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Friday, February 18, 2005 

The Steady Decline of Wages

CNN/Money is running the following headline: "Inflation posts the biggest jump in 6 years."

The long and short is, core producer prices jumped for January at a rate not seen since the end of 1998 - the time period routinely pointed out by Bush regime hacks as stage one of their inherited recession. Given the sum total of such economic indicators on both the produce and consumer sides of the equations, working Americans (and those of us who fight to better the conditions we face as a class) should be prepared for a continuation of the steady decline in real wages we have been seeing since the 1970s (not to downplay to boom of service sector jobs in the mid and late 1990s - I'm reminded of that famous labor cartoon which goes something like "Mr. Clinton says the economy created X million new jobs this year" - "Yeah, and I've got two of them!")

While the immediate impact this jump in producer prices for cars, cigarettes and aspects of other the BLS's core index (which excludes more "volatile" food and energy prices) will be sizable jumps in the CPI, a look into the elite's response to January's figures provides a more telling, and frankly more alarming picture. In response to the PPI news, bond prices - specifically US treasury bonds - plunged. The study of dialectics makes it clear that small adjustments have the capability of producing far reaching changes when these continual quantitative shifts reach a tipping point. Given recent tends towards dollar instability in global currency markets,
peak-oil, a mammoth and growing US trade deficit, the quagmire in Southwest-Asia and the real possibility of massive changes in the South-Asian status quo (not to mention China's role in funding Uncle Sam's current financial adventurism), every new hiccup has the potential of being the proverbial last straw.

To bring this matter closer to home (for me anyways) - this is why a 1% raise and a 1% (one-time) bonus for state and higher-education workers doesn't mean ass (despite what the company-sponsored employee "association" says).

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