This is the not-so-thin edge of the wedge aimed at the multiple regional US housing bubbles.
For the first time in 14 years, the American workforce has in effect gotten an across-the-board pay cut.I wrote a long post on this issue back in January, and with another three months of the same trend unfolding -- and now bolstered by average US gasoline prices of $2.22/gal. -- we're just that much closer to the Day of Reckoning. Just think of all those Californians living in their zero-downpayment ARMed homes and you'll see what I mean.
The growth in wages in 2004 and the first two months of this year trailed inflation, compounding the squeeze from higher housing, energy and other costs.
The result is that people like Victor Romero are finding themselves falling behind.
The 49-year-old film-set laborer had to ditch his $1,100-a-month Hollywood apartment because his rent kept rising while his pay of $24.50 an hour stayed flat.
"There's no such thing as raises anymore," Romero said. . . .
Although pay rose only about 2.4% last year, benefit costs jumped almost 7%.
With benefits factored in, workers' total compensation did outpace inflation in 2004, even if they didn't see it in their paychecks. But employers also are requiring workers to pay a greater share of their premiums.
"Healthcare has eroded the wage base," said Janemarie Mulvey, chief economist with the Employment Policy Foundation, a business-funded think tank in Washington.
"In the long run, we can't continue like this. If healthcare keeps crowding out wages forever, something's got to give."