Jobs & Wages Lagging In US
Rich Winkel
** Topic: Jobs & Wages Lagging In US **
** Written 9:42 AM Sep 6, 1994 by newsdesk in cdp:headlines **
From: George Gundrey - IGC News Desk <newsdesk>
/* Written 8:33 PM Sep 4, 1994 by lvpsf in igc:labr.newsline */
/* ---------- "Jobs & Wages Lagging In US" ---------- */
From: Labor Video Project <lvpsf>
/* ---------- "UNITED STATES: Jobs and wages laggi" ---------- */
Copyright 1994 InterPress Service, all rights reserved.
Worldwide distribution via the APC networks.
*** 01-Sep-94 ***
WASHINGTON, Sep 3 (IPS) - Jobs and wages in the United States are
lagging far behind the almost three-year-old economic recovery,
increasing pressures on the U.S. middle class, according to a
major new report released Saturday by a Washington thinktank.
Timed to coincide with the nation's Labour Day observance
Monday, the report by the Economic Policy Institute (EPI) finds
that the wage and income gap between rich and poor, which grew
dramatically in the 1980s, has continued to widen in the 1990s.
Wages have kept declining since 1989, showing ''a disconnect
between overall economic growth and improved incomes for middle-
and low-income families, unless they work longer hours or more
family members enter the workforce,'' according to the report,
'The State of Working America, 1994-5'
The current recovery is also not reducing the 1992 poverty rate
of 14.5 percent as quickly as would have been expected. In 1992,
20 percent of all children and more than half of all black
children under the age of six were living in poor families.
''The bleak job opportunities for young workers and the rate at
which children are being born into poverty should be a wake-up
call for us,'' according to co-author Jared Bernstein. ''The
current economic conditions will be felt hardest by the next
generation.''
The report shows that U.S. workers, like their counterparts
elsewhere in the industrial world, are facing an era of ''jobless
growth'' which is challenging policymakers everywhere.
Last Wednesday, U.S. Labour Secretary Robert Reich, in his own
Labour Day assessment, noted that the middle class of the 1970s
has split into three new groups: ''an underclass largely trapped
in centre cities; an overclass of those who are positioned to
profitably ride the waves of change; and, in between, the largest
group, an anxious class.''
The last, he said ''are justifiably uneasy about their own
standing and fearful for their children's future.''
He blamed the situation primarily on technological innovation
and argued that the best response is to revitalise the country's
labour movement and increase education and skill levels.
''The fundamental fault line running through today's work force
is based on education and skills,'' he said.
''Well-educated and skilled workers are prospering, those whose
skills are out of date...anxiously contemplate their prospects,
those without education or skills drift further and further away
from the economic mainstream.''
But the EPI report takes issue with that analysis. It finds
that wages for college-educated workers, as well as high school-
educated workers, are now falling.
From 1989 to 1993, median real wages fell 2.6 percent overall
and by 4.6 percent among men. During the same period, entry level
wages declined 7.8 percent for high school-educated and 6.1
percent for college-educated workers. New statistics show that
wages for male college-educated workers have fallen at the same
rate as those for male high school-educated workers.
Since 1979, real wages of entry-level male and female high
school graduates have fallen 30 percent and 18 percent
respectively. Over the same period, the wages of entry-level
college graduates fell eight percent among men, but rose four
percent among women, according to the report.
The only education groups seemingly exempt from falling real
wages in the early 1990s have been highly educated women.
The authors of the 367-page report, Lawrence Mishel and Jared
Bernstein, attribute the shifts to several factors, including a
sharp drop in the value of the minimum wage and continuing de-
unionisation. Only 11 percent of the U.S. workforce now belongs to
a union -- down sharply from 25 percent in 1979.
They also cite the expansion of low-wage, service-sector
employment, the increasing globalisation of the economy through
immigration and trade, and the growth of small business and
temporary and part-time work arrangements.
The report takes issue with Reich's argument that technological
change is the primary reason for wage inequality. Since technology
had no greater impact in the 1980s than in the 1970s, it says, it
could not be the cause of the growth of wage inequality that began
around 1979.
There was no ''technology shock'' in the 1980s and no ensuing
demand for ''skill'' that could not be satisfied by the continuing
growth in the education level of the workforce.
''Skill leves are up, but compensation is down,'' Mishel told a
business publication last week.
Nor can lagging productivity be blamed on lower wages because
the nearly one percent annual growth in productivity since 1979
exceeded that of the 1970s, according to the
report.(ENDS/IPS/JL/94)
Origin: Washington/UNITED STATES/
----
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