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(National Employment Law Project)
Whatever is shown by the numbers of Friday's much-awaited April jobs report, the analysts will be digging into them like a Roman seer pawing through rabbit entrails for evidence of the direction of the labor market and the greater economy. One thing that typically gets missed in all the amateur and professional analyses of labor-force participation rates, the rise and fall of manufacturing jobs and the impact of seasonal adjustments to jobs is the quality of those jobs and how much they pay.

Though not the first to do so, the National Employment Law Project points out that the plunge in the rate of wage gains in the past five years is holding back the recovery. Workers simply cannot buy as much as is needed to increase demand so that more workers can be hired to meet that demand: fact, as of March 2012, hourly wage change was nearly 44 percent below the rate of change as of March 2007, prior to the Great Recession. Not only is wage growth slowing, but the real value of hourly wages—once adjusted for inflation—is also declining when compared to the prior year. From March 2011 through March 2012, real average hourly earnings fell 0.6 percent for all private sector workers and declined by even a great degree—1.0 percent—for nonsupervisory and production workers.

Changes in the number of hours worked per week by both groups did not make up for the loss in wages: an uptick in the hours worked among all private sector employees left their real total weekly wages (a product of the hourly wage and hours worked per week) unchanged, while an increase in hours for production and nonsupervisory workers still resulted in 0.5 percent decline in real total weekly wages.

The Bureau of Labor Statistics has noted that for all of 2012, aggregate wages went up 1.7 percent. But inflation for the year was 3 percent. In other words, workers overall lost ground.

Worse yet is that low-wage occupations are the ones dominating the recovery. And worse still is that fully 30 percent of job openings from now until 2020 will pay around the $20,000 level. Those are poverty wages for a household of four. The litany of wage problems goes on and on. New entrants are being paid less than before. Unemployed people who finally find a job are often paid less even if they get hired in the same field. Those who had to switch fields to find employment took even harder hits. And people who have been out of work the longest typically find it hard to do anything but switch fields because their skills have atrophied and they aren't as attractive to employers as workers with more up-to-date skills.

People at the very bottom end of the job market are paid a minimum wage (or less)  that has far less buying power than it did at the peak in 1968, $7.25 an hour. To reach parity with the '60s, that minimum would now have to be $10.55 an hour. And if it had kept up with productivity gains, it would be $22 an hour.

As Laura Clawson explained recently, the low wage floor, when combined with the drop in unionization and shredding of employment protections have made the U.S. the "global leader in low-wage work: the US labor force is made up of a larger share of low-wage workers than any other comparable economy."

All this has been a major contributor to income inequality. It did not happen overnight or solely as a consequence of the Great Recession. That downturn only worsened a trend that has been on-going since the mid-1970s for all but a few years of the Clinton administration. The median, inflation-adjusted wage has only increased 5.7 percent in the past 30 years.

Raising the minimum wage or finding other means to provide income support to low-wage earners along the lines of how many European nations have done it, is a crucial first step in rectifying this situation. But it will take a good deal more than such tinkering to truly improve matters for U.S. workers. Progressive tax reform and cooperative forms of ownership are key to making that happen. In the current political climate, short of a movement focused on comprehensive economic reform, making those changes is simply off the table.

Making it a priority will mean reducing the number of elected Republicans determined to go the other direction in such matters. But it will also require electing leftist Democrats and changing the minds of a lot of already elected Democrats whose best efforts of late have been addressed at rearguard actions to protect gains we once thought were permanent. Getting better Democrats into place and making better Democrats of those already elected will be no easy task. But it's one essential to the future well-being of American workers. And it will take prodigious efforts, with both movement and electoral activists cooperating instead of pretending that they don't need each other to make the changes we so desperately need.


Originally posted to Daily Kos Labor on Thu May 03, 2012 at 12:57 PM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  Well of course it puts a drag on the economy. with (2+ / 0-)
    Recommended by:
    beltane, cocinero

    out moolah, ppl cannot purchase anything.

    "Say little; do much." (Pirkei Avot: 1:15)

    by hester on Thu May 03, 2012 at 01:08:54 PM PDT

    •  Economics for dummies (5+ / 0-)

      When rich people have all the money, nobody else has any to spend.  This makes the economy haz a sad, because rich people can only spend so much of all the money.  They use lots of it to sit around making more money, and even more creating jobs!  Jobs in places where they can pay people 89 cents a day.

      If you want economic growth, take lots of money away from rich people and make sure everybody else gets some.  The economy is happy and grows, and even rich people wind up with more.

      This sounds elementary for Sesame Street, but that's only because it's true.

      When Free Speech is outlawed, only outlaws will have Free Speech.

      by Dallasdoc on Thu May 03, 2012 at 05:02:48 PM PDT

      [ Parent ]

  •  Chart should have used real wages not nominal (1+ / 0-)
    Recommended by:

    Real wages is what matters not nominal wages.  In addition to being more accurate representation it would make your point better.

    I would not be surprised to see negative growth in the chart.

    You also could have had the title say something like, "Wage Decline drags economic recovery"

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Thu May 03, 2012 at 01:09:44 PM PDT

  •  Dems so far right, everything looks "left" to 'em (11+ / 0-)

    From Kevin Drum: "Democrats Have Moved to the Right, Not the Left"

    Via Le Monde diplomatique, this past weekend (a must-read for MB, IMHO): "Locking down an American workforce" It's hard to compete against $0-per-hour labor!

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Thu May 03, 2012 at 01:18:51 PM PDT

  •  Oxymoron: "Wage Growth Decline" n/t (4+ / 0-)

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Thu May 03, 2012 at 01:24:54 PM PDT

  •  I saw yesterday in the Ed show this chart (5+ / 0-)

    Technology changes int the eighties and nineties (internet and communication) and Outsourcing apparently the main factors.

    TPM imagesizer

  •  Not enough money to mediate the (3+ / 0-)
    Recommended by:
    blueoregon, skyounkin, NoMoreLies

    transactions people want to engage in is a problem.
    Imagine if you had to wait to take turns using the alphabet because only so many letters are available to be used at any time -- like playing scrabble.
    Why is the availability of money restricted even though the supply keeps increasing?  Because--

    some people hoard
    some people set up road blocks
    some people divert
    some people deprive
    some people don't know the difference between a tool and a jewel

    People to Wall Street: "LET OUR MONEY GO"

    by hannah on Thu May 03, 2012 at 02:11:11 PM PDT

  •  one thing to note (0+ / 0-)

    real wage increase during the election year is a MUCH better indicator of incumbent presidents share of the electorate than other things like the unemployment rate. So this is not very good news for President Obama.

  •  The supply of labor also plays a role in this. (3+ / 0-)
    Recommended by:
    dewley notid, Saint Jimmy, NoMoreLies

    In each of the years 2008,2009,2010 and 2011 more than 1 million green cards were issued. Generally 3/4 of those immigrants are working age adults and they are, on average, much less educated than American workers. While blue collar unemployment remains very high and blue collar wages fall in real terms we continue to import blue collar workers. Maybe unemployed workers is one of those things we should stop importing.

    •  Things were going up (4+ / 0-)

      from the New Deal until the 1970s and since then workers have made little progress while the wealthiest have captured an ever increasing share of the wealth.  Given that, focusing on migrants is largely beside the point.

      That said, many policies make American workers less secure, multinationals more rich, and displace people in other parts of the world producing (not necessarily uncoerced) migration.  Stopping those policies would help all of us, and has the added bonus of not encouraging people the blame other poor people for things driven by the rich).

      Policies, not "markets" are the problem.

      Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity. @DavidKaib

      by David Kaib on Thu May 03, 2012 at 04:00:58 PM PDT

      [ Parent ]

      •  The 1970s were when legal immigration rates (0+ / 0-)

        started to rise. George Borjas, a labor economist at Harvard, found that from 1960 to 2000 the employment rate for black men with less than a high school education fell from 89% to 56%. He attributes 40% of that increase in unemployment to immigration. A number of policies are problematic, and a high legal immigration rate is one of them.

        •  So you suggest (1+ / 0-)
          Recommended by:
          Meteor Blades

          that the progressive answer is to revive the 1924 immigration laws, which were passed at the behest of that most progressive and eleemosynary of all US organizations, the Ku Klux Klan?

          The law, in its majestic equality, forbids rich and poor alike from sleeping under bridges. ~ Anatole France

          by ActivistGuy on Thu May 03, 2012 at 05:06:36 PM PDT

          [ Parent ]

        •  So if you ignore the entire larger trend (0+ / 0-)

          and pull out one small part of that trend, immigration accounts for less than half of it (if I assume Borjas is right, that is).

          This argument is not nearly as strong as you think.

          It strikes me that the wholesale closing of factories along with the rise of mass incarceration doesn't leave much room for immigration as a factor.  It wasn't Mexicans that closed the factories, it was macroeconomic policies.

          Regardless, if you are concerned about high immigration, the solution is to stop forcing people to migrate through disastrous neoliberal policies, a position I heartily endorse (not to keep people out, but to stop screwing them).

          Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity. @DavidKaib

          by David Kaib on Thu May 03, 2012 at 07:05:58 PM PDT

          [ Parent ]

    •  Well, from a RATIONAL perspective and with the (2+ / 0-)
      Recommended by:
      IowaPopulist, NoMoreLies

      NATIONAL INTEREST in mind, you would THINK that is true, wouldn't you?  HOWEVER, if you are an ultra rich fucktard.....

      One in four people in the United States suffers from chronic anxiety, a mood disorder, or depression—which seems to me to be a normal reaction to our march toward collective suicide. Welcome to the asylum. ~ Chris Hedges

      by Saint Jimmy on Thu May 03, 2012 at 04:40:08 PM PDT

      [ Parent ]

  •  and this too shall pass... (0+ / 0-)

    we have to realize that it is the nature of things where the rich get richer, and the "non-rich" get poorer until the safety net breaks.  the big blowout is yet to come.  there will be a world shaking series of economic storms that will force a major asset allocation from the rich to the "non-rich."  Don't know when, though.  The "non-rich" are tapped out.  there is too little credit demand, and no wage increases in the forseeable future.  that equals less spending, unless the rich do it, and that is not in their make up.  how do you think they got rich in the first place.  since the older class is the richest, I'm thinking that the shift could go from older rich folks to younger folks (the poorest class).  how, I don't know.

    There is no hell on earth appropriate enough for those who would promote the killing of another person, in the name of a god.

    by HarryParatestis on Thu May 03, 2012 at 04:44:41 PM PDT

  •  It will also require an overhaul of the UAW... (0+ / 0-)

    ...the same UAW that sold out its workers by allowing new hires to earn 50% less than legacy ones.  What's the likely impact of a 50% cut in pay on real median wages?

    It is what it is, and the fact is, certain unions in the US are beginning to resemble their Mexican counterparts more each day.  In Mexico, year in and year out, union leaders say, we got the best deal we could without compromising the competitiveness of "el patron".  That's what the UAW said as well.

    Meanwhile, in Mexico, the disparity between the CFO and the rank-and-file Ford worker is as large as ever.

    The UAW could at least have indexed new hire pay to the pay of c-level executives.  But that would have involved some inspiration and street smarts.

    The best thing the UAW leadership can do right now is apologize to the rank-and-file and resign en masse.

    Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project.

    by PatriciaVa on Thu May 03, 2012 at 04:46:30 PM PDT

  •  This is why (1+ / 0-)
    Recommended by:
    Meteor Blades

    ... the spender of last resort (the govt) really needs to step up to the table. Of course, this means that Dems really need to take the House and hold the Senate this year.

    Always be sincere, even if you don't mean it.

    by justinb on Thu May 03, 2012 at 05:03:13 PM PDT

  •  It will require a new discourse (1+ / 0-)
    Recommended by:
    Meteor Blades

    which becomes in turn the basis for a new organizing and a new struggle.   Words like "precarity" and"flexicurity" will find their way to the front of the line if we're to address this situation effectively.

    The law, in its majestic equality, forbids rich and poor alike from sleeping under bridges. ~ Anatole France

    by ActivistGuy on Thu May 03, 2012 at 05:03:34 PM PDT

  •  In the break room today was a notice announcing (1+ / 0-)
    Recommended by:

    the search for a tester. The person had to be an H1B. Is that even %^&$ legal???  I almost took a picture of it. Dear God, what is this country coming to when they advertise for foreigners?

  •  Truth. (2+ / 0-)
    Recommended by:
    NoMoreLies, TexasTom

    Workers simply cannot buy as much as is needed to increase demand so that more workers can be hired to meet than demand

    That's truth right there.

    There are people at my facility who were going hungry before we started sharing food on the dock. They have jobs, and they were still going hungry. They sure as heck aren't out there doing any extra "consumer spending".

    I write the series Confessions of a Retail Worker here on DK. It documents my life in a non-unionized workplace.

    by Lightbulb on Thu May 03, 2012 at 05:13:04 PM PDT

  •  this diary should remain on the FP (1+ / 0-)
    Recommended by:

    for the next 12 months, or until everyone reads it and gets it...
    this diary should stay at the top of the page.

    The economy isn't getting is changing.  And this is HOW it's changing.  Look behind the numbers, people....look at the jobs.  Look at the trend line.  LOOK AT WHERE WE ARE HEADING.

    It's no wonder recent college grads can't find a THIS real skills are required.  Oh, sure, they may ask that you bring some to the table....but you will never use them.

    Thank you Richard Nixon for going to China.  Thank you Carter for cementing the relationship.  Thank you Clinton for so callously selling us down the river.  Thank you Bush for cementing it further with WTO acceptance of China.

    It didn't have to be this way...but this is the way it played out.

    You know why?  Because greed cannot be contained.  At least not by humans.

    Show me one candidate who recognizes China as the source of our ills, and I'll show you a man or woman I'd gladly vote for.  Not in this economic system, though....China is like crack cocaine.  

    It didn't have to be this way.  We are still the world's largest economy.  We could have made some rules...but we didn't.  Not the Dems....and certainly not the Repubs.

    They sold us like chattell.  Cause that's what we are.

    Oregon:'s cold. But it's a damp cold.

    by Keith930 on Thu May 03, 2012 at 05:22:13 PM PDT

  •  but the thing about politicians (0+ / 0-)

    is they do not achieve power without being representative of the people, and the people are hopelessly in denial on this front. These are sobering numbers, very real numbers, reflective of an economy that has lost forever its undue influence on the markets.
    Incomes will never again be what they were for the median classes. Ever. Start with that. Make the people understand that, and only then will adaptation be possible.
    I'm betting on chaos, myself.

    and I wait for them to interrupt my drinking from this broken cup

    by le sequoit on Thu May 03, 2012 at 05:23:25 PM PDT

  •  I Demand "Demand" dammit! (0+ / 0-)

    We need to make stuff here in the USA, hire people here, buy that stuff here. Rinse, lather , repeat.

    This Rover crossed over.. Willie Nelson

    by Karl Rover on Thu May 03, 2012 at 06:26:46 PM PDT

  •  Britain's good history with minimum wage (0+ / 0-)

    Britain had no statutory minimum wage at all until 1997.  The Tony Blair government was quite aggressive with introducing one when they took office, launching in at the equivalent of a little under $6 an hour and rapidly ramping it up at a rate faster than inflation to the point where it's now about $10 an hour (currently £6.08 an hour in local currency).  The net job loss effect?  Basically, NIL.  The boost to the economy?  Incalculable, because it finally cleared the bottom end of the British economy of the slave labor syndrome that had been dragging it down through depressed consumer demand from all those underpaid workers.  Overall, the minimum wage proved to be a big economic boost to the point that it helped cover some of the stupid things the Blair government was doing with other sectors of the economy.

    Of course the above-inflation increases have stopped with the Conservative-"Liberal" coalition.  But imagine what things would be like without the minimum age at all.

    We need a national minimum wage of $10 or so with a special up-weighting for high-cost markets like San Francisco, Washington DC and New York.

  •  Damn, but you're good. n/t (0+ / 0-)

    The Internet is just the tail of the Corporate Media dog.

    by Jim P on Thu May 03, 2012 at 09:44:13 PM PDT

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