Thursday, April 21, 2005
Everything is going up, except pay
St. Paul Pioneer Press | 04/21/2005 |
"It's important to note that anemic wage growth is a decades-long trend. While the benefits part of employee compensation has been growing fast, wages and salaries are a far bigger part of compensation and, as a percent of corporate sales, have declined steadily for decades.
In fact, taken as a percent of U.S. corporate sales, total employee compensation — including health care and other benefits — is about as low as its ever been since World War II, said Wells Capital Management economist James Paulsen in Minneapolis. It's about 63 percent of corporate sales now. It's never exceeded 68 percent.
Like other economists, Paulsen attributes the fall to the decline of labor bargaining power, increased merger activity and the widespread acceptance in corporate culture of layoffs "as a regular pursuit.""
Snapshot from April 2004: Lopsided trends in profits and wages threaten to topple growth
As pointed out, "This imbalance is potentially bad news for the economy. Labor compensation is more likely to be converted to demand for domestic production and fuel a sustained growth spiral. In contrast, when income goes to corporate profits, a larger share is likely to be spent abroad (on imports or investments abroad) or to pay down debt."
Which leads one to the obvious, inevitable conclusion that all the Republicans in Congress who are so vehemently opposing a minimum wage increase right now are not really concerned about jobs or the economy, but rather are engaged in a rather vicious and regressive form of "class warfare."
Minimum Wage: The Floor Has Holes In It
A few things to keep in mind regarding the minimum wage
• The number of Americans in poverty has increased by 4.3 million since President Bush took office. Nearly 36 million people live in poverty, including 13 million children. Among full-time, year-round workers poverty has doubled since the late 1970s—from about 1.3 million then to more than 2.6 million. An unacceptably low minimum wage is a key part of the problem.
• Minimum wage employees working 40 hours a week, 52 weeks a year, earn $10,700 a year, $5,000 below the poverty line for a family of three. Since the last increase in 1997, the value has eroded by more than 15 percent.
• Today, the real value of the minimum wage is more than $3.50 below what it was in 1968. To have the purchasing power it had in 1968, the minimum wage would have to be $8.70 an hour today, not $5.15.
• In the past eight years, Members of Congress will have raised their own pay seven times—by $28,500. In those same eight years minimum wage workers have not gotten a single raise—they continue to earn $10,700 a year.
• The current minimum wage fails to provide enough income to enable minimum wage workers to afford adequate housing in any area of this country.