Economy improves on unusual track

This spring’s burst of job creation brought to an end the first episode in modern history in which nearly a million jobs were eliminated during the first two years of an economic recovery.

But even as the expansion started churning out jobs as well as goods and services, as is usually the case, some questions have lingered about how well American workers will fare in a world in which new technologies as well as lower-paid foreign workers continue to threaten their well-being.

Average wage gains in the United States have dropped by half from 4.3 percent in 2000. And what gains in income workers are seeing are being eaten up by soaring prices for energy, homes, health care, education and other expenses, which this year are increasing at a 5 percent pace.

Kingsley Achikeh, a Silver Spring dentist, says his patients seem worse off than they were during the 2000 economic boom or even during 2001, when the economy was in recession.

Patients who three years ago would spend without hesitation on elective dental procedures like a $500 laser treatment for whitening teeth, today say they do not have the money to spare, he said.

“I’m not really seeing the improvement in the economy you hear about,” he said. Teeth-whitening patients this year have dwindled to one or two from eight to 10 in 2001.

Dr. Achikeh’s clinic in downtown Silver Spring serves people with low-paying jobs and no insurance. Many do not have money to spend on even basic dental work, he said.

The pinch that patients are feeling has made it harder for Dr. Achikeh to buy the new equipment he needs to offer the latest services, such as a $4,000 laser bleaching light for rapid tooth-whitening.

But he says he purchased the laser anyway, because it helps him save money by enabling him and his assistant to fill teeth in roughly three minutes rather than 40. That way, they can handle more patients.

Dr. Achikeh’s dental practice is experiencing the trends that Federal Reserve Chairman Alan Greenspan and other experts say are behind the prolonged job losses and weak wage gains that have made the current recovery unusual by historical standards.

Job losses, which are typical during recessions, continued into the recovery because of the extraordinary productivity gains brought about by new technologies that enable businesses to produce more with their existing work forces.

Today’s anemic wage gains are a legacy of the three-year recession in the job market. But analysts say the strong productivity gains should enable employers to increase wages again soon.

Workers short-shrifted

Mr. Greenspan noted in testimony before the Senate banking committee last week that, until recently, America’s 147-million-strong work force was getting the short end of the stick as wages got crowded out by increasing profits as a share of corporate income.

The result was wage stagnation during 2003, the first time workers did not see any real increase in their earnings, adjusted for inflation, in seven years. Mr. Greenspan said workers with less skills and education have been particularly hard hit.

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