PRESIDENT Barack Obama has spent a fair amount of time during his first two weeks in office talking about pay in America. On day one, he froze the salaries of White House staffers making more than $100,000 a year.
Then, this week, he sent a message to Wall Street that his administration won’t condone executives making more than a half-million bucks if they accept a future taxpayer bailout.
But while the president’s comments on executive comp were surely welcomed in most zip codes outside of 10021 and 06831, it’s a fair bet runaway wages won’t be the thing that keeps our new president up at night over the next four years.
No, if he hasn’t realized it already, President Obama has a much more pernicious problem on his hands – not wage inflation but its evil twin, wage deflation.
And it’s already starting to creep into the system. While the official job loss number of 598,000 grabbed headlines Friday, the fine print points to even further erosion in American incomes.
Total hours worked across the economy fell 4.6 percent in January from a year ago, while the average work week is now at a record low of33.3 hours – about on par with France.
Americans haven’t become less industrious, but they are being asked to work fewer hours in order to keep the jobs they have.
At Gannett, for example, workers are being asked to take one week of mandatory, no-pay vacation this quarter, while in California more than 200,000 state workers are being forced to stay at home without pay two Fridays a month in a cash-saving move.
The trend is pointing to overall wage deflation in the US for the first time since the Great Depression.
It’s a frightening development, and one that few living Americans have ever witnessed.
Stopping the nascent wage deflation will be job one for President Obama, and a job that I’m sure will keep him from worrying about excessive pay on Wall Street for a long time to come.
TERRY KEENANis anchor of Cashin’ In, an investing program that appears on Fox News Channel on Saturday mornings at 11:30. E-mail terry.keenan@foxnews.com.