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Overworked and Underpaid? Workers Pushed to Threshold, Wage Growth Declines
By Akito Yoshikane
As Labor Day approaches, many Americans are breathing a sigh of relief for the extra day off. On a day that celebrates unions and the eight-hour work day, many workers are feeling like their hard work isn’t exactly paying off the way it used to.
Even as productivity has continued to climb, wages have been either stagnant or declining. Household income for the average working family has continued to fall, but men, latinos and those without a college education have experienced an especially sharp deceleration of wage growth since the recession, according to a new briefing paper by the Economic Policy Institute.
The Washington, D.C.-based think tank says that from 2002 to 2007, productivity rose 11 percent but the hourly wage for high school and college educated workers fell. In fact, the average median household income (adjusted for inflation) actually earned $2,000 less during that period, going from $60,804 to $58,718. For the first time, family income levels sunk below what they had been at the beginning of the economic cycle.
Typically, an era of higher productivity would also cause wages to rise as workers receive compensation for harder work. Instead, the opposite has been happening. As many companies have reduced staff to cut costs, employees have been squeezed to work longer and produce more. And with productivity falling slightly for the first time in more than a year, many workers have likely reached their threshold this past Spring.
That's because the labor isn't transferring to the employee paychecks. Nominal wage growth in the private sector was 3.4 percent before the economic crisis, but fell to 1.6 percent by the recession’s third year. Similarly, wage compensation dropped from 3.1 percent to 1.8 and most of the benefits went to the upper class. From 1989 to 2007, the top one percent of households earned 56 percent of the total income growth. The bottom 90 percent received a total of 16 percent.
This isn’t surprising since the trend has actually been ongoing for the last 30 years. The reasons wages have continued to stagnate are varied. But could the lack of wage growth be also tied to labor’s declining membership? Workers who belong to unions enjoy better pay and benefits than non-unionized employees. In a Washington Post column by Katrina vanden Heuvel, The Nation magazine editor and publisher, describes how unions were able to raise American living standards:
“But when unions represented over 33 percent of all private workers in the 1940s, they drove wage increases for everyone -- non-union firms had to compete for good workers. Now, unions struggle just to defend their members' wages and benefits. Over the past decade before the Great Recession, productivity soared, profits rose and CEO pay skyrocketed, but most workers lost ground.”
The wage stagnation and its correlation to unionization is not far fetched. Change to Win, a coalition of several union organizations, points out that the peak of real wages was in 1972 when private sector union membership was 28 percent. They write:
Workers are now earning only 83 cents of every dollar they earned more than 35 years ago, while their productivity has increased a dramatic 80%. This is the central explanation for the explosion in corporate profits and the growing income gap in America, and the reason workers in America still believe the economy is moving in the wrong direction.
Still, with less than 13 percent of the workforce belonging to a union, it’s difficult to get the same strength in numbers to raise the standard of living for everyone. The power of collective bargaining has been a central tenet to negotiating a living wage. But the small union numbers, coupled with companies invoking the current economic climate to justify concessions, has eroded the negotiating power of the average worker.
The workplace has been getting tighter to the employer’s advantage. The tight job market makes it difficult to negotiate a better wage. For every job opening, there are five unemployed people vying for that spot. In a job market like today where there is a big pool of applicants and a small number of openings, companies are able to leverage the pay and benefits on their terms.
Flexible pay scales are also on the rise, where workers have a smaller base salary in exchange for big single payment bonuses. According to Businessweek, more than 90 percent of U.S. corporations now use this plan for non-executive employees. In the early 1990s, it was less than 50 percent. And to top it off, with rising healthcare costs, companies have also shifted the burden onto workers by reducing their wages.
As a result, many are still feeling financially vulnerable despite having a job. A Gallup poll from August 16 found that 26 percent of Americans were worried about pay reductions. Not as many workers are concerned as last year but the statistic is still high compared to previous surveys. Another polls says consumer confidence is also falling to the lowest levels all year and many are saying the economy is only getting worse.
The growing anxiety is because workers have not been able to benefit from the productivity. Spurring median wage growth is a big policy concern. If households are not able to keep up with the cost of living, the decline in consumer spending could further prolong the economic recovery.
But as EPI suggests, raising the minimum wage or nudging the federal government to create job growth are some short-term solutions.
On Monday, though, workers across America will be enjoying a much-needed holiday before going back to the grind.
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Stay warm this winter in a black hooded sweatshirt. Order one. Order them by the dozen and donate them to occupations!
Incomes today are far less than they were several decades ago in real terms. The incomes have increased, but only [nominally]. In terms of real increases, there mostly haven't been any. A person earning a normal, fair income in the early 1960s could buy a house, a whole house, along with the whole yard or property, including a garage with closing door, for $15,000 in Framingham, Mass. I know, for my parents did this; except their incomes were low, so both had to work full-time. Nevertheless, you won't find comparable prices today in real terms. You'd have to go out to far wilderness, hermit country to [possibly], maybe find comparable prices, today; and you'd need to be lucky enough to buy from a generous person or group.
In 1970 or '72, you could buy a brand new, top of the line Cadillac Eldorado for around $12,000 to $13,000, a Fleetwood for several thousand dollars less, and two to three thousand dollars for a used Eldorado two or three years old, which is what my father bought in the early 1970s, for $2,000(he liked big cars, do-do that he then was). The car was no more than one or two years old. Today, you'ld be looking at four or maybe five times more costly, nominally speaking. It'd be more, if considering fully real comparison; instead of only considering nominal cost differences.
It's a [sick] society. It almost always has been sickly mis-goverened and this has become increasingly obvious with the wicked swing upward for cost of living. And there is no good or valid reason for this. The reason for it is a combination of greed and mass stupidity, and neither can make for valid, good, acceptable reasons. They are rather criminal; the stupidity being criminally negligent, at best.
We have been "cultured" to be selfish. It's long past due time to wake up to [reality]; in all important respects.
The economic system has been defined or redefined for the profit of the rich elites; ddefinitely not for general society.
Most people evidently prefer to be silent and it's true in many respects, but one is that it was proven in the 1960s that a carburetored car could be easily and safely modified to produce high fuel efficiency on the order of 60 to 65 mpg; and there evidently was more than one way to make cars fuel-efficient. That did not suit the greed of the oil industry and fuel efficiency efforts were more-or-less killed. It's been funny to read about fuel-efficiency with hybrid cars of today, for they don't provide the efficiency that was proven to be possible with carburetored cars running on gasoline (maybe also diesel engines, but this'd need to be verified).
I know some people who learned this about carburetored cars in courses when studying to become mechanics and the teachers were forbidden from teaching this, but some risked giving this extra-curricular learning and just told their students to not spread this knowledge. If students didn't comply, then the teachers could or would be quickly fired; or might wind up "mysteriously" dead, as has "mysteriously" happened with other people, like plenty of scientists who had conscience and had worked for the govt in secret labs where very or extremely immoral things happened or were experimented with, f.e. It's news kept out of news media, but news media definitely isn't my church.
Anyway, there is a cousin I learned this from around 1978, and while working for an engineering consulting firm in 1993, I learned of three other people who had also learned this about carburetored cars or vehicles. And if we search the Web, then we will find more information about ways of making cars fuel efficient. Wade Frazier, www.ahealedplanet.net, is a former accountant and has written an article about an invention a friend of his came up with during the 1970s, and his friend, as all other people who have knowledge the oil industry wants to be censored, is fearful enough of the industry that he would not publicly tell what he went through. (The very interesting essay is linked in his home page.)
My cousin didn't invent anything, but he learned how to make a carburetored car very efficient and he barely accepted to answer some questions I had in August 2004. With gentle, but persistent prodding, I was able to get answers from him and one question was what the problem was with modifying a car as he had learned, because he lightly said there was a problem. What's the problem? Oh, nothing dangerous. It was or is only that when car was driven uphill, it would lose some speed. How much speed, I asked, 5 or 10 mph or kmph? He said yes, and I said that I'd definitely accept this. He smiled and agreed.
He studied in high school to become a mechanic and once he graduated, he immediately got a job with trucking company as diesel mechanic, the only one there and with basically unending work. After several years he became a tractor-trailer truck driver, short and long distance, and then he bought his own truck and worked for himself, doing the driving and mechanical work. He did this for many years, so when I spoke with him again in 2004, he knew what he was talking about.
A guy in the general locality where I'm presently resident invented a highly efficient method in the 1960s, Ford temporarily used his invention on I believe the Baracuda in 1968 or 69, but called back all of these cars within a year and removed the fuel efficiency component, which is rather simple in concept. Try to approach this guy to ask some questions about this and you should not be alone. If you're alone, then beware, and if you're not alone, then you're not going to get honest answers. He definitely made me feel like I was in danger. He will not talk to strangers about his invention and isn't nice about this.
All of these people fear for their lives about this topic. But that's not surprising. After all, western governments basically make it legal for tobacco product companies to load cigarettes with toxic chemicals, including formaldehyde. It's the politicians and these corporate execs who should be filled with formaldehyde, et cetera, instead of letting them all get away with the silent poisoning they commit and are complicit with or in.
Anyway, not only was relative cost of living much less decades ago than it is today, we also had means of making the costs even lower; if it wasn't for corruption of government by corrupt politicians and corporate chiefs.
My parents managed to be able to buy a full house in 1963. Yes, imagine that, able to buy a complete house and nothing fancy. It was definitely not luxurious and had a small amount of property, though, and if the soil had been adequate, which I'm not sure that it was, certainly enough back yard for a garden sufficient to feed the family for a full year or more, and a garage, to boot; all of this for only $15,000. When the high-tech. boom hit Massassuchetts in the late 1970s or 1980, or so, the market price of the house skyrocketed to around $150,000 (at least) and the property and house structure hadn't grown. It was the same house my parents sold in 1977 or 78 for $45,000, which was [reasonable]; even if my father had redone the complete interior of the house. $45,000 might've been a little less than reasonable, given all of the work he put into the house, but wasn't far from reasonable. They then relocated to southeastern Quebec, where they're originally from, and my father, two uncles and I built a new house with a much larger property, which was bought for a mere $2,000.
My Dell P120c pc cost me around $2,600 in 1995 without monitor and was worth much less than a piece of property like the one my parents bought; over 200ft by 100 or 125ft!
Most people where my parents built their retirement home could not afford either of the properties my parents had, because income increases mostly are for the rich. And this is also being seen with IT jobs today. IT jobs still pay well enough, but we can nevertheless see that the pay-off is for the rich; while many American IT professionals and university graduates have trouble finding work because of the racket H-1B foreign worker importation program started by Pres. GHW Bush in 1990 or 1991 and greatly worsened by Clinton; but returned to the original official quota of importation visas since Clinton. It doesn't matter which quota is considered; they were all unjustifiable, except for maybe 15,000 a year and only for people with master's degrees and PhDs. By far most imported people with this program had at most a bachelor's degree.
It's a very serious racket that sent myself and other IT professionals into total, in-the-red bankruptcy. I lost everything, but the racketeers made a lot of money and fast. And they aren't finished with this racket, yet. It continues and is in widespread use.
Economic justice is like real Christianity; very difficult to find real examples of. There certainly are examples, but we need to be either lucky to learn of them, or need to spend considerable time searching for them. And people who integrally live according to "Do not do to others what you would not want to be done to yourself" and "Do for others what you'd want done for yourself" are a rare species. F.e., [everyone] who buys new computers contributes to the racket putting and keeping IT pros of U.S. citizenship and permanent residency into the rouge (red), and schools profit similarly, but also because they pretend that Americans investing in a university degree in IT is very worthwhile. They sucker citizens and other residents into believing that there's a real and good job market out there for them, only to later learn about the H-1B racket. These schools hire H-1Bs, instead of Americans and US residents, and lie about job market viability to Americans and US residents. And IT is the worst affected area, but isn't the sole one.
"War is a racket", there is economic warfare, and neither military nor economic war of aggression is officially declared. The military aggression is obvious, while the economic one is not obvious, but it's aggression when we wittingly replace employment of citizens and residents in need of employment with the importation of foreigners; especially done for cheaper or much cheaper labor, though only for the first couple of years or so. Hidden, masked treason is tantamount to these racketeers, so we get a lot of cover-up propaganda and lies by omission. How often do we get news reports about the H-1B [problem]? Hardly ever, and when we do get news about this, then it's usually or always in industry mags and they don't provide the full picture. Professor Norman Matloff is definitely a or the leading resource person on this H-1B topic, but there are also some other alternative sources; just that many will be polluted with nonsensical claims of the problem being racial. It's not racial. It's economic racket.
Considering the costs of living today, we should be able to easily see that we don't have societies based on human-hood. Instead, we have societies based on rich people's greed and stupid citizens following suit. There is no really valid reason for the general cost of living that we have today in the West; but it's a racket-based society or world in the West, which spreads its predatory ways worldwide, always f*cking the poor, the people who can easily be made victims with no or awfully little ability or power to be able to prevent and stop what's criminally done to them, us.
A thorough economic analysis will take up at least one large volume just in terms of the economics. Add the related politics and militarism, and we'll then have volumes.
"War is a racket" and the same is very true of economics. Enron and some other corporations, certainly one in the telephone business that I'm not recalling the name of, maybe Worldcom (?), are examples, and the government's relationship with Wall Street biggies over the past year or two is another example; of economics being "played" as war(s) against us. We see it with the extreme and disgusting exploitation of farm workers in Florida and Chicanos in the west. Et cetera.
"War is a racket" and what's a racket? It's about economics. Military war of aggression is about power, also, but economics is the basis.
We don't rule. The rich elites do.
What's the big deal about having one statutory day off from work? How about making it a week? That would be far more sensible and of course not everyone could get this week off at the same time, but most workers in the US could certainly be provided a whole week off for Labor Week, even if not all at the same time. It could all be done during the month of September, which could then be called Labor Month.
I don't know if it's still like it was in the 1990s, but many western Europeans got five weeks off a year and I think this was also true when first starting a job; instead of only after years working for the same employer. And these workers were said to be very productive, which is credible for sufficiently obvious reasons.
Give a person two weeks off a year and another five weeks off. Which of the two will be more productive for an employer? The worker getting five weeks off and paid; although a highly paid worker would still be productive even if the whole week off wasn't paid. Low income earners would need the week off and for it to be paid, like vacations and sick days are.
Labor Day is a damn mockery. I would certainly take the day off if I had employment, no question about it; but it's barely worthy of note, or simply isn't worthy of note. Labor Week would be humane, deserved, and beneficial for employers.
We still get 5 weeks off a year here in France, despite the efforts of that little neocon turd Sarkozy, to destroy our hard earned benefits.