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September 9, 2004
As the nation marks the passing of another Labor Day, American employees still have yet to feel the promised effects of the Bush economic plan. While most media attention has been focused on the soft job market, it has focused less on an equally disturbing problem: falling wages. While all groups have been affected by declining incomes, lower- and middle-income families and people of color have especially felt the crunch, reversing many of the gains these groups made in the 1990s.
- Real wages are falling across the board. The Bureau of Labor Statistics reported last week that real earnings for production and non-supervisory workers had fallen by $2 per week (inflation-adjusted) between July 2003 and July 2004. This decline has occurred despite the recent surge in productivity, which in theory should lead to higher wages. Because the labor market is sluggish, however, workers have not been able to obtain higher pay despite increased productivity.
- Black and Hispanic workers have been hit especially hard. According to the U.S. Census, average household income has fallen $1,535 since 2000 and has declined in each of the last three years. Black and Hispanic households have been hit the hardest. Black households saw income decline $2,045 during this time period, while Hispanic households saw theirs fall $2,432.
- Lower- and middle-income families have also suffered. The distributional impact of income declines has been the mirror opposite of what it was in the 1990s. Instead of lower- and middle-class families seeing the largest gains in income, they have seen the largest declines. Incomes of the lowest wage earners are down 7.9 percent since 2000.
Daily Talking Points is a product of the American Progress Action Fund.
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Daily Talking Points is a product of the American Progress Action Fund. |
