Wages Dropped for Almost All American Workers in First Half of 2014

Lynne Stuart Parramore

Think your money’s not going very far this year? It’s not your imagination. According to new research by the Economic Policy Institute, real hourly wages declined for almost everybody in the U.S. workforce in the first half of 2014. Thanks, so-called recovery.

Photo via DG EMPL @ Flickr.

Photo via DG EMPL @ Flickr.

Economist Elise Gould pored over data from the government’s Current Population Survey and determined that workers at the 20th, 30th, 40th, 50th, 60th, 70th, 80th, 90th, and 95th percentiles all saw declines in their real wages in the first half of 2014 compared with the same period last year. This was true whether you had no high school degree, a high school diploma, some college, a college degree, or an advanced degree. In fact, people with advanced degrees saw the biggest drop (2.7 percent).

EPI reveals this isn’t just a blip. Real wages dropped 4.9 percent for workers with a high school degree and 2.5 percent for workers with a college degree from the first half of 2007 to the first half of this year.

Gould explains in the report that “the last year has been a poor one for American workers’ wages.” She states that “on the whole, the broad wage trends by education level over the last decade and a half make clear that wage inequality cannot be readily explained by stories about educational credentials and technology; wage inequality has increased steadily, yet even those with a college diploma or advanced degree have experienced lackluster wage growth.”

Gould adds, “It’s an indication of the fact that no one — not even educated workers — is able to bargain for anything.” Employers have the power and they are using it to pay their workers less.

The only workers who saw real wages go up over the past year were workers at the10th percentile of income, but only two cents an hour, from $8.36 an hour to $8.38. Two pennies! Don’t spend it all in one place. That paltry increase happened because of minimum wage increases in 13 states. The lack of wage growth harms society and the economy in a whole host of ways. When workers don’t have enough money in their pockets to spend on goods and services, businesses can’t hire and they fail, which increases unemployment. Unable to keep up with the growing expenses of things like healthcare and college tuition, the middle class shrinks. For those less well off, life becomes a daily struggle for survival. The increasing gap between the very rich and everyone else produces a wide range of social ills, from mental illness to addiction to chronic diseases. The social fabric becomes unraveled.

Not a very promising reflection for Labor Day, is it?

Originally published at Alternet.Org.

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