Thursday, February 26, 2015

What Recovery?

In a recovery, you would expect to see higher median income. In Obama’s recovery, median incomes have actually dropped. Median inflation-adjusted household income in 2013 was $2,100 lower than when President Obama took office (and $3,600 lower than when George W. Bush took office). Productivity is up by 7.2 percent since the end of the recession, but hourly wages at the end of June 2009 were the same as they were at the end of October 2014: $22.15. Most Americans didn’t lose their jobs during the recession. But most Americans haven’t seen their incomes go up in this recovery.  This is the crisis known as “wage stagnation.”  Commentary Magazine - The Truth About Wage Stagnation

Bargaining power has shifted to employers, based on workers’ fears of permanent job loss.  Since 2000, it notes, a shrinking share of workers has changed jobs. In economics jargon, labor markets have “less fluidity”; workers are “moving less among jobs” than before. By reducing turnover, this defensiveness relaxes pressure on employers to increase compensation.  The study finds the tendency of people to shift jobs has dropped by almost one-third, from about 13 percent of the 16-and-over population in 2000 to 9 percent in 2013. Slower growth in compensation has, in turn, reduced labor’s share of the national income.  Washington Post -What's behind Wage Stagnation

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