Although employment is at a record high, the liberal Economic Policy Institute (EPI) is pessimistic about any improvement in the economic position of American workers. Its biannual report on the economy, "The State of Working America, 1998-1999," says that "...the typical American family is probably worse off near the end of the 1990s than it was at the end of the 1980s or the end of the 1970s."

Economists dispute the EPI's claim:

• This claim rests almost entirely on the Consumer Price Index (CPI), which experts acknowledge overestimated changes in the cost of living by approximately 1 percentage point per year, a bias that existed for at least two decades.

• The Bureau of Labor Statistics (BLS) has recently made corrections to the CPI that should reduce future upward bias; however, it has not corrected the past series, so historical measures of real earnings or income growth are consistently understated.

• A modestly corrected CPI shows that real median family income has been increasing steadily since 1993 and is now almost 20 percent higher than in 1979.

What has made the biggest difference in families' incomes, say economists, is that more married women are working.

• Married couple families with both spouses working had a 20 percent increase in real average incomes between 1979 and 1996 using the official, uncorrected CPI.

• The increase is 35 percent after correcting the CPI by about 0.8 percentage points per year.

• Even in married-couple families in which only one spouse worked, real average income increased by 6 percent -- actually, by 19 percent using a corrected CPI.

Source: Max R. Lyons and Anita U. Hattiangad, "Unfounded Economic Pessimism," Fact & Fallacy, November 1998, Employment Policy Foundation , 1015 15th Street, N.W., Suite 1200, Washington, D.C. 20005, (202) 789-8685.