Obama Ended as He Began—With Americans’ Real Earnings Falling
Feb. 19, 2017 (EIRNS)—More on the state of household incomes in the United States—or, "losing," as President Trump calls the trend he has campaigned to reverse—came from the Labor Department’s Bureau of Labor Statistics (BLS) on Feb. 17.
For all employees during 2016 (i.e., from January 2016 to January 2017, as BLS counts it), real hourly earnings were unchanged and real weekly earnings dropped -0.6% due to lower hours worked. The drop in weekly real earnings was -0.4% just from December 2016 to January 2017. For production and non-supervisory employees (the great majority), the January to January drop was -0.4% in weekly earnings, -0.1% in hourly earnings. These employees also had the -0.4% drop in real weekly earnings in the past month.
The U.S. inflation rate has definitely increased, as the so-called CPI-W Index rose +0.6% in January, on top of 0.3% in December. Note again, there was no change in the median household weekly income over the course of 2016. Another sign is that FHA mortgage delinquencies have risen sharply, to nearly 10% as of January.
The Economic Policy Journal on Feb. 16 used BLS data to show that in the decade 2006-2016, there were very few food categories for which prices did not rise by between 30% and 65% (leaving out tobacco products, which rose 90%). By comparison, average weekly wages of all U.S. employees—those who are working—have risen about 27% in absolute amount during that decade.
In House testimony Feb. 15, Fed Chair Janet Yellen claimed that real wages had grown "by some measures" since the 2008 crash, but didn’t volunteer which measures; and she acknowledged that production and non-supervisory employees (almost 85% of all) were still somewhat underwater on real earnings since the crash. Yellen was also pushed fairly hard by some GOP members on how absent growth has been in Obama’s U.S. economy. She admitted this, but said it wasn’t the Fed’s fault, as European economies are even more stagnant.