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America's Empty Growth Leaves Its Workers Behind |
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Tuesday, 14 November 2006 |
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Last week's drubbing for the Republicans reflected tough times for hard-working American families, according to economists - who point out that average pay in the US has actually declined in real terms over the last five years while a booming stock market has handed windfall gains to the lucky few.
Heather Stewart, economics correspondent The Observer 'I think the economy loomed very large, particularly in areas of the country where there was a disconnection between overall growth and how working families were doing,' says Jared Bernstein of the Economic Policy Institute in Washington. While a wall of cash from fast-growing economies in the Far East has helped to keep interest rates low and pump up asset prices, contributing to bumper bonuses on Wall Street, little of the benefit has trickled down. Wages now make up the lowest proportion of GDP in the US since just after the Second World War. 'In a recent survey, 50 per cent of households said they were just managing to keep up their living standards; 17 per cent said they were falling behind,' says Bernstein. 'That's two-thirds of households holding steady or backsliding. Yet we've got policy elites saying, "Why aren't people giving us credit for the economy?"' As wages stagnate, health insurance and petrol prices have soared, creating what Democrats have described as a 'middle-class squeeze'. |
