Bush [v. Clinton] median income falls 2.9%, [11.3%], collece grades earn less, job growth 1.3% [12%] ... taxes, offshoring, immigration, China

The end of the American dream? | Analysis | By Steve Schifferes | Economics reporter, BBC News website
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So far, though, little of that growth has translated into the hands of the average worker, according to new research from the Economic Policy Institute (EPI).

Click here for a graph of wages vs. productivity

For real household incomes, the median point - the level at which half of households earn more and half less - has actually fallen over the past five years.

That marks a notable contrast with the 1990s, when the economic boom boosted both jobs and incomes.
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"The unprecedented split between growth and living standards is the defining economic agenda of the day," says the EPI's senior economist, Jared Bernstein.

During the five years from 2000 to 2005, the US economy grew in size from $9.8 trillion to $11.2 trillion, an increase in real terms of 14%.

Productivity - the measure of the output of the economy per worker employed - grew even more strongly, by 16.6%.

But over the same period, the median family's income slid by 2.9%, in contrast to the 11.3% gain registered in the second half of the 1990s.

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Average hourly real wages for both college and high school graduates actually fell between 2000 and 2005, and fewer of the jobs they found carried benefits such as health care or company pensions.
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One way to comprehend what is happening is to look at the split between how much of the economy is won by profits and how much by wages.

The share allotted to corporate profits increased sharply, from 17.7% in 2000 to 20.9% in 2005, while the share going to wages has reached a record low.

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Unemployment has remained stubbornly high despite the economic recovery, with the latest figure at 4.7% compared to 4% at the end of 2000. Overall job growth in the first half of the current decade has been just 1.3%.

In the 1990s, job growth of some 12% goes some way towards explaining why prosperity in that earlier period spread down the income scale.

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The incomes of the top 20% have grown much faster than earnings of those at the middle or bottom of the income distribution. The income of the top 1% and top 0.1% have grown particularly rapidly.

From 1992 to 2005, the pay of chief executive officers of major companies rose by 186%.

The equivalent figure for median hourly wages was 7.2%, leaving the ratio of CEOs' pay to that of the average worker at 262.

In the 1960s, the comparable figure was 24.

There has been much debate about the extent to which the tax policies of the Bush administration, which lowered many taxes on capital, have contributed to this trend.

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The authors of the EPI report argue that low minimum wages, weakened union power, and the loss of both blue and white-collar jobs to off shoring do much to explain the jobs picture.

Admittedly the Federal minimum wage has been static for a decade, but the downward pressure on wages is probably coming from other sources.

One is immigration, which may have a greater effect on the wages of low-skilled workers.

Another is the "China effect,", the idea that low prices of imported manufactured goods are pushing US industry to cut its workforce in order to increase productivity.

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