Median wages and employment to population ratio

From colleague New Deal Democrat at the Bondadd blog comes this comment and clarification regarding the reporting from this post at Angry Bear:

I have left this comment elsewhere, because there is widespread misreporting and misunderstanding of this report.

While the data is correct, the conclusion drawn by most of your readers probably is not. The Sentier paper does not show a decline in wages, salaries, earnings, compensation, or paychecks, because they did not measure for that (something i have confirmed with them directly). Those have stagnated for a decade, but actually rose during the recession, declined about 3% after, and have steadied or slightly risen in the last year, mainly due to the effects of $3+ gasoline flowing through the economy. I’ve written about it, but if you don’t want to believe me, how about this paper by the Economic Policy Institutue published just this past week:

The Sentier data is taken from the Household Survey, which includes both retirees of all ages and the unemployed. The typical retiree takes a 50% haircut in income, and Boomers are retiring at the rate of 10,000 a day. According to the Sentier paper, the typical unemployed household has suffered a 17% loss of income, from nearly the median in 2009 to well beneath it now. In other words, about half of the households with unemployed fell from above the 2009 median income to below it. That, plus retirements, accounts for almost all of the reported differences between stagnant median wages and greatly declining household income. In short, it is another manifestation of the employment to population ratio.

Stagnant median wages, growing at a nominal 1.5% to 2% is still not good, but I think it puts the urgent frame on the crisis of continued high unemployment, and weaning this country off of over dependence on oil.

Dan here:   I think it would be well to remember that the shrinkage of the labor force at least in part follows from a persistently high number of discouraged workers. How many boomers would have kept working rather than retired  in a stronger labor market? My guess is, at least in the under 65 cohort, many of them.

This is from the Sentier report itself (pdf):

The decline in real median annual household income for households with an unemployed householder far exceeded that of any other subgroup. Median income for households with an unemployed householder declined by 21.0 percent, from $41,806 to $33,036, during the post-recessionary period. This decline reflects, in part, the continued high number of long-term unemployed. In contrast, the median income for households with a working householder declined by only 4.1 percent, from $71,191 to $68,275.

Says NDD:  In other words, once you strip out “an unemployed householder” (they don’t define how that applies in dual-income households), the decline is very close to that of wages alone. The report does not directly address the issue about Boomer retirements .