by Rod D. Martin
November 22, 2006
Just in time for Christmas, the latest economic reports show that over the past 12 months real wages have grown at a rate of just over 4 percent, faster than inflation and the best growth rate in almost ten years.
Wage growth — or the lack thereof — has been a constant complaint of the left since the Clinton bubble/recession of 2000-2002. Conservative economists have consistently noted that wage growth is a lagging indicator, which is to say, it normally only shows up after an economic recovery is well-established, before which time it would merely indicate inflation.
There’s no danger of that now. In fact, the inflation non-story is such that the Fed may well cut rates next year. The wage growth is real, and significant.
But the bigger point all of us have been making now for years is that wages — like unemployment claims — are a terrible indicator of how average Americans are doing, because they measure an America that hasn’t existed for decades. Most Americans work for small businesses or for themselves: that trend grows by the day. The Labor Department’s payroll survey measures this, and has shown radically better numbers for most Americans — both in employment and compensation — for the past four years. But liberals hate this better, post-union economy, and the media parrots their line.
Anyway, lest anyone doubt, the economy is now officially great by anyone’s measure. Just don’t hold your breath to hear Katie Couric say so.