from Bloomberg- Inflation Ravages U.S. Wages, Fueling Angst at Bush's Economy June 20 (Bloomberg) -- Americans' wage gains are evaporating as inflation accelerates, helping explain why confidence in the economy isn't soaring along with job growth. Weekly wages adjusted for inflation fell 0.7 percent last month and are down 0.2 percent over the past year, according to a report last week by the Labor Department. Pay has been flat or declined in more than half of the 65 months since January 2001, when President George W. Bush took office. Those numbers contrast with other government reports showing incomes for all workers staying a step ahead of prices, highlighting a growing disparity between the wealthy and those of more modest means. The difference may explain why the economy's performance isn't translating into greater popularity for Bush, whose poll ratings hover near record lows. ``People at the high end of the income scale are doing a lot better than people in the middle or low end, but there are a lot more people in the middle and low end,'' said Douglas Lee, president of Economics From Washington, a Potomac, Maryland, consulting firm. ``For those people, inflation is eating into their income gains.'' Adjusted for inflation, the median income for the top 10 percent of U.S. households rose 2.3 percent between 2001 and 2004, covering much of Bush's first term in office, according to the Federal Reserve's Survey of Consumer Finances, issued in February. For the other 90 percent of households -- which earned less than $184,800 in 2004 -- the median fell 0.5 percent over the same period. Obscuring the Decline The increase in income among the top 10 percent was enough to pull the median income for all families up by 1.6 percent, the Fed report shows, obscuring the decline among the other households. From 1998 to 2001, median family income adjusted for inflation rose 9.5 percent for all households. While the top 10 percent also led the gains then, all income levels showed increases that exceeded 10 percent. The income disparity is one reason Americans are giving Bush little political credit for the economy's performance despite the creation of 3.7 million new jobs in the last two years and an unemployment rate that dropped to 4.6 percent last month, the lowest since July 2001. The rate has declined a half percentage point over the last 12 months as the economy grew 3.6 percent, a half percentage point faster than the average over the last two decades. Sixty percent of 1,003 adults surveyed in a June 5-7 Associated Press-Ipsos poll said they disapproved of Bush's handling of the economy, while 38 percent approved. Seventy percent said the country was on the wrong track. Insecure About the Future ``Our job is not simply to tell the American people how good the economy is, but to try to tap into the reasons they don't feel secure about their future,'' Vin Weber, a former Republican congressman and now a lobbyist who consults with the White House, said in an interview. The University of Michigan's consumer sentiment index registered a preliminary reading of 82.4 in June, according to a report last week. While up from May, the figure is below the index's average of 88.1 since monthly reports began in 1978. It reached a record of 112 in January 2000. Few Americans hold out the hope that incomes will improve in coming months. The share of consumers expecting their incomes to rise in the next six months dropped to 16.6 percent in May from 18 percent a month earlier, according to a survey by the Conference Board, a New York research group. The reading is approaching the 15.3 percent who looked forward to income gains in March 1993, the lowest since records began in 1967. ``The most important economic indicator is what is going into our pocket and how much and how fast it's going right back out,'' said Ken Goldstein, an economist at the Conference Board in New York. ``In terms of incomes, consumers feel like they've been in a slump and haven't come out.''
Basic Republican phenomenon. Tax cuts for rich, rise in poverty, enrich oil and defense at taxpayers expense, budget deficits, etc... Its was Jesus would've supported.