Quote of note:
"You have a lower half of the wage distribution in the United States that has not experienced any income gains for a long time now," said Barry P. Bosworth, an economist at the liberal-leaning Brookings Institution. "But from a macro perspective this doesn't have much impact."
Even as the average worker's wages are stuck in neutral, corporate profits, professionals' incomes, gains from investments and executive compensation - the kind that frequently comes in the form of stock options - are all surging, supporting healthy gains in the economy.
How Long Can Workers Tread Water?
By EDUARDO PORTER
James Barnes, a $350-a-week guard at an office building on Madison Avenue in Midtown Manhattan, has not had a raise in years. But his income just jumped sharply: Three months ago, he took on a newspaper delivery route from 3 a.m. to 7 a.m., which pulls in an extra $235 a week.
Mr. Barnes fits snugly into the pattern of America's current economic expansion. The wages of typical workers are treading water, growing roughly at the same rate that inflation eats into their buying power. Last week, the Labor Department reported that average wages for production and nonsupervisory workers in the private sector, about 75 percent of the labor force, reached $16.06 an hour in June, just 2.7 percent above the level a year ago.
Yet in terms of the aggregate effect on the total economy, that statistic does not seem to matter much. Workers' wages may be barely keeping up, but Americans' average incomes are growing briskly - in part, because of growth in the overall number of jobs, including Mr. Barnes's extra one. But it also reflects other forms of income, flowing mostly to the more affluent, which are fueling the consumer spending that has provided a crucial pillar of support for economic growth over the last three years.
"You have a lower half of the wage distribution in the United States that has not experienced any income gains for a long time now," said Barry P. Bosworth, an economist at the liberal-leaning Brookings Institution. "But from a macro perspective this doesn't have much impact."
Even as the average worker's wages are stuck in neutral, corporate profits, professionals' incomes, gains from investments and executive compensation - the kind that frequently comes in the form of stock options - are all surging, supporting healthy gains in the economy.
"Profit has roughly doubled in the last year on revenue growth of about 40 percent," said Alex Mann, co-owner of Clicktime.com, a company in San Francisco that sells time-sheet applications over the Internet. "The top-line growth was very satisfying. There's been very strong growth in the amount left for compensation of the owners and for profits."
