ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, September 13, 1996 TAG: 9609130146
SECTION: NATL/INTL PAGE: A-5 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Knight-Ridder/Tribune
Even as Bob Dole and Bill Clinton promise to put more cash in consumer pockets, two new studies suggest the American family is working harder and earning less, and that the treadmill they're on isn't likely to slow any time soon.
American families are ``running in place'' economically, squeezed by lower wages and having to work harder to make ends meet, according to studies commissioned by the Competitiveness Policy Council, a bipartisan federal advisory group set up by Congress.
Despite a strong economy, average hourly wages, after accounting for inflation, are still $1.20 below their peak of $8.50 in 1973, the group says.
While a recent uptick in average income has been touted by President Clinton as evidence that the wage slide has halted, the increase does little to reverse a 23-year deterioration in wages, the studies describe.
``Neither candidate is addressing these issues,'' said Fred Bergsten, chairman of the Competitiveness Council, and an economist for the Economic Policy Institute, a liberal research group.
And one campaign proposal - Dole's 15 percent across-the-board tax cut - could make matters worse for workers, said Rep. Amo Hougton, R-N.Y. ``A lot of us worry about a repeat of the 1980s, when a cut in taxes lead to an increase in consumption rather than investment.''
Increased investment in manufacturing, productivity, education, and the creation of high-skilled jobs that pay more is the key to turning around the decline in real wages, Bergsten said Thursday.
The studies, ``Is Anxiety About Living Standards Justified?'' by Frank Levy of the Massachusetts Institute of Technology, and ``Trouble in Paradise: Eroding Wages and Growing Income Inequity'' by Larry Mishel and Jared Bernstein of the Economic Policy Institute, are contained in a report called ``Running In Place: Recent Trends in U.S. Living Standards.''
Among the conclusions:
* Wage declines in the past 20 years have resulted in stagnant incomes for all but the wealthiest 5 percent of the population. Only people who owned real estate, stocks, bonds and other assets that appreciated considerably enjoyed improvements in incomes.
* Workers with less than a four-year college degree, now three out of every four U.S. workers, have experienced the greatest declines in income. Also most effected are women, younger and blue-collar workers.
* The $36,959 median family income after inflation in 1993 was only $66 higher than it was in 1973, even though many more families are supported by two breadwinners.
But statistics can be misleading.
``Real median family income is lower now, but the size of the family today is generally smaller, too, versus 20 years ago, so the money may go further,'' said Jim Bills, an economist with Comerica Bank of Detroit, not involved in the studies.
And statistical averages don't reflect whether an individual family is better off than it was a decade ago. It is true, however, that many families are better off financially only because now both the husband and wife work.
LENGTH: Medium: 62 linesby CNB