Real Wages Decline in First Quarter
- Apr 19, 2012
The U.S. Bureau of Labor Statistics reported on Wednesday that the median weekly earnings of the nation’s 100.8 million full-time wage and salary workers was $769 in the first quarter of 2012. This was 1.9 percent higher than the same quarter a year earlier, which sounds like better than nothing, but in fact it’s worst than nothing, because the Consumer Price Index was up 2.8 percent during the same period.
The $769 figure is just a median, however. Earners in the top 10 percent of all wage earners pulled in a median of $1,858 a week, while the bottom 10 percent earned $360 a week. Moreover, the recession has made the difference between the groups wider. Between mid-2009 and 1Q12, according the BLS, the top 10 percent saw an increase of 7 percent in their wages, while the bottom 10 percent realized an increase of 2.5 percent.
Separately, the private compensation data tracker PayScale Inc. said earlier this month that in the first quarter of 2012, U.S. earnings grew about 0.5 percent quarter-over-quarter and roughly 1.5 percent year-over-year. That uptick, the company said, was made possible by steady if unspectacular U.S. economic growth throughout 2011.
Workers in industries related to energy were among those who did the best during the first quarter, the company noted, due to the increasing price of oil and gasoline during the period. Those industries included mining, energy exploration, and utilities, but also related businesses in places in which the energy sector is strong—parts of Texas, for example, or the Dakotas. All together for workers in mining and energy exploration, the year started with gains of more than 2.5 percent quarter-over-quarter and almost 5 percent growth year-over-year, which was the highest annual growth of any industry tracked by the company.
Those working in other industries fared worse. In some cases, such as food service and hospitality, considerably worse. Wages in the food services and hospitality industry gained no ground in the first quarter. Even more sour news was the fact that this industry experienced the only negative annual wage growth among industries tracked by PayScale, down 0.2 percent year-over-year.
Spanish banks loaded with bad loans
More news from Spain (expect to hear from Spain with some regularity for a while): the Bank of Spain said on Wednesday that the nation’s banks are now holding bum loans on their books to the tune of 8.2 percent in February, the highest level since Oct. 1994. More homeowners and businesses are simply giving up on their loans as the economic crisis in the Iberian nation deepens. In February alone, nonperforming loans increased by 3.8 billion euros ($5 billion) month-over-month, up from a total of 7.9 percent of all bank loans in January.
Nothing has been quite right in Spain since its housing bubble burst with tremendous force in 2008, a situation made much worse in the years since by the fact that mortgage loans aren’t nonrecourse debt in Spain, thus sticking some foreclosed homeowners with large debts even after their evictions. Public austerity at German instance continues to push the Spanish economy into a downward spiral, and, by some estimates, 25 percent of the working-age population is without work, which is a Great Depression level by any measurement.
After exuberance on Tuesday (irrational or otherwise), Wall Street came back to Earth a little on Wednesday, with the Dow Jones Industrial Average losing 82.79 points, or 0.63 percent. The S&P 500 was down 0.41 percent and the Nasdaq declined 0.37 percent.