With all the focus on unemployment, a lot of us have lost sight of the fact that those workers with jobs have not seen their wages rise significantly, if at all, over the last few years. The Boston Globe 's Jay Fitzgerald reports on the findings of a new study by Northeastern University's Center for Labor Market Studies that shows worker salaries have not moved up along with corporate profits. Corporate profits have increased by 93 percent before taxes from the fourth quarter of 2008 through the fourth quarter of 2011, rising to a record $1.9 trillion, according to Northeastern data. The Dow Jones industrial average has risen by 35 percent in the same time period, pushing above the 12,000 mark for the first time since 2008. And labor productivity, ultimately measured by the growth of the economy amid current labor market conditions, has increased by about 8 percent over the same three-year period. But mean weekly wages have risen only 0.4 percent over the past three years, to $796, or by $3, and weekly wages have actually fallen by 0.1 percent over the past year, or by $1 a week, according to Northeastern data. To Northeastern’s Sum, it all adds up to the slowest postrecession wage and salary recovery since the Great Depression - and the largest postrecession accumulation of corporate profits over the same period. It all ties back to jobs - or lack of them - and the subsequent pressures that are keeping labor market wages from rising, Sum said. “The bargaining power of workers has simply deteriorated,’’ said Gary Burtless, an economist at the Brookings Institute, a liberal-leaning think tank in Washington, D.C. “The supply-and-demand equation is off. Workers have no leverage to ask for higher salaries.’’ Some sectors like technology are seeing employment and wage gains, according to recent data from PayScale Inc., which tracks national employee compensation trends. But in many others, economists say, companies aren’t hiring more workers because consumer demand and the economy are still too fragile to justify long-term hiring commitments. Other firms are worried about major government policy changes - such as to the tax code or to the health care sector - that could disrupt their labor costs and bottom lines. It would seem that if unemployment rate drops at a quicker rate we should see wages rise again. But as Fitzgerald reports there are other factors at play. What would you look to, beyond unemployment, as key factors? Read the full article here .
Filed under: jobs, profits, unemployment, wages, labor market, unemployed, boston globe, jay fitzgerald, northeastern university, profitability, center for labor market studies, labor studies, labor market conditions