4/11/2005

The American pay cut

From the Center for American Progress:
According to the Los Angeles Times, "For the first time in 14 years, the American workforce has in effect gotten an across-the-board pay cut." Corporate profits are high – the economy last year grew 4 percent, more than the 3 percent historical average. Companies didn't feel the need to pass along those profits with increased salaries, however. As a result, in the first two months of 2004, the growth in American wages fell behind the growth in inflation. Compounding the problem, while salaries remain flat, high housing costs, rising health insurance premiums and skyrocketing energy prices have all taken their toll on the finances of American workers, especially the working poor. "The squeeze is especially intense on the 47% of the workforce whose employers don't directly provide their health insurance. For lower-income workers, who are more likely to be uninsured, the falling value of their wages is even more serious because they're more likely to live paycheck to paycheck. And rising food and energy prices take a proportionately higher toll on the poor than on the rich."

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