The most important point for Democrats to hammer home this fall is that the economic expansion which Bush claims his tax cuts brought about is the most lopsided expansion since 1970. Bush points out that the average American is better off today than he was in 2000?
But these gains are a result mainly of increases at the top of the income spectrum that pull up the overall numbers. Even for workers at the 90th percentile of earners -- making about $80,000 a year -- inflation has outpaced their pay increases over the last three years, according to the Labor Department.
Simply put, unless you're one of the luckiest ten percent of the population, you've seen the effectiveness of your wages fall by about 2% since 2003. Of course, if you're one of the top ten percent, you're probably making money hand over fist, and wouldn't notice if the world was ending all around you.
Say it with me: 90% of American workers don't benefit from Bush's tax cuts. 90% of Americans are making less money every hour because of the Republican mismanagement of our economy.
What are some of the reasons for this fall in real wages? Greenhouse and Leonhardt first point to the rising cost of healthcare. They suggest that the bonus of employee benefits has allowed real wages to outpace inflation since the expansion began. However,
Over the last year, the value of employee benefits has risen only 3.4 percent, while inflation has exceeded 4 percent, according to the Labor Department.
What's the main reason for soaring health care costs? Pharmaceutical companies writing the legislation. Medicare-D. Prescription drugs. Republicans. Take your pick.
What about the rising price of oil? Check. Slowing housing market? Check. They both contribute to the rise in inflation, and the stagnation of Americans wages.
But with interest rates relatively low, Americans are borrowing to compensate for the wage decrease. What happens when borrowing isn't an option?
So how can the Democrats turn this around, and use it to win in the fall?
The writers suggest that economic policy doesn't play into midterms as much as presidential elections. Fine. But we haven't seen this type of economy in 30 years - let's change the conventional wisdom.
Some talking points for your Republican friends around the water cooler this morning:
1. The Bush tax cuts have lowered our income, while making us work harder.
2. The average American is making less money for every hour he works because the President cares more about ensuring the top ten percent of the population continues to ride the wave of his tax cuts.
3. The Democratic party has a plan to ensure workers get paid what they're worth.
4. The Democrats will bring a New Direction to the American Economy by reigning in the cost of healthcare, so the average American can have more money in her pocket.
CW says Americans don't pay attention to the economy during midterms? Let's change the CW, start educating your friends.