Labor Day, of course, was intended to celebrate the American worker. But, for those of us lucky enough to be employed, the labor market still isn't pretty.
In the first report of a new series 'State of Working America' from the Economic Policy Institute (EPI), entitled 'Recession Hits Workers' Paychecks: Wage Growth Has Collapsed,' the EPI charts how wage growth has been suppressed despite huge increases in productivity.
This goes against traditional economic thinking which says that as productivity increases, so does compensation. After all, in healthy economic times, employers need to raise wages and fringe benefits to attract and keep their most productive workers. Clearly, reality tells a different story.
Between 2002-2007, a period of recovery from the dot-com bust, productivity went up 11 percent while nominal hourly wages decreased. Furthermore, since the summer of 2008, wage growth has slowed: wages grew at a 2 percent annualized rate over the past three months, versus 2.6 percent during the same period in 2009 and 4.2 percent in 2008.
What's worse, according to EPI president Lawrence Mishel and economist Heidi Shierholz, who authored the report 'Recession Hits Workers' Paychecks,' we may be stuck in this pattern for awhile:
"This erosion of wage growth will only compound the deterioration of incomes and living standards that occurred over the course of the 2000-07 business cycle.
Click here to see the full report from the EPI, or click on the chart below to see four alarming trends in the American workforce.
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