I’ve argued off and on for a while that although most of us (quite appropriately) focus on the long-term unemployed in assessing the human damage wreaked by the Great Recession and the very shallow recovery, the broader implications for people who have lost not their jobs but their mobility and their leverage with employers are pretty important as well. Now comes Felix Salmon with some empirical wage data evidence that’s upsetting if not surprising:
NELP, the National Employment Law Project, has taken a detailed look at what happened to wages during the recovery — specifically, between 2009 and 2012. They looked at the annual Occupational and Employment Statistics for three years — 2007, 2009 and 2012 — and created a list of wages for 785 different occupations. They then split those occupations into five quintiles, according to income; the lowest quintile made $9.49/hr, on average, last year, while the highest quintile averaged $40.23/hr…..
The big-picture lesson that NELP draws is that between 2009 and 2012, real median hourly wages fell by 2.8% — and that the poorer you were to start with, the more your wages fell. The top quintile didn’t do well: their wages dropped by 1.8%, in real terms. But the fourth quintile did particularly badly: its wages fell by 4.1%, on average. To take one example, occupation 39-5012 — that’s Hairdressers, Hairstylists, and Cosmetologists — was earning $12.00 an hour, in 2012 dollars, in 2009. But by 2012 they were earning just $10.91 per hour: a drop of more than 9%. Or look at occupation 51-6042 (“Shoe Machine Operators and Tenders”): that job saw wages fall 14%, in real terms, in just three years, with nominal wages falling from $12.69 to $11.69 per hour….
This…shows where a lot of the current stock-market strength is coming from: capital is taking more than 100% of real productivity gains, with labor steadily losing out. This, I fear, is the New Normal: OK for investors, bad for workers.
Keep in mind that this data is from the “recovery,” not the recession. And that’s why, as Salmon says, it could represent the New Normal. So if you thought U.S. inequality was bad before the Great Recession, you hadn’t seen nothing yet.