Recession's surprising winners & losers

In the October 21, 2009 Wall Street Journal article "Women's Wages Outpaced Men's During Recession," Sara Murray says "Men are more likely to be unemployed than women — but that's not their only problem."

The wages of the typical woman who had a job during the worst recession in decades rose faster than those of the typical man, new data from the Bureau of Labor Statistics show.

Over the past two years, the wages of the median woman -- at the statistical middle -- rose 3.2% when adjusted for inflation. Wages of the median man rose 2%. Minority men were particularly hard hit, while minority women and highly educated women of all races did better.

The typical full-time female worker earned $657 a week in the third quarter, the BLS said. The typical man earned $812 a week. Men are more likely to be unemployed, though: The male jobless rate is 11%; for women, it's 8.4%

Economists cautioned that the wage numbers and the increases don't reflect the large numbers of workers who aren't working at all.

There were about 8.2 million fewer full-time wage and salary workers in the third quarter than two years ago; the data don't include part-time or self-employed workers. Low-wage workers are hit disproportionally during recessions, and their absence from the tally could cause median wages to rise even if the typical worker isn't getting a raise.

"This is a situation where everyone's losing but men are losing more, and that's not really a victory for women," said Heidi Shierholz of the Economic Policy Institute, a left-leaning Washington, D.C., think tank.

Asian men fared worse than other men, but the median weekly wage for Asian men and women was $877 in the third quarter -- higher than any other ethnic group. Whites were next at $753, then blacks at $607 and Hispanics at $527. The median pay of Asian men declined 4.1% between the third quarter of 2007, just before the recession began, and the third quarter of 2009. The typical black man saw his wages fall 2.8%.

The recession began in December 2007 and most economists believe it ended this past summer. Women's wages have long lagged behind men's, but minority women did much better than their male counterparts during the recession.

Over the past two years, the wages of the typical black male full-time worker fell, but wages rose 7.3% for black women. Among Hispanics, the median male wage rose 0.4% over the past two years, but the median female wage rose 5.5%.

Wages of white and Asian women didn't rise as much as those of other women; the median increased 2.4% and 1.8%, respectively, over the past two years. White males were slightly better off: Their wages rose 2.8%. It was the only ethnic group in which men's wages rose more during the recession than women's; white women's wages rose 2.4%.

"It's risky to make too much of these fluctuations," said David Autor, an economics professor at the Massachusetts Institute of Technology. "That said, male employment has been in relative decline for some time, and I would not be at all surprised that the industries and occupations in which males are most concentrated have been hit relatively hard by the recession."

The pattern of larger gains among some women and minorities isn't likely to hold when the U.S. economy recovers. As jobs return, there will be more low-wage jobs, and that will pull down the median wage. But higher-paying jobs in male-dominated sectors, such as manufacturing, construction and finance, will return as well, and that will boost the median male wage.

Young workers, particularly vulnerable during recessions, were the only age group to see their wages decline over the past two years. Wages for 16- to 19-year-olds fell 0.3% based on numbers that the BLS didn't adjust for inflation. Seniors fared the best: The wage of a typical worker over age 65 rose 15.4% over the two-year period.

Education also was a factor: Those without a high school diploma earned a median of $448 a week in the third quarter, compared to $1,145 for those with at least a bachelor's degree. Pay of women with advanced degrees grew faster than pay of men with advanced degrees. But men still earned more: The highest-paid 10% of male workers with advanced degrees earned $3,260 or more weekly, compared to $2,252 or more for women of the same education level.

Wages of full-time workers in the top 10% grew much faster during the two-year recession (9.5% before adjusting for inflation) than those of workers in the bottom 10% (5.2% before adjusting for inflation).

Write to Sara Murray at sara.murray@wsj.com

Consumer spending rises in June, incomes drop

According to the August 4, 2009 article "Consumer spending rises in June, incomes drop" by Associated Press economics writer Christopher S. Rugaber:

WASHINGTON – Consumers opened their wallets and pocketbooks a bit more in June, increasing their spending for the second straight month while saving less, even as incomes fell sharply.

Consumer spending is closely watched because it accounts for about 70 percent of total economic activity. Many economists warned that despite the slight increase in June, falling wages and rising unemployment likely will keep spending sluggish for the rest of this year.

Still, the housing market continued to show signs of life as pending U.S. home sales rose in June for the fifth straight month, according to the National Association of Realtors. The group's pending home sales index rose more than expected to 94.6, from an upwardly revised reading of 91.3 in May. The last time there were five straight monthly gains was July 2003.

The Commerce Department said Tuesday that consumers boosted their spending 0.4 percent in June, slightly ahead of analysts' estimates. That comes after spending rose 0.1 percent in May.

Personal income fell 1.3 percent, the steepest drop in more than four years. Incomes rose by the same amount in May, boosted by one-time payments from the government. Economists expected personal incomes, the fuel for future spending, to fall 1 percent.

Incomes benefited in May from a one-time payment of $250 that was mailed to 50 million Americans receiving Social Security and other government benefits, as part of the Obama administration's $787 billion stimulus package.

Excluding the impact of the stimulus, personal income would have fallen 0.1 percent in June after a flat reading in May, the department said.

Wages and salaries fell 0.4 percent in June from May, the eighth straight monthly drop. That makes it unlikely consumers will ratchet up their spending anytime soon, economists said.

"The U.S. consumer will not be much of a help during the early stages of the economic recovery," Joshua Shapiro, chief U.S. economist at consulting firm MFR Inc., wrote in a note to clients.

Amid the longest recession since World War II, the personal savings rate has surged as Americans seek to rebuild their nest eggs after home values and stock portfolios plummeted last year. While saving can be good in the long run, rapid increases in saving can slow the economy.

The department said the personal savings rate fell to 4.6 percent in June, after jumping to 6.2 percent in May, which was the highest since February 1995. The rate dropped as low as 1 percent last year.

Spending may increase in July and August due to the government's "cash for clunkers" program, which has spurred thousands of Americans to trade in old cars for newer vehicles, Shapiro said. But the savings rate is likely to keep rising later this year.

Investors appeared unfazed by the economic report and focused on locking in some profits after a 14 percent climb in stocks since July 13. The Dow Jones industrial average lost about 15 points in morning trading, and broader indices also dipped.

The department also revised its spending and income data back to 1929, as it did last week when it reported second-quarter gross domestic product, the broadest measure of the economy's output. The changes show that Americans saved slightly more than previously thought.

For example, the department revised the savings rate in 2008 to 2.7 percent from 1.8 percent.

The government reported last week that the overall economy, as measured by the GDP, shrank at an annual rate of 1 percent in the second quarter, far less severe than the 6.4 percent decline in the first quarter and a 5.4 percent decline in the fourth quarter of 2008.

Sluggish consumer spending has held back the sales of food and beverage companies. Tyson Foods Inc., the world's largest meat producer, said Monday that sales fell 3 percent in its third quarter. The company posted a strong profit due to cost cuts.

And sales for MillerCoors, the U.S. joint venture owned by Molson Coors Brewing Co. and SABMiller, increased by only 1 percent in the most recent quarter, Molson Coors reported Monday.