The Absence of Real Wage Growth despite Strong Productivity Gains – Book Report/Review Example
The paper "The Absence of Real Wage Growth despite Strong Productivity Gains" is an outstanding example of a book report on macro and microeconomics. Top five firms of the walls street; Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan/Stanley are busy rewarding their CEO’s and employees. These stories in the nation’s financial newspaper shook many people. Some elements of the society welcomed it as it would generate revenue through the purchase of property, new luxury cars, vintage wines, champagne, fine dining, and designer clothes. This has affected the average worker, and the strong link between the productivity gain and the wage increase for the average worker has been cut off. The productivity gains in 2000-2006, of production and non-supervisory workers in the private, non-farm economy was strong but the weekly earnings did not show a good increase and their real annual earnings were less than half of the value of bonuses awards to employees of firms in the walls street. In these years labor productivity in the manufacturing sector increased but real mean weekly earnings for the workers only showed a small increase. Between 1999 and 2004-2005 the increase in the real annual earnings of the white, non-Hispanic workers was as much as the walls street employees in 2006. The real weekly earnings of the full time employed wage and salary workers above 25 years of age showed an increase of positive three. Over the past six years, the US economy has been twisted, workers with increased productivity have less bargaining power and only a few teens and young adults have jobs. The corporate profits have roused by higher productivity and there’s no wage gain, the stock prices have risen which has resulted in higher returns on Walls Street. This economic condition is expected to change the Christmas scenario this year.