Wednesday, September 5, 2007

Here's an idea - add more unskilled workers!

Apparently, the economic growth of the past 6 years has not resulted in net pay increases for the median American wage earner, according to a recent set of studies. Women have had their median pay net of inflation increase 4.7 percent in the past 6 years, men have had theirs increase 1.1 percent. Overall, this works out to about a 3 percent increase in net wages for median wage earners.

Benefits have increased pretty substantially in the period studied.

The main reason given by the article for the decline: "...workers' bargaining power has diminished during the period..."

This should be a self-evident situation: when workers' bargaining power is diminished, wages will fall. Think these results are bad? Imagine what would happen to bargaining power, particularly in the unskilled labor force, when several million new unskilled workers are added to the labor force through amnesty for illegal immigrants.

GDP growth not reaching paychecks
CNN

NEW YORK -- The economic expansion that began six years ago has failed to benefit most workers, according to a report from the nonpartisan Economic Policy Institute, released Monday.

Productivity growth, although slower of late, has been strong since 2000. After a sluggish start in the period, employment has picked up, although at a slower pace than in past recoveries. Yet, that growth hasn't transferred to workers' paychecks, particularly for workers at the lower and middle end of the pay scale, the report found.

After rising quickly in the second half of the 1990s, most workers real wages have been stagnant in the 2000s, especially since 2003.

While productivity jumped almost 20 percent since 2000, the real median hourly wage of all workers rose just 3 percent in the same period. Since 2003, productivity has risen 5 percent, while the median hourly wage fell 1.1 percent.

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