Less progress than meets the eye
AS the United States lurches through budget season via tax reform on the way to congressional elections this fall, ``Been Down So Long It Looks Like Up to Me'' may turn out to be the theme song for the economy. After a little number-crunching with some economists at the US Bureau of Labor Statistics, we've concluded that, when it comes to the contents of their pay envelopes, millions of American families have lost some ground over the past seven years.
A series of BLS figures, the ``median usual weekly earnings of families,'' which has been reported quarterly since 1979, shows white families' wage and salary earnings up some 48 percent in seven years, and black families' up some 45 percent.
Sounds good? Not when you realize that inflation, as measured by the consumer price index, was some 58 percent for the period.
Even two-paycheck families, while doing relatively better than single-earner families, lost ground during this period.
As long as there is any inflation at all, you really do have to keep running faster and faster just to stay in the same place. If you're not keeping up with inflation, you're losing ground.
The BLS figures suggest that middle America, or at least median America, has lost ground over the past seven years, even allowing for the much-touted economic recovery, dating from November 1982.
Then why do we keep reading polls showing that people feel good about their economic situation? Maybe we have been down so long it feels like up.
In fairness, there are a number of mitigating factors to consider. For one thing, people pay attention to where they are going, and not just where they are -- and sensibly so. We have had a considerable period of low inflation. A relatively small pay increase therefore really means something nowadays; it didn't in 1979.
Interest rates have fallen, and the tax cuts of the early 1980s no doubt made many people feel better about their situation. The bull market on Wall Street has increased the paper wealth, at least, of many. The universal IRA has made lots of ``little people'' into investors.
Somehow we suspect that these groups -- investors, and those affluent enough to have felt the tax cuts -- are overrepresented in the polls on economic well-being, while the poor guy having to make wage concessions to keep his job in the tire factory is more or less ignored.
Statistics can show only so much, and it should be noted that these family earnings figures exclude many types of income -- investment income and income from self-employment, professional and otherwise. It also excludes the income of those in business for themselves, and one of the notable characteristics of the past few years has been the huge increases in numbers of people going into business for themselves -- up and down the economic scale.
Still, a cleareyed look at the numbers can be a helpful assessment of progress. In this case, for many Americans there has been less progress than meets the eye.