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U.S. Wages Continue Falling Despite Economic Boom

The average wage earner in the United States (especially manufacturing and production workers) took home a smaller paycheck over the last 12 months despite a surging economy that only benefits the rich.

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Arthur J. Villasanta – Fourth Estate Contributor

Washington, DC, United States (4E) – The average wage earner in the United States (especially manufacturing and production workers) took home a smaller paycheck over the last 12 months despite a surging economy that only benefits the rich.

The Bureau of Labor Statistics (BLS) on Aug. 10 reported real average hourly earnings throughout the country fell 0.4 percent over the past year despite a resurgent economy, That figure takes into account seasonal differences and the effects of rising prices.

More distressing for American wage earners, is that an increase in the length of the average workweek wasn’t enough to compensate for the drop in wages. This caused average weekly earnings to fall 0.1 percent in the same period. In July alone, real hourly wages remained flat, while real weekly earnings dropped 0.2 percent.

The disheartening “rise” in wages comes amid an economy that grew by 4.2 percent in the second quarter. Unemployment nationwide was below four percent in July.

A study by the Economic Policy Institute (EPI) in 2013 found that middle-wage workers have seen their hourly earnings stagnate since 1979. Earning rose by a paltry 0.2% annually. This is way below the 3.5% average annual rate of inflation for the same period.

Low-wage workers suffered even more as their wages have plummeted by 5% between 1979 and 2013. EPI found that in 2013, young college graduates’ real hourly wages were lower than they were in the 1990s. The average real hourly wage of a young college graduate (regardless of gender) was $18.00 in 1998, while it was $16.99 in 2013. Manufacturing and production workers have been hit the hardest by low wages.

Wage stagnation is a problem for broad swathes of the U.S. population, not just those workers without a post-secondary education. And why are American wages so low? It’s because of globalization.

To remain competitive, American companies must either sell their products at cheaper prices while maintaining quality, or move their operations overseas. Firms that kept their base of operations in the United States are forced to streamline their production process, a tactic that means either firing workers or paying workers lower wages.

In both scenarios, American workers have seen their wages fall or stagnate due to globalization.

This exploitation of American workers by Republicans, which proves the Democrats’ point the GOP’s tax cuts only benefit the rich, will rattle Republicans hoping the positive economy will boost them in November’s midterm elections.

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Labor

Here are the New Minimum Wages in 22 States and D.C.

Twenty-two states and the District of Columbia are slated to increase the minimum wage for employees starting January 2019 from $8 to $15 an hour or thereabouts.

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Arthur J. Villasanta – Fourth Estate Contributor

Washington, DC, United States (4E) – Twenty-two states and the District of Columbia are slated to increase the minimum wage for employees starting January 2019 from $8 to $15 an hour or thereabouts. In addition, 38 cities and counties are also scheduled to hike their minimum wages.

The National Employment Law Project (NELP) report reveals that more than 17 million workers will benefit from the 2019 wage increases. It said the increases are either due to policies designed to help lower-income workers or are part of regularly scheduled cost-of-living adjustments.

Cost-of-living adjustments are small increases, but at least workers won’t be falling behind inflation in the coming years, said Yannet Lathrop, policy analyst at NELP.

The next step is a wage higher than $15 in more expensive states and cities. Lathrop pointed out that in some parts of the country, $15 is not a living wage, “so folks need to think about a higher wage.”

She noted that Hawaii is already thinking about a $17 minimum wage bill.

Here are the states where the minimum wage is set to rise in 2019.

* Alaska

Current minimum wage: $9.84

2019 minimum wage: $9.89 (as of Jan. 1, 2019)

* Arizona

Current minimum wage: $10.50

2019 minimum wage: $11 (as of Jan. 1, 2019)

* Arkansas

Current minimum wage: $8.50

2019 minimum wage: $9.25 (as of Jan. 1, 2019)

* California

Current minimum wage: $11 for large employers; $10.50 for small employers

2019 minimum wage: $12 for large employers; $11 for small employers (as of Jan. 1, 2019)

* Colorado

Current minimum wage: $10.20

2019 minimum wage: $11.10 (as of Jan. 1, 2019)

* Delaware

Current minimum wage: $8.25

2019 minimum wage: $8.75 and then another to $9.25

Effective date: First increase in January; second increase in October

* District of Columbia

Current minimum wage: $13.25

2019 minimum wage: $14 (as of July. 1, 2019)

* Florida

Current minimum wage: $8.25

2019 minimum wage: $8.46 (as of Jan. 1, 2019)

* Maine

Current minimum wage: $10

2019 minimum wage: $11 (as of Jan. 1, 2019)

* Massachusetts

Current minimum wage: $11

2019 minimum wage: $12 (as of Jan. 1, 2019)

* Michigan

Current minimum wage: $9.25

2019 minimum wage: $9.48

Effective date: 90 days after the Michigan legislature adjourns, approximately late March or early April

* Minnesota

Current minimum wage: $9.65 for large employers; $7.87 for small employers

2019 minimum wage: $9.86 for large employers; $8.04 for small employers (as of Jan. 1, 2019)

* Missouri

Current minimum wage: $7.85

2019 minimum wage: $8.60 (as of Jan. 1, 2019

* Montana

Current minimum wage: $8.30

2019 minimum wage: $8.50 (as of Jan. 1, 2019)

* Nevada

Current minimum wage: $8.25 with no benefits; $7.25 with benefits

2019 minimum wage: The Nevada Labor Commissioner will determine in April whether to increase the state’s minimum wage in 2019 based on a formula in the state constitution. (as of Jan. 1, 2019)

* New Jersey

Current minimum wage: $8.60

2019 minimum wage: $8.85 (as of Jan. 1, 2019)

* New York

Current minimum wage: $13 for large employers in New York City; $12 for small employers in New York City; $11 in Long Island and Westchester County; and $10.40 everywhere else

2019 minimum wage: $15 for large employers in New York City; $13.50 for small employers in New York City; $12 in Long Island and Westchester County; and $11.10 everywhere else

Effective date: Dec. 31, 2018

* Ohio

Current minimum wage: $8.30

2019 minimum wage: $8.55 (as of Jan. 1, 2019)

* Oregon

Current minimum wage: $12 in Portland; $10.75 standard; and $10.50 in rural areas

2019 minimum wage: $12.50 in Portland; $11.25 standard; and $11 in rural areas

Effective date: July 1, 2019

* Rhode Island

Current minimum wage: $10.10

2019 minimum wage: $10.50 (as of Jan. 1, 2019

* South Dakota

Current minimum wage: $8.85

2019 minimum wage: $9.10 (as of Jan. 1, 2019

* Vermont

Current minimum wage: $10.50

2019 minimum wage: $10.78 (as of Jan. 1, 2019

* Washington

Current minimum wage: $11.50

2019 minimum wage: $12 (as of Jan. 1, 2019)

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Labor

UK Employers Prefer ‘Job Readiness’ Over Academic Credentials

A surprising new study shows most employers in the United Kingdom place greater weight on “job readiness” instead of formal academic credentials.

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Arthur J. Villasanta – Fourth Estate Contributor

London, United Kingdom (4E) – A surprising new study shows most employers in the United Kingdom place greater weight on “job readiness” instead of formal academic credentials.

The study published in the Journal of Education Policy challenges existing theories that higher levels of formal education determine the result of jobs competition in the UK labor market. It analyzed more than 21 million UK job advertisements based on labor market analytics and found that only 18 percent of job ads specified a qualification requirement.

Employers were also more likely to highlight social qualifications, specific skills and cognitive abilities such as organizational skills or time management in their recruitment ads. These attributes are aspects that signal job readiness.

The study reveals that employers look for a wide range of technical and social skills in new employees. Employers emphasized performance rather than assuming academic squalifications equal the skills they needed, or indicated that candidates would be easier to train.

The focus on job readiness rather than trainability indicates employers are looking for ways to reduce training costs and shorten the time it takes for newly-hired employees to make a productive contribution to the company.

It also emphasizes the need for job candidates to develop marketable skills of immediate value to employers. This outcome helps explain the increasing popularity and importance of high quality internships in Britain.

There is, however, little to suggest that a reduced emphasis on academic credentials will lead to a reduction in class-based inequalities in the competition for jobs.

The study noted that candidates with greater financial, cultural and social resources will likely maintain a major advantage when specific skills and personal traits not a central part of formal education are perceived as an important part of what it means to be job ready.

The study’s findings call for a fresh discussion on the meaning of merit and fairness in the relationship between education and the labor market. This is especially relevant at a time when government reforms in the UK are premised on the assumption that increasing intergenerational social mobility can be achieved by widening access to higher education.

The research was led by Professor Phillip Brown and Professor Manuel Souto-Otero of Cardiff University.

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Labor

Global Wage Growth Falls to Lowest Level in a Decade

Employees around the world aren’t getting the salaries they deserve despite companies raking-in more profits than ever before.

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Arthur J. Villasanta – Fourth Estate Contributor

Geneva, Switzerland (4E) – Employees around the world aren’t getting the salaries they deserve despite companies raking-in more profits than ever before.

The International Labor Organization’s (ILO) Global Wage Report reveals that global wage growth fell to its lowest in almost a decade in 2017. The report found that international wage growth saw a 0.6 percent decline in 2017 based on data from 136 countries.

Surprisingly, the rich G-20 nations saw wage growth fall from 0.9 percent to 0.4 percent between 2016 and 2017. Average wages in advanced G-20 economies only grew by 9% during the period.

Emerging and developing G-20 countries saw wage growth fall from 4.9 percent to 4.3 percent. Average wages in emerging and developing G-20 countries almost tripled over the last 20 years in contrast to the 9% growth in G20 countries.

Wage inequality between genders was also a key issue. This problem was more marked in low and middle-income economies. ILO said wages were frequently insufficient to cover workers’ needs or provide for families in these countries.

ILO Director General Guy Ryder said wage growth was generally seeing a continuous slowdown.

“It’s puzzling that in high-income economies we see slow wage growth alongside a recovery in GDP growth and falling unemployment — and early indications suggest that slow wage growth continues in 2018,” he said.

“Countries should explore, with their social partners, ways to achieve socially and economically sustainable wage growth.”

Earlier this week, a study suggested wage growth could slow in the U.S. if Trump went ahead with the 25% tariffs on Chinese goods. This move will mean households spending an extra $2,400 in 2019 and as much as $17,300 by 2030.

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