New York Times Editorial - The falling paycheck

New York Times Editorial - The falling paycheck
Copyright by The New York Times
Published: August 30, 2006


After huddling with his economic team at Camp David this month, President George W. Bush emerged from a meeting and, flanked by advisers - including the secretaries of labor, commerce and the Treasury - announced to reporters, "Things are good for American workers."

The comment is preposterous. As The New York Times reported on Monday, the economic expansion that began in late 2001 is on track to become the first since World War II that fails to offer a sustained lift to the real wages of most American workers. Although the U.S. economy has grown and productivity has been strong, American employees have not shared in the wealth they've helped to create. Wages and salaries now make up the lowest proportion of the economy since the government began keeping records in 1947, while corporate profits have climbed to their highest share since the 1960s.

Until recently, the decline in real wages has been masked in large part by the housing boom that allowed many Americans to borrow and spend, even as their pay was squeezed. But now the housing market is flagging and with it, the Bush- era economy - without American workers having ever experienced a period of solid prosperity.

Unfortunately, there's little likelihood of meaningful improvement anytime soon. When Bush and his advisers are not insisting that everything is fine, they're promising more high-end tax cuts as a cure-all, or painting the problem as one of impersonal market forces for which there are no government solutions.

Those are not the paths out of the predicament. Just the opposite, they are approaches that have contributed to it.