Sadly, Ed Yardeni is the Wanker of the Day – wage stagnation edition

by New Deal democrat         (re-posted with permission from Bondadd blog)

Sadly, Ed Yardeni is the Wanker of the Day – wage stagnation edition

Dr. Ed Yardeni has some clickbait up at his blog titled, The Wage Stagnation Myth.

Yardeni is a highly-regarded financial markets analyst, but this is just sad.

He writes that

There is a widespread myth that real incomes have been stagnating for many years.  That’s apparently true based on real median income for households…. [but]

real pre-tax compensation per payroll employee (including wages, salaries, and supplements) is up … 16.8% since the start of 2000.

Real wages and salaries in personal income is … up 14.6% since the start of 2000.  Real average hourly earnings of production and nonsupervisory workers i sup … 13.4% since the start of 2000.

In the first place, like so many others, he starts by conflating wages and income, setting up a straw man.  No, Dr. Ed, the fact of wage stagnation is not based on income metrics, but on wage metrics.  To give you a head start, here are 7 of them I helpfully catalogued in a post only one month ago.

Secondly, note that all of Yardeni’s metrics appear to be mean, not median, measures.  You remember the old saw about Bill Gates walking into a bar, and now the mean wealth of the patron is $1 billion.  That’s what Yardeni does. When you measure in median, not mean terms, wage stagnation is blazingly apparent.

The only measure he cites which might possibly be a median measure (“real pre-tax compensation,” he doesn’t name the data series), includes “supplements.” Whether these are management bonuses or e.g., health benefits, they hardly are contrary evidence.  We know that health cost inflation has soared for several decades.  That companies may have picked up some of these has nothing to do with actual wages.

That a premier Wall Street analyst is so blind to the blazingly bright evidence is, sadly, not shocking at all.