Low Wage Growth = Slow Economic Rebound

CNNMoney tells MHProNews the unemployment rate not only hurts those looking for work, it also hurts those with jobs. Why? Employers have no incentive to give raises because they know workers have few options. Hourly wages dropped by one cent in August, which indicates workers have little or no bargaining power in the face of employers, according to Heidi Shierholz of the Economic Policy Institute. Although the Bureau of Labor Statistics says hourly wages in the private sector have increased over the past year from $23.12 to $23.52, a gain of 1.7%, if you remove managerial and professional jobs, the rise is only 1.2%, which is less than the rate of inflation. Shierholz says 82% of the private workforce is in non-managerial jobs. Almost 40% of private sector employment added since early 2010 are service jobs that pay an average of $15/hour. Low wage growth translates into less consumer spending which means a robust economic recovery may be in the distant future.

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