This year’s Christmas stocking isn’t getting much stuffing for a high number of American workers -- at least if last year’s trend continues to hold true.
The Washington Post reported on Friday that, for many U.S. workers, their 2018 take-home pay is exactly the same as it was in 2017. President Trump’s crowing about the lowest unemployment figures in nearly 40 years may have led to job security and new employment, but that improvement also put the brakes on raises.
"Roughly 14 percent of workers — or 1 in 7 — have seen their earnings stall over the past year, counting only those who have stayed in the same job," reported the Post. "That’s only a slight improvement over the 16 percent rate reached in the hangover years after the Great Recession."
The report noted that this situation comes with a bonus win-lose.
If you count for inflation and the cost-of-living uptick employees often get to offset that increase, workers whose salaries have been frozen are actually losing money. According to the U.S. Bureau of Statistics (BLS) inflation calculator, that’s approximately a $1,600 jab to someone who earns $40,000 a year.
Why this is happening
One would think that if economic growth and productivity are on the rise, workers would see a little more in their paychecks.
Well, yes and no.
The Post says the reason is because there’s no one forcing the employer’s hand. Cited is the decline of private sector unions that would typically champion workers’ wages. There’s also not as many competitors that workers can scout out for a job change and higher salary -- since larger companies are currently ruling the day.
"Another possibility is that business leaders may still be scarred by memories of the Great Recession. In those years, ‘sticky wages’ kept them from cutting salaries -- lest they hurt morale. But the result was higher labor costs at a time of collapsing profits and tight budgets," The Post reports.
Is all hope lost?
There are still companies and governments that are trying to keep their workers’ trip to the bank a happy one.
In the most recent election, both Arkansas and Missouri saw a "by the people, for the people" minimum wage victory at the polls.
In Missouri, voters approved a ballot initiative to raise the minimum wage within the state from $7.85 per hour to $12 by 2023. Under the measure, the minimum wage will rise gradually over that five year period.
In neighboring Arkansas, the current $8.50 an hour minimum wage will rise to $11 an hour by 2021. The National Employment Law Project (NELP) estimates that will affect at least 300,000 workers.
Companies like Target and Amazon also seem willing to share their windfall with employees. The latter recently raised its minimum wage to $15 an hour and Target has gone on record saying that its minimum hourly wage will also be $15 an hour by 2020.
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