Some interesting data analysis on the economy:
Wage increases for employees at almost all income levels are giving important and unexpected support to the nation’s economy. If the gains continue, they offer hope that the rapid economic expansion of recent months could prove more durable than other spurts of growth over the last two years.
Forecasters expect the Commerce Department to say in its quarterly report on Thursday that the economy grew about 6 percent in the three-month period ending in September, which would be the fastest pace since 1999. Most of that growth stemmed from a sharp rise in consumer spending, driven largely by a continuing boom in mortgage refinancing and checks that were mailed out as part of the recent tax cut.
Let’s hope.
David Perron
It’s probably all in the defense sector, John. They’re making money hand over fist. Why, just look at the stock performance!
Kimmitt
Interestingly, wage increases seem to be more than compensated for by benefit decreases; folks have to pay a lot more of their health insurance premiums.
David Perron
Cite, Kimmitt? I can say that although my cost of benefits did rise, they didn’t rise by anything resembling five or six percent of salary. To be precise, my healthcare benefits rose by 4.4%, or 0.07% of my salary. I know, anecdote does not equal data. Still, your claim; you need to support it.
David Perron
I guess there’s this, but let’s face it, if your healthcare premium increases by 15% and that wipes out your 5% salary increase, there’s something terribly wrong with this picture.
Kimmitt
Check out the graph on the side of the article; a combination of a decrease in “hours worked” and an increase in employee-borne healthcare costs means that while wages are increasing, take-home pay is decreasing, overall.
David Perron
I hadn’t bothered to fight my way past the NYT registry page. I think I see what you’re getting at; wages are still declining slightly (without any increases in healthcare costs; was that a red herring?) unless you factor in tax cut effects. And then, the tax cut is responsible for the boost in take-home, not the economy.
Have I gotten close to the right answer?
Kimmitt
Essentially. And unless the cut engenders economic growth which would not have taken place without it (which seems unlikely at this time), we’re just shifting consumption from our kids (or our ten-years-older selves) to our present selves, which isn’t precisely responsible governance.