Earlier this week I updated my commentary on Five Decades of Middle Class Wages, an analysis of Real Average Hourly Earnings of Production and Nonsupervisory Employees. During the 21st century and especially since the end of the Great Recession, wages have clearly been stagnant. But, as Mark Twain famously remarked, there are three kinds of lies: lies, damned lies, and statistics. I was, therefore, not surprised when a reader sent me a link to a blog article entitled Real Wage Stagnation Is a Bit of a Myth. Seriously! The article featured a chart that included the very same earnings data series that I had used, but it came to quite the opposite conclusion: Contrary to popular belief, wages have been rising a bit faster than prices. In other words, real wages haven’t stagnated as widely believed, but have been moving higher, albeit at a slow pace. All it takes is a simple statistical manipulation to paint a smiley face on the real wage data. And what is that? Choose a tame deflator for your inflation adjustment. Here are side-by-side charts of the Average Hourly Earnings of Production and Nonsupervisory Employees stretching back to 1964, the year the Bureau of Labor Statistics (BLS) initiated the series. The chart on the left is my analysis. The one on the right is the optimistic variant that claims stagnation is a myth (click them for larger versions). advisorperspectives/dshort/commentaries/Real-Wages-Lies-and-Statistics.php
Posted on: Sun, 24 Aug 2014 14:32:49 +0000
Trending Topics
Recently Viewed Topics
© 2015