The Sky Is Falling, But Are Wages?

Paul Krugman wrote recently an Op-Ed piece in the New York Times on the "Falling Wage Syndrome."

He pointed to two troubled industries, print journalism and American automobile manufacturers, both of which have workers taking pay cuts.

He also noted that the Bureau of Labor Statistics "Employment Cost Index for Wages and Salaries" rose only 0.2% in the first quarter this year (annual rate ~0.8%), the lowest in the history of the index.

The sky is falling in many areas of the economy: unemployment is up, profits are down, and investment banks, newpapers, housing construction, and car manufacturing are faltering.

Are real wages really going down too? This is the opposite of the opinion David Leonhardt gave a month or so ago. Perhaps Krugman is right; after all he has a Nobel prize :-)

At PayScale, we have a lot of data, collected as recently as yesterday, to look at this question; read on to see what we have found.

Should you be taking a wage cut, or are you do for a raise? Use the PayScale salary calculator to figure out the answer for your job.

The wage picture for each job, town, and industry is different.


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