Tuesday, February 08, 2005

GDP rose, but inflation-adjusted wages fell

American Prospect Online - ViewWeb

GDP up 4.4%, inflation-adjusted wages on average down 0.2%*. So many people are still out of work and competing for jobs that employers can pay less, despite making more.

This is a perfect example of why trickle-down economics simply does not work.

  1. By and large, employers hire new employees when there is a demand for new employees, not when there is extra money sitting around
  2. By and large, employers pay employees what they can get away with, not what they can afford

Two very simple concepts to keep in mind when listening to an voodoo economist lie, or watching the devastating effects of them.

* Of course wages of the 95th percentile actually rose 1%, but who's counting eh?


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