Back on the downward escalator of declining pay

[eridani]

http://www.alternet.org/story/146494/the_feeble_economic_recovery_ahead?page=entire

These cost-cutting moves have allowed many companies to show profits notwithstanding relatively poor sales. Alcoa, for example, had $1.5 billion in cash at the end of last year, double what it had on hand at the end of 2008. It managed this largely by cutting 28,000 jobs, 32% of its work force. But for workers, there’s no return. Those who have lost their jobs to foreign outsourcing or labor-replacing technologies are unlikely ever to get them back. And they have little hope of finding new jobs that pay as well. More than 40% of today’s unemployed have been without work for over six months, a higher proportion than at any time in 60 years.

The only way many of today’s jobless are likely to retain their jobs or get new ones is by settling for much lower wages and benefits. The official unemployment numbers hide the extent to which American workers are already on this downward path. But if you look at income data you’ll see the drop.

Among those with jobs, more and more have accepted lower pay and benefits as a condition for keeping them. Or they have lost higher-paying jobs and are now in new ones that pay less. Or new hires are paid far lower wages than the old. (In January, Ford Motor Co. announced that it would add 1,200 jobs at its Chicago assembly plant but didn’t trumpet that the new workers will be paid half of what current workers were paid when they began.) Or they have become consultants or temporary workers whose pay is unsteady and benefits nonexistent.

[Hannah Bell]

1. one of the most significant facts of our era.

[TomClash]

2. Dead on, obvious and ignored by MSM nt

[necso]

3. He sounds a little negative.

...

But not on this basis.

[proudohioan]

4. Excellent post!!

Although I do have to disagree, to some extent, with the author of the article (not the poster) about those with college degrees; there are plenty of recent grads out there flipping burgers at Mickey D's..... while that would technically be considered "employed", it certainly can't begin to cover basic living expenses, much less those hefty student loans.

I too have noticed a downward spiral in the past 10 years, and most notably in the past 3 years, of starting salaries in general. And the trend does seem to be going toward temporary work, thus further depressing wages and the sense of any kind of security and/or sustainability for the workers.

This is important stuff here, and calls attention to the severity of the situation in this country. The "official" unemployment rate doesn't show the whole picture, but this article helps pull the whole thing together; why such a large percentage of Americans are in default/foreclosure on their mortgages, why so many are receiving foodstamps and other forms of public assistance, etc.... I often wonder what the rental picture looks like; M$M never mentions the vacancy rates, or if evictions are on the rise? I personally had to "double up with friends or family" myself, and I'm one with a college degree. I just wasn't making it financially......

Thanks for posting this, it's crucial information for all.

[RM33]

5. Declining pay Good Post

Yep. All of it is true. The goal of Corporate America is to create a large labor pool of unemployeed people. That why they don't have to pay to much for labor. And if somethong asks for a pay raise, they fire that person and easily get someone news.

[RC]

6. We need to tie the words 'Living Wage' to 'Jobs' so "Living Wage Jobs" is one word.

How can they justify the wages of workers going down when the pay and benefits of management keeps going up at the same time?

[KG]

7. but the stock market is soaring! amerka is awesome!

:eyes:

[lunatica]

8. They're making a profit because they're paying lower wages and

laying people off. That's a false count because they aren't making a profit on supplying consumers with products. Evidently they've forgotten that companies need financially healthy customers in order to sell their products. It isn't a great leap of imagination to know that profits will dry up very quickly when no one is left to buy anything. Henry Ford deliberately kept the price of his cars down because he understood that the people who were making his cars on his newly innovative use of the assembly line were also potential customers. That's brilliant business acumen.

No such long term thinking now. I wonder what they're teaching MBA's now. Isn't it part of being a good businessman to make sure you have customers who will buy your products?