(although not the absolute levels of earnings)
The news wasn't all good, though, since (according to the Journal) "despite the latest gains, many workers are still paid less, adjusted for inflation, than they were a decade ago. And it remains unclear whether the latest gains will last or how broadly they will continue to flow. According to White House calculations, wages for adult male workers at the bottom 10% of the pay scale actually fell 1.6% to $5.99 in 1998 after rising in 1997."
The article also makes an interesting claim about immigrant labor: "Another factor that economists said has held wages down in the past decade has been a surge in immigration. The White House report suggested that immigrants are no longer dragging the wage scale down. Since 1995, wages for Mexican-born and Central American-born immigrants have risen -- 6.8% for men and 3.8% for women."
It seems likely to me that wage reports for immigrants included in the data base of the Council of Economic Advisers would only include legal immigrants--the undocumented would not be be figured in, surely? (I haven't been able to find the report itself at the White House website yet so I could be wrong.)
Anyone have any thoughts about this?
K. Mickey (the WSJ article is below, less a couple of charts) ------------------------------------------------------------------------
Low-Wage and Minority Workers Made Strong Pay Gains in 1998
By JACOB M. SCHLESINGER Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- Low-wage workers and minorities enjoyed healthy pay gains last year, further making up for the losses those groups have suffered in the past decade.
Thanks to a tight labor market, hourly wages for adults in the bottom 20% of the pay scale rose 2.4%, after inflation, to $7.77, according to the White House Council of Economic Advisers. That was the second consecutive annual gain, and put pay for that group at the highest level since the peak of the last expansion in 1989. For the lowest-paid women, wages also rose 2.4% over 1997, and were the highest since 1979.
Biggest Gains for Black Women
For all adult African-American men, meanwhile, wages rose by 4% last year, outpacing the 3.1% gain for whites. The gap between the two groups remains substantial-blacks earned $10.57 an hour, compared with $14.41 for whites -- but the difference narrowed slightly. African-American women saw even faster gains, with wages rising 5.2% to $9.35; wages for white women rose 3.7% to $10.59. Wages for Hispanic men rose 3.1% to $9.11. Wages for Hispanic women rose 4.9% to $7.99.
The data appear to suggest that one of the big clouds hanging over the 1990s boom -- the relatively meager benefits flowing to traditionally disadvantaged groups -- appears to be dissipating. "Groups whose economic status has not improved in the past decades are now experiencing real progress," boasted the annual Economic Report of the President, which was released Thursday.
While it's not surprising that the White House would trumpet such a trend, the assertion has been supported by private economists. The liberal Economic Policy Institute -- which has played a major role spotlighting the plight of low-income workers and minorities through the 1990s -- released a separate report earlier this week that reached many of the same conclusions.
"New data for 1998 reveal continued good news for the American work force," the report from the Washington think tank began. "Wage growth has been particularly strong at the bottom of the wage scale," the EPI said.
Yet despite the latest gains, many workers are still paid less, adjusted for inflation, than they were a decade ago. And it remains unclear whether the latest gains will last or how broadly they will continue to flow. According to White House calculations, wages for adult male workers at the bottom 10% of the pay scale actually fell 1.6% to $5.99 in 1998 after rising in 1997.
Lowest Unemployment Since '69
The biggest reason for the latest broad-based wage gains is the ever- tightening labor market. The unemployment rate last year was 4.5%, the lowest rate since 1969, while the jobless rate for minorities and for lower-educated workers has plunged sharply. A big factor behind the rising income inequality in the past two decades has been the rising pay premium employers have placed on workers with more education. But with labor shortages, even high-school dropouts have found jobs more easily, and have been able to demand higher pay.
"If you run a strong economy long enough, it really does get down to the bottom, and it gets to the bottom with a vengeance," said Rebecca Blank, a member of the White House economic council. "We've really seen that in the last year."
Recent policies have also contributed to those gains. Most important, the Federal Reserve has refrained from raising interest rates, even as unemployment has fallen below levels traditionally considered inflationary. "Working families have clearly benefited" from the central bank's new flexibility, the EPI said, "with no evidence at all of inflationary pressure."
Both the EPI and the Council of Economic Advisers also gave credit to recent boosts in the minimum wage, and both are pushing for more increases this year. Republicans have rejected that assertion.
Another factor that economists said has held wages down in the past decade has been a surge in immigration. The White House report suggested that immigrants are no longer dragging the wage scale down. Since 1995, wages for Mexican-born and Central American-born immigrants have risen -- 6.8% for men and 3.8% for women.