### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [August 26, 2013, 6:06pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/1 "2013-08-26T18:06:03Z")
N.B.: This is not just a problem of the poor or the working-poor, it is the problem of practically **everybody** who works for a living.
From [_The Nation:_](http://www.thenation.com/blog/175880/week-poverty-90-percent-workers-arent-getting-bupkis#axzz2d5sYEA3h)
> [@](#):
>
> However, a new report from the Economic Policy Institute (EPI) shows just how much Americans across the economic spectrum have in common when it comes to stagnating wages.
>
> “The bottom 99 percent may be a bit of an exaggeration but it’s not much,” said EPI president Lawrence Mishel, who co-authored _A Decade of Flat Wages_ with economist Heidi Shierholz. “In an era when the only people moving ahead are those with an advanced degree—and that’s just 12 percent of the workforce—we shouldn’t partition off people at the low end as if they are totally distinct.”
>
> The report demonstrates that during the recession and its aftermath, **from 2007 to 2012, wages fell for the entire bottom 70 percent of workers** despite productivity growth of 7.7 percent. \*\*But Mishel emphasizes that the cause of stagnating wages isn’t the recession.
>
> “We need to be clear that these trends are really evident from 2002 to 2007, after the momentum of the strong wage growth of the late 1990s ended,” he said.\*\*
>
> From 2000 to 2007, productivity increased by a robust 16 percent but a worker at the fiftieth percentile saw a wage growth of just 2.6 percent, a worker at the twentieth percentile saw a wage increase of 1 percent and the eightieth percentile saw a wage growth of 4.6 percent. Indeed, over the past ten years, wages were stagnant or declined for the bottom 70 percent.
>
> “And even the wages of the worker at the eightieth percentile rose only 1.7 percent over the past ten years—that’s less than 0.2 percent annually, which in economic terms is zero, ” said Mishel. “Bascially, somewhere between 80 and 90 percent of workers in the last decade aren’t getting bupkis, as my grandmother used to say.”
EPI report: [here](http://www.epi.org/publication/a-decade-of-flat-wages-the-key-barrier-to-shared-prosperity-and-a-rising-middle-class/).
Now, the [EPI](http://en.wikipedia.org/wiki/Economic_Policy_Institute) is a liberal/progressive economic think-tank, so some Dopers might distrust it; so, if you have contrary studies showing wages have not stagnated, bring them.
Obama gave a speech July 24, [“A Better Bargain for the Middle Class,”](http://www.whitehouse.gov/blog/2013/07/24/president-obama-lays-out-better-bargain-middle-class) identifying the “severed link” between rising productivity and rising wages. But he seems to think America can grow its way out of the problem through technological advances and education. “But Mishel and Shierholz note that there is nothing about innovation that guarantees either better jobs or broad-based wage growth.” Note that this wage-stagnation **preceded** the current recession; why should we have expect it won’t outlast it?
The authors’ solution:
> [@](#):
>
> “If you really want to get wages to grow broadly for everybody it means confronting power in the workplace,” said Mishel. “Confronting the fact that we have an economy geared toward creating huge corporate profits and rising stock prices, but not rising wages, and an economy constructed to give some people power and other people less power.”
>
> \
>
> In addition to “aggressively increasing the minimum wage,” Mishel and Shierholz offer many recommendations, including: rapidly lowering unemployment through large-scale, ongoing public investment; restoring the collective bargaining power of low- and middle-wage workers; guestworker programs only being used to relieve documented labor shortages, and guestworkers having the same labor protections as resident workers; citizenship for undocumented workers who are currently vulnerable to exploitation; executive action so federal dollars aren’t spent employing people in jobs with poverty-level wages; and job quality and wage growth as the key priorities in economic policymaking.
Seems good to me. Anybody got a better solution? Or does anyone have an argument in denial of the problem?
---
### Author:  [@aNewLeaf](https://boards.straightdope.com/u/aNewLeaf)
#### Post date: [August 26, 2013, 6:10pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/2 "2013-08-26T18:10:37Z")
> [@](#):
>
> “Confronting the fact that we have an economy geared toward creating huge corporate profits and rising stock prices,
Doesn’t seem to describe reality. Corporations aren’t exactly enjoying extraordinary profit booms.
Some specific industries are profitable. It’s not at all a broad phenomenon, what’s more widespread is sagging sales and weak to nonexistent profits.
---
### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [August 26, 2013, 6:38pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/3 "2013-08-26T18:38:08Z")
> [@aNewLeaf](#):
>
> Doesn’t seem to describe reality. Corporations aren’t exactly enjoying extraordinary profit booms.
> Some specific industries are profitable. It’s not at all a broad phenomenon, what’s more widespread is sagging sales and weak to nonexistent profits.
Now, might that not have something to do with wage stagnation (translated into reduced consumer buying-power), do y’think?
---
### Author:  [@dracoi](https://boards.straightdope.com/u/dracoi)
#### Post date: [August 26, 2013, 7:25pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/4 "2013-08-26T19:25:09Z")
I don’t really have time to pull numbers to back up an argument, but I think an awful lot of wage stagnation has to do with healthcare costs - specifically insurance.
From the employer’s perspective, it’s not unusual to see costs go up 10-20% in a year for health care, and it’s not unusual for healthcare to be 10-25% of an employee’s wages. Those numbers mean that the employee got a raise of 1-5% but it was all in health care costs and not wages. These increases go back at least 15 years and are not just linked to the recession or to Obamacare.
Other than that - especially in regards to lower-paid workers without employer-paid health coverage - I think it’s a natural result of globalization. I’m not even sure it’s undesirable provided that it can be done in a gradual way. At some point, wages in the US need to reach some kind of parity with worldwide wages. I want to see that happen by lifting everyone up, but that means slower growth for those who are already high up.
---
### Author:  [@Voyager](https://boards.straightdope.com/u/Voyager)
#### Post date: [August 26, 2013, 7:30pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/5 "2013-08-26T19:30:35Z")
> [@aNewLeaf](#):
>
> Doesn’t seem to describe reality. Corporations aren’t exactly enjoying extraordinary profit booms.
> Some specific industries are profitable. It’s not at all a broad phenomenon, what’s more widespread is sagging sales and weak to nonexistent profits.
[Um, not really true.](http://www.businessinsider.com/corporate-profits-hit-new-record-high-2012-11) Now in the last quarter they seem to be seeing some issues, but that might be because their screwing the workers is finally catching up to them.
---
### Author:  [@Voyager](https://boards.straightdope.com/u/Voyager)
#### Post date: [August 26, 2013, 7:35pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/6 "2013-08-26T19:35:28Z")
> [@dracoi](#):
>
> I don’t really have time to pull numbers to back up an argument, but I think an awful lot of wage stagnation has to do with healthcare costs - specifically insurance.
>
> From the employer’s perspective, it’s not unusual to see costs go up 10-20% in a year for health care, and it’s not unusual for healthcare to be 10-25% of an employee’s wages. Those numbers mean that the employee got a raise of 1-5% but it was all in health care costs and not wages. These increases go back at least 15 years and are not just linked to the recession or to Obamacare.
>
> Other than that - especially in regards to lower-paid workers without employer-paid health coverage - I think it’s a natural result of globalization. I’m not even sure it’s undesirable provided that it can be done in a gradual way. At some point, wages in the US need to reach some kind of parity with worldwide wages. I want to see that happen by lifting everyone up, but that means slower growth for those who are already high up.
But many of the employees without health coverage work in service industries like retail and fast food, and those employees are not directly affected by globalization.
Also, since employers are pushing more of the burden of healthcare costs on the workers, who have to pay more, their actual wages deducting healthcare are even worse than the numbers show. You’d think if this were really a problem the business world would be pushing UHC to get out of it altogether.
---
### Author:  [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)
#### Post date: [August 26, 2013, 7:36pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/7 "2013-08-26T19:36:02Z")
Inflation destroys real wage growth. Rising prices have accompanied increases in productivity. If we experienced increased productivity with sound monetary policy, you would see a rising real wage. We had a comparably sound monetary policy for decades in the US. During this period the middle class grew to attain levels of wealth never before seen. Maniacal inflationists Greenspan and Bernanke have delivered a one-two punch to the American middle class. The first being a destruction of real wages through inflation. The second being the destruction of savings through inflation.
American policy makers dogmatic worship of inflation over the course of several boom-bust cycles powered by loose money policies is unequaled by any tale of cultism or religious zealotry in the history of the world.
---
### Author:  [@XT](https://boards.straightdope.com/u/XT)
#### Post date: [August 26, 2013, 7:42pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/8 "2013-08-26T19:42:41Z")
Just a drive by, but why SHOULD wages continue to go up and up in the US? What about the US and US citizens/workers enables a perpetual wage upgrade machine for us? Why do US workers deserve continual increases? What about us is special that this should be expected ad infinitum?
> [@](#):
>
> Seems good to me. Anybody got a better solution? Or does anyone have an argument in denial of the problem?
Didn’t read the article you linked too, but just in what you quoted I think the magic bullet of mandating higher minimum wage by fiat isn’t going to work out too well. I’ve never understood why people think they can just mandate this sort of thing and it will simply work without ramification. As for the rest, it’s the standard dogs breakfast of using magic money to do public works at huge scale, pushing through more unions at all levels (again, by fiat), cutting foreign workers (as if Americans will flock to those jobs done by migrant workers, even if you raised wages by fiat and disregard what that would do to the price), and…well, not sure what the last ones are getting at. No minimum wage federal jobs? ARE there a lot of minimum wage federal jobs??
As I don’t think that lower wages in the US is a bug but instead is a feature (especially since I suspect that they are looking at wages and not at benefits, so are ignoring the fact that health care costs are rising and a lot of peoples take home pay might not have risen or even gone down, but that this is absorbed by higher costs and benefits), I don’t think it’s something that we need to ‘fix’. Even if we did need to fix it, I don’t see the benefit of any of the stuff quoted in the OP.
---
### Author:  [@Voyager](https://boards.straightdope.com/u/Voyager)
#### Post date: [August 26, 2013, 7:43pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/9 "2013-08-26T19:43:54Z")
> [@WillFarnaby](#):
>
> Inflation destroys real wage growth. Rising prices have accompanied increases in productivity. If we experienced increased productivity with sound monetary policy, you would see a rising real wage. We had a comparably sound monetary policy for decades in the US. During this period the middle class grew to attain levels of wealth never before seen. Maniacal inflationists Greenspan and Bernanke have delivered a one-two punch to the American middle class. The first being a destruction of real wages through inflation. The second being the destruction of savings through inflation.
>
> American policy makers dogmatic worship of inflation over the course of several boom-bust cycles powered by loose money policies is unequaled by any tale of cultism or religious zealotry in the history of the world.
Inflation? What inflation? Do you mean the inflation that absolutely, positively has to show up due to budget deficits and Fed policies but which hasn’t yet?
[here you go](http://www.usinflationcalculator.com/inflation/current-inflation-rates/). Notice that inflation is lower than during much of the Bush years. 1,7%? I’m quaking in my boots. Some more inflation would probably be good for us, to help get people and companies spending again before prices rise.
---
### Author:  [@davidw](https://boards.straightdope.com/u/davidw)
#### Post date: [August 26, 2013, 7:45pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/10 "2013-08-26T19:45:51Z")
> [@XT](#):
>
> Just a drive by, but why SHOULD wages continue to go up and up in the US? What about the US and US citizens/workers enables a perpetual wage upgrade machine for us? Why do US workers deserve continual increases? What about us is special that this should be expected ad infinitum?
Nothing special about US workers, but if productivity is increasing (it is) and corporate profits are increasing (they are), then it makes sense to me for wages to increase as well.
---
### Author:  [@Voyager](https://boards.straightdope.com/u/Voyager)
#### Post date: [August 26, 2013, 7:52pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/11 "2013-08-26T19:52:01Z")
> [@XT](#):
>
> Just a drive by, but why SHOULD wages continue to go up and up in the US? What about the US and US citizens/workers enables a perpetual wage upgrade machine for us? Why do US workers deserve continual increases? What about us is special that this should be expected ad infinitum?
The increases should come from productivity increases - which all seem to be going into exec salaries and increased profitability now. That’s the deal these days. If profits drop, workers are expected to take cuts or have stagnant wages. But when profits rise, they get told what you just said - tough shit.
> [@](#):
>
> Didn’t read the article you linked too, but just in what you quoted I think the magic bullet of mandating higher minimum wage by fiat isn’t going to work out too well. I’ve never understood why people think they can just mandate this sort of thing and it will simply work without ramification.
Because it has? And because the minimum wage is low in terms of constant dollars?
> [@](#):
>
> As I don’t think that lower wages in the US is a bug but instead is a feature (especially since I suspect that they are looking at wages and not at benefits, so are ignoring the fact that health care costs are rising and a lot of peoples take home pay might not have risen or even gone down, but that this is absorbed by higher costs and benefits), I don’t think it’s something that we need to ‘fix’. Even if we did need to fix it, I don’t see the benefit of any of the stuff quoted in the OP.
Okay, so WalMart should quit whining about reduced sales, right? Where do you think the money from increased wages goes? If you are rich, it goes into savings, but if you are not rich, it goes into delayed consumption. And everybody wins.
---
### Author:  [@XT](https://boards.straightdope.com/u/XT)
#### Post date: [August 26, 2013, 7:54pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/12 "2013-08-26T19:54:22Z")
> [@davidw](#):
>
> Nothing special about US workers, but if productivity is increasing (it is) and corporate profits are increasing (they are), then it makes sense to me for wages to increase as well.
Depends on WHY productivity has increased. If it’s increased because of the workers (more training or skill sets, for example) then you are right…wages should go up, and in fact they would go up in that case unless across the board all US workers simply got better at the same time, thus increasing productivity. However, if it’s technology or process refinement that companies invested in that is the main reason for increased productivity then there is no reason for US workers to get across the board increases. Simply because companies profit more doesn’t mean workers should get more money. They have to be WORTH more money to get more money.
---
### Author:  [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)
#### Post date: [August 26, 2013, 7:55pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/13 "2013-08-26T19:55:59Z")
> [@Voyager](#):
>
> Inflation? What inflation? Do you mean the inflation that absolutely, positively has to show up due to budget deficits and Fed policies but which hasn’t yet?
>
> [here you go](http://www.usinflationcalculator.com/inflation/current-inflation-rates/). Notice that inflation is lower than during much of the Bush years. 1,7%? I’m quaking in my boots. Some more inflation would probably be good for us, to help get people and companies spending again before prices rise.
You are talkin about 1.7% inflation when there should be a deflationary correction. Bernanke hasn’t allowed prices to come down as they are wont to do. That would be a healthy reaction to the rising prices of the last Greenspan bubble. If you don’t see inflation look at the stock market. Look at farm land prices. Look at housing prices starting to go up.
---
### Author:  [@Bone](https://boards.straightdope.com/u/Bone)
#### Post date: [August 26, 2013, 7:57pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/14 "2013-08-26T19:57:26Z")
> [@davidw](#):
>
> Nothing special about US workers, but if productivity is increasing (it is) and corporate profits are increasing (they are), then it makes sense to me for wages to increase as well.
Only if you have ownership in the business. Otherwise your wages are controlled by the relative availability of others who can do the same job as you (supply) and the needs of the business (demand). Profits and productivity are tangential to those things.
---
### Author:  [@XT](https://boards.straightdope.com/u/XT)
#### Post date: [August 26, 2013, 8:03pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/15 "2013-08-26T20:03:59Z")
[QUOTE=Voyager]
The increases should come from productivity increases - which all seem to be going into exec salaries and increased profitability now. That’s the deal these days. If profits drop, workers are expected to take cuts or have stagnant wages. But when profits rise, they get told what you just said - tough shit.
[/QUOTE]
Again, depends on why workers are or aren’t more productive.
> [@](#):
>
> Because it has? And because the minimum wage is low in terms of constant dollars?
It has what? Risen slightly without overt ramifications? True enough…make small adjustments and you will have a small effect. Even if it’s a negative effect it won’t make a huge difference. But they aren’t talking about small adjustments to minimum wages…they are talking about large adjustments. Are you saying that you think that large adjustments could be made to minimum wage without effect??
As to minimum wage being low, that’s true…which is why it doesn’t have a huge impact on the price of things. Or why it hasn’t had a larger impact on unemployment at the low end…it’s still in companies best interest to hire unskilled workers to be check out clerks and such. If the minimum wage is pushed up to higher levels though it will have a negative impact. Something has to give, be it price or unemployment.
> [@](#):
>
> Okay, so WalMart should quit whining about reduced sales, right? Where do you think the money from increased wages goes? If you are rich, it goes into savings, but if you are not rich, it goes into delayed consumption. And everybody wins.
Uhuh. So, to take it to a ridiculous level, why not just mandate that everyone in the US makes a minimum of $50k a year? Or $100k? Then we’d have LOTS more money for folks to buy stuff with, right? Everybody wins, right?
My take is that labor is like any other commodity. It’s worth what it’s worth to companies. The more skilled your labor coupled with the more in demand it is, the better you are going to be able to sell it for. The less skilled and less in demand, the less you are going to be able to sell it for. Simple as that. If you want to make more, then work to enhance your actual ability to be productive to a company. Saying that companies are more productive and that this should automatically mean you get more money for your labor (enhanced not by your ability but by the tools provided to you by the company in question) is, to me, silly. YMMV.
---
### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [August 26, 2013, 8:10pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/16 "2013-08-26T20:10:49Z")
> [@Voyager](#):
>
> You’d think if this were really a problem the business world would be pushing UHC to get out of it altogether.
Except that “the business world” includes the health-insurance industry . . . and there are such things as interlocking directorates . . .
---
### Author:  [@msmith537](https://boards.straightdope.com/u/msmith537)
#### Post date: [August 26, 2013, 8:14pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/17 "2013-08-26T20:14:10Z")
> [@BrainGlutton](#):
>
> Now, the [EPI](http://en.wikipedia.org/wiki/Economic_Policy_Institute) is a liberal/progressive economic think-tank, so some Dopers might distrust it;
This statement doesn’t make sense.😃
---
### Author:  [@Voyager](https://boards.straightdope.com/u/Voyager)
#### Post date: [August 26, 2013, 8:35pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/18 "2013-08-26T20:35:52Z")
> [@XT](#):
>
> Again, depends on why workers are or aren’t more productive.
We’ve had this discussion already. Workers get all? Of course not. But surely it is not hard to believe that workers are somewhat responsible for increases.
> [@](#):
>
> It has what? Risen slightly without overt ramifications? True enough…make small adjustments and you will have a small effect. Even if it’s a negative effect it won’t make a huge difference. But they aren’t talking about small adjustments to minimum wages…they are talking about large adjustments. Are you saying that you think that large adjustments could be made to minimum wage without effect??
Every time a small increase is proposed we here the gloom and doom, that it will inevitably lead to high unemployment and overall catastrophe. I’m sure proponents of a big increase wouldn’t mind it being phased in over time. That would seem to make sense.
> [@](#):
>
> As to minimum wage being low, that’s true…which is why it doesn’t have a huge impact on the price of things. Or why it hasn’t had a larger impact on unemployment at the low end…it’s still in companies best interest to hire unskilled workers to be check out clerks and such. If the minimum wage is pushed up to higher levels though it will have a negative impact. Something has to give, be it price or unemployment.
Since an X percent rise in wages is not going to produce an X% rise in prices, increased wages might more than make up for the increase, and those of us well above the minimum wage should be able to handle it. I’d be more worried about increasing unemployment from falling sales due to reduced purchasing power. Like we are seeing now. The crash was due in part to people getting increasingly indebted trying to maintain spending in the face of stagnant wages, and using perceived equity in their homes to do it. Look what happened.
> [@](#):
>
> Uhuh. So, to take it to a ridiculous level, why not just mandate that everyone in the US makes a minimum of $50k a year? Or $100k? Then we’d have LOTS more money for folks to buy stuff with, right? Everybody wins, right?
I’ve got a counter-example. Let’s not pay workers anything. If they work hard enough, they can get promoted to manager which does pay. It works for interns, right? What could go wrong?
You obviously missed the part about paying for increased wages out of productivity improvements.
> [@](#):
>
> My take is that labor is like any other commodity. It’s worth what it’s worth to companies. The more skilled your labor coupled with the more in demand it is, the better you are going to be able to sell it for. The less skilled and less in demand, the less you are going to be able to sell it for. Simple as that. If you want to make more, then work to enhance your actual ability to be productive to a company. Saying that companies are more productive and that this should automatically mean you get more money for your labor (enhanced not by your ability but by the tools provided to you by the company in question) is, to me, silly. YMMV.
That just means more skilled people get more money than less skilled people. Duh. One person, who had to eat and who is a commodity, is not going to have equal negotiating power with a company except in times of labor shortages. Unions exist to make negotiating power more equal, by allowing a group of employees to cause a company pain as a company can cause an employee pain. Not surprisingly, companies don’t like a balance of power.
---
### Author:  [@Voyager](https://boards.straightdope.com/u/Voyager)
#### Post date: [August 26, 2013, 8:37pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/19 "2013-08-26T20:37:23Z")
> [@BrainGlutton](#):
>
> Except that “the business world” includes the health-insurance industry . . . and there are such things as interlocking directorates . . .
Directors, as we have found, don’t have all that much power. And I assure you that one company would stab another in the back in a second if it would increase the bonus of the CEO.
---
### Author:  [@Eonwe](https://boards.straightdope.com/u/Eonwe)
#### Post date: [August 26, 2013, 8:39pm UTC](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222/20 "2013-08-26T20:39:00Z")
> [@XT](#):
>
> Uhuh. So, to take it to a ridiculous level, why not just mandate that everyone in the US makes a minimum of $50k a year? Or $100k? Then we’d have LOTS more money for folks to buy stuff with, right? Everybody wins, right?
Surely there’s a line somewhere, between pure unregulated employer/employee relations on one side, and a “pay enough to make everyone a millionaire” on the other.
Frankly, a system that does not funnel the rewards of societal economic growth to the citizens of that society in an intentional and broad-based way is not a society I would be proud to be a part of.
[Next page](https://boards.straightdope.com/t/what-can-be-done-about-wage-stagnation-in-the-u-s/667222.md?page=2)