JAMES TARANTO: Mrs. Clinton’s Deceptive ‘Bargain:’ The inevitable one fails Econ 101.
According to Hillary Clinton, Americans were a lot lazier when she was granddaughter Charlotte’s age than they are today.
To be sure, she made that claim while seeming to say the opposite. “Previous generations of Americans built the greatest economy and strongest middle class the world has ever known—on the promise of a basic bargain,” she said in today’s much-hyped economic-policy speech.
She described the “bargain” as follows: “If you work hard and do your part, you should be able to get ahead. And when you get ahead, America gets ahead. But over the past several decades, that bargain has eroded.” Mrs. Clinton’s campaign tweeted a chart to illustrate the point.
The source is the Economic Policy Institute, a left-liberal think tank affiliated with Big Labor. The fever chart shows labor productivity rising by 240.4% between 1948 and 2014. During the same period according to the chart, “hourly compensation” grew by 108.3%.
The Clinton campaign version of the chart doesn’t define the terms, but we tracked down an earlier version, in an EPI report from last year. The “hourly compensation” figures are not for all workers but for “production/nonsupervisory workers in the private sector.” Private-sector managers and all government employees are left out. The productivity figures, on the other hand, are for the entire U.S. economy, making this something of an apples-and-oranges comparison.
“You’re working harder but your wages aren’t going up,” declares the Clinton campaign version of the chart (though not the EPI one). The latter part of that statement is defensible, though it depends on what the meaning of “are” is.
The hourly compensation figures are adjusted for inflation, which means that real compensation for nonsupervisory workers has risen by 108.3% since 1948. Note that’s an increase of 108.3%, which means that such compensation has in fact more than doubled during that period.
Yet as EPI points out, most of the increase took place in the first half of the 65-year period in its version of the chart (which stops in 2013): Hourly compensation rose 93.5% between 1948 and 1979 and only 8% from 1979 through 2003. Thus it’s accurate to say that compensation growth for nonsupervisory private-sector workers has been stagnant during the past 3½ decades, including the (Bill) Clinton and Obama years as well as the Reagan, Bush and Bush ones. Since the compensation figures include noncash benefits, it’s possible that wages have declined somewhat.
The first half of the Clinton campaign’s claim, however—the claim, directed at those nonsupervisory personnel, that “you’re working harder”—is either a demagogic lie or a falsehood born of shocking economic illiteracy.
What difference, at this point, does it make?