Sunday, October 4, 2015

Forty years of increased productivity = lower wages

When was the last time you got a decent raise? I know the older woman who takes my order at Panera Bread every morning has not had one in more than five years. Yet, there she is every morning, taking breakfast orders. It was hard not to notice the tip jars that suddenly appeared in front of the cash registers.

Between 1948 and 1973, productivity and compensation went hand in hand. As productivity increased so did compensation. The gap grew during the turbulent economy of the 1970s, and then in the 1980s the gap increased and there was no looking back as wages went down while productivity went up.

While we are bringing more money home than we were 40 years ago, that money does not have the same buying power. Take the minimum wage: In 1967, the minimum wage was $1.40. Today, the minimum wage is $7.25 an hour—which when adjusted for inflation is 12.1 percent lower than it was in 1967.

That is just minimum wage:

Measured in 2014 dollars, the median male full-time worker made $50,383 last year against $53,294 in 1973, according to new U.S. Census Bureau figures.
On average we have lost $3,000 dollars in wages, but why have we seen this decrease? It would be easy to point the finger and Ronald Reagan and trickle-down economics, and while that is likely part of the problem there are many factors involved. Keep reading below to see what they are.
Corporate America’s push to outsource jobs — whether call-center jobs to India or factory jobs to China — has fattened corporate earnings, while holding down wages at home. New technologies have raised productivity and profits, while enabling companies to shed workers and slice payroll. Computers have replaced workers who tabulated numbers; robots have pushed aside many factory workers.
We are no longer competing with other Americans for jobs. We are competing with people all over the world. We have seen entire industries in this country disappear. The garment industry in the United States is for the most part non-existent. Looking back now, it's clear that the "Look for the union label" ads of the late '70s/early '80s were really about saving an entire industry from being shipped overseas.

If you watched the video you could hear the desperation in her voice as she said:

"This is no import, we made this blouse. We belong to the International Ladies Garment Union, and we have sewn our union label right in here. It tells you we are able to do what every American worker wants to do, have a job doing honest work at decent wages. When you see the union label, think of us, making a living, making your clothes right here in America."
Manufacturing jobs like those in the garment industry are long gone as we have transitioned to a service economy. But like the garment industry, we have seen service industry jobs go overseas as well. Call any company and you could be talking to a person anywhere in the world doing a job that used to be done here in the United States. All in the name of corporate profit.

Those of us who still have jobs are working longer hours and taking less time off, and we are not seeing additional compensation for the added productivity, while the price of everything goes up.

The garment industry is long gone and service jobs that can be done elsewhere are being farmed out across the world. Jobs that cannot be farmed out are paid low wages, and of course we also have the gig economy, brought to you by Uber and Lyft. Now Amazon is getting in on the gig economy with Flex. Don't be fooled: The gig economy cannot replace the jobs we have lost, and is really just an excuse for employers to not provide decent wages and benefits to their employees.

The problem for corporate America and many in the 1 percent is that sooner or later, no one will be able to afford their goods and services if this trend continues. All we want—all any of us want—is to have a job doing honest work at decent wages.


 Oct 04, 2015 by Mark E Andersen

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