Real Earnings: Nothing to Write Home About

By Lee Russ

Wednesday, April 18, 2007 at 10:04 AM

Although you hear a lot of recent talk about how worker earnings are "beginning to catch up" with corporate profits, it's hard to find any real evidence of real progress in real earnings. It also ignores the fact that corporate profits themselves seem to have stalled.

The Bureau of Labor Statistics (BLS) just released the Real Earnings report for March of 2007:

Real average weekly earnings fell by 0.1 percent from February to March after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. A 0.3 percent rise in both average weekly hours and average hourly earnings was more than offset by a 0.8 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). ...

Average weekly earnings rose by 4.4 percent, seasonally adjusted, from March 2006 to March 2007. After deflation by the CPI-W, average weekly earnings increased by 1.6 percent. Before adjustment for seasonal change and inflation, average weekly earnings were $580.31 in March 2007, compared with $556.42 a year earlier.

Down for the month, up a puny 1.6 percent over 12 months. Not exactly a raise to write home about.

And that continues a lengthy series of BLS reports in a similar vein:

Real average weekly earnings fell by 0.3 percent from January 2007 to February 2007 after seasonal adjustment.

Real average weekly earnings fell by 0.3 percent from December 2006 to January 2007 after seasonal adjustment.

After deflation by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), average weekly earnings increased by 2.1 percent from December 2005 to December 2006.

After deflation by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), average weekly earnings decreased by 0.4 percent from December 2004 to December 2005.

So the reports of rising earnings come from where exactly?