Forum Post: U.S. Suffers Biggest Pay Drop On Record, As Workers Squeezed Tighter
Posted 10 years ago on June 15, 2013, 9:49 p.m. EST by itsmyblood
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http://www.huffingtonpost.com/2013/06/05/us-pay-drop_n_3391664.html
The economic "recovery" just keeps getting worse for the average worker: U.S. employers squeezed their employees even harder than usual in the first quarter, leading to the biggest drop in hourly pay on record.
Hourly pay for nonfarm workers fell at a 3.8 percent annualized rate in the first quarter, the Bureau of Labor Statistics reported on Wednesday. This was the biggest quarterly decline since the BLS started keeping track in 1947. Some of the drop was payback for a 9.9 percent surge in hourly pay in the fourth quarter of 2012, as employers shoveled money out the door to avoid tax changes they expected to take place in 2013.
But there have been plenty of such quarterly pay increases in the past. Many were even bigger. Some went on for several quarters at a time. And never has there been such a steep pay drop in response as there was in the first quarter of this year.
Smoothing out the quarterly ups and downs doesn't make the picture look any better. Hourly worker pay rose just 1.9 percent in 2012, a pitiful increase that barely kept up with the 1.8 percent gain in the consumer price index. That was the third-weakest annual increase in hourly pay since 1947, topping only the 1.4 percent gain in 2009 and a 1.8-percent gain in 1994.
Hourly pay has grown by just 2 percent per year, on average, for the past four years, the weakest four-year stretch on record. At the same time, corporate profits are at record highs, and until a recent swoon, the stock market was setting records, too. Workers haven't been reaping the rewards, but their employers have been.
The economy hasn't been getting much out of the bargain lately, either. Worker productivity -- hour output per hour worked -- gained 0.5 percent in the first quarter, according to the BLS. That's weaker than the 0.7 percent gain in all of 2012 or the 0.6 percent gain in all of 2011. Productivity is down dramatically from average annual gains of 3 percent in 2009 and 2010.
Weaker productivity could be good news. Maybe employers have hit the limits of how much they can squeeze out of their workers, meaning they'll have to hire some more.
But it does not bode well for future growth. The U.S. had four straight years of meager productivity going into the Great Recession. Stagnant productivity can erode living standards and leave less money for the kind of research and development that leads to the jobs of the future.
Productivity has seemed decoupled from worker pay for awhile now -- even when the economy is productive, pay has been mostly stagnant, as most of the benefits flow to the very top of the income stack. So, hooray, yet another culprit in the death of the middle class.
And the hits just keep coming.
This is inevitable. I've written less than 10 articles on my www.debtsuspensionrights.blogspot.com blog but each one hits an area where the financial elite are robbing mainstream.
Things will get much worse if our economic system does not change much now to adapt to the revolution in automated and customized production happening right now.
It is not too bad if the middle class will own the means of production and simply become the leisure class. It is disastrous if the middle class or what will be left of it will not own the means of production. As we stay on the current trajectory of our economy, it will be disastrous and very socially disruptive with "the Rise of the Machines" if we do not own them. The machines are not at fault. It will be human beings' unable to adapt their socioeconomic structures that will be the culprit. Actually the problem is no longer simply for the middle class, it will be for the upper middle class and the professionals, too.
I agree. What needs to change is the idea that debt is a good thing. Debt forgiveness is not necessarily the answer but incredibly humane repayment terms so people can reduce their debt is needed. As consumers reduce their debt, they can fund their own local economies rather than wall street's rather fake indenturing economy.
48% of our economy is now financial debt trickery.
At the very least, we must bring the rate of growth of debts into line with the rate of growth of incomes used for servicing the debts or else the debts will drag down the economy. We already have extremely high level of debts relative to assets for most people so we even need to grow the incomes faster to ride over any potential shock to the economy.
I do not see these things happening -- either debts give in some or incomes grow some. I am therefore rather pessimistic about our future economy, such as what will happen if Iran and Saudi Arabia start a shooting war with each other?
grow incomes OR reduce penalties, fees and interest rate charges on the consumer debt.
Yes, or a combination of them all including the forgiveness of debts through revamped bankruptcy laws. There is something very deeply wrong about our system when the oligarchs have the rules changed when they had perceived that there would be a financial crisis coming due to none other than their manipulative actions driven by greed.
It is an UNFAIR game if they changed the rules of the game when they were about to lose lots of their money in their rigged game. Apparently, our Congress and President consented to the changes without much reservation.
Debt forgiveness will create an even larger schism between political groups in this country.
On my www.debtsuspensionrights.blogspot.com I think I've found a valid reason to cut consumer credit card debt by 65% and simultaneously increase monthly minimum payments to 5% from the 2% they presently are.
These two acts would instantly help main street and help reduce future credit card debt traps.
That makes sense if ample warnings are given for the increase of the monthly minimal payments to 5%.
That's what is so mind bogglingly simple. Consumers have been screwed over by not having affordable debt suspension insurance. I calculate the damage at least a trillion dollars.
If everybody with credit card debt has their debt reduced by around 65%, and at the same time their monthly minimum payments are raised to 5%, the net effect is the monthly minimum payment is approximately the same. However, they can now either get out of debt within two years time, OR, the amount they pay in monthly interest drops, which increases their buying power even if they choose to maintain their debt where it is at the new level.
Perhaps debt suspension rights should become part of the revamping of the bankruptcy laws.
An excellent connection. Yes, Bankruptcy for dummies. I'm all for it because it removes the lawyers and could be done in such a way as to not necessarily hurt one's credit score if the debt is being slowly paid down after it has been frozen.
Yes, cut a deal with the debtors rather than creating $85000000000 new money from thin air every month to prevent the implosion of the mortgage-backed securities and buoy the bond and stock markets. Compound interests are the delusional work of man, not the way of nature. Long-term compounding inevitably invites a day of reckoning when reality catches up to the delusion.
The key is "long term" compounding interest. In the short run, compounding interest works when projects are created that create more job opportunities for more people (such as a bridge that shortens the trip time for thousands of commuters). But eventually, the tide turns and an already built up infrastructure creates more efficiency (aka the internet, then the "APP revolution"), which means LESS compounding interest rate resources are needed, not more.
What you and I are discussing is rather revolutionary stuff, certainly the type of economics not taught at Harvard.
Harvard, as well as so many others in positions of prominence, have a hard time grasping non-linearity in economics. Harvard has its veritas, veritas, veritas motto so it keeps on coming out with fragmented linear "truths" to approximate the non-linear Truth. Who are we to judge if they turn into lies, more lies, and new lies?
I cringe when I hear ongoing media repetitive hyperbole about economic growth. Economic growth that is achieved by using less non-renewable resources is what matters, but that is never discussed by the media.
Economic growth became a religion of the leaders of the world so they embraced the "consumer society" with gusto, piling up pollution everywhere. This situation reminds me of the poor people buying very expensive goods to improve their social status viewed by other people but in the process enslave themselves to pay the bills incurred.
Neither is the 85 billion a month in bailouts that are keeping futures prices as high as they are.
just wait till these two new trade deals kick in the tpp and the us/eu agreements. this is going to open the flood gates. god help us if there is one.
The new trade deals will enable the opening of new markets to even bigger multinational corporations than what we have now. There will be massive layoffs as these corporations emerge through mergers and acquisitions because there are bound to be duplicated functions in different existing corporations.
Essentially, the profits will accumulate to a small group of people who will become a choke point so the economy will develop thrombosis (blood clot) in its flow of money and experience catastrophes.
Don't forget "immigration reform". A new tidal wave of unskilled labor to depress the wage scale.
all this is... is more complaining.... where's the effort to change things ?
It wouldn't be a problem if there were enough jobs to be had, but unfortunately that's not the case.
Or if low skilled jobs paid better. I would gladly pay twice as much for a head of lettuce if I knew that the pickers were getting paid twice as much. And they might get paid more if there weren't so many migrants willing to work here for next to nothing. The fact Grover is for the proposed immigration reform tells you it can't be good for the 99%.
Not to mention the migrant workers who are tricked into coming here with the promise of good wages, then trapped in virtual servitude once they arrive, as detailed in my slavery thread.
True, too. What I really would like to see fixed is the visa system. They say almost 1/2 the illegals here have overstayed their visas. And right after the Boston Bombing, seemed everyday we were hearing about someone here on a student visa who wasn't going to school where they should be, or had overstayed. If we can collect every piece of communication in this country you would think they could track the folks here on visas.
Yeah, that's a good point. How can so many illegals fly under the radar when the surveillance state can supposedly track every move?
The flood of cheap labour keeps the wages down.
The bottom line is all they care about.
Oh yeah, it's part of what NAFTA was all about. Drive down US wages.
Remember all the hoo-ha about building a wall to keep out the illegals? I'm sure there's some active and honest men and women on the ground, trying to defend the borders, but there's probably a hundred more who are trucking them in, and setting them up in sweatshops, et al.
"During any hyper-inflation episode, paper money becomes next to worthless."
Yeah, and we're well on our way to that now. Just think how many Americans are completely unaware this is going on. They watch MSM, hear about the imaginary "Recovery" and the stock market's doing fine, so they think everything's cool.
Wondering what it will take to wake the sleeping giant....
I'm kinda bouyed up by the reaction to the news about GE and GMO in our food supply, but that seems to be a bit of a flash in the pan, even here in Australia.
Release an app for the android and iPhone, and get on with living. Most people I know are simply tied to a debt-vehicle, and forced to keep working.
It's life, Jim, but not as we know it.
That's a tough question, what will it take to wake the masses.
And I don't think the GMO thing is going away any time soon. It may ebb and flow, but from some of the things I've been reading about recent animal studies, I think it's only going to get bigger. They can only pull the wool for so long. Those days are almost over.
Anyway, B, I've got to go. It's about that time here again. I'll be back on tomorrow some time. See ya then.
I hope you're right on the GMO thing.
The tests across Europe about glyphosate levels in humans are mind-blowing. It's linked to all kinds of cancers and stomach disorders. Autism and multiple scleroscis, as well as infertility.
The prez might be on the stand explaining about signing an indemnity against prosecution, in a fair and just world. We live in hope.
"More grist for the mill, while the 0.01%ers kept laughing all the way to the Caymans."
I'd like to think their laughing days are just about over. It can never be too soon.
Switch the currency. I'd like to think that it's a possibility that they get caught holding useless script.
Now THAT would be just desserts.
I wouldn't put it past the fed, actually.
Narcissism knows no boundaries, after all.
During any hyper-inflation episode, paper money becomes next to worthless.
It makes a lot of sense. And those 'honest men and women on the ground?' Well, you have to maintain the illusion, after all.
There's a couple of "reality" tv shows focussed upon keeping the borders "safe". At least I remember some from a decade ago.
People were quite serious about the fence idea.
It's deleriously delusional.
Deliriously delusional, heheheh. I think there's still a lot of people serious about the fence idea.
Oh yeah. It was such a hot topic there for a long while.
More grist for the mill, while the 0.01%ers kept laughing all the way to the Caymans.
Yes, Bubba is a great one for helping corporations make money. Are you familiar with the details of the Industrial park his global initiative forced into Haiti post earthquake? They took good farmland to build clothes factories that pay poverty wages.
One year after it started operations, only 1,388 people work in the park; 26 of them are foreigners, and another 24 are security guards. Also, HGW research among a sampling of workers found that, at the end of the day, most have only 57 gourdes, or US$1.36, in hand after paying for transportation and food out of their 200 gourdes minimum wage (US$4.75) salary. read story here
http://www.globalresearch.ca/haiti-open-for-business-sourcing-slave-labor-for-u-s-based-companies/5327292
Didn't hear about that Haiti industrial park. I'll definitely check out that link in a minute. No surprise there, eh? Take advantage of a natural disaster to exploit the locals.
No, no surprise, but I gotta tell you, I was much happier in life when I didn't pay attention to what goes on in this world.
I can definitely relate to that JZ.
The best way to keep illegals out is by creating good paying jobs back in their own countries, by reinstating Glass Steagall, and a New Deal style economic development program on a global level. Basically, reversing everything that globalization and market liberalization have been about.
Sounds like a good plan, arturo. I wonder how much of that could've been implemented with the trillion a year in QE we've been spending.
Most likely a substantial amount.
You've touched on something I was thinking recently. How is it that human trafficking for the global sex trade and pedophiles can elude capture when every piece of communication is being watched?
The oligarchs have long been involved in prostitution, child slavery, paedophilia rings, you name it.
They make it a "crime" so they have no competition.
I know, darlin'. I've known for a long time...I'm just waiting for everyone else to catch up, is all.
But I don't have to tell you, you were already there. Thank goodness someone is.
The whole surveillance thing is meant to instill fear and quell dissent, for mine.
And thanks for the compliment, Sweetheart. Good to see the core group still calling the real shots here.
The people in charge of those who watch are probably pedophiles.
This never occurred to me until this conversation. It's a damn good question. It makes you wonder if perhaps they're being selective about who they track.
Yes, but.....you are opening up the NSA database to law enforcement at that point and THAT is where all this collection becomes overwhelmingly Orwellian.
Drug testing in the work place started with transportation type workers due to 'public safety' and now you can't get a job flipping burgers without peeing in a cup....or play sports in HIGH SCHOOL.
Can you imagine if law enforcement starting getting access to every one of your phone calls and emails, etc? Years worth? I figure it will start with trying to nail drug dealers, or as you talk about, sex slaves and pedophiles. Then it is just a quick run down that slippery slope.
I hope this "national debate" results in at least a 1 year retention rule or something.
Yep, drug dealers will be the easiest to spot considering their phone records will be unique in the sense of the number and duration of phone calls. Lots of incoming calls that are less than a minute long probably means drug dealer.
the government is the drug dealers. they have been flooding our streets with cocaine and heroin for decades. check our gary webb's article series dark alliance.
Oh, I'm not disagreeing with that at all. But as far as them wanting to bust the little guy, that's how they'll narrow it down; amount and length of incoming phone calls. And I have seen a number of articles that talk about the connection between the crack epidemic and the CIA. Hell, there was a three-part series about the CIA on cable a few years ago where an ex-CIA agent even admitted it. Some even say that's why Clinton got to sit in "the big chair" for eight years, because of the good job he did when they flew the coke into Arkansas.
yeah of course.
oh yeah!!! thanks for reminding me. they are freaking imploding us fast now. why can't anyone see this???
Class War on the Labor Front
Complain? Or take action? What action? Why not offer or seek cures to a serious problem?