And in a "Duh!!" moment, the brainiacs at WSJ came up with this realization (only a couple of years too late):
Since the end of 2000, gross domestic product per person in the U.S. has expanded 8.4%, adjusted for inflation, but the average weekly wage has edged down 0.3%.
That contrast goes a long way in explaining why many Americans tell pollsters they don't believe the Bush administration when it trumpets the economy's strength.
Well, since basically everyone living in the reality based community is at odds with the cheery but inaccurate projections of Bu$hCo, this is hardly a shocker.
We have seen a number of articles that discuss how many more people are living in a dire financial situation. We have seen states take the lead on raising the minimum wage. And we have seen some very good analyses by bonddad and Jerome a Paris on these items.
But surprise, surprise, the Bush tax cuts have had the effect of WIDENING the gap between high and low wage earners. And guess what one of the biggest culprits is - health care costs and other payroll related costs, which in turn gets passed along to the employees in the form of crap raises.
Another factor holding down wages is that employer-paid health benefits, pensions and payroll taxes have risen almost 16% since 2000, making employers less generous with wages.
In addition, it appears that the highest-salaried workers -- executives, managers and professionals -- are widening their lead on the typical worker.
The Bush tax cuts appear to have widened the income gap, according to many analyses. They increased take-home pay of almost all working Americans, but boosted it most for those at the top. Mr. Swagel, acknowledging that cuts in taxes on capital gains and dividends benefit the affluent in the short run, argues that they will benefit all workers in the long run as they spur investment and higher productivity.
Still, the gap between the wages of the highest- and lowest-paid workers has continued to widen. Based on Labor Department data, Mr. Bernstein estimates the weekly wage of the worker at the 10th percentile -- the one earning less than 90% of all workers -- fell 2.7% from 2000 to 2005, adjusted for inflation. The wage of the worker at the 90th percentile rose 5.3%.
Of course, the overlooked part of this is that for all but a small portion of the population, BOTH weekly wages and total income has dropped since 2000.
This chart pretty much summarizes it:
But don't worry, say trickle down apologists and other greedy bastards - it will eventually work our for the worker as well. Just maybe not in time for the next hurricane, unexpected illness, car breakdown, gas price increase or other unexpected event.
According to Treasury Secretary John Snow:
[he] argues that inequality has narrowed since Mr. Bush took office. His staff calculates that the richest 20% of U.S. taxpayers saw their average after-tax income, defined broadly to include capital gains, fall 9.4% from 2000 to 2003, the latest year for which data are available. The middle 20% had a drop of 0.2%; the bottom 20% had a rise of 1.6%.
Either way, no matter how you slice it, those are pretty shitty numbers to be "touting" as part of an economic expansion. And leave it to the good folks at the WSJ to put a shiny happy spin on it:
History suggests that with unemployment low and growth steady, the typical family will see its income rise noticeably. As that happens, Americans' spirits will rise, as well.
Um, too bad history doesn't have much of a reference point for the total and utter destruction of the economy, the environment and the world trust in the US and the US dollar. Add that to the fact that the US doesn't "make stuff" anymore, and you wonder if history even has a frame of reference here.