Chart compares annual growth in
wages for May 2007 vs. May 2011.
(Chart by the Economic Policy Institute)
The job creation situation is well known. Nearly 14 million Americans out of work, another 10.5 million underemployed, another 3, or 4, 5 million wanting to work but so discouraged they've disappeared from the ranks of those who get counted when the government is tallying the employment situation.
For those who actually have jobs, there's another problem: average wage growth is way down. As Heidi Shierholz at the Economic Policy Institute points out, in May 2007, before the Great Recession officially started, wages were, on average, rising at 3.8 percent annually. Last month, the annual growth was clocked at 1.8 percent, as the chart shows.
This is not news to Americans who have seen food and fuel prices on the rise. Or to seniors who saw no cost-of-living addition to their Social Security checks in the past year. As always, it's low-income Americans who take it in the neck since food and fuel take a higher proportion of their income than it does of the more affluent. If this increase in prices continues, it could add up to $175 billion for the year, yet another drag on the economy.
With so many workers still out of a job, there is no pressure on employers to offer even modest raises. And given the pace of job growth, 157,000 monthly for the first five months of 2011, full recovery is a long, long way off, which likely means wages will remain depressed as well. For many workers, the current drop puts another layer of hurt on the stagnant growth in wages over the past three decades.