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COLUMN: Productivity’s up, but paycheck isn’t
More of us are working now, 7.4 percent unemployed in July versus 8.2 percent a year earlier, but we’re working harder for less money.
That’s a generalization, but a recent Economic Policy Institute study states that, for the bottom 70 percent of American workers, real wage growth was either flat or negative from 2002 through 2012. Productivity has grown almost 20 percent in that period.
The gap between the haves or have-nots continues to widen, and it didn’t just start with the Great Recession. According to that same study, workers in the bottom 10 percent averaged $8.71 an hour in 1979 (in 2012 dollars). In 2012, that average had fallen to $8.19. For the top 5 percent, the wage (again in 2012 dollars) went from $37.03 to $51.48 an hour.
Not surprisingly, the more education you have, the more likely you are to be making progress. In that 1979–2012 timeframe, those with less than a high school education saw their average salaries shrink from $14.85 to $11.75 an hour, while those with advanced degrees enjoyed growth from $28.53 to $37.34.
The years after World War II saw some of the greatest economic growth in the nation’s history, and the pie seemed big enough for everyone to have a slice. People believed that if they were willing to work hard, they probably could count on decent housing, a comfortable if not grand retirement and a better life for their kids. The American Dream was, if not universal, at least the norm.
Just about everyone was able to hop on the train, even if the plush cars up front were mostly reserved for white males.
Now, that sleek 20th Century Limited is more like an aging local line, creaking along on rusting tracks, overcrowded and leaving hordes of Americans stranded at the station.
The 21st century still could be another American century, despite a start that has included 9/11, constant war and the biggest economic crisis in 80 years. If this is going to happen, though, it isn’t going to happen unless all—or at least most—Americans have a chance at that dream.
Education has to become more accessible. Kids have to be able to start out with something resembling an equal chance at success. Americans have to be shown that the same rules apply for Wall Street pirates and 7–Eleven stickup men.
And the engine that pulls our economy along, fueled by us all, has to have a seat for everyone. No, the playing field is never going to be truly level. Rich people have better lawyers and accountants, plus more disposable income with which to buy politicians’ favor.
But the gap has become a chasm. The middle class and those who yearn to be middle class are watching the train recede in the distance.
When too many Americans come to believe the train’s not coming at all, we will all be off the tracks.
Business Editor Howard Owen writes this semiweekly column on business and the economy. He can be reached at 540/ 374-5539 or