Yesterday, one of the dozen or so folks out to support Bush amidst the few hundred of us there to protest as his motorcade passed yelled out “The economy’s the strongest it’s been in twenty years!” Today the Times highlights one of the reasons it’s not true:
The amount of money workers receive in their paychecks is failing to keep up with inflation. Though wages should recover if businesses continue to hire, three years of job losses have left a large worker surplus. “There’s too much slack in the labor market to generate any pressure on wage growth,” said Jared Bernstein, an economist at the Economic Policy Institute, a liberal research institution based in Washington. “We are going to need a much lower unemployment rate.” He noted that at 5.6 percent, the national unemployment rate is still back at the same level as at the end of the recession in November 2001. Even though the economy has been adding hundreds of thousands of jobs almost every month this year, stagnant wages could put a dent in the prospects for economic growth, some economists say. If incomes continue to lag behind the increase in prices, it may hinder the ability of ordinary workers to spend money at a healthy clip, undermining one of the pillars of the expansion so far.
Thing is, those CEOs whose taxes Bush cut don’t change their spending patterns much based on fluctuations in income. But the folks who are paying for that tax cut in the gutting of the social services they depend on sure do.