KATIE ZERR: Wages are stagnant in stronger economy


As a nation, we have been recovering from a recession for the past six years. Unemployment is down, the housing and manufacturing sectors have shown positive signs of recovery, the U.S. oil industry is booming and the auto industry has come back from brink of extinction, if we are to believe some sources.

There are good signs that our nation is doing better than expected, yet millions of Americans are having to cope with paying more for goods and services, while making the same or less than before the recession.

Grocery prices are jumping and the cost of gas remains high. The hourly wages in the U.S. are growing at a modest 2 percent this year. American workers’ paychecks are barely ahead of the recent increase in inflation.

Wages have been stagnant in the U.S. for decades. We have lagged behind other nations since the 1980s.

According to the Economic Policy Institute, median production and non-supervisory workers, which are 80 percent of all private-sector employees, have seen a total gain in their hourly wage of 6.1 percent over 34 years.

The median income in the United is nearly 4 percent less than that earned in 2009, when the recession officially ended.

During this time corporations have seen income gains that far out perform expectations. The health of corporate America is improving at a solid rate. Corporate earnings have risen at an annual rate of 20.1 percent since the end of 2008. Yet those on which these corporations are built, unless they are upper management, are working for stagnant wages.

According to Business Week, the average CEO of a major corporation made 42 times the average hourly worker’s pay in 1980. By 1990 that had almost doubled to 85 times and in 2000, the average CEO salary was 531 times that of the average hourly worker.

As upper management’s pay soars and profits increase at a steady rate, shouldn’t those who provide the engine that drives this corporate health also benefit from the positive bottom lines?

With the jobless rate at 6.1 percent one would hope that wage increases might follow the healthier economy, but will it happen? When there are fewer people available in the job market, shouldn’t competition begin to push wages higher?

There are a number of reasons the U.S. work force isn’t enjoying the same benefits as corporate management. The number one reason in the national discussion is the failure to raise the minimum wage. Others include a tax code that pushes U.S. jobs abroad and the weakening of collective bargaining.

Those who own smaller businesses are finding they need to increase worker compensation to hire quality employees. Why isn’t corporate America following suit?

Economists are saying it will take longer for wage earners to see the benefits of a healthier economy. Some how it seems grossly unfair that those who suffered the most during the recession are forced to wait longer to recover while those who weren’t as hard hit by the recession are enjoying record compensation.

How can this gap in wages be closed? Of course an increase in the minimum is at the top of the list as labor officials and some business owners are advocating.

But that alone is not the answer.  Closing corporate loopholes in the tax code and a basic overhaul of the system that gives the lion’s share of breaks to corporate America will play a major role in the recovery of the American worker.

None of this will be possible if Congress continues their path of refusing to work together to do what is right for the people of this country.

There is no need to point fingers at either Democrats or Republicans. They are all responsible for keeping this country from fully recovering from the recession.

While they enjoy the trappings of their jobs, the American people struggle day-to-day, paying more for essentials while working for nearly the same wages as those in the 1980s.

We pay their wages with our tax dollars. Unfortunately for the American people, corporate American can compensate Congress much better than we can. Their corporate perks make them millionaires. While the people struggle, Congress grows wealthy along with their corporate supporters.

Basically, we the people are on the short end of this wage stick and will remain so until changes are made in Washington.

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