Anxious middle: why ordinary Americans have missed out on the benefits of growth
Jack Drake understands better than most Americans how strongly the US economy has performed over recent years. His job with a media company in Atlanta involves transcribing conference calls hosted by public companies to deliver financial information to analysts and investors.
"Almost every day, I listen to chief executives explaining how well their companies are doing," he says.
But Mr Drake, 42, complains that the soaring corporate profits and robust economic growth he helps document are not reflected in his own financial circumstances. His $47,000 (￡24,650, �36,850) annual salary has barely moved for five years. "Healthcare costs are up. Energy is up. But my income is standing still."
Mr Drake is among millions of educated middle-class Americans seeing their pay stagnate and blaming that on technology and globalisation. "It would be hard to outsource my job because there is so much specialist knowledge and business jargon involved," he says. "But it is used as an unspoken threat to keep wages down."
Mr Drake plans to vote Democrat in next week's congressional election. But he has little faith in either party to protect the economic interests of ordinary Americans. "I want the Republicans out but I don't see the Democrats coming up with any good ideas," he says.
The experience of people like Mr Drake helps explain why the Republican party is not getting the political credit that policymakers in the administration of President George W. Bush think it deserves for the state of the US economy. At a time when the party is already under siege over Iraq, failure to win credit for economic growth could prove costly.
The nub of the problem for the Republicans is this: since 2000 there has been a striking disparity between growth in productivity and gross domestic product on the one hand and growth in wages for the average American worker on the other. Economists call this phenomenon median wage stagnation.
Median measures give the best picture of what is happening to the middle class because, unlike mean or average wages, median wages are not pulled upwards by rapid gains at the top. As the joke goes: Bill Gates walks into a bar and, on average, everyone there becomes a millionaire. But the median does not change.
Between 2000 and 2005, the US economy grew by 12 per cent in real terms and productivity, measured by output per hour worked in the business sector, rose 17 per cent. Over the same period, the median hourly wage - the wage the average American takes home - rose only 3 per cent in real (inflation-adjusted) terms. That compares with a 12 per cent gain in the previous five years. Real median family income fell every year from 2000 to 2004. It increased last year but is still lower than it was in 2000.
Jared Bernstein, an official in Bill Clinton's administration and now at the Economic Policy Institute, says the gap between productivity and median wage growth "is the most significant economic challenge of the day". He adds: "Workers have a right to be concerned about the large and growing gap between productivity growth and their pay cheques. They are working harder and smarter, baking a bigger pie more efficiently, but ending up with smaller slices."
Median wage stagnation is unlikely to be the only reason the Republicans are not getting credit for strong economic growth - angst over Iraq is almost certainly poisoning voters' views on a wide range of unrelated subjects. But it is fair to say that the Republicans would be in a stronger position if the average worker's pay had better kept pace with overall economic growth since Mr Bush came to power.
In his first speech as Treasury secretary, Hank Paulson admitted that median wage stagnation was a problem, saying that "amid this country's strong economic expansion, many Americans simply are not feeling the benefits". Ben Bernanke, chairman of the Federal Reserve, has also aired worries about wage and income trends. He told senators in July that "inequality is potentially a concern for the US economy . . . to the extent that incomes and wealth are spreading apart, I think that is not a good trend."
But while the basic facts are undeniable, there is heated debate as to whether there is anything unusual about the recent period of median wage stagnation - and whether it is explained by different policies pursued by Democrat and Republican administrations or by economic trends and cycles that politicians can do little to correct.
Gene Sperling, a former chairman of the Clinton council of economic advisers who is now at the Council for Foreign Relations, draws a pointed contrast between the Bush years and the later Clinton years. "From 1995 to 2000, as America became more productive, typical workers, even low-income workers, were sharing in the wage gains," he says. "Over the last five years, there has been the continuation of productivity growth but with a historically small share of the gains going to typical workers."
Republicans see this comparison as fundamentally unfair. Ed Lazear, current chairman of the Bush council of economic advisers, says it is common for productivity and real wages to diverge in the first half of a business cycle. "Wage growth sometimes lags productivity growth, especially coming out of recessions," he says. Then, as the cycle matures, "real wages begin to catch up with productivity".
What is different this time, he says, is that unforeseen increases in the price of oil from 2003 onwards robbed workers of what would otherwise have been decent real wage gains, based on the expected rate of inflation.
There is undoubtedly some truth in this but it is not the whole story. To see why real wages for the average worker are not keeping up with productivity, it is necessary to break the gap down into component factors.
One partial explanation for the gap between productivity and median real wages is that total compensation - including non-cash benefits - has grown faster than wages, in part due to rapid increases in health insurance premiums. "Anything that just looks at cash wages is incomplete," says Greg Mankiw, a Harvard professor and former chairman of the Bush council of economic advisers. "On the other hand, no question there is increasing inequality between high and median income people - no adjusting for compensation would change that."
Unfortunately, there is no good and timely measure of median total compensation that includes all these non-cash benefits. At the mean average level, hourly compensation has grown steadily since 2001, but still much less than productivity.
Another partial explanation is that prices of consumer goods have risen faster than those of domestically produced goods in general, so a given increase in output productivity buys fewer additional consumer goods.
Mr Bernstein and Larry Mishel, also at EPI, estimate that these two factors account for a little less than half of the total divergence between productivity and real median wages since 2000. The other half reflects growing inequality among wage earners and a shift in the share of national income captured by labour and capital.
In the 1980s, the story of wage inequality in the US was one of the poor falling further and further behind the middle class, while the rich pulled ahead. Now the poor are keeping pace with the middle, but the rich keep pulling away.
Thomas Piketty, a professor at Paris Jourdan Sciences Economique, and Em-manuel Saez, a professor at Berkeley, estimate that the share of total income captured by the top hundredth in the US doubled from8 per cent in 1980 to 16 per cent in 2004. In fact, the gap between the middle and upper income brackets grew more rapidly in the late 1990s under Mr Clinton than it has subsequently under Mr Bush. The difference is that in the late 1990s the rising tide in the labour market was so strong that it lifted all boats, even if some rose a lot higher than others. In the early 2000s some remained stranded while others went up.
Mr Mankiw says: "Nothing special happened since 2000. Increasing inequality happened some time in the 1970s." The late 1990s was the "exceptional period" - with real wage gains across the income spectrum - but only because the economy was "going through a bubble". This "was not something that could be sustained".
Democrats, however, claim labour market gains under Mr Clinton were largely the result of sound economic policies, including the elimination of the budget deficit, which encouraged business to hire.
A fundamental feature of the late 1990s economy was a dramatic shift in the share of national income going to labour, which surged from 56.7 per cent in 1997 to 58.2 per cent in 2000 - and then fell dramatically from 2001 onwards, reaching a low of 56.8 per cent in 2005. Meanwhile, profits soared, reaching 13.6 per cent of GDP in the second quarter of 2006 - close to an all-time high.
Mr Lazear argues that the US is today where it was in 1997 - when the labour/capital share began to swing back towards workers. Nominal wage growth has accelerated this year - certainly at the average level, probably at the median too - with an extra boost to real incomes recently from falling energy prices. "We have seen the turnround," he says.
Others are not so sure, particularly since unemployment is widely expected to rise from its low of 4.6 per cent, reducing pressure on companies to compete for workers with pay rises. "I hope Lazear is right," says David Autor, an associate professor at MIT. "I don't think it is at all normal five years out of recession for there to be this divergence between productivity and real wage growth."
It is possible that over the next few years labour as a whole will capture a bigger share of income from corporate profits. It is also possible that it will not, since globalisation may have permanently changed the relative bargaining power of capital and labour in the industrialised world.
But even if average wages start to catch up with productivity gains, median wages may grow at best sluggishly, reflecting an increasing gap between the average American and the high-salaried elite. Glenn Hubbard, dean of Columbia business school and another former chairman of the Bush council of economic advisers, says most explanations for this revolve around the "familiar culprits - globalisation and technology".
Increased global competition has eaten away the economic "rents", or excess returns, earned by US manufacturing workers, he argues. Meanwhile, the growth of global corporations and markets allows "superstars" - whether in business, finance, sports, law or entertainment - to apply their talents across a much bigger base, increasing the economic return to their skills.
The most potent force, though, may be technology rather than globalisation - though the two are inextricably linked. Larry Katz, a Harvard professor who worked in the Clinton administration, says information technology is essentially "complementary to workers at the top, a substitute for workers in the middle" and of minimal relevance to those at the bottom of the income scale.
"The question is: what's your remedy?" says Mr Hubbard. Most economists favour increased investment in education; Mr Hubbard thinks the government should fund personal retraining. accounts for workers.
Yet education is likely to be only half a solution, since the big increase in financial rewards to education is at the very top - to MBAs and law or medical degrees - and these are not easily spread through the population. Many pro-Democrat economists favour higher taxes at the top to redistribute the economic gains more widely.
The difficulty that orthodox economists have in coming up with effective ways to spread the benefits of growth opens the door to protectionist populism. This month, median wage stagnation is a problem for the Republicans. Longer term, though, it may prove an even bigger political challenge for the Democrats. This will be the subject of a feature in tomorrow's FT.
经济见涨，钱包不见胀(上)
杰
克?德雷克(Jack Drake)比大多数美国人都更了解，最近几年美国经济的表现有多么强劲。他在亚特兰大一家传媒公司上班，工作内容包括记录上市公司的会议电话，将金融信息传递给分析师和投资者。
他说：“几乎每天，我都能听到首席执行官们解释各自公司运作得多么好。”
但今年42岁的德雷克抱怨称，他帮助记录的持续飙升的公司利润和强劲的经济增长，并没有反映在他自己的财务状况上。他4.7万美元的年薪，5年来几乎一动不动。“医疗费涨了。能源费涨了。但我的收入却停滞不前。”
德雷克是数百万受过良好教育的美国中产阶级一员，他们看着自己的收入停滞不前，并将其归咎于科技和全球化。“很难将我的工作外包，因为其中包含了太多的专业知识和商业术语，”他表示。“但外包被用作压低工资的无言威胁。”
德雷克打算在今天国会选举时投票给民主党。但他不相信两个党派中的任何一个能保护普通美国人的经济利益。他表示：“我希望共和党下台，但我也看不到民主党会想出什么好办法。”
像德雷克这样人的经历有助于解释，共和党为什么没有得到政治赞誉，而布什(Bush)政府的决策者们认为，从美国经济状况看，他们应该得到这种赞誉。当共和党在伊拉克问题上四面楚歌之时，如果连经济增长方面也不能赢得赞誉，那么代价也许是很高昂的。
共和党问题的症结是：自2000年以来，生产率和国内生产总值(GDP)的增长，和普通美国工人的工资增长之间的差异非常显著。经济学家称这种现象为薪资中值停滞(median wage stagnation)。
中值指标为我们提供了一幅中产阶层现状的最好画面，因为与平均薪资不同，薪资中值不会因为最高层的快速收入增长而“拔高”。就像一则笑话所讲的：比尔?盖茨(Bill Gates)走进一家酒吧，平均计算的话，在场的每个人都成为了百万富翁。然而中值不会变。
2000年至2005年，美国实际经济增长率为12%，以企业每小时产出衡量，生产率增长17%。然而，同期（经通胀调整）实际时薪中值――普通美国人得到的税后工资――仅增长3%。而此前5年的增幅高达12%。2000年至2004年，实际家庭收入中值每年都在下降。去年，这个数字有所增加，但仍低于2000年。
比尔?克林顿(Bill Clinton)政府的一位官员、现供职于经济政策协会(Economic Policy Institute)的贾里德?伯恩斯坦(Jared Bernstein)表示，生产率和薪资中值增长之间的差距“是目前最重大的经济挑战”。他补充称：“员工有权关注生产率增幅与工资之间日益拉大的巨大差距。他们正更为卖力并更有智慧地工作，以更高效率烘焙着一块更大的蛋糕，但最终得到的却是更小的一份。”
薪资中值停滞不太可能是共和党未因强劲经济增长而得到赞誉的唯一原因，对伊拉克问题的担心，几乎肯定在影响着投票人对一系列不相关问题的看法。但公平而言，自从布什上台以来，如果普通员工的薪资水平能够更好地跟上整体经济增长的步伐，共和党人将处于更为有利的位置。
在出任美国财政部长的首次演讲中，汉克?保尔森(Hank Paulson)承认，薪资中值停滞确实是个问题，他表示“在美国经济大举扩张之际，许多美国人却完全没有感受到这些好处”。美联储(Fed)主席本?伯南克(Ben Bernanke)也表达了对薪资和收入趋势的担忧。他在7月份对参议员表示：“不平等是美国经济的潜在担忧……这导致收入和财富向两极分化，我认为这不是一个好趋势。”
然而，尽管基本事实不可否认，但人们在激烈辩论的是，最近出现的薪资中值停滞期，是否存在不寻常之处，再者，能够解释这种现象的，究竟是民主党和共和党政府实行的不同政策，还是政客们无法改变的经济趋势和周期？
克林顿经济顾问委员会前任主席、现供职于外交事务委员会(Council on Foreign Relations)的吉恩?斯珀林(Gene Sperling)对布什政府和克林顿政府执政后期进行了尖锐对比。“1995年至2000年，美国的生产率开始提高，普通员工，甚至低收入员工分享了薪资上涨所带来的好处，”他表示。“过去5年，生产率继续增长，但普通工人从中分享到的比例却处于历史最低水平。”
共和党认为，从根本上说，这种比较是不公平的。布什政府经济顾问委员会现任主席埃德?拉奇尔(Ed Lazear)表示，在经济周期前半段，生产率和实际薪资脱节是很平常的。他表示，“薪资增幅有时落后于生产率增幅，特别是在走出经济衰退时。”之后，随着周期的发展，“实际薪资开始赶上生产率。”
他表示，这次的不同之处在于，自从2003年以来未预见到的油价攀升，剥夺了员工本来能获得的实际薪资大幅上涨，这种上涨基于预期的通胀率。
这确实有些道理，但并非问题的全部。要弄清普通员工实际薪资为何没有跟上生产率，我们有必要将二者间的差距，细分成若干构成因素。
（待续）
