ou probably didn't see this in the newspapers, but real wages rose at an incredible 14.8% annual rate over the last three months. The basic story is straightforward. While nominal wages have continued to grow at a modest 3.2% annual rate, prices have plummeted, hugely increasing the value of the paycheques of those workers lucky enough to still have a job. This pattern is not likely to continue. Price declines will almost certainly slow, and rising unemployment will dampen nominal wage growth, but the nature of this wage gain presents an extremely important economics lesson. Put simply, real wages rose because house prices and stock prices crashed. The collapse of the housing bubble destroyed more than $6tn of housing bubble wealth, while the plunge in the stock market eliminated more than $8tn in stock wealth. full: http://www.guardian.co.uk/commentisfree/cifamerica/2008/dec/22/us-economy-prices-goods Yeah but, no but... Yikes for those wage slaves in "debt-bondage" ? the repayments of $ borrowed (plus interest) is supposed to be recovered by selling the house at a higher price than paid for it. But some house prices have already levelled (not increased) or fallen; so the percentage of income spent on housing goes higher. If a dual income some stress can be shared but sole income households... This probably negates the "real wages increase"... Rents have NOT levelled or dropped - of course - so those renting have to cope with landlords squeezing more... PRETTY VACANT ? Howabout this curious tale told to me at a party recently was that due to water restrictions there are now "water police" who do random checks on household useage in this case in Sunshine/western suburbs of Melbourne. These inspectors have a measure which if below that level they presume the house or flat or factory etc to be empty. Rumour (from a relative of one of these inspectors) is that there are many more places "empty" than we are told eg."1% vacancy for rental market". Strewth maybe the housing shortage is artificial, a racket proclaiming scarcity to keep the inflated rents etc and competition amongst homeless intense/desperate. But I am just cynical bitter and twisted I guess ? Have noticed more family folks in our area this holiday season have not gone overseas, interstate or even for regional break stayed home with kids. (Despite "one tank full" holidays promotion to visit regional Victoria) Their clever kids on long term working holidays overseas have returned - not only for holidays here with family - to stay as their jobs went in Americas and Europe Next generation are pregnant, having families soon (despite or because of everyday hyped world economic and environmental crises ? ) The media magnified great retail therapy boom of new white goods, huge tv screens, new cars, motor bikes etc is not as big as last year, same overseas so the disposable income of many has shrunk. Above is "generalised observations" and "anecdotal" may be statistically different in hindsight but seems like the house of credit cards is a shaking and not many are bringing home the bacon and other metaphors for "poverty creep" amongst the wAGEslaves. Those on social (in)security are expected to say "farewell-welfare" eg disability pensioners & single moms have to do more hours per week to get same rough deal. Civil conscription really. In Europe and Americas and here in Oz the only stable employer is the military (government financed) so a drift by younger proles towards "job security" there as always it is economic conscription. And not really a safe job eh; getting out of the (jobless) frypan into the (military) fire (zone) so to speak. 'Occupational hazard' of getting maimed or killed eg in Afghanistan loomed larger this week with 8th Oz soldier killed there. Not as big and fast a sausage machine as the US casualties but sobering after the glamorous adventure adverts aimed at youths showing high-tech-game paid to have fun-holiday media spin . 2009 is shaping up to be more bloody crazed than 2008: Gaza-Palestine, Tamil Nadu-Sri Lanka, Darfur-Sudan, Iraq-Afghanistan, Congo, Burma, West Papua etc all competing for our collective compassion fatigued interest. Then there is climate-change fuelled extreme weather to survive for many on the cutting edge of the economic "downturn" as food prices go up after droughts and floods. Interesting times we seem to be cursed to entering, even the parasite rich who fly up to the International Space Station return to find its the same old place ! For a view from the global south check out the TV series City of Men about youths growing up in the favela/slums in Brasil. Each episode focusses on different aspects of their lives eg school, gangs, work. Well edited and written to glimpse community organising at times. V No jobs on a dead planet - Earth Worker Live in harmony with the earth - IWW |
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Industrial Workers of the WorldOne Big Union for All |
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Ah yes, not all prices have
Ah yes, not all prices have stayed the same or gone down. But overall, there has been deflation since the current economic slump raised its head on the stock markets and in the banks and speculators' pockets and deflated the price of their wealth.
My rent has stayed stable for two years now. My income has increased because of a cola attached to social security and yet my saved for pension, my super has declined by 50%. It's complicated.
But Dean is right about the prices of commodities in general since the crash. Just like the last Depression, if you've still got a place to make money and if you didn't invest in the markets before the crash, you've experience a relative increase in real wages in relation to the prices of other commodities like stocks and bonds and real estate i.e. you can buy them more cheaply now than before and the net effect is a real rise in your wages.
"...without the making of theories, I am convinced there would be no observation." Charles Darwin, 1860 http://www.iww.org.au/