from the Working Life blog:
American Dream Done: WSG--Steep, Lasting Drop in Wagesby Jonathan Tasini
Tuesday 11 of January, 2011
The jobs crisis is really devastating. We all know the numbers on how many people are out of work. But, the truth is that just calling for more jobs is not enough--because what we lack in the country is GOOD-PAYING JOBS. And wages are not coming back.
The Wall Street Journal reports what many of us have been trying to point out for a long time:
But the decline in their fortunes points to a signature outcome of the long downturn in the labor market. Even at times of high unemployment in the past, wages have been very slow to fall; economists describe them as "sticky." To an extent rarely seen in recessions since the Great Depression, wages for a swath of the labor force this time have taken a sharp and swift fall.
The only other downturn since the Depression to see similarly large wage cuts was the 1981-82 recession. But the latest downturn is already eclipsing that one. Unemployment has stood above 9% for 20 straight months—longer than the early 1980s stretch—and is likely to remain above that level for most of 2011, putting downward pressure on wages.
Many laid-off workers who have found new jobs are taking pay cuts or settling for part-time work when they get new ones, sometimes taking jobs far below their skill levels.
Economists had wondered how far this dynamic would go in this recession, and now the numbers are starting to show it: Between 2007 and 2009, more than half the full-time workers who lost jobs that they had held for at least three years and then found new full-time work by early last year reported wage declines, according to the Labor Department. Thirty-six percent reported the new job paid at least 20% less than the one they lost.(emphasis added)
When will we get those wages back. Maybe never:
The severity of the latest downturn makes it likely that many of the unemployed who get rehired will take wage cuts, and that it will be years, if ever, before many of their wages return to pre-recession levels, says Columbia University labor economist Till von Wachter. "The deeper the recession, the lower the wage you're going to get in the next job and the lower the quality of your next job," he says.(emphasis added)
The WSJ article though is wrong: this actually has been taking place for at least three decades. Productivity has been rising, more or less, steadily for the mast 30 years but wages have been flat. So, we have been falling behind.
When the recent job stats came out, I pointed out that one in five Americans does not have good-paying work.
We treat poverty as a way of doing business in America. The minimum wage is a poverty-level wage. We say people who work full-time for the minimum wage are "employed" but, for a family of four, that puts them below the federal poverty line. The minimum wage should be above $19 an hour if we factored in productivity over 30 years--how hard people have worked. ........(more)
The complete piece is at:
http://www.workinglife.org/blogs/view_post.php?content_id=15076
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
