The Elusive Economy

Thursday, April 14, 2005

Are we in a recession or is the economy turning the corner? The answer to that question would differ based on whom you ask. The numbers for 2004 and the first two months of 2005 paint a bleak picture for the average American worker. Consumer price index rose 2.7% while wages rose only 2.5%, add this to the rising costs of energy, housing and other items. Health premiums rose an astonishing 7%, especially tough on the 47% of the workforce whose employers don't provide health insurance; and home prices also rose 9% nationwide. During the same time period worker production rose 2.1% and the economy expanded 4% (which is 1% higher than the historical average). Now let us look at the numbers for the average chief executive officer during the last yr. CEO salaries rose 12% in 2004 compared to 2.5% for the average worker. The average CEO of a major corporation was paid $9.84 million in 2004 compare this to the average worker salary of $33,176. To dive a little further into this discrepency a look at CEO's pay from 1990 to 2003 shows a pay increase of 313%. To put this into context for the same time period the Standard & Poor's 500 stock index rose 242%, corporate profits gained 128%, and the average worker's pay rose 49% while inflation also rose 41%. Clearly the economy as a whole is doing better, with CEO's and corporations raking in the profits while the average worker carries the load.

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