The decline of the American paycheck

[CShine 0]

America's "jobless recovery" faded into history a year ago when the economy started to add jobs again after a brief recession. But the middle class is still feeling a squeeze - what Michael Alter calls the "pay less" economy.

He's president of SurePayroll Inc., a firm in Skokie, Ill., that services payrolls for some 13,000 small businesses across the country. His analysis of those payrolls shows businesses are hiring new people - but at lower pay.

"It's different from past recoveries. It's not normal," he says of this pattern of salary deflation.

His aren't the only numbers on worker salaries, and economists see some pickup in wages since May. But recent Census data confirm that the median household income - a level where half of US households earn more and half less - has fallen by $1,500 between 2000 and 2003.

Behind the salary slump that Alter sees is a broader challenge to America's middle class - the core of America's consumption-driven economy. As George W. Bush and John Kerry spar over who can best help ordinary Americans prosper, many workers are finding upward mobility harder to achieve.

Economists don't have a standard definition for the "middle class." But the percentage of households having a pretax income of between $25,000 and $75,000 - a group occupying roughly the middle half of Census income tables - has declined by 1.2 percentage points since President Bush took office, after adjusting for inflation.

In the same 2000-2003 period, those making less than $25,000 grew by 1.5 percentage points to 29 percent of households. Those making more than $75,000 declined by 0.4 percent to 26 percent of all households. These numbers were crunched by FactCheck.org, a project of the University of Pennsylvania's Annenberg Public Policy Center to examine campaign statements for accuracy.

The trends in wages are linked to the question of job creation. Even though the recovery may no longer be "jobless," economists say employers need to hire more vigorously - picking up the slack in a growing labor market - before workers will be able to command higher wages.

"These are not great times for the middle class," says Isaac Shapiro, an economist at the Center on Budget and Policy Priorities.

http://www.csmonitor.com/2004/0908/p03s01-usec.html

[BamaGrad03 0]

Thats interesting. Since wages were WAAAAAAY over inflated between 1996-2000...I would say that this is about right.

The economy still has to realign itself to where it should be. Salaries are based on actual company earnings and profits and not based on stock prices or over inflated venture capital as they did in the late nineties.

Now that we are coming out of the recession, small businesses who survived (or learned from failed businesses of the late 90s) are holding more cash reserves than did in the past. They dont want to get bitten again. And in the IT industry, for example, the crash of the dot coms and the recession caused companies to let go of a TON of people. And for the last year or year and a half, you see the market FLOODED with working professionals who have experience and are willing to work their same job at a lower price because the hardship of having no job is still fresh in memory.

Thats what KILLS me about Kerry who wants to compare salary numbers now to that of the late 90s and say we are in trouble...Yeah dude, because kids with no formal training could come out of high school and make 50 dollars an hour because they knew how to type...was a good thing. (thats not an exaggeration btw)

[CCTAU 3,351]

America's "jobless recovery" faded into history a year ago when the economy started to add jobs again after a brief recession. But the middle class is still feeling a squeeze - what Michael Alter calls the "pay less" economy.

He's president of SurePayroll Inc., a firm in Skokie, Ill., that services payrolls for some 13,000 small businesses across the country. His analysis of those payrolls shows businesses are hiring new people - but at lower pay.

"It's different from past recoveries. It's not normal," he says of this pattern of salary deflation.

His aren't the only numbers on worker salaries, and economists see some pickup in wages since May. But recent Census data confirm that the median household income - a level where half of US households earn more and half less - has fallen by $1,500 between 2000 and 2003.

Behind the salary slump that Alter sees is a broader challenge to America's middle class - the core of America's consumption-driven economy. As George W. Bush and John Kerry spar over who can best help ordinary Americans prosper, many workers are finding upward mobility harder to achieve.

Economists don't have a standard definition for the "middle class." But the percentage of households having a pretax income of between $25,000 and $75,000 - a group occupying roughly the middle half of Census income tables - has declined by 1.2 percentage points since President Bush took office, after adjusting for inflation.

In the same 2000-2003 period, those making less than $25,000 grew by 1.5 percentage points to 29 percent of households. Those making more than $75,000 declined by 0.4 percent to 26 percent of all households. These numbers were crunched by FactCheck.org, a project of the University of Pennsylvania's Annenberg Public Policy Center to examine campaign statements for accuracy.

The trends in wages are linked to the question of job creation. Even though the recovery may no longer be "jobless," economists say employers need to hire more vigorously - picking up the slack in a growing labor market - before workers will be able to command higher wages.

"These are not great times for the middle class," says Isaac Shapiro, an economist at the Center on Budget and Policy Priorities.

http://www.csmonitor.com/2004/0908/p03s01-usec.html

How can we be paying more taxes and making less money with all the tax cuts. All the reports about paying more taxes failed to exclude employer taxes WHICH WILL GO UP if you make more money. None of this math adds up.

I paid more taxes last year because I made more. but I also got back more because of the tax credits. So I guess technically you could say that I paid more taxes, but you'd be on the fringe of lying. Kinda sums up the demoncratic mantra.... Just give enough truth to amke people listen, then retract it when they are not listening..........

[War Eagle 96 10]

I was making $60k in 2000, this year I'll make $80k....next four years?....who knows. Quit being such dependent losers and develop a skill and freaking go to work! This is the greatest country in the history of the world. Let's not blow it. Embrace capitalism...live the American dream! Viva Bush!!!!!!!!!!!

[Bottomfeeder 244]

I was making $60k in 2000, this year I'll make $80k....next four years?....who knows. Quit being such dependent losers and develop a skill and freaking go to work! This is the greatest country in the history of the world. Let's not blow it. Embrace capitalism...live the American dream! Viva Bush!!!!!!!!!!!

That's just it. Those with skills are as lucky as you. It seems education has been the divide between the haves and have nots. You seem to be in the class of the haves and the have mores. Capitalism beats down labor and labor is the foundation upon which this country was built. Without it you would not have a job making $60,000 to $80,000 per year. Just think about it for a moment. Who pays the bills at your company, or who pays for the services there? Or, who pays for the services of the companies whom you service? It all boils down to the laborer or working man either here or abroad. Without customers you don't have a job. And, if they are unable to afford your services, due to lack of work, then you can't be paid. The only exception being that you are some type of government employee, or your company contracts for the government. As with likes of Haliburton, I would not be so proud of my salary, as it is unjustified.

[BamaGrad03 0]

That's just it. Those with skills are as lucky as you. It seems education has been the divide between the haves and have nots. You seem to be in the class of the haves and the have mores. Capitalism beats down labor and labor is the foundation upon which this country was built. Without it you would not have a job making $60,000 to $80,000 per year. Just think about it for a moment. Who pays the bills at your company, or who pays for the services there? Or, who pays for the services of the companies whom you service? It all boils down to the laborer or working man either here or abroad. Without customers you don't have a job. And, if they are unable to afford your services, due to lack of work, then you can't be paid. The only exception being that you are some type of government employee, or your company contracts for the government. As with likes of Haliburton, I would not be so proud of my salary, as it is unjustified.

Um...ok. Is it WRONG for education to be the divide between the haves and the have nots? If you dont ever learn a skill...how can you contribute to society?

Capitalism does not beat down labor. I know people in the service/labor industry who make really really good money. They do, however, have a skill. People who bag groceries shouldnt be making enough money to feed a family of five.

[CarolinaTiger 0]

this article says that those making over 75K actually decreased by .4%. i thought the 'rich' were getting richer.

maybe that phrase means those who are lucky enough to stay rich actually get richer....all 3 of them. :roll: now there's a thought...people who know how to make money know how to make more money.

[bigsixfive 328]

That's just it. Those with skills are as lucky as you. It seems education has been the divide between the haves and have nots. You seem to be in the class of the haves and the have mores.

I'm sorry, but thats a crap statement. There are waaaay too many scholarships, grants, and financail sources for the 'have nots' in this country to even make a statement like that. It boils down to what the individual's EFFORT and what he WANTS, not what is handed to him. Do a quick search for scholarships/grants. I guarantee you that 90% of them will be directed at students in lower income families or minorities. And you know, even if you don't qualify for any of those and still can't manage to go to school, there are 100s of financial institutions more than willing to loan money to a student with potential. I'm sick and tired of 'education dividing this country' when in fact, its the people that divide it with ignorance and greed.

Capitalism beats down labor and labor is the foundation upon which this country was built.

Ok, make a decision right now. Which one is it? You whine about the country being Communist, now you gripe about capitalism?

You know, there are a few utopian communes still around, ones right up in Tennessee. With your dislike of many forms of government and getting 'beat down' by capitalism, it might be a way you can live like you want to.

[BamaGrad03 0]

Yeah, my parents had money...but i did not. So i couldnt qualify for grants and stuff because of the governments idea that the parents, based on income, have an 'expected contribution' to my education. But since I was 100% responsible for my education...financially i was in an even WORSE spot than those who came from lower income families.

I got loans and jobs.

[War Eagle 96 10]

I was making $60k in 2000, this year I'll make $80k....next four years?....who knows.  Quit being such dependent losers and develop a skill and freaking go to work!  This is the greatest country in the history of the world.  Let's not blow it.  Embrace capitalism...live the American dream!  Viva Bush!!!!!!!!!!!

That's just it. Those with skills are as lucky as you. It seems education has been the divide between the haves and have nots. You seem to be in the class of the haves and the have mores. Capitalism beats down labor and labor is the foundation upon which this country was built. Without it you would not have a job making $60,000 to $80,000 per year. Just think about it for a moment. Who pays the bills at your company, or who pays for the services there? Or, who pays for the services of the companies whom you service? It all boils down to the laborer or working man either here or abroad. Without customers you don't have a job. And, if they are unable to afford your services, due to lack of work, then you can't be paid. The only exception being that you are some type of government employee, or your company contracts for the government. As with likes of Haliburton, I would not be so proud of my salary, as it is unjustified.

The world needs ditch-diggers.

[bigsixfive 328]

Yeah, my parents had money...but i did not. So i couldnt qualify for grants and stuff because of the governments idea that the parents, based on income, have an 'expected contribution' to my education. But since I was 100% responsible for my education...financially i was in an even WORSE spot than those who came from lower income families.

I got loans and jobs.

Same boat. My parents helped me out here and there, but didn't outright pay for my education. I don't think they should have to either, because its MY education. My expected contribution was based on my parents salaries (and was absurd) so I have 2 big loans. I also had a job for a few years too. I'm now in grad school and still living very conservatively, because the stipend basically covers rent, a few small bills, and food.

Damn capitalism. If only we were Communist I wouldn't have the option to go to grad school, or even pick what degree I wanted to earn, and I could bust my balls to earn just enough to pay inflated prices for small amounts of food.