Follow us:

Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

April 2, 2014 at 10:02 AM

The wages of work: rotten

If you need additional evidence of the radical divergence between people who make most of their earnings through investments and “rents” — and the majority that depend on wages and salaries, here is the latest report from PayScale, the Seattle firm that tracks compensation data.

In other words, this is why a roaring bull stock market and rising overall household wealth exists side-by-side with many people barely getting by and most seeing stagnant income at best. With nearly three job-seekers chasing every job, companies have little incentive to raise wages. Some smaller outfits are struggling to get by.

The PayScale Real Wage Index shows wages adjusted for inflation are down nearly 8 percent since 2006. Inflation may be low on a macro level, but the compensation most workers receive is not enough to keep up.

According to Katie Bardaro, the company’s lead economist:

Our results show the economy is on a steady, but very tepid recovery with wage growth rising at a slow rate. We anticipate the trend of sluggish overall wage growth to continue in 2014 with a few industries such as science, biotech, and healthcare showing periodic gains that are more significant.

Seattle ranks second in real annual wage growth, at 1.6 percent, behind No. 1 Minneapolis-St. Paul. San Francisco, Boston and New York rounded out the top five. However, some large metros such as Phoenix did not even keep up with the national average.

Healthcare and engineering saw the most pay growth since 2006, at 10.3 percent and 10 percent respectively. Manufacturing wages fell at an annual rate of 0.5 percent, while construction paychecks declined by 0.3 percent.

The situation may be even more dismal than the data show. PayScale tracks full-time, private industry employees. Thus, the rising use of temps isn’t factored in. Nor is the heavily low-wage cohort that is kept from achieving full-time hours.

And Don’t Miss: Caterpillars Swiss tax avoidance scheme is even more galling than the rest | The New Republic

Today’s Econ Haiku:

The Supremes’ new hit

Government by the people?

Buy the government

 

 

Comments | More in Income/wages

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►