What's up with the slow growth in workers' pay?

[Doondoo]

When Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill Wednesday and Thursday he will likely be peppered with questions about why wages are not rising at a more rapid pace. But he may have to leave lawmakers guessing.

That's because economists aren't sure why wages haven't increased at a faster pace even though the labor market is tight. A tight labor market is often a precursor to a big pickup in pay as employers enter into bidding wars to attract and retain workers.

Adjusted for inflation, average hourly earnings for non-supervisory workers rose 1.7% in December from a year earlier, according to the government. While earnings rose five consecutive months through December and are rising at the fastest rate in years, economists say they aren't sure why the gains haven't been larger given the jobless rate, at 4.5% in December, is near a five-year low.

"It has been curious in this cycle why wage growth has lagged," ClearView Economics head Ken Mayland says.

Bernanke likely will be asked about the slow growth in workers' wages when he delivers his twice-yearly testimony on the economy to lawmakers. A number of Democrats, including Senate Banking Committee Chairman Chris Dodd, D-Conn., have promised to make workers' wages, particularly the divide between the haves and the have-nots, a focus of the hearings. Bernanke is scheduled to testify to the Senate today and to the House on Thursday.


http://www.usatoday.com/money/economy/employment/2007-02-14-wages-usat_x.htm?csp=15

[NMDemDist2]

1. two words for ya

"Corporate Greed"

[Selatius]

2. Outsourcing is a heavy depressant on wages as well as illegal immigration and union smashing.

The only wages that aren't under that kind of downward pressure are the wages of those at the top who push outsourcing, encourage illegal immigration in order to depress local wages, and smash labor unions. The wages of people at the top, in contract, have exploded in the 1990s and 2000s.

Another big depressant to progress is cuts to social programs such as public education, health care, and job training programs. The cost of going to university continues to outstrip the increase in worker salary as well as health care.

[SheilaT]

3. It's also very much connected

to the fact that we do not have strong unions in this country. Workers as a whole are quite powerless.

[InkAddict]

7. Boss's quotes:

"This is not a democracy."
"Poor people don't have choices."

[Sir Jeffrey]

4. Another big reason not mentioned in this thread yet...

is the transition to a service-based economy. Service jobs like retail and fast food do not pay nearly as well as the old manufacturing jobs, yet those are the jobs we are replacing the outsourced jobs with.

[Rosemary2205]

5. If Bernanke doesn't know why then he's the only one.

Everyone and their momma can easily look at record corporate profits and pay at the very top and figure out why rank and file incomes are stegnant. Why is Bernanke too stupid to figure it out?

[htuttle]

6. Do you think most businesses would raise pay if they weren't forced to?

No -- and that's what unions used to be for. Who would ever expect a capitalist to part with any of their money willingly? The US corporate world doesn't have a conscience anymore -- the Chicago School of Economics took care of that...

Now with outsourcing, there isn't even market pressure to increase wages, since they can always find someone cheaper overseas.

[sutz12]

8. One additional cause is the under-reporting of the unemployed.

Once you stop getting checks, you stop getting counted accurately.

That, and the 10 year hiatus on minimum wage legislation.

[The Anti-Neo Con]

9. Easy answer...

corporate CEO's are stealing it.