Compensation Growth Is Strong

From Allan Hubbard of the National Economic Council:

"In the past three years our economy has grown 3.7% per year, faster than any other major industrialized economy, and added more than 5.7 million payroll jobs, more than all the jobs added in the European Union and Japan combined. " ...

"Over the first half of this year, compensation growth has averaged a remarkable 6.3%, at an annual rate adjusted for inflation. This growth is much faster than in previous years." ...

"The difference between this economic expansion and the last expansion is that higher-than-expected energy prices have consumed much of this strong nominal wage growth. Inflation-adjusted wage growth without the increase in energy prices is similar to past economic expansions." ...

"With some politicians and commentators criticizing tax relief, free trade, immigration and labor policies, it is important to recognize the truth about wages and the distinctions between this economic expansion and past expansions. Increasing the tax and regulatory burden on our economy will not increase wages or make the current expansion more rewarding for workers. Without the tax relief, workers would be taking home a smaller portion of their paychecks. Higher taxes and a higher regulatory burden would just slow the strong productivity growth that we need to remain competitive in the global economy and increase standards of living."

Read the whole article here.