The Front Page story on the NY Times says Long a Laggard, Wages Start to Outpace Prices and the thesis in the lede is
wages for most American workers have begun rising significantly faster than inflation
Most people reading that would conclude that the story was "wages are rising" but the true story is buried in the small print.
More after the break
The two opening paragraphs are
After four years in which pay failed to keep pace with price increases, wages for most American workers have begun rising significantly faster than inflation.
With energy prices now sharply lower than a few months ago and the improving job market forcing employers to offer higher raises, the buying power of American workers is now rising at the fastest rate since the economic boom of the late 1990s.
Note "With energy prices now sharply lower than a few months ago" which turns out to be the real story.
This is followed by discussions of how bad it's been with wages dropping until in paragraph 5 we get
The fall in unemployment to 4.4 percent and the recent surge in wages, however, raise the prospect that the job market could be on the brink of another strong run, much like the one that lifted incomes in the late 1990s.
"Surge" see, Happy Times Are Here Again. The article goes on with paragraph after paragraphs hiding the real story: on the one hand on the other hand and irrelevant statistics which tell us that tight labor is raising wages, (no proof), maybe just a spike, unemployment is low (neglecting discouraged workers), even poor anecdotal Mexican immigrant getting increase (although recent Union victory is cited but not as cause), good news for White House (because they have been losing sleep over the poor workers), "huge" wage increases, what will next months stats show, will housing slump cause problems, where is macro economy going, only expansion since WWII without wage improvement, wage earner lowest share in 40 years, may be globalization (bugga bugga), "good but not great", tales of the 90's burger kings, election exit poll pessimism, until finally we get some real relevant facts:
After years of sharply rising income inequality, the recent rise in wages also appears to be increasing pay for both rich and poor. From July through September, the inflation-adjusted hourly pay of workers near the bottom of the wage scale — those making less than 90 percent of all workers but more than the worst-off 10 percent — rose 0.1 percent.
That compares with 0.4 percent wage growth for those close to the top, those making more than 9 out of 10 other workers, according to an analysis of Labor Department statistics by the Economic Policy Institute. Wage growth for both groups is likely to pick up in the final quarter of the year.
Get it. Wages rose 0.1 percent for low wages workers (aka Poor) and 0.4 percent for those close to the top. A fair writer would say wages for the rich went up 4 times as much as poor workers wages. Except that wouldn't be fair because after a paragraph saying last year that wages for the poor went down 6 times as much as wages for the rich went up, (only not that clearly). we finally get the real story.
Finally around paragraph 30 or so, I lost count, we get the what really happened.
The most obvious cause of the recent turnaround is the fall in energy prices. Nominal wages have been accelerating since the beginning of 2004, but inflation, led by soaring gas prices, kept Americans from noticing any real rise in their pay during much of that time. Since the price of a gallon of regular gasoline peaked for the year at $3.03 in early August, prices at the pump have steadily declined. The national average is now down to about $2.29 a gallon.
That has taken a tremendous weight off wages, which finally started to outpace inflation in August. Inflation ran at a rate of 1.3 percent from October 2005 to October of this year, the lowest level since mid-2002. Earlier this year, inflation was running as high as 4.3 percent.
Get it, no "Huge" wage increased, just a pre-election drop in gas prices. So what they have been doing is citing employer or Republican mouthpieces who talk about "Huge" "Surge" in wages while all the time talking about "inflation adjusted wages". That means if I cut your wages 5% but inflations down 10% you get a "Huge" "Surge" in inflation adjusted wages. Essentially, the White House, is taking credit for falling gas prices. And, the rich still get rich faster than the meager trickles to the poor.
Oh thank you NY Times for keeping us in the dark. I am not an economist, just a beleaguered NY Times subscriber.