In fact, MoneyWatch warns that a "combination of short-term factors and long-range changes may conspire to squeeze salaries for some time to come," and annual raises "could be in jeopardy."
So how did we get to this point? It turns out real wages have actually been flat for years.
Looking back, it turns out a decade’s worth of easy credit and faux real estate wealth obscured the fact that incomes for the majority of workers weren’t keeping up. After healthy salary growth of roughly 1.8 percent annually from 1995 to 2000, for example, inflation-adjusted, or real, wages for the median worker remained essentially flat from 2000 until 2007 when the recession started, according to government data (average wages increased roughly 2 percent, but that number is skewed by huge gains at the top). In fact, after the recovery in 2002, notes Shierholz, no real wage growth occurred at all for the median worker — despite an increase in productivity of 11 percent over the seven-year time frame. [emphasis added].In other words, we've been working our tails off and have little to show for it. So who reaped the productivity gains?
Typically, companies and their shareholders.And what do experts point to as the reason for our declining prosperity?
Shierholz and other economists attribute the disconnect between wages and output to declining unionization and the need to keep prices low in a competitive global environment.The "kill the unions" and "outsource everything" crowd accomplished what they set out to do - drive wages down for average Americans. And the scenario for new jobs created doesn't look any rosier.
A 2009 analysis of figures from the U.S. Department of Labor showed that sectors that expanded through this decade have paid an average annual compensation of $55,300, compared with $65,100 for industries that are shrinking. This is partly because many of the newly-created positions are in service industries, which tend to be less organized and have less bargaining power. Think home healthcare and “green” jobs versus auto manufacturing and heavy industry.In fact, six of the top 10 fastest-growing jobs are low wage.
There are steps Washington can take to start improving living standards for average Americans, but as long as people keep voting for anti-union, globalization embracing politicians, I don't see things changing.