Worker Compensation Grows by Lowest Amount On Record

(AP): Employment compensation for U.S. workers has grown over the past 12 months by the lowest amount on record, reflecting the severe recession that has gripped the country.

The Labor Department said Friday that employment costs rose by 1.8 percent for the 12 months ending in June, the smallest annual gain on records that go back to 1982.

The department said that for the April-June quarter, its Employment Cost Index rose by just 0.4 percent, just slightly above the 0.3 percent rise in the first quarter, which had been the smallest quarterly gain on record.

Companies, struggling to cope during the current hard times, have been laying off workers, trimming wage gains and holding down overtime to save costs.

The 1.8 percent increase in overall compensation for the past 12 months included a record low 1.8 percent rise in wages and salaries, which account for 70 percent of compensation costs.

Benefits, which include such things as health insurance and contributions to pension plans, also rose by 1.8 percent during the past year, the lowest annual gain in this category since a similar increase during the 12 months ending in September 1997.

The rise over the past 12 months was far below the 3.1 percent increase in the 12 months ending in June 2008. Analysts said that with unemployment expected to keep rising even after the recession ends, wages will continue to remain under pressure and inflation will not be a threat.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, said that both wages and benefit gains have been cut almost in half over the past year. "As long as this lasts, it is very hard to see anything but downward pressure on core inflation," he said.

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In a separate report, the Commerce Department said Friday that the overall economy sank at an annual rate of 1 percent in the April-June quarter, an indication that the severe recession is beginning to hit bottom. The economy had tumbled at a 6.4 percent pace in the first three months of the year.

The Federal Reserve's latest survey of business conditions around the country, which was released Wednesday, found that while economic conditions remain weak, the pace of decline had moderated since the huge decreases in output that occurred at the end of last year and early this year.

As for wage pressures, the Fed said, "Most districts indicated that labor markets were extremely soft, with minimal wage pressures."

The Fed reported businesses were using various methods to trim compensation costs including freezing wages or even cutting them in some instances.

The Fed report, known as the beige book, will form the basis of discussion when policymakers next meet on Aug. 11-12 to consider what to do with interest rates. Economists widely expect that the Fed will continue to keep its key interest rate, the federal funds rate, at a record low of zero to 0.25 percent, where it has been since last August.

Many economists believe that the Fed will not begin worrying about inflation and the need to boost interest rates until the unemployment rate, now at a 26-year high of 9.5 percent, begins to come down. Some economists expect the jobless rate to peak above 10 percent sometime early next year.

The economy has been hit by heavy layoffs as companies struggle to deal with the severe recession, which began in December 2007.

Comments

[SangZe]

Thanks Obama. I really need a pay cut to help my boss pay for his yachts.

[Bettysdad]

"Employment compensation?"

What the hell is "employment compensation?

Is it anything like wages and salaries?

Leave it to the right-wing, anti- Obama AP to put out a story that people might not even relate to.

[bikerdude]

lowest worker compensation and soaring compensation for the executive perps who got us into this mess. cut unemployment. save by cutting worker costs and then compensate the execs...Ab­surd.
Republican thinking got us here and will keep us here unless we throw them all out.

[FreedomCorpse]

Funny how the article didn't mention the 8 years of the bush admin had the lowest record of job creation and wage growth since records have been kept. Now the economy is a disaster and they're writing these things? Globalization is eating american workers for lunch and laughing at their suffering.­..and military is powerless against the money power that controls our corrupt political system and them.

[JessWonderin]

Nor was it mentioned that under the same Bush, we had the GREATEST shift in income from the "middle class" to the 1%ers . . . with the biggest tax cuts going to those that made the MOST . . .

[SamKnause]

That would require honest journalism and apparently that is not high on the list of journalist. Maybe the lobbyist have taken over journalism and that is why we never get any honest reporting.

[hauty007]

Truth is TREASONOUS in the Empire of Lies.
10% Unemployed of course Workers Comp is low, DUH.
UNPRECEDENTED
just for that.. I am making my first contribution to SARAHPAC.
sending the receipt to the DNC, using their pre-paid envelop!

[JessWonderin]

such ire . . . seen this post in SEVERAL places . . . must have sent a LOT . . . .

or maybe you are trying to earn that autographed snowsuit . . . .

[Agent420]

What do you know about truth?

[themainpoint]

What is most astounding, is that Americans are led to think things are okay and this is just a temporary recession(which might be true if youa re a CEO, huge investor or a corporation that has your claws in the US treasure that average Americans fund).

And what's more astounding than that, is we've been watching what's left of the American wealth via tax income being transferred in the dark and at lightening speed for bailouts, subsidies, unnecessary wars, and now Wealth Care Reform (that I doubt will reform much except that the Wealth Care Industry will get their hands on even more tax money).

[themainpoint]

Globalization with a Congress that showed little interest in protecting American workers means the growing international competition for wages is likely to have a huge effect on most Americans.

Workers in other parts of the world have much lower expectations & weaker labor protections. They will do the same work for much less & without benefits or retirement plans, etc., That means continued outsourcing, lowering of US worker wages, & massive importing people who will work for less so that when Americans try to stop the bleeding, there are plenty of people all ready to do their jobs for much less.. Americans are in for a tough ride that's probably just begun.

Seems our economy has been propped up to look far better than it is for workers. I suspect this slow letdown is so Americans don't freak out when they realize that what's left of their near term wealth has been handed to banks for bailouts and housing bubbles, and soon to be committed to the health care industry for it's artificially inflated prices.

Add to this the fact that in many corporations have become desperate with greed and no longer share the profits with the workers who make the profits possible. Even some companies with growing profits are lowering salaries.

Add to this the fact that worker protections and unions have been on a huge decline.

I worry we could become one of those dismal countries where a few greedy crooked types take everything while the masses are

[hopefull252]

The Federal Reserve Bank "This is a Private Bank" is basically the manager of the Banking System and the manager of Employment in is country. Congress gave them this responsibility in 1913 and since then Congress changed the rules and laws several times. Here is a list of the acts of Congress.

* Federal Reserve Act
* Banking Act of 1935
* Employment Act of 1946
* Federal Reserve-Treasury Department Accord of 1951
* Bank Holding Company Act of 1956 and the amendments of 1970
* Federal Reserve Reform Act of 1977
* International Banking Act of 1978
* Full Employment and Balanced Growth Act (1978)
* Depository Institutions Deregulation and Monetary Control Act (1980)
* Financial Institutions Reform, Recovery and Enforcement Act of 1989
* Federal Deposit Insurance Corporation Improvement Act of 1991
* Gramm-Leach-Bliley Act (1999)
* Emergency Economic Stabilization Act (2008)

Despite all these changes the Federal Reserve has done dismal job in almost if not all areas of there responsibilities.

We have never audited the Fed in the 96 years, What have they done? We see the effects not the cause.

It's time to pull back the curtain and open the books and reconcile there actions over the years.

"AUDIT the FED"

[Expatslacker]

There was a pres who suggested that & he was a$$in ated in 1963. Thurth is stranger the fiction, only a myth but google it.

[blueskybigstar]

pht I'm a Fan of pht permalink
Reagan didn't have to be saved but the country did from carter and what did it was tax cuts.Just a little fact for you todwell on for the rest of your life.

Response: Reagan caused a great recession. Things were very bad. Carter inherited the Vietnam War. He was sabotaged by treasonous forces in the CIA. Reagan only created bubbles of spending by tax cuts. That money went out the window. Reagan's people sold d rugs to the American public in black neighborhoods and pocketed the money. He destroyed our educational system. He let the mentally ill who could not care for themselves out on the streets in CA. He cheated to get into power. George Will stole Carter's debate notes. Reagan raised the minimum wage which stimulated the economy and saved the good image of him. Everything he represented failed. The grand Ayn Rand experiment has failed. If we had followed Carter's energy policies we would be much richer than we are today. Stop trying to rewrite history.

[Expatslacker]

Re-write history???? You've just done a great job...we you even born then?

[SamKnause]

Google just a few of the topics mentioned and there is proof of what this person is saying. The CIA did and does sell drugs in the U.S. Carter's energy policies would have been better for the U.S., and we would not be so dependent on foreign oil now, if they would have been instituted. Reagan's trickle down economics was an assault on middle and working class. The rich got richer and poor got poorer. What exactly is the person rewriting? You may have been alive during this time, but I don't think you were paying attention. Union busting, tax cuts for the rich, and taxes on unemployment for the middle class and poor.

[SWissouri]

In my area of the country there was no increase at all. So, I'm not surprised at these numbers. Most businesses around here gave no raises or, in my case, you got a pay cut from between 2-10%. I'm assuming that the 1.8% increase must be because of all the AIG and other outrageous bonus's that were metered out. What would be real good numbers to look at is the rate of increase of salaries in the $100K and less group. I'd be interested to see that.

[ibsteve2u]

...and in the $100K+ group.

Just separated.­..

[RandVictims]

The only time in history that Capitalism ever worked was when it was heavily dilluted with Socialism. The New Deal and immense union influence created opportunity for people.

1980s, Americans allowed aintellectually challenged, failed actor to convince them that they don't deserve a home, healthcare, occasional vacations in return for working like slaves and allowed big corporations to destroy all labor and consumer protections by voting corporate hitmen into high office. The chickens stumped for Colonel Sanders.

Now white and blue collar workers face slavery and class extermination but we now have a chance to reverse this corporate tyranny. We can get a fair deal if we stop listening to the corporate media snake oil that sold us Reaganomics and listen to people who support a decent way of life..

Being lazy and stupid opened the front door for corporate thieves and rapists, sociopaths per Thom Hartmans keen analogy.

Let's please not be stupid again.

[ShakeYourComplacency]

Your post is right on the money. And honestly, if any political candidate regardless of party came out and said they were going to rebuild the middle class then I'd likely vote for them. There are only a few dems in the party that have a clue, and the republican party sold their souls to the religous/racist right long ago, just prior to selling their souls to corporate america.

America was the most productive, most hardest working, most patriotic group in the world. Japan made money off our OUR car designers and electronic gagget makers. China profited from OUR consumerism stemming from our buying power. We should be unbelievably strong right now. Instead...­.the middle class is dead, there are no good paying jobs, and no health care. From all our work, we are broke. Broke!

They took away what we built, handed us slave wages instead, told us to go sit down in front of the tv and then come to work at 7am the next day to re-build what we "thought" we built yesterday.

It's old fashioned thievery, and last time this happened it was 1776.

[hulagirrrl]

So right on the money with this comment, wow.

[Expatslacker]

A great post, & oh so true. Having lived through that time I know EXACTLY what you are talking about but you said it much beer then I ever could. Thanks

[mismicma]

The sad thing is the majority will do nothing until the system completely collapses. As long as people have credit cards, fake home equity and taxpayer bailouts they will continue on in fantasy land.

[peterbeagle]

and as long as the far right uses scare tactics and phony boogey men to get people to believe they'll be 'protected' from (gasp!) socialist ideas, such as single-payer health care ... the reality-based populace will be screwed.

[Cristancho]

On the money. I wish we all had the will to put a stop to this. If everyone bought local, cleared their debts, and saved money the message would be heard. We are are all complicit.

[Expatslacker]

Exactly. As long as people keep using their plastic with the thought that it is free money we will stay in trouble. As long as our government spends money they don't have into the future we will never recover. It's hard to say what tomorrow will bring, most of us never dreamed that we would be unemployed at this time in our lives, let alone will be happening in 2019 or 2020. The new rule should be that if it doesn't pay for itself now...it should not be spent. (Like that will ever happen in government)

[AbyssinianLion]

Greed is an ugly sin. I have never been against people becoming rich in a capitalist society, but how much money is enough? Is being a Gozillionaire worth eroding our Country? How may yatchs,hou­ses,planes and cars does any one man need?

[ShakeYourComplacency]

There was a recent financial article on here there mentioned wages briefly, and I screamed at the top of my lungs, that WAGES were the key, and the crux of the whole economic meltdown. It doesn't take a rocket scientist to understand that if our wages don't keep up with the cost of living, we're going to borrow, use credit cards, and finance our houses with little money down. We already figured out "leasing" cars instead of owning them, because apparently we couldn't save up for a freaking car anymore. People are not going to live in cardboard boxes on the street, I'm sorry, so they did what they had to do, period.

Unless the government figures out that this country can't survive on poor wages, it will continue to decline. If people can't buy, then businesses close. And as another poster pointed out, the corporation money is there, as evidenced by CEO billionaires. Corporations would rather buy-out other weaker companies and takeover the market share, instead of rolling the money back into reinvestment for the company, including labor.

But everybody got greedy, and they're still greedy. Health care is one of the safest recession proof jobs, and lots of women are in nursing schools right now. Wait till they find out that there's no jobs when they come out, because hospitals and private facilities have cut back on staff. New grads won't find work.

[Gregor53]

Of course this data does not include the Executives of these organizations. They seem to always get more and more. This is no different than the Middle Ages where the peasants paid in blood and sweat for the upper class. Nothing changes.

[SamKnause]

I agree and now it is global. The affluent and those in power of other countries are uniting to keep all of their citizens poor so the rich can control the world. This is really scary. They were talking about a group that call them selves "The Family" on the Bill Maher show last night that fly to countries all over the world helping them keep their citizens in line. "The Family" members say they are the chosen to rule the world and were chosen by God and nothing they do is illegal or bad. It sounds like the most evil cult I have ever heard of and it is real. A man lived in the C Street house undercover and wrote the book titled "The Family". It is our Congressmen and Senators who are involved in this. It sounds like a Hollywood movie plot and it is happening now. I think the world in in a downward spiral that can not be stopped. Native Americans seem to believe that mother earth will take care of the problem by wiping the majority of the human race out so mother earth can repair her self.

[peterbeagle]

The US middle class has been gradually shrinking for a couple decades. Nothing changes ... until it disappears and those of us in the lower class REVOLT, MARCH IN THE STREETS, and throw out the wealthy white guys on top, who already own everything and call all the shots!

[Agenhippy]

Unless and until we get a handle on CORPORATE PERSONHOOD we will be spooning sand against the tide of the oligarchs.

end CORPORATE PERSONHOOD

[yliza]

Amen!

Hey, can we combat this by declaring that one corporation owning another is slavery? If they want the same rights as people, doesn't that follow?

[dogman44]

You might be on to something. Personally I'd rather fight the corporations
in the streets than in the courts where they have the advantage

[Konnie]

at last. thank you for saying what i have been yelling at my tv and computer screen
for years.....­......ther­e has to be a way.......­.......