“Mr. Secretary,” Frank said, “I agree with much of your statement, but I confess to some trouble with your citation of the rise in hourly wages. What’s the CPI increase over the past 12 months? Do you know?” Replied Snow: “Well, about 5, I think, 5.1.”
To which Frank said: “OK, because you’ve got hourly earnings going up 3.8%, and I believe…that’s not adjusted for inflation. So my understanding is that even in the past 12 months, which are your best 12 months, hourly wages have barely kept up with inflation….. But you would acknowledge that 3.8% increase in wages you’re talking about is nominal, not adjusted for inflation, correct?
Snow, who has a Ph.D. in economics, was a bit flummoxed at first. “I’ll have to go back, Congressman, and check these numbers,” he said.
“That’s not a trick question,” Frank insisted.
“I know it’s not,” replied the Treasury secretary. He then confirmed that the 3.8% was nominal, that is unadjusted for inflation.
The concession didn’t satisfy Frank. “I think it’s misleading to talk about the 3.8% over 12 months when that doesn’t take into account inflation, which was very close to that. I’d ask you to submit to us, what’s it been over 24 months, 36 months and 48 months, because, in fact, during this recovery…wages have dropped… compared to inflation.”