Report: Low-Wage Employees Working More, Earning Less

By @TrishaMarczakMP |
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    The bottom fifth of income earners put in 22 percent more hours annually, yet only saw hourly wage increases just shy of 8 percent, according to a Economic Policy Institute study. (Photo by Sid Pranke)

    The bottom fifth of income earners put in 22 percent more hours annually, yet only saw hourly wage increases just shy of 8 percent, according to a Economic Policy Institute study. (Photo by Sid Pranke)


    (MintPress) – Americans may be working harder than ever before, but that doesn’t mean they’re cashing in more at the bank, especially those on the lower end of the income tier.

    That’s the consensus of a study released by the Economic Policy Institute, which observed working trends among Americans between 1979 to 2007 and found that only the wealthiest of Americans saw the advantages of working longer hours. On the other hand, the lowest earners put in longer hours without reaping proportionate rewards.

    The bottom fifth of income earners put in 22 percent more hours annually, yet only saw hourly wage increases just shy of 8 percent. Those in the top 5 percent range saw annual hours increase by 7.6 percent, yet saw wages rise by 30 percent.

    The winners in the 30-year period were the middle class, at least in terms of the hours to earning ratio. Those in that bracket saw hours increase roughly 11 percent and wages increase 16 percent.

    “The data suggests that Americans started working more hours in part as a coping strategy to ensure some income growth in the face of very slow wage growth,” the study’s author, Lawrence Mishel said in a press release. “In contrast, wages grew quite quickly for top wage earners. Workers, especially those in the bottom 60 percent, have been working much more but have had very modest gains in real hourly wages.”

    For those on the lower end of the income scale, this news isn’t exactly shocking. A 2012 Congressional Research Service report confirmed the top 5 percent of earners’ share of the wealth rose from 16.3 percent in 1968 to 22.3 percent in 2011. The lowest wage earners, over the same period of time went from holding 4.2 percent of the income, to making up for just 3.2 percent.

    “Estimates derived from federal income tax data, which allow researchers to look within the top 5 percent of the U.S. income distribution, suggest that those at the very top have reaped disproportionately larger gains from economic growth,” the report states.

    If current job creation trends continue, that gap will grow even wider. Nearly 60 percent of all jobs created in the wake of the recession have been low-wage positions, paying less than a $13.83 hourly wage, according to the National Employment Law Project.

    The sectors seeing employment growth have come in the service industry, including the retail and dining sectors. In fall 2012, Americans watched as those working in the New York fast food industry protested against the very trend represented in nationwide statistics. The median pay for that working group, representing just $50,000 in New York alone, was $18,500 a year — lower than the Census Bureau’s designated poverty line of $23,000 for a family of four.


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