June 20 (Bloomberg) -- Americans' wage gains are evaporating as inflation accelerates, helping explain why confidence in the economy isn't soaring along with job growth.
Weekly wages adjusted for inflation fell 0.7 percent last month and are down 0.2 percent over the past year, according to a report last week by the Labor Department. Pay has been flat or declined in more than half of the 65 months since January 2001, when President George W. Bush took office.
Those numbers contrast with other government reports showing incomes for all workers staying a step ahead of prices, highlighting a growing disparity between the wealthy and those of more modest means. The difference may explain why the economy's performance isn't translating into greater popularity for Bush, whose poll ratings hover near record lows.
``People at the high end of the income scale are doing a lot better than people in the middle or low end, but there are a lot more people in the middle and low end,'' said Douglas Lee, president of Economics From Washington, a Potomac, Maryland, consulting firm. ``For those people, inflation is eating into their income gains.''
Adjusted for inflation, the median income for the top 10 percent of U.S. households rose 2.3 percent between 2001 and 2004, covering much of Bush's first term in office, according to the Federal Reserve's Survey of Consumer Finances, issued in February. For the other 90 percent of households -- which earned less than $184,800 in 2004 -- the median fell 0.5 percent over the same period.
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