Wage-Price MEGO

MEGO -- My Eyes Glaze Over

   When prices rise 5 percent and wages rise 1 percent, guess what? You're losing money.
   That's not hard to figure, and you don't need to be an economist or a math genius to figure it out. Like much that's at the root of economics, it's common sense.
   Academic gobbledygook and political palaver aside, that's what's happening to workers in America, and while many experts point to broad figures and statistics to say things are improving -- and technically, they're right -- on a household level, people have a different opinion. As part of a larger picture, that's what enables some aspiring politicians to gain support.
   It was Mark Twain who said, "Figures don't lie, but liars do figure." And through the use of selectively picking out data points to "prove" their message, candidates can enhance their pitch by citing even government statistics.
   So is the American economy doing better, or not?
   Point to some sets of numbers, and the answer is yes, the national economy is doing better. Not improving as well as it might, but it has been doing better.
   At the same time, figures like those fresh from the Bureau of Labor Statistics show that even though "real average hourly earnings for all employees" increased in September by 1 percent from a year earlier, that boost was overwhelmed by 1.5 percent rise in prices overall, led by a nearly 6 percent jump in gasoline prices. And the shelter part of the Consumer Price Index rose by 0.4 percent in September, its largest increase since May.
   Overall, the CPI for all items rose 1.5 percent for the 12 months ending in September, its largest year-to-year jump since October 2014. Set beside the 12-month rise in wages of 1.0 percent, it's clear that prices rose faster than wages.
   Moreover, the wage level from August to September of this year actually faded by 0.1 percent, according to the BLS report, while prices over the same period increased by 0.3 percent.
   Bottom line: Prices are rising faster than wage income for American workers.
   Watch for political candidates to pick various numbers to support their own plan, and to demonize the opposition's proposals on how to help workers.
   Whether all this will help voters decide their choice of candidates is an open question.
   The only good news might be that retirees hoping for a cost-of living increase in their pension checks would see a boost, which they missed last year because statistical levels were flat from the year before.
   Assuming, of course, Congress doesn't get in the way, stumbling over themselves in their zeal to discredit the Administration, somehow finding a way to blame the President for not helping seniors.