Wages & Personal Income

Monday, July 25, 2005 | 06:31 AM

Why did U.S. workers suddenly see a "surprisingly large increases in pay at the end of 2004?"

According to a new comprehensive look at employment and wage trends across 317 of the country's largest counties, the gain seems to be bolstered by commissions and end-of-year bonuses, which are included in the counts:

The report showed wages are growing, from suburban areas like Williamson County, near Austin, Texas, to big cities like New York. It also helped clarify a muddled national picture on the state of worker pay. Economists have been puzzled for months about why national income seems to be rising at a healthy pace while measures of hourly wages are barely keeping up with inflation.

The latest report lends weight to the argument that end-of-year bonuses and commissions were a factor, economists say.

The statistics showed that weekly wages averaged $812 throughout the nation. Workers in Williamson saw the biggest increases in weekly wages, with a 17.8% jump to $893 from a year earlier. Williamson County, the home of Dell Inc., is benefiting from the recovery in the tech sector and from robust single-family housing construction, according to Moody's Investors Service.

The report notes that robust real estate markets contributed in many counties, as commissions and bonuses are included in this measure of income.

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click for larger chart
Wages_economy07192005201118
graphic courtesy of WSJ

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Source:
Weekly Salaries Rise an Average of 5.7% in U.S.
RAFAEL GERENA-MORALES
WALL STREET JOURNAL, July 20, 2005; Page A2
http://online.wsj.com/article/0,,SB112177493386889374,00.html

Monday, July 25, 2005 | 06:31 AM | Permalink | Comments (5) | TrackBack (0)
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Comments

My guess is that real estate companies are flushing out broker and agent commissions at year end to avoid paying corporate income taxes on any unpaid amount. Think about it. Record real estate sales x 6% x brokers' share of commission has to equal some big bucks.

Posted by: touche | Jul 25, 2005 11:04:42 AM

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