Skip to main content

Elise Gould at the Economic Policy Institute writes Why America’s Workers Need Faster Wage Growth:

The last year has been a poor one for American workers’ wages. Comparing the first half of 2014 with the first half of 2013, real (inflation-adjusted) hourly wages fell for workers in nearly every decile—even for those with a bachelor’s or advanced degree.

Of course, this is not a new story. Comparing the first half of 2014 with the first half of 2007 (the last period of reasonable labor market health before the Great Recession), hourly wages for the vast majority of American workers have been flat or falling. And even since 1979, the vast majority of American workers have seen their hourly wages stagnate or decline—even though decades of consistent gains in economy-wide productivity have provided ample room for wage growth.

The poor performance of American workers’ wages in recent decades—particularly their failure to grow at anywhere near the pace of overall productivity—is the country’s central economic challenge. Indeed, it’s hard to think of a more important economic development in recent decades. It is at the root of the large rise in overall income inequality that has attracted so much attention in recent years. A range of other economic challenges—reducing poverty, increasing mobility, and spurring a more complete recovery from the Great Recession—also rely largely on boosting hourly wage growth for the vast majority. […]

The vast majority of Americans have experienced disappointing living standards growth in the last generation—largely due to rising inequality.

• Between 1979 and 2007, more than 90 percent of American households saw their incomes grow more slowly than average income growth (which was pulled up by extraordinarily fast growth at the top).

• By 2007, the growing wedge between economy-wide average income growth and income growth of the broad middle class (households between the 20th and 80th percentiles) reduced middle-class incomes by nearly $18,000 annually. In other words, if inequality had not risen between 1979 and 2007, middle-class incomes would have been nearly $18,000 higher in 2007. […]

The large increase in income inequality that has blocked living standards growth for the vast majority has been driven by the failure of hourly wages for the vast majority to rise in line with overall productivity after 1979.

• Between 1979 and 2013, productivity grew 64.9 percent, while hourly compensation of production and nonsupervisory workers, who comprise over 80 percent of the private-sector workforce, grew just 8.0 percent. Productivity thus grew eight times faster than typical worker compensation.

• Between 1979 and 2013, median real hourly wages rose just 6.1 percent (or 0.2 percent annually), compared with a decline of 5.3 percent (or -0.2 percent annually) for the 10th percentile worker (i.e., the worker who earns more than only 10 percent of workers). Over the same period, the 95th percentile worker saw growth of 40.6 percent, for an annual gain of 1.0 percent. The tight labor market of the late 1990s was the only period when hourly wages increased across the wage distribution, with the strongest growth occurring at the bottom.

• From the first half of 2013 to the first half of 2014, real hourly wages fell for all deciles, except for a miniscule two-cent increase at the 10th percentile. Underlying this exception to the general trend at the 10th percentile is a set of state-level minimum-wage increases in the first half of 2014 in states where 40 percent of U.S. workers reside. […]

Blast from the Past. At Daily Kos on this date in 2010Terminators:

In the first months of 1811, a secret army drilled on the chilly moors outside Nottingham, England. Under the shadow of darkness, these men gathered to learn guerrilla tactics —how to move as a team, how to avoid detection, how to break through locks and barriers, and how to escape when their task was complete. Only this army was not made up of soldiers.  They were stocking makers.

By the spring of the next year, nearly 200 of the mechanical "stocking frames" at local factories had been destroyed. In this following months, the destruction would spread to cloth works in Yorkshire and Leicestershire, to Lancashire cotton mills, and eventually into the factories of London. By then the army was not so secret. Handbills had arrived for months warning factory owners of their fate. Many of these were signed by the supposed leader of this rebellion—General Ned Ludd. It from from this name that the movement gained it's popular moniker: the Luddites.

The Luddite movement would fade only after rising to widespread violence that took the lives of workers, hired guards, and a few mill owners. This was followed by a swift reaction from government to imprison or hang many of those suspected of being Luddites. The breaking of machinery was itself made a capital crime, and by 1812 several men had been executed for the offense of damaging automatic looms. 

When we hear the term "Luddite" today, our reaction is to think of a brutish lout frightened by any sign of progress. A Luddite is someone who can't understand their computer, hates the Internet, and thinks that there hasn't been a worthwhile invention since the well-chipped stone. But that doesn't really describe the men (and women) who were involved in that original movement. They were not anti-technology. They were reacting to a change that was seeing many of them either lose jobs or face a sharp decrease in pay.

Tweet of the Day
Wait: People risked jail to set up bribes for Ron Paul presidential caucus votes? WHY? Not exactly talking "The Italian Job" there

On today's Kagro in the Morning show, we check in with the end of the Market Basket management dispute. Or was it a labor dispute? Or both? Louisiana's libertarian water, now with brain-eating amoeba! Gideon opens the door to an inquiry into the many & varied issues surrounding police militarization.
HuffPo reports that video gaming collectives are SWAT-ing their rivals' offices! Also: what's a gaming collective and why do they have offices? Courts make it increasingly difficult to hold cops accountable. Another video surfaces, this time of cops arresting an unarmed black man who answers demands for ID in exactly the same way open carry protesters do.

High Impact Posts. Top Comments

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site