Wages as portion of gross domestic product.
Come Friday, another monthly job report from the Bureau Labor Statistics will be released. If the professional forecasters get it right, which they rarely do, we'll see a seasonally adjusted increase in jobs for May similar to what it was in April, around 165,000. It will mark the 32nd consecutive month that private jobs have been added since the Great Recession began in December 2007. Unless the increase is surprisingly far off the mark, the traditional broadcast media will spend a few minutes and the print media a few column inches analyzing the results and that will be that for another month.
What will not be discussed except in passing is what kind of jobs these additions are other than to say there were xxx gains in retail and xxx in manufacturing and xxx in health care. But we won't hear much about what kind of work has been added and how it compares with what's been lost. McJobs? More part-time positions replacing full-time ones? Career builders or dead-end slots?
Nor will we hear much if anything regarding what the new jobs pay.
John Schmid at McClatchy points out Tuesday what all-too-many Americans already know anecdotally from their friends, colleagues or own situations: Ground is being lost.
Competition from China and other low-wage rivals, coupled with fallout from the 2007-'09 financial crisis, has put American wages under such unprecedented strain that they have shifted into reverse—not merely stagnating, but falling. [...]
In the U.S., the phenomenon is not limited to isolated and vulnerable sectors, such as commodity manufacturing. Rather, wages have fallen across the entire national economy—down 1.1 percent in the 12-month period from September 2011 to September 2012, the most recent comparisons available.
"Average weekly wages declined in every industry except for information," the U.S. Bureau of Labor Statistics reported in its latest economic census.
Read below the fold for more analysis on the wage situation.
In developing countries—China, Brazil, Peru, among others—wages have been rising, but labor there is still cheap. And as all-too-many Americans are aware, corporations engaging in global competition have had no qualms about seeking out those cheap labor markets with their lax safety, environmental and labor laws. When they aren't hunting for such places to locate their goods-and-services operations, they're using the situation in these developing nations to drive down wages in the United States and put pressure on Congress and regulators to alter or undermine laws brought into being after long fights to shield American consumers and workers.
There is "a movement toward convergence" on wages according to Patrick Belser, a senior economist in Geneva at the International Labor Organization. And that's been going on since the 20th century. A good portion of this chronic problem has been concealed by the acute problems that have accompanied the Great Recession and the tepid recovery that will begin its fifth year next month with 25 million Americans still unemployed or underemployed.
If "we" were all in this together, it might be a different story. In the arena of shared sacrifice, however, there is none. As can be seen by the chart at the top of this post is what workers are giving up. In the one below can be seen the plight of the corporadoes.
Corporate profits as portion of gross domestic product.