It’s been a while since we reviewed the economic data. It’s not a pretty sight. David Cay Johnston took a long look at the first income data we have for 2010 in First look at US pay data, it’s awful (Reuters).
Anyone who wants to understand the enduring nature of Occupy Wall Street and similar protests across the country need only look at the first official data on 2010 paychecks, which the U.S. government posted on the Internet on Wednesday.
The figures from payroll taxes reported to the Social Security Administration on jobs and pay are, in a word, awful.
These are important and powerful figures. Maybe the reason the government does not announce their release — and so far I am the only journalist who writes about them each year — is the data show how the United States smolders while Washington fiddles.
Doesn’t announce their release? Fiddling while Rome burns? Imagine that! Quelle surprise!
The median paycheck — half made more, half less — fell again in 2010, down 1.2 percent to $26,364. That works out to $507 a week, the lowest level, after adjusting for inflation, since 1999.
The number of Americans with any work fell again last year, down by more than a half million from 2009 to less than 150.4 million.
More significantly, the number of people with any work has fallen by 5.2 million since 2007, when the worst recession since the Great Depression began, with a massive taxpayer bailout of Wall Street following in late 2008…
While median pay — the halfway point on the salary ladder declined, average pay rose because of continuing increases at the top. Average pay was $39,959 last year, up $46 — or less than a buck a week — compared with 2009. Average pay peaked in 2007 at $40,764, which is $15 a week more than average weekly wage income in 2010.
The number of workers making $1 million or more rose to almost 94,000 from 78,000 in 2009. However, that was still below some earlier years, including 2007, when more than 110,000 workers made more than $1 million each…
Even as income and the number of workers fell in 2010, CPI inflation hit a new 3-year high of 3.9% (annual rate) in September. However, you will be pleased to know that non-core inflation is up only 2% over the past year, and that’s the more important number. Unlike normal people, Federal Reserve officials do not require food and never pay for gasoline, preferring to use teleportation instead. (You can disregard the rumor that they are from outer space.) The Wall Street Journal’s Kathleen Madigan covered the inflation issues in Pay Raises Trail Behind Even Mild Inflation.
See? For Fed officials, even if they are “hawks” like Charles Plosser, inflation is a non-issue. You know, for “the recovery”.
Last week, Plosser, the president of the Federal Reserve Bank of Philadelphia and one of the dissenters to recent monetary policy decisions, said he expects “inflation will moderate in the near term.”
Plosser remain cautious about future inflation — as any inflation hawk would be — but he’s right to recognize current price pressures are extremely low. The Labor Department said Wednesday the consumer price index [CPI] increased 0.3% in September. Core prices, which exclude food and energy, were up a milder 0.1%.
The Fed tends to watch the core rate, and policymakers are probably happy that core prices are up just 2.0% over the past year.
Households, however, have to deal with the jumps in energy and food prices. The annual top-line inflation is running at a faster 3.9%.
Over the past year, food prices have risen 4.7%, gasoline costs 33.3% more and the cost of fuels and utilities used at home are up 4.0%. While households can reduce buying some of these staples, they cannot avoid them completely, which leaves less money to spend on other items.
More troubling for the consumer outlook, wage gains aren’t keeping pace with price hikes. Real weekly earnings rose in September for the first time since May. But the 0.2% gain reflected workers putting in longer shifts, not from wages increasing. Real hourly wages fell 0.1% in September from August.
After rising briefly at the start of this recovery, real hourly pay is back to about where it was two years ago — despite the fact that worker productivity has risen more than 5% since then.
There you have it. Fewer jobs, lower pay, 3.9% annual inflation and wage gains decreases are not keeping up with price hikes. Jobs and prices—American workers are getting screwed both ways, being shafted, sucking it up, getting the short end of the stick, taking it up the wazoo. In short, little has changed since the last time we looked at the economic data. What was Johnston’s word?