Republicans Trial New "Complete Fabrication" Approach to Wages Issues

The Economist this week has an exceptionally good survey on the changing global economy. The best piece of all is sadly subscription only, but deals with problems of the unequal share of globalization's benefits. The piece concentrates on the wage problem:

Most of the fears about emerging economies focus on jobs being lost to low-cost foreign competitors. But the real threat is to wages, not jobs. In the long run, trade and offshoring should have little effect on total employment in rich countries; rather, they will change its composition. So long as labour markets are flexible, job losses in manufacturing should eventually be offset by new jobs elsewhere. But trade with emerging economies can have a big impact on both average and relative wages.

There is an interesting piece in Today's Roll Call, about the new push by Democrats on economic issues. It quotes a GOP spokesperson, showing off their new economic attack line. “Wait, is the economy yet another ‘new direction’ for the Democrat leadership?” says one GOP staffer quoted in the piece. “Good luck. Gas prices are down, jobs and wages are up and security is still the top concern.” For the final time, especially for those who haven't been listening at the back, real wages have not risen. And here is the Economist to prove it:

Over long periods of time, real wages tend to track average productivity growth. But so far this decade, workers' real pay in many developed economies has increased more slowly than labour productivity. The real weekly wage of a typical American worker in the middle of the income distribution has fallen by 4% since the start of the recovery in 2001. Over the same period labour productivity has risen by 15%. Even after allowing for health and pension benefits, total compensation has risen by only 1.5% in real terms. Real wages in Germany and Japan have also been flat or falling. Thus the usual argument in favour of globalisation—that it will make most workers better off, with only a few low-skilled ones losing out—has not so far been borne out by the facts. Most workers are being squeezed.

The GOP approach to the economy this cycle looks clear. They are running a twin track strategy: (1) tax-raising accusation and (2) outright disembling on incomes and wages. But how can they get if even the Economist and the FT aren't prepared to give them a pass?