More on the Stagnating Wage Myth
A while back, when I discussed the stagnating wage myth, I observed that folks spreading this meme were careful to show figures only for cash wages, and not for total compensation. In the period from 2000-2006, which is the typical period critics focus on (in part because it implies blame on the Bush administration, and in part because it lets them measure economic peak to trough) there has been a substantial shift in compensation mix from cash to non-cash benefits, including health care and paid time off. Ignoring these components is particularly disingenuous given that many of these same critics have been long-time supporters of more paid time off and better company-funded health care.
As an example, this data (courtesy of Mark Perry) on the Big 3 automakers contracts is telling. In 2000 (table page 3) it shows cash wages per hour worked at $22.71 and total comp at $43.57. In 2006, the most recent year of data, it shows cash wages per hour worked at $29.15 and total comp at $75.86. So, while cash wages per hour have increased about 4.25% compounded each year, total compensation has increased more than twice as fast, at 9.7% a year. That latter increase is due both to a rapid rise in health care expenditures for employees as well as an increase in paid day off to 34.5 a year. (by the way, if you are wondering why the UAW is fighting so hard for a government bailout, look no further than jobs with $75.86 an hour total comp. and seven weeks a year of paid days off.)
