Last week the employment cost index for the third quarter was released by the BLS. It showed that real wages and salaries dropped by an astonishing 1.8% in the third quarter compared to a year earlier(not a number you will find reported anywhere else in the news media, as far as I know). That’s one of the quarterly declines on record.
In fact, real wages and salaries peaked in 2003, and have been trending downwards since then. I consider this to be an absolute critical fact in understanding the current financial crisis. In fact, Americans were borrowing so heavily because their real wages were declining. And no one has escaped. Here is a table which shows the decline in real wages by occupational category since 2003.
|change in real wages|
|All civilian workers||-2.4%|
|management, business, and financial||-3.5%|
|professional and related||-0.7%|
|office and administrative support||-2.1%|
|construction, extraction, farming||-0.9%|
|installation, maintenance, repair||-3.1%|
|Data: BLS (based on employment cost index)|