Real wages: two years of losses
The economy has been in recovery since late 2001 and has been creating jobs since the fall of 2003. But despite the upward trend for jobs, the hourly wages of most workers (the 80% of workers who are in manufacturing or non-managerial services) have failed to keep up with inflation over the last two years. In the first quarter of 2005, real (i.e., inflation-adjusted) wages were 0.2% below those of the same quarter a year earlier. Real wages have fallen 0.3% over the last two years after rising by 2.0% over the prior two years starting in early 2001. The chart above shows the worsening real wage trends since early 2001. This erosion of real wages despite rapid productivity growth and continued job growth is disappointing and a real detriment to working families' living standards.