US Productivity Up, Wages Stagnant
No surprise here. A new report from the WSJ as part of a series on manufacturing jobs at home finds that even as US productivity hits a record high, our wages are in a holding pattern.
Here's the key info:
A recent uptick in factory employment and the return of some production to U.S. shores from abroad both added jobs that probably otherwise wouldn't exist. But sluggish wages also are squeezing workers' incomes and spending. That, in turn, hurts retailers who target middle-income earners and restrains the vigor of the economic recovery.
"The U.S. has held manufacturing wages in check while there has been strong wage growth in China and moderate wage growth in Mexico," says economist Gordon Hanson of the University of California, San Diego, referring to two of the U.S.'s biggest lower-wage competitors.
The poor economy gives employers the upper hand--and due to this pressure many unions have accepted two-tiered structures that invite younger workers into the workforce with fewer benefits and lower wages.
With unemployment still high and global competition intense, employers have the upper hand in asking unions to relax work rules and restrain, or reduce, wages and benefits. Scores of U.S. companies have negotiated two-tier contracts with unions that allow them to pay new hires less than existing workers or otherwise restrain wage and benefit costs.
So while some workers have employment that otherwise wouldn't have, the dignity of a wage commensurate with the times eludes many.