The Anxious Middle

Posted by on November 11, 2006

Energy prices are up. Healthcare costs are up. But wages are standing still.

The Financial Times reports that between 2000 and 2005, the U.S. economy grew by 12 percent in real terms and productivity, measured by output per hour worked in the business sector, rose 17 percent. But median hourly wage rose only 3 percent in real terms. That compares with a 12 percent gain in the previous five years. Real median family income fell every year from 2000 to 2004. It increased in 2005 but is still lower than in 2000.

What's the answer? Opinions differ, with solutions offered ranging from education to personal training accounts to charging higher taxes on the top to redistribute. But clearly, this will become an issue for the new Congress, so stay tuned.