News Column

Stagnant Pay Puts Damper on Labor Day

September 3, 2013

Isaac Cohen --


To judge by recently released figures by the Labor Department on salaries and income, there were not many reasons to celebrate on Labor Day in the U.S.

Adjusted for the present very low inflation rate of less than 2 percent, hourly pay for a worker employed in nonsupervisory and nongovernment activities has declined 0.9 percent since the end of the recession in June 2009.

However, there are differences by sectors of economic activity and by earning groups. For instance, hourly earnings since 2009 have increased 0.9 percent in education and health care.

But others have had an even worse time. Workers employed in entertainment industries such as restaurants, a sector dominated by Hispanics, have seen their paychecks decrease by 2.7 percent.

Manufacturing hourly wages, meanwhile, have decreased by 3.1 percent. The Wall Street Journal described how restructuring the auto industry has led to new employees being hired at half the salaries of older workers.

There are also differences in earnings by levels of income. President Obama in a July speech at Knox College in Galesburg, Ill., described how most income gains of the last 10 years have gone to the top 1 percent.

Mr. Obama said the average CEO "has gotten a raise of nearly 40 percent since 2009," while the average worker "earns less than he or she did in 1999."


Isaac Cohen is an international analyst and consultant, a commentator on economic and financial issues for CNN en Espaņol TV and radio, and a former director, UNECLAC Washington Office.

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