Get your news from a source that’s not owned and controlled by oligarchs. Sign up for the free Mother Jones Daily.


In a widely read column on Tuesday, David Leonhardt said that although unemployment is high, there’s good news for those who still have jobs.  Instead of falling, as they normally would during a recession, real wages have risen at a steady clip this year.  Now, there’s no question this was true in the second half of 2008, when nominal wages rose modestly but plummeting prices (especially energy prices) meant that in real terms wages skyrocketed.  Unfortunately, Dean Baker says those days are long gone:

The story then reversed in 2009. Inflation has advanced at close to a 3.5 percent annual rate thus far this year. Nominal wage growth has fallen sharply….For 2009, real wages have unambiguously been falling and are likely to continue to fall as modest increases in commodity prices are not offset by nominal wage growth.

So how does Leonhardt get the story so wrong? Most importantly he uses year over year data. This includes the large fall in prices at the end of last year, which still outweighs the impact of falling real wages through 2009. Using year over year data, we can say that real wages have risen in the last year. We will not be able to say that four months from now.

Italics mine.  Real wages have gone up if you compare August to August, which includes the big deflation in the Fall of last year.  But that’s a one-off.  If you look at January to August instead, inflation is up, wage growth is anemic, and real wage growth is negative.  That’s the path we’re currently on, not one of rising incomes.

PLEASE—BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things it doesn’t like—which is most things that are true.

We’ll say it loud and clear: At Mother Jones, no one gets to tell us what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please do your part and help us reach our $150,000 membership goal by May 31.

payment methods

PLEASE—BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things it doesn’t like—which is most things that are true.

We’ll say it loud and clear: At Mother Jones, no one gets to tell us what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please do your part and help us reach our $150,000 membership goal by May 31.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate