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Opinion | Corporate America Is Suppressing Wages for Many Workers
Keywords: U.S. Wages, Wage Growth,
Krueger and Posner, eminent economists, say the reason wages have stagnated in the U.S. with wages not having budged much over a decade 2008-2018, is not only because of globalization and automation as long term trends. They attribute this stagnation in wages to "monopsony power," or power American corporations have over workers because of their stronger bargaining position and because workers have few alternatives.
For most of this period 2008-2018 high unemployment as reflected by the people out of work and taking part time jobs or having stopped looking for work, shifted bargaining power to companies. The Economist magazine pointed out that workers have not shared in the profit and gains corporations made during this period.
Here Krueger and Posner show additional factors such as non compete clauses in worker agreements that have depressed wages. Half of franchise agreements prohibit competition for labor. Outsourcing work to other companies that hire workers means these outsourcing companies have more power over workers than the original companies using the labor.
Unions represent only 7 percent of private sector workers by 2017, compared to 35 percent in the 1950's, so that there are no mechanisms to counteract the greater bargaining power gained by companies vs. workers. The way workers have roots in the communities they live and the consolidation of employers into a few companies in a particular area, mean fewer options exist for workers.
Senators Warren and Booker and the anti-trust division of the U.S. Justice Department are in agreement on this issue of widespread use of noncompete agreements that is considered unlawful, says this report in the NYT, offering hope for a solution to bring a better balance between the rights of workers to fair wages and companies seeking profit for stakeholders.
Issues about workers, lack of gains for workers, prevalent outsourcing, and the frustrations of labor with parties that had lost touch with their worker base- such as Labor in Britain, SPD in Germany, Socialist Party in France and the Democratic Party in the U.S. - have led to political upsets with support shifting to other parties. This has not led to significant change to improve bargaining power of workers to correct the imbalance that now exists between labor and companies, leading to calls for change.
Eric Posner is a law professor at the University of Chicago law school and co-author of a new book "Radical Markets: uprooting Capitalism and Democracy for a Just Society." This book turns the popular notion on its head that free markets have produced the imbalances that hurt social cohesion and democracy, by saying it is precisely the suppression of free competition such as for labor that have created this unhealthy situation. This is true in other areas where monopoly power has developed in other parts of the U.S and European economies in 2008-2018, as also for distortions in capital allocation that hurt infrastructure and other public investment. Krueger is a professor of public affairs at Princeton University and former head of the President's Council of Economic Advisors in 2011 under Obama, showing that Democrats themselves failed to correct this imbalance leading to a shift to other parties and Mr. Trump, who also appear to lack ideas or solutions to this problem that affects social cohesion and democracy. This is contrary to the vision of American or European society of better opportunity for all shared by all Americans and Europeans for most of the twentieth century.
Corporate America and stagnant wage growth 2008-2018
02/28/2018
Grouped Articles
Opinion | Corporate America Is Suppressing Wages for Many Workers
The New York Times 02/28/2018
Trump’s Tax Cuts in Hand, Companies Spend More on Themselves Than on Wages
The New York Times 02/26/2018
Boom in Share Buybacks Renews Question of Who Wins From Tax Cuts
WSJ 03/01/2018
Efforts to reverse the decline in wages for factory workers in the U.S.- the automobile industry in 2015
09/18/2015
Grouped Articles
U.A.W. Contract With Fiat Chrysler Would Give 2nd-Tier Workers Big Raise
New York Times 09/18/2015
A stunning stat about pay seems impossible but actually is true - The Washington Post
Washington Post 09/22/2015
The CNN Democratic debate transcript, annotated - The Washington Post
Washington Post 10/14/2015
Washington Post 10/23/2015
America’s Inequality Problem: Real Income Gains Are Brief and Hard to Find
The New York Times 09/13/2016
The New York Times 09/16/2016
Wages, benefits and productivity in U.S. manufacturing 2005-2015
01/01/2010
Grouped Articles
Does America Need Manufacturing?
New York Times 08/24/2011
Whirlpool Shifts Some Production to U.S. From Mexico
Wall Street Journal 12/20/2013
Wall Street Journal 10/02/2010
Wall Street Journal 01/06/2012
U.S. Productivity Growth Has Taken a Dive
Wall Street Journal 02/04/2014
Falling Wages at Factories Squeeze the Middle Class
New York Times 11/20/2014
The other roots of increasing inequality in the U.S.- global competition and sourcing, the case of the U.S. auto industry and manufacturing workers
03/24/2015
Auto parts imports into the U.S. from Mexico have increased by 86% since 2008, more than doubled for China. As wages rise in China, India is the next source country for low cost automobile parts from auto industry hubs in Gujarat and Tamilnadu, placing continuous downward pressure on manufacturing wages for the next decade, and the next. Parts imports were $32 billion in 1990, $138 billion in 2014. Workers in manufacturing make as low as $10 an hour today, similar to workers at Wal-Mart. An entire generation of manufacturing workers are now shifted from middle class to lower class from their parents generation to their own, reducing educational mobility in the American system and fewer opportunities for improvement. As more jobs are created in manufacturing than in IT related industries this is a significant hurdle for improving wages and employment in the U.S.
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U.S. Car-Making Boom? Not for Auto-Industry Workers
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Income Inequality Is Costing the U.S. on Social Issues
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Economic-Ladder Concerns Trump Income Gap in Poll
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Sanders, Corbyn and the coming debate inside the Democratic Party - The Washington Post
Washington Post 09/13/2015
U.A.W. Contract With Fiat Chrysler Would Give 2nd-Tier Workers Big Raise
New York Times 09/18/2015
A stunning stat about pay seems impossible but actually is true - The Washington Post
Washington Post 09/22/2015
High unemployment and declining wages in the U.S.: 2010-2012
01/01/2010
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OECD report cites rising income inequality - The Washington Post
Washington Post 12/06/2011
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No longer the land of opportunity - The Washington Post
Washington Post 01/05/2012
Recovery Has Created Far More Low-Wage Jobs Than Better-Paid Ones
New York Times 04/27/2014
The world economy: Wealth without workers, workers without wealth
Economist 10/06/2014
Falling Wages at Factories Squeeze the Middle Class
New York Times 11/20/2014
Focus on wages, income disparities, rising inequality, and a shrinking middle class in the first Democratic debate, for the U.S. 2016 presidential election
10/14/2015
O'Malley, Sanders and Clinton emphasize this issue in the debate.
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The CNN Democratic debate transcript, annotated - The Washington Post
Washington Post 10/14/2015
Democrats Say the Economy Stinks
Wall Street Journal 10/15/2015
Clinton, judged winner of debate, holds big national lead over Sanders - The Washington Post
Washington Post 10/20/2015
Not There Yet on Equal Opportunity
Wall Street Journal 10/21/2015
Washington Post 10/23/2015
Paris massacre could alter the 2016 presidential race in this country - The Washington Post
Washington Post 11/15/2015
The puzzle of continuing U.S. job gains in 2014-2015 with tepid wage growth, low productivity, and low economic growth
03/06/2015
Weak business investment, low productivity, slack in the labor market, and more low paying jobs are some of the reasons explaining the puzzle of job gains in 2014-2015 with small wage gains.
Grouped Articles
Sluggish Productivity Hampers Wage Gains
Wall Street Journal 03/07/2015
After a Bounce, Wage Growth Slumps to 0.1%
New York Times 03/06/2015
The New Jobs Report Shows Janet Yellen’s Quandary in a Nutshell
New York Times 03/06/2015
Slowing Job Growth Tests Economy
Wall Street Journal 04/04/2015
U.S. Economic Growth Nearly Stalls Out
Wall Street Journal 04/29/2015
The Mystery of Declining Productivity Growth
Wall Street Journal 05/15/2015
Globalization and manufacturing job losses in the U.S. and Canada 2000-2015
01/26/2016
Wage stagnation in the manufacuring sector in the U.S. is another aspect of the globalization trends, as workers in the U.S. compete with low wage workers in emerging markets such as Mexico and China.
Grouped Articles
What’s Our Duty to the People Globalization Leaves Behind?
New York Times 01/26/2016
After Michigan Loss, Hillary Clinton Sharpens Message on Jobs and Trade
New York Times 03/09/2016
Brexit: The Era of the Angry Voter Is Upon Us - SPIEGEL ONLINE
SPIEGEL ONLINE 07/06/2016
Trump era confronts organized labor with gravest crisis in decades
Washington Post 12/09/2016
The White House’s claim that 800,000 manufacturing jobs were added during Obama’s presidency
Washington Post 12/09/2016
Mexico is growing less pessimistic about Donald Trump
The Economist 04/14/2017
Shift of American manufacturing overseas and the disastrous results for jobs, pandemic
08/27/2020
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How China Built ‘iPhone City’ With Billions in Perks for Apple’s Partner
The New York Times 12/29/2016
California Nears Deal to Adopt a $15 State Minimum Wage
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Opinion | Bringing the Factories Home
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Donald Trump Presides Over GOP Remade in His Image
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China’s Faux Comparative Advantage
WSJ 04/15/2018
Opinion | Corporate America Is Suppressing Wages for Many Workers
The New York Times 02/28/2018
The problem of declining wages and rising inflation in the U.S. - 2011-2012
01/01/2010
Grouped Articles
OECD report cites rising income inequality - The Washington Post
Washington Post 12/06/2011
Recovery Has Created Far More Low-Wage Jobs Than Better-Paid Ones
New York Times 04/27/2014
Job Growth Fails to Help Paychecks of Workers
New York Times 01/09/2015
Hiring Booms, but Soft Wages Linger
Wall Street Journal 01/10/2015
Sluggish Productivity Hampers Wage Gains
Wall Street Journal 03/07/2015
U.A.W. Contract With Fiat Chrysler Would Give 2nd-Tier Workers Big Raise
New York Times 09/18/2015
The impact of declining factory wages on the U.S. middle class 2004-2014
11/20/2014
Grouped Articles
Falling Wages at Factories Squeeze the Middle Class
New York Times 11/20/2014
Hiring Booms, but Soft Wages Linger
Wall Street Journal 01/10/2015
Sluggish Productivity Hampers Wage Gains
Wall Street Journal 03/07/2015
Wall Street Journal 09/17/2015
U.A.W. Contract With Fiat Chrysler Would Give 2nd-Tier Workers Big Raise
New York Times 09/18/2015
A stunning stat about pay seems impossible but actually is true - The Washington Post
Washington Post 09/22/2015
The end of the two tier wage system at U.S. automakers in 2015
11/24/2015
Negotiations in 2015 between the UAW union and Fiat Chrysler ended in the scrapping of the 2 tier wage system for all 3 automakers, Ford, GM and Chrysler. Under the new contracts with the UAW union all workers at the three companies can earn the top wage of $29 an hour. This is a major achievement for UAW president Steve Williams and the auto workers union which rejected the two tier system in a vote, leading to the scrapping of this arrangement.
Grouped Articles
U.A.W. Contracts Change Math for Detroit Automakers
New York Times 11/24/2015
Opinion | Corporate America Is Suppressing Wages for Many Workers
The New York Times 02/28/2018
Washington Post 07/04/2018
The Economist on corporate profits in America and the smaller share of output going to workers- a public debate in the U.S. presidential election of 2016
03/24/2016
Most of the candidates in the 2016 presidential election have emphasized the problems of sluggish wages and lack of upward mobility in the U.S. Here the Economist looks at the situation with a small number of firms reaping the benefits of high profits and a lagging working class. Rising disparities in income and inequality are creating social discontent and voter dissatisfaction with the establishment candidates.
Grouped Articles
Economist 03/24/2016
Apple should repay Ireland 13bn euros, European Commission rules - BBC News
BBC News 08/30/2016
Apple must now pay its taxes. This is a vindication of protest | Owen Jones
The Guardian 08/30/2016
U.S. Household Incomes Surged 5.2% in 2015, First Gain Since 2007
WSJ 09/13/2016
The New York Times 09/16/2016
Struggling to Serve at the Nation’s Richest University
The New York Times 10/24/2016
Increase in the minimum wage in 29 U.S. states by Jan. 2015 bringing more food, bus fare to millions of Americans
12/31/2014
Grouped Articles
States’ Minimum Wages Rise, Helping Millions of Workers
New York Times 12/31/2014
Australia Weighs Whether Its Minimum Wage Is Too High
Wall Street Journal 01/26/2015
Andrew M. Cuomo: Fast-Food Workers Deserve a Raise
New York Times 05/06/2015
Democrats Are Rallying Around $12 Minimum Wage
New York Times 04/22/2015
Los Angeles Lifts Its Minimum Wage to $15 Per Hour
New York Times 05/19/2015
A stunning stat about pay seems impossible but actually is true - The Washington Post
Washington Post 09/22/2015
Workers in U.S. manufacturing plants in 2015- global competition, U.S. competitiveness and downward pressure on wages
03/24/2015
Workers who were once in the middle class are now lower class as conditions have changed in the automobile and other U.S. manufacturing plants. As more jobs are created in manufacturing than in IT related industries, this is a significant factor in improving U.S. employment and wages. There is an 86% increase in imports of parts from Mexico since 2008, over double for China.
Grouped Articles
U.S. Car-Making Boom? Not for Auto-Industry Workers
Wall Street Journal 03/24/2015
U.S. Trade Gap Widens on Surging Imports
Wall Street Journal 05/06/2015
Dollar’s Rise Lifts Imports and Widens Trade Gap
New York Times 05/05/2015
Mexican Auto Production Sets Record in April
Wall Street Journal 05/07/2015
U.A.W. Contract With Fiat Chrysler Would Give 2nd-Tier Workers Big Raise
New York Times 09/18/2015
A stunning stat about pay seems impossible but actually is true - The Washington Post
Washington Post 09/22/2015
Lower unemployment in the U.S. in 2015 with weak wage gains, low productivity growth and low GDP growth
03/06/2015
Productivity growth in the U.S. since 2009 is about 1.3% according to the Labor Department, with slack in the labor market not reflected in the 5.5% unemployment rate in Feb. 2015, resulting in tepid wage gains. GDP growth for the same period is an average of about 2% with businesses not increasing capital spending as they did in previous expansions.
Grouped Articles
Sluggish Productivity Hampers Wage Gains
Wall Street Journal 03/07/2015
After a Bounce, Wage Growth Slumps to 0.1%
New York Times 03/06/2015
The New Jobs Report Shows Janet Yellen’s Quandary in a Nutshell
New York Times 03/06/2015
Slowing Job Growth Tests Economy
Wall Street Journal 04/04/2015
Oil Layoffs Hit 100,000 and Counting
Wall Street Journal 04/15/2015
U.S. Economic Growth Nearly Stalls Out
Wall Street Journal 04/29/2015
The National Employment Law Project study of the U.S. recovery and jobs created, showing more low paying jobs created replacing better paying ones
04/27/2014
The study shows high wage industries such as accounting and legal work lost 3.6 million jobs in the recession and added 2.6 million in the last four years. In low wage indusries such as fast food and retail 2.0 million jobs were lost in the recession and 3.8 million jobs were created. Overall better paying jobs were replaced by poorer paying jobs in a weak U.S. recovery.
Grouped Articles
Recovery Has Created Far More Low-Wage Jobs Than Better-Paid Ones
New York Times 04/27/2014
Strong Voice in ‘Fight for 15’ Fast-Food Wage Campaign
New York Times 12/04/2014
Sluggish Productivity Hampers Wage Gains
Wall Street Journal 03/07/2015
A stunning stat about pay seems impossible but actually is true - The Washington Post
Washington Post 09/22/2015
America’s Inequality Problem: Real Income Gains Are Brief and Hard to Find
The New York Times 09/13/2016
Opinion | Corporate America Is Suppressing Wages for Many Workers
The New York Times 02/28/2018
Corporate America's choices between corporate buybacks and increasing stagnant wages/making capital investments in 2018
03/01/2018
Linked Articles
Boom in Share Buybacks Renews Question of Who Wins From Tax Cuts
WSJ 03/01/2018
Opinion | Corporate America Is Suppressing Wages for Many Workers
The New York Times 02/28/2018
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