…after a lag, average wages are rising sharply. Real average wages rose by 2 percent in 2006, the second fastest rise in 30 years.
This met with many screams, not the least because he did not report the median wage. Yet the following shows up as reported in Brooks’s own NYT:
The average hourly wage for workers below management level [emphasis added] – everyone from school bus drivers to stockbrokers – rose 2.8 percent from October 2005 to October of this year , after being adjusted for inflation, according to the Bureau of Labor Statistics. Only a year ago, it was falling by 1.5 percent.
The author on that piece is David Leonhardt (with Jeremy Peters), who is usually accorded significant (and deserved) respect by the left-wing side of the blogosphere. Yes there are other ways to read the data, and of course that was December, but read that piece and you will see that Brooks is not way out of line. For instance Leonhardt and Peters report (with caveats):
For now, however, paychecks are growing fatter in nearly every corner of the economy.
A 2007 update shows higher gas prices hurting this trend in real terms; that doesn’t change the fact that labor markets have been doing better than in the recent past.
Brooks makes nine claims (or try this link), and to my eyes eight of them check out directly, based on material I am familiar with and yes I mean the original sources, not journalistic summaries of them. (I should note it is not easy to estimate the total gains from globalization, and I wouldn’t put much weight on any particular number here; still those gains are likely very large, as Brooks suggests.)
I am busy recording your podcast requests, and haven’t had time to check out his claim number two:
The second complicating fact is that according to the Congressional Budget Office, earnings for the poorest fifth of Americans are also on the increase. As Ron Haskins of the Brookings Institution noted recently in The Washington Post, between 1991 and 2005, “the bottom fifth increased its earnings by 80 percent, compared with around 50 percent for the highest-income group and around 20 percent for each of the other three groups.”
Your opinions on this claim are, of course, welcome in the comments. But in the meantime the economy — however imperfect — simply isn’t as bad as many bloggers are suggesting.