Arnold Williams (notebuyer) wrote,
Arnold Williams

Weakness in the Labor Market

Not really, gents.

But that depends on doing the numbers, and paying attention to how you compare them. Sample?

average real weekly earnings from pre-recession high
prior: -1.9%
this: +0.25%

In fact, during the prior recovery real average weekly wages would stay below their 1990 pre-recession high for seven years, until well into Clinton's second term.

So a small gain today is decried as weakness -- while a real decline that lasted more than seven years was the happy course to the "miracle economy".

Now maybe we get an idea about why the bad news bears always present their numbers without any context, without the perspective of any comparison to the prior business cycle. In making such a comparison using DeLong's five indicators the current recovery is up 3 to 0 right now -- already we have a winner!

As a brief aside I'll mention here a cherry-picking tactic near always used by the class warriors to make it seem that workers are being paid less, and gaining less, than they really are.

This is the constant quoting of "earnings" or "wage" numbers in newspaper stories, op-eds and the like, when the average reader doesn't realize that these are only subsets of the amounts earned by workers, excluding among other things the benefits that comprise an ever growing part of compensation. They thus systematically understate both the amount and rate of growth of employee compensation.

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