The average private-sector wage now stands 8 cents lower than it did when the Great Recession officially ended three years ago, according to data from the Labor Department. The slide from $8.85 per hour in June 2009 to $8.77 per hour last month is the latest evidence that the recovery has thus far failed to engage a key economic feedback loop between worker pay and consumer demand, undermining growth.
The numbers are adjusted for inflation, and exclude managerial workers and government employees. The stagnation and slight decline in hourly pay corresponds with two studies put out last week that showed American household earnings are down by more than $2,000 per year since the recession and that workers have suffered a lost decade in compensation despite increasing their productivity by nearly 25 percent.
The disconnect between how hard Americans are working and the level of financial security that work provides is leading to some of the most significant labor unrest in years. Strikes in the fast food and retail industries, where poverty wages are the norm, have now spread to at least 9 cities. Those workers are calling for a nationwide walkout on August 29, a few days before the Labor Day weekend. 10 were arrested last week in front of Walmart’s office in Washington, D.C., for protesting the company’s reported retaliations against dozens of worker activists.
The federal government’s role in subsidizing poverty wages for millions of workers employed by private companies that receive government contracts has lead to increasing calls for President Obama to act by executive order to require that contracts go to employers that pay livable wages. Obama called for raising the federal minimum wage in his State of the Union address, and various members of congress have gone even further with minimum wage proposals, but to date no such bill has moved towards a floor vote.