Real wages in the US are falling at their fastest rate in 14 years, according to data surveyed by the Financial Times by the Economic Policy Institute.
Inflation rose 3.1 per cent in the year to March but salaries climbed just 2.4 per cent, according to the Employment Cost Index. In the final three months of 2004, real wages fell by 0.9 per cent. The last time salaries fell this steeply was at the start of 1991, when real wages declined by 1.1 per cent.
Stingy pay rises mean many Americans will have to work longer hours to keep up with the cost of living, and they could ultimately undermine consumer spending and economic growth.
But that OK, because the good news is this has not effected the earning potential of CEOs and other senior executives.
Don't worry, if things get real bad we still have the option of going into bankruptcy. For the average American it will be even more difficult and damming, but for the rich, or for Companies like United it is still a very good option.
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