Inflation-adjusted wages fell in U.S. in 2004 despite job growth

Inflation-adjusted wages fell in 2004 despite job growth
Job Watch, EPI

The good news is that employment grew in 2004; the bad news is that the rate of wage growth fell.

The year 2004 was the first since 1999 that saw job growth in every single month, and it was also the first year since 2000 that the jobless rate declined. Yet the labor market remained relatively slack, and despite the reversal of job losses, there was little labor market pressure on employers to raise wages. Thus... wages grew more slowly in 2004 than in the previous year. In fact, the 2.1% growth rate for nominal hourly earnings in 2004 is the lowest in the history of this wage series, which began in 1964 ...

At the same time, inflation grew more quickly last year, accelerating from 2.3% in 2003 to 2.7% in 2004...

...

Since the start of the recession 46 months ago (March 2001), a negligible 62,000 jobs have been added in the U.S. economy. Private sector jobs are still down by 703,000, a contraction of 0.6%. Both represent the worst job performance since the Bureau of Labor Statistics began collecting monthly jobs data in 1939 (at the end of the Great Depression).