BUSH TO CROW ECONOMY AS WAGES INCREASE/DECREASE

'It's hard work!'

Washington (WPI) - After hitting new targets for lowered earnings for American workers President Bush tonight will highlight his successes with the economy while down playing the occupation of Iraq.

The Labor Department reported yesterday that wages and benefits paid to civilian workers rose last year by the smallest amount in nine years. The report said that employee compensation was up 3.1 percent in 2005. This is a drop of more than one half percent from 2004.

The decline in worker earnings came largely from corporations slashing benefits — items such as health insurance and pensions. These benefits, which are counted as wages in new Labor Department statistics, rose by only 4.5 percent in 2005 after “jumping” by 6.9 percent in 2004.

The 3.1 percent increase in total compensation, before inflation, for the 12 months ending in December was the smallest annual increase since a 2.9 percent rise in 1996.

Wall Street investors reacted swiftly to the good news.

“This is great, corporations finally have a process to divest themselves of those bulky and unprofitable health care costs and pensions” gushed Grant D. Richess, investment counselor at Bear, Sterns, “The goal of divesting benefits is well under way.”

“This moves us along our path toward lowering the overall standard of living in America to be more in line with the rest of the world,” said Thomas J. Donohue, Chairman of the US Chamber of Commerce, “Global markets work best when the consumer base is large. The fact is, the average Chinese family won’t become meaningful consumers until wealth migrates to China from someplace else.”

Not everyone was so effusive.

“This is diabolical!” raged Union organizers Wes and Virginia Minors. “The ‘Global Market’ plan of US corporations has only one goal: to slowly float the economy of China by siphoning off the jobs, wages and benefits of Americans! They are well under way!” claimed Mr. Minors.

Ms. Minors added, “Conservatives have convinced middle America, all those Red State voters, that ‘states rights,’ and ‘Christian Values’ and ‘small government’ are the important political issues . It has proven to be an excellent smoke screen for sinking the US economy with the full support of the victims.”

“Oh, pish-posh!” retorted Senator Bill Frist senate majority leader, “America must adapt to the global marketplace! These are the sacred forces of a free market economy. We can no more challenge these powers then we can alter evolution or the Word of our Lord!”

The new “Employment Compensation Index” which now includes the severe burden of benefits plus wages that companies must bear, should ease concerns at the Federal Reserve that improving labor markets could be starting to push up wage pressures which could ignite inflation.

“If we have too many good jobs being created then that exerts an upward pressure on wages as people quit lousy jobs for better ones, “ explained Donohue, “Increased job competition can have a devastating effect on the corporate bottom line, upset Wall Street and ruin the entire American economy over the long run. It is the single most dangerous element in the economic equation.”

Wages and salaries rose by 2.6 percent last year, only slightly higher than a 2.4 percent increase in 2004. The 3.1 percent increase in Total Compensation for the year was the smallest annual increase since a 2.9 percent rise in 1996, about ten years ago.

To Donohue’s satisfaction, the 2005 wage and benefit increase was still not enough to keep up with inflation. With inflation factored in, Total Compensation actually fell by 0.3 percent. This is the first time there has been a decline since 1996, when compensation/inflation was down by 0.4 percent.

For the final three months of the year, total compensation was up 0.8 percent, the same increase as in the July-September quarter, and a rise that was in line with Wall Street expectations.

“Overall we are happy with the results. Even though employees continue to show a modest increase in compensation, the important value- the decline in worker’s standard of living- continues it’s target decline. We are on track for an eventual world-wide wage equilibrium.” said Donohue