What motivated Greg Mankiw to write this comment:
The average hourly wage for workers below management level – everyone from school bus drivers to stockbrokers – rose 2.8 percent from October 2005 to October of this year, after being adjusted for inflation.
Yes, Greg is quoting a NYTimes that we discussed this morning and yes it is technically true – if one does not consider the latest news from the BLS that nominal wage growth was only 2% on an annualized basis last month. We’ll have to wait to see how much the CPI rose. If real wages dip even by the slightest amount, then real wage growth from November 2003 to November 2006 will have been ZERO. Not exactly commensurate with the real wage growth during the 1997 to 2001 period. This is rather obvious to anyone who understands the facts – and I’m sure that Greg Mankiw does as well as anyone. So why does he continue to write Karl Rove approved spin? I hope Harvard is compensating him enough that he does not need income from the National Review crowd.