Fact-checking the fact-checkers on Martin O'Malley and wages

[bigtree]

Last edited Tue Jun 9, 2015, 08:16 AM - Edit history (1)

Kristin Sosanie ?@ksosanie
Good read: On Substance, Martin O’Malley Was Right About American Wages http://www.epi.org/blog/on-substance-martin-omalley-was-right-about-american-wages/ …


____The Washington Post fact checker says that “The percentile data from EPI do not reflect individual Americans’ wages, and instead shows the distribution of wages.” That’s flat wrong. Our data absolutely reflect individuals’ wages. What she means is that it’s not a panel dataset—it doesn’t follow the same individuals over time. Instead it is a repeated cross-section of American workers. This means that if O’Malley had said “the bottom 70 percent of American workers make less than 12 years ago” it would have been perfectly accurate. By saying instead that 70 percent “of us” saw wage declines, O’Malley opens the issue of individual workers getting older and potentially making more money as they get promotions and gain experience throughout their career.

Looking at individual workers’ wages over time to rebut a story about economy-wide wage stagnation artificially raises the bar. After all, people do tend to see their wages rise as they accumulate skills and experience, earning more in their thirties than in their twenties, more in their forties than in their thirties, and so on. This is called the age-earnings profile. Wage stagnation for the large majority of Americans (let’s focus on workers lacking a four-year college degree, for example) has manifested itself in lower (or stagnant) wages for new workers as they enter the labor market—earning less in their twenties than an earlier cohort – and seeing smaller wage growth (or flatter age-earnings profiles) as they age...

Further, O’Malley’s analysis of wages by percentile is much more relevant to the question he’s speaking about: rising inequality. We could have wages rising over any specific workers’ lifetimes with overall wages not rising at all in the economy, as was just explained. But so long as wages for the bottom 70 percent of American workers fail to rise, this leads to a divergence between typical workers’ pay and productivity growth, which in turn leads to a sharp rise in economic inequality. And this is exactly what has happened to the U.S. economy in recent decades...

All-in-all, the judgement of the fact checkers on the overall truth of O’Malley’s claims are awfully nitpicky. O’Malley is claiming that policies embraced by many in the GOP are bad for wage growth, and he cites a correct statistic that wages for the bottom 70 percent of American workers have been stagnant or worse for a dozen years. That’s also important for demonstrating that wage stagnation occurred in the last recovery (2001-2007) as well as in the current recovery, and is not simply a Great Recession phenomenon .

Did O’Malley wordsmith it perfectly from our perspective? No, but EPI isn’t running a campaign. We would note the broad-based wage stagnation of the past 12 years but also note the longer-term stagnation (other than the exception of the late 1990s and the spillover into 2000-02). But there’s nothing misleading about O’Malley’s claims—it has indeed been a terrible 12-year period for wage growth for the vast majority of American workers, and this poor wage growth is a clear root cause of rising inequality.


read more: http://www.epi.org/blog/on-substance-martin-omalley-was-right-about-american-wages/

[elleng]

1. Thanks for fact checking the fact checkers, bigtree!

[Andy823]

2. Yep

Some fact checkers have their own agenda. They are not always telling the truth.

Thanks for the post.

[Koinos]

3. Great post as usual, bigtree!

[bigtree]

4. »

[NCTraveler]

5. Informative read and fact check.

No one should be taking issue based on concept alone.