Many economists, politicians and pundits assert that
median wages have stagnated since the 1970s. That's a call for government to do
something about it. But before we look at the error in their assertion, let's
work through an example that might shed a bit of light on the issue.
Suppose that you paid me a straight $20 an hour in 2004. Ten years later, I'm still earning $20 an hour, but in addition, now I'm receiving job perks such as health insurance, an employer-matched 401(k) plan, paid holidays and vacation, etc. Would it be correct to say that my wages have stagnated and I'm no better off a decade later? I'm guessing that the average person would say, "No, Williams, your wages haven't stagnated. You forgot to include your non-monetary wages." My colleagues Donald Boudreaux and Liya Palagashvili discuss some of this in their recent Wall Street Journal op-ed, "The Myth of the Great Wages 'Decoupling'"....... "First, the value of fringe benefits — such as health insurance and pension contributions — is often excluded from calculations of worker pay......."The claim that ordinary Americans are stagnating economically while only 'the rich' are gaining is also incorrect. True enough, membership in the middle class seems to be declining — but this is because more American households are moving up." ........Yes, the U.S. economy is in the doldrums, thanks to a variety of factors, most significantly the effect of growth-deadening government policies like Obamacare and the Dodd-Frank Act - See more at:
Suppose that you paid me a straight $20 an hour in 2004. Ten years later, I'm still earning $20 an hour, but in addition, now I'm receiving job perks such as health insurance, an employer-matched 401(k) plan, paid holidays and vacation, etc. Would it be correct to say that my wages have stagnated and I'm no better off a decade later? I'm guessing that the average person would say, "No, Williams, your wages haven't stagnated. You forgot to include your non-monetary wages." My colleagues Donald Boudreaux and Liya Palagashvili discuss some of this in their recent Wall Street Journal op-ed, "The Myth of the Great Wages 'Decoupling'"....... "First, the value of fringe benefits — such as health insurance and pension contributions — is often excluded from calculations of worker pay......."The claim that ordinary Americans are stagnating economically while only 'the rich' are gaining is also incorrect. True enough, membership in the middle class seems to be declining — but this is because more American households are moving up." ........Yes, the U.S. economy is in the doldrums, thanks to a variety of factors, most significantly the effect of growth-deadening government policies like Obamacare and the Dodd-Frank Act - See more at:
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