>I've been seeing headlines about this over the last few days, but
>today's big one was from California: an 'extra' $1.5B of tax revenue
>showed up this month than they were expecting (sort of a drop in the
>bucket, since Arnold's recent budget was $125B, but still), and
>total revenues for the month of April (with a few days left) might
>be an all-time high.
It's happening at a lot of states, and the likely causes are bonuses and higher managerial salaries. Growth in wage and salary income in the NIPAs is running far ahead of the proxy for production worker pay (employment * weekly wages * 52). Though conventional measures of "wage inflation" are quite subdued, these other forms of compensation are suggesting shortages of skilled labor.
Doug