The New York Times carried a very important news story today asits front-page lead. It revealed in devastating detail how Americanworkers have lost ground on wage incomes during thisso-called economic recovery. Only it's not news really. You might say,it represents an elaborate "correction" on Page One. Long overdue, butwelcomed and I think of great significance.
Until now, the Times, like most leading newspapers, has stuckwith the orthodox economist's view of what has occurred during thelopsided recovery engineered by George W. Bush and Alan Greenspan atthe Federal Reserve. Profits booming, productivity improving smartly,robust GDP growth. What's not to like?
Times editors did not seem to notice the dark side of thisstory--the negative impact on the wages of Americans in non-supervisoryjobs (that's 82 percent of the workforce). Their wages stagnated andeven declined in real terms, discounted for inflation. This helpsexplain why typical Americans did not join the cheering--they arelosing ground and borrowing more to keep afloat. Last year for thefirst time since 1933, the family balance sheet went negative, that is,negative savings.
I congratulate the two skillful reporters who produced the article--Steven Greenhouse, who covers labor, and David Leonhardt, who coverseconomics--and congratulate the Times for giving it the playthese facts deserve.
But I am left with this question: Why now? These facts have beenvisible for at least three or four years. I have written variations onthe same theme numerous times in The Nation [see for example "The One-EyedKing," on the actual impact of Greenspan's long reign at the Fed.The Economic Policy Institute,probably the most respected think tank with a liberal-laborperspective, has expertly described what going on again and again. Sohave other voices.
What changed at the Times? I think we are witnessing animportant "course correction" in the approved perspective shared andsanctioned among governing elites. "Correct thinking" is changing amongthe influentials. Nothing confirms this so much as the New YorkTimes changing its view of things.
The facts have been quite stark for years, but to recognize what washappening to wages would open a taboo subject--globalization'sdevastating impact on America's broad middle class. If elitesacknowledged that connection, not to mention harsh disloyalties toworkers practiced by the leading US corporations, the policy thinkersand politicians might have to address the larger political question:What, if anything, does the government intend to do to reverse thislong-running trend of deterioration?
The mainstream press, as I have written more than once, mainly takesits cues from the top-approved authorities and orthodox experts. Thisseason, reporters and editors could observe that several heavyweightinfluentials are beginning to acknowledge the wage reality, albeit in acautious, euphemistic manner.
FormerTreasury Secretary Robert Rubin of Citigroup, leading correctthinker for Democrats, launched the Hamilton Project to examine swelling inequality and relatedquestions. Early this month, Bush's new Treasury secretary HenryPaulsen startled the press by also acknowledging the seriousness of thewage deterioration. Even the new Fed chairman Ben Bernanke took a swing at the problem last week.
In short, it's now okay to for the mainstream to talk about thesubject. They won't be called heretics or protectionists orbackward-thinking Luddites. This is genuine progress. We are not thereyet, but the country is at least creeping slowly toward an honestdebate about America's role in the global trading system.
If my analysis is correct, we may soon even see Times columnistThomas Friedman write about the broad deterioration of US wages. He isthe preeminent cheerleader for the global system that exists, but Ihave never seen him address the wage question frontally beyond tellingworkers they need to get better educated. I can't wait to hear what hehas to say.