Wednesday, March 07, 2012

American Wages Fall

Young workers see pay shrink in United States. The Economic Policy Institute think tank found that the average inflation-adjusted hourly wage for male college graduates aged 23 to 29 dropped 11% over the past decade to $21.68 in 2011. For female college graduates of the same age, the average wage is down 7.6% to $18.80.

For the entire working population, average hourly wages have risen modestly over the past 10 years. But that is partly because many of the lowest-paid workers have lost their jobs and are no longer included in the average. "People who normally make below-average wages are not working," said Bart Hobijn, an economist at the Federal Reserve Bank of San Francisco. "That raises the average wage."

For men with only high school degrees, aged 19 to 25, the average wage is down 10% from a decade ago to $11.68. For women in the same category, the average has declined 9.2% to $9.92

Downward pressure on wages is likely to persist as long as unemployment remains high. In recessions, employers rarely cut wages for their long-standing workers, though they often impose wage freezes or grant below inflation-rate ones.

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