Negative 4.6 percent!
That is the difference between the 4.2 percent real wage increase that the Obama Administration’s Bureau of Labor Statistics claimed American workers enjoyed at the end of the first quarter of 2016, and the revised reality of a .4 percent drop in wages reported for that same period in the report released in August.
It is almost as if 1960s television sitcom spy Maxwell Smart is the commissioner of the statistically challenged BLS in this, “missed it by thaaat much” report.
The incredible part of this complete reversal of the real wage data from the Labor Department is that millions of dollars are bet on stock and currency markets based upon the expectations of what a large increase in real wages would mean in the retail and other sectors of our nation’s economy, and BLS’ miss most likely cost investors millions of dollars.
Can those investors recover their losses because of an economic boom that never materialized because the expectation was built on reporting errors beyond any imaginable margin of error? No they can’t, but no investor worth their salt should trust anything coming out of this government agency that can’t shoot straight until its management changes and its processes are thoroughly reviewed.
What’s more, President Obama used this absolutely wrong data in his economic speech in Elkhart, Indiana, where he claimed, “Now, here’s the good news: Wages are actually growing at a rate of about 3 percent so far this year. That’s the good news. Working Americans are finally getting a little bigger piece of the pie.”
Obama repeated the higher wage theme while not directly mentioning the fake real wage increase to millions of Americans at the Democratic National Convention, falsely portraying an economy where American workers are beginning to thrive, instead of one where the real wages have actually dropped by 2 percent in the first half of his final year in office. Hard to take a victory lap touting a thriving economy when the average paycheck has been cut by two cents on the dollar in real terms in just six months (a decrease which almost wipes out the entire gain in real wages from 2015.) Yet, due to BLS bad report, that victory lap is exactly what Obama and Team Hillary have been allowed to take, even as the GDP growth numbers have been stagnant at best.
And the heavily worker focused Donald Trump campaign and other Republicans in the primary were denied the opportunity to talk about the real wage situation in America earlier this year, because BLS either lied or was so far off base, and in either case the Commissioner should be fired for either corruption or incompetence.
The art of politics is creating and reinforcing perceptions, and the Obama-Hillary economic story doesn’t want to focus on what is the worse recovery since the Great Depression. Instead, they want to talk about job creation and workers making more money.
BLS’ false claim that real wages are accelerating rather than the actual decline that has just been revealed in an almost sidebar note in their latest report harmed investors, the economy and skewed the political process, and BLS Commissioner Erica Groshen should be held accountable just as CEOs of corporations are often fired when their actual results fall dramatically short of those they projected publicly.
The Department of Labor’s BLS has one job – compile economic data and report it accurately. They failed spectacularly with the real wage report, and that failure cannot just be shrugged away.
Obama lied, real wages died.
Rick Manning is the president of Americans for Limited Government.