Tags
economists, inflation, non-supervisory workers, Paul Krugman, private sector, production workers, pundits, Tyler Cowen, {What's Left of) Our Economy
To Paul Krugman, Americans’ recent grumpiness about the state of their economy has little to do with the state of their economy itself (which he writes is “seemingly booming”) and lots to do with a ceaseless barrage of misinfomation – generally from Republican politicians and conservative news outlets – that’s “disconnected with personal experience.”
In other words, Paul Krugman is a New York Times columnist and Nobel Prize-winning economist who hasn’t looked at the official U.S. data on Americans’ real wages. If he had – as suggested in brief yesterday by fellow noted economist Tyler Cown – he’d have known that for most of this year so far, the purchasing power of what his compatriots typically earn on the job has been shrinking, and therefore their living standards have been worsening, due to inflation.
For example, he’d know that in October (the latest available figures), average inflation-adjusted hourly pay for private sector workers fell by 0.53 percent month-on-month in October, and 1.24 year-on-year. He’d know that in April, change in these constant dollar wages tuned negative on an annual basis (by 3.66 percent) for the first time since February, 2017 (when they dipped by just 0.09 percent).
And he’d know that the current 18-month stretch of 4.68 percent cumulative decline in real wages for the entire private sector is the longest such workers have endured since the 19 months between July, 2011 and February, 2013. And then, this compensation decreased by just 0.49 percent. (As known by RealityChek regulars, government workers’ wages aren’t tracked by the Labor Department because their levels are largely set politicians’ decisions, not by market forces, and therefore say little about the funamental state of the nation’s labor markets.)
In addition, Krugman would know that in October, for production and supervisory workers, after-inflation wages tumbled by 0.72 percent on month, and by 1.13 percent on year. He’d know that annual change in price-adjusted hourly pay for these workers also turned negative in April (by 3.37 percent), and that for the first time since July, 2018, when it sank by 0.22 percent.
He’d also know that this workforce hasn’t lived through a span of falling real wages this long (4.26 percent over 18 months) since the August, 2016 through February, 2018 timespan (when it was shrank by a fractional 0.05 percent over the same 18-month period).
But clearly Krugman hasn’t looked at any of this, and the reason is pretty clear to me: For too many folks like Krugman, who work in lucrative and coddled occupations like tenured academia and punditry (seriously, when’s the last time you heard of a Mainstream Media columnist losing a job or getting a pay cut for peddling obvious falsehoods and predictions that turned out to be laughingly offbase?), current inflation is indeed something that can be blandly and abstractly described as “indeed high by recent standards.”
For too much of the rest of the country, it means the loss of hard-won economic gains – and often real pain due to soaring food and energy prices. All of which indicates that you can learn more about at least some of the economy’s biggest problems by watching, say, Fox News than by reading Paul Krugman.
RealityChek 