Wages Are Rising! (Or Are They?)

As we peek our noses out from the dank bomb shelter of the recession, we're beginning to see some positive signs. Here's one of them, from the New York Times' David Leonhardt, we get word that year-over-year earnings are up. "Wage growth has picked up in the last several months, according to two different government surveys." Great news!

Not so fast, says Dean Baker. Leonhardt's being tricked by nominal wages as opposed to real wages. In fact "for 2009, real wages have unambiguously been falling and are likely to continue to fall as modest increases in commodity prices are not offset by nominal wage growth."

I would throw in three additional points. (1) Whatever small wage increases we're experiencing now comes on top of $63 billion of income lost in the first quarter of this year alone. (2) Health care premiums continue to grow faster than wages, and (3) If we're going to talk about buoyant wages, we should give some credit to the stimulus, which the Center on Budget and Policy Priorities estimates is keeping 6 million Americans out of poverty with provisions that include tax credits, food stamps and one time payments.