Real Hourly Pay is down 2-4% since 2003

[powayseller]

The New York Times writes Anxiety Rises as Paychecks Trail Inflation

Was it Rightside, who posted a few months ago that wages are going up? Well, they are not. The rich are getting richer, so the average wages are going up, but the middle class and lower income people have lost earning power for 3 years.

“Since peaking in 2003, the real hourly pay of the median worker has fallen about 2 percent. The decline has been closer to 4 percent for people in the upper-middle part of the wage distribution and for those toward the bottom, according to Labor Department data analyzed by the Economic Policy Institute.”

[Peace]

PS, Do you know how they calculate the “real hourly pay”?

I know from our experience and from what I hear from others that many of us are not making what we used to. Plus, looking at salary doesn’t tell the whole story either because everyone I know is paying much more for “benefits”

Example: A teacher that was making $38,000 in San Diego and paying $110/month for health insurance (3% of salary) was offered a job in Scottsdale, AZ. Wishing to relocate to a lower cost of living, accepted the position even though the salary was $36,000 – then found out that health insurance for his family was going to cost $774/month (26% of salary). Subsequently declined the offer.

The point is that many of the benefits that were a given in many white collar jobs now are becoming prohibitively expensive for employees.

Someone actually suggested that his salary was low enough that he would qualify for the state’s low income health insurance for children, like the California’s Healthy Families program. Thus he would not need to cover his children through his job – so this is what we’re coming to, many will be on the Walmart plan where they don’t make enough to buy into the company’s benefits so the taxpayers will have to pick up the medical bills.

Just wondering if these new payroll deductions are also being taken into account when calculating peoples’ real income.

[powayseller]

I doubt it. The UCLA Anderson Forecast exlained that rising benefits costs are to blame for lower wages. Employees’ pay increase is going more and more to their health insurance.

Real hourly wages ” exclude nonwage forms of compensation — health care benefits, employers’ share of social security contributions, and the like. ” This guy says real compensation is up over 1% annually since Bush took office. Maybe so, but if people take home less money every year, they don’t really appreciate that their employer is paying more for health insurance on their behalf. All they know is they have less money in their paychecks. And by that measure employees are definitely falling behind.

[Author]

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