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Real wages in Republican America and the "golden era"

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Back in late 2004 when I tried to find the silver lining to the pathetic showing by the Democrats, I used to think that at least Bush and the GOP would have no excuses when things went south. With such complete control in DC, the GOP may try to wiggle out of ownership and the Democrats often let them get away with it, but the reality is that the GOP owns the government in Washington.

This story about real wages and the sorry state of the American working class is coming at a very interesting time since the election is just around the corner. There is nobody out there to blame for this one because the current business model in the US, where the select few profit while most don't, has been the result of years of GOP assistance. The American public may have been fooled for a while, but I'm guessing people have had enough and want some balance once again.

With the economy beginning to slow, the current expansion has a chance to become the first sustained period of economic growth since World War II that fails to offer a prolonged increase in real wages for most workers.

That situation is adding to fears among Republicans that the economy will hurt vulnerable incumbents in this year in midterm elections even though overall growth has been healthy for much of the last five years.

The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity - the amount that an average worker produces in an hour and the basic wellspring of a nation's living standards - has risen steadily over the same period.

As a result, wages and salaries now make up the lowest share of the nation's gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960's. UBS, the investment bank, recently described the current period as the golden era of profitability.

Until the last year, stagnating wages were somewhat offset by the rising value of benefits, especially health insurance, which caused overall compensation for most Americans to continue increasing. Since last summer, however, the value of workers benefits has also failed to keep pace with inflation, according to government data.

Oh what a golden era...for the select few.

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