Daniel Gross reads Nell Henderson and Peter Baker reporting on yesterday’s report that employment growth was very weak and just shakes his head. The title of the Washington Post article was “U.S. Job Numbers Remain Strong Bush Promotes September Totals”. Beyond falsely claiming the BLS reported strong employment growth, Henderson and Baker write:
Demand for labor helped drive workers’ average hourly wages, not including those of most managers, up to $16.84 last month. That’s a 4 percent increase from September 2005, the fastest wage growth in more than five years.
Dan reminds us that consumer prices have increased by 3.8% over the same period. Our graph shows real wages of non-supervisory employees in terms of 1982$ as reported by the Bureau of Economic Analysis. Real wages as of August 2006 were $8.16 as compared to $8.15 as of August 2005. Real wages back in August 2001 were $8.13 but increased to $8.23 as of August 2002 and were $8.28 as of August 2003. It is true that real wages fell over the next two years – even if Dick Cheney was falsely claiming real wages were rising during the 2004 Presidential campaign.
If Henderson and Baker are to write on labor market issues, might we expect them to understand the difference between nominal wages increases and change in real wages?