Stagnation of wages is described in the excerpt below. It is apparent in the disparity between corporate profits distribution to workers, while worker productivity rises. Also – things like health care costs rise and eat into wage increases (inflation) and so there is stagnation because the average American worker cannot get ahead. The hamster on a wheel –running, expending energy –but going nowhere. It’s a well known business trend that executive pay is 100s times higher that worker pay – a disparity that has grown in enormous proportions over the past couple decades.
“…The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity — the amount that an average worker produces in an hour and the basic wellspring of a nation’s living standards — has risen steadily over the same period.
As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s. UBS, the investment bank, recently described the current period as “the golden era of profitability.”
Until the last year, stagnating wages were somewhat offset by the rising value of benefits, especially health insurance, which caused overall compensation for most Americans to continue increasing. Since last summer, however, the value of workers’ benefits has also failed to keep pace with inflation, according to government data….”
(Real Wages Fail to Match a Rise in Productivity
By STEVEN GREENHOUSE and DAVID LEONHARDT
Published: August 28, 2006,NYT)
On a related topic, one article said corporate profits are held at the top for “investment” having to do with propping up their stock value. Can someone give a good explanation of that?
