US Workers on Job Longer for Less Pay
IT'S old news that blue-collar workers and those with high school graduation or less education have been getting financially clobbered in the United States for a decade or so.
Now college graduates also are being hit.
Two economists at the Economic Policy Institute say that since 1987 the real, after-inflation wages of college grads, white-collar workers, and most women have been falling.
Indeed, Lawrence Mishel and Jared Bernstein find in their study for the liberal-leaning Washington think tank that some 80 percent of American workers saw their wages fall between 1979 and 1991. "It is increasingly difficult to see our economy as one where the work force is moving up some 'income ladder,' " the two state.
Messrs. Mishel and Bernstein are looking only at hourly wages and hourly compensation (which includes fringe benefits). Many families may well be maintaining or even improving their incomes by working longer hours at less pay or by having more members of the family work, Mishel noted in a telephone interview. But he says these families aren't really "better off" than before the extra work.
In a recession, of course, many employees find that their wages do not keep up with the inflation rate. US economic output was declining from July 1990 to sometime in the spring of 1991. However, the Mishel/Bernstein study holds that the wage slump began before this recent recession and might thus continue in coming years.
"We need economic growth and a strategy to have growth with high wages," Mishel says. "The idea that recovery will put our economic problems behind us is wrong-headed."
The only groups to enjoy rising wages from 1979 to 1991 were men with advanced educations (at least two years beyond college), and women with at least some college education.
From a political standpoint, recent news on income trends has been hammering the Republicans, who have occupied the White House since 1980. The party in power always likes to claim credit for good news, and usually gets blamed for bad news as well - even though nonpartisan economists may find other factors more responsible for either good times or bad times. For example, many economists figure the monetary policy of the quasi-independent Federal Reserve System usually accounts for a goodly portion of the
Mishel charges that the weak wage performance stems from an indifference of the federal government to a loss of good blue-collar jobs, a collapse in trade unions, and the failure of the minimum wage to keep up with inflation.
"We have permitted a situation where employers are trying to become competitive globally by cheapening wages rather than by raising productivity and quality," he says. He holds that a North American Free Trade Agreement, now under negotiation with Mexico and Canada, would make it easier for companies to shift some jobs to Mexico and, more importantly, to keep down wages in this country.
Proponents of the agreement argue that it would stimulate the creation of high-paying jobs in the US. Mishel asks, referring to his study, "Where are the better jobs?"
The findings of the Economic Policy Institute study include:
* Average hourly compensation since 1987 shows a decline of 2 to 5 percent. "The Bush administration will be the first one in the postwar period where hourly compensation has declined," the authors write.
* Average wages (not including benefits) have fallen 6 percent since 1987. Fringe benefits have not grown in this time period and, therefore, did not offset the loss in wages.
* The median hourly wage for men (as many were paid more as were paid less) in 1991 was 2.6 percent less than in 1989 and 14 percent less than in 1979.
* The 5.3 percent gain in the median hourly wage for women from 1979 to 1989 was almost entirely reversed by a 4 percent reduction from 1989 to 1991.
* Wages of college graduates fell 3.1 percent between 1987 and 1991. "Having a college degree no longer affords protection against falling wage trends," the study says.