Wages, compensation, and our standard of living

Michael links, through Brian Leiter's blog and Daily Kos, to a "depressing map showing income drop under Bush."  Here is a New York Times story on the same issue.

A quick thought:  Clearly, Governor Jennifer Granholm -- a Democrat -- of Michigan, where the "income drop" is most pronounced, has to go!  Go De Vos!  Beat Granholm!

A more serious question:  What, exactly, does the map mean??  No doubt, and this is particularly true for those of us -- that is, for all of us -- who don't really understand the ins and outs of labor economics, the news that wages are dropping should cause us to be concerned, sit up, and try to figure out what is going on.  After all, "under Bush," the economy has grown, notwithstanding the bursting of the Clinton-era tech-bubble, the September 11 attacks, and wars in Afghanistan and Iraq.  If it were the case that, despite this growth (which was not inevitable, was it?), Americans in the middle-, working, and lower classes were worse off, it would indeed be upsetting, and "depressing".

This map does not show, though, that Americans' standard of living is declining.  It isn't.  This Bureau of Labor Statistics report, "100 Years of U.S. Consumer Spending," might be of interest here.  See also this recent Washington Post op-ed on why statistics like those in the map o which Michael links provide an incomplete picture of poverty and well-being.

Nor does the map accurate depict developments regarding Americans' real, total compensation (including benefits, insurance, pension contributions, etc.)  According to this BLS chart, real hourly compensation in the non-farm sector has increased consistently since the 2001 recession.  See also this post, by our fellow MOJ-er Steve Bainbridge, on whether statistics like those depicted on the map ignore the realities of the "ownership society."

Clearly, a map showing declining median wages in the face of growth and productivity increases is politically useful in September of an election year.  And, we might conclude that, even the full picture of the economy (i.e., one that factors in real compensation and the considerations outlined in the Post op-ed) is troubling, perhaps because of the disparity between those at the top and the bottom.  (See these old MOJ posts on income inequality.)  We might think that even real, total compensation is too low, and failing to keep pace with American workers' increased productivity.  And so on.  But, if it turns out to be the case that, while median wages are not growing, real compensation and consumer spending are, is this something that is "depressing"?  Morally objectionable?