Employee Wages Decline During Lost Decade

The real reason for depressed wages is that no one believes our country is headed in the right direction. Anyone with the responsibility for hiring or giving out wage increases will be concerned with where the profits will come from to support the wage increases or new hires.

Bottom line economics is what is foremost in the decisions of all businesses. The progressive socialist agenda of taking from the productive is case in point for wage depression and huge unemployment numbers, and with the reelection of Mr Obama, this situation will only get worse. Optimism for the future is gone.

Given all this bad news on our economic future that most everyone is aware of, who actually voted of Mr Obama and why? Where is the common sense?

U.S. Workers Endure "Lost Decade" of Declining Wages
Source: Kevin G. Hall, "U.S. Workers Endure 'Lost Decade' of Declining Wages," McClatchy, November 15, 2012.

November 26, 2012
Real earnings have declined across most job sectors since the Great Recession. Now, real wages are about the same level as they were in December 2005, highlighting the slow growth of the economy. This has been referred to as a "lost decade" for workers, says Kevin G. Hall of McClatchy Newspapers.

•Real wages have been on a downward slope for more than 40 years now.
•The median working-age man earns 4 percent less than he did in 1970 when adjusted for inflation.
•Nearly every occupational group is either below the 2005 level or at most 1.5 percentage points above the 2005 level.
•As a result of stagnant wages, economic recovery is likely to be more difficult since Americans are unable to pay off their debts.

To the confusion of many economists, the only occupational category that has seen a rise in real wages is office and administrative workers.

There are several explanations for the decline in wages.

•First is that the Federal Reserve has tamed inflation so wages have not had to increase to keep up with the rising prices of other goods and services.
•Second, it is possible that the decline in labor unions have resulted in less of a force for demanding higher wages and better benefits.
•Another likely reason is that productivity has improved due to automation of many jobs.

Some economists say that consumption is a better measure of the increase in wages. Since the 1970s, there hasn't been much of a change in inequality or a widening of inequality in consumption tables. In fact, low-income households have seen their purchasing power increase. However, this may be the result of increase in government transfer programs.

Some argue that the reason wages haven't increased is because the labor market is so depressed. So many people are unemployed and looking for jobs that employers are able to land workers that are willing to take less money.