Steve Beck went nearly six years without a raise.
The 55-year-old factory worker in Fort Dodge used to routinely get pay bumps in his previous job at an office supply company. But then the owners retired and closed the business.
In his current manufacturing job, Beck until recently hadn't seen his $10-an-hour pay increase since he first started there almost six years ago, even while his costs have grown.
“Things are going up — groceries, everything is going up, up, up,” he said.
It's a familiar lament for many workers, both in Iowa and across the U.S., who have seen their earning power suffer as their costs rise faster than their wages. And it's been a rallying cry on the campaign trail for the Democratic presidential candidates who will debate at Drake University Saturday night.
How bad is it? After adjusting for inflation, an Iowan who earned the state’s median wage of $15.98 per hour last year had $1,200 less to spend than he or she would have a decade earlier.
All three major Democratic candidates have called for raising the minimum wage as one way to address the issue, while Republicans have emphasized lower taxes and less regulation.
Candidates in both parties almost universally agree that wage earners aren't sharing in America's economic recovery.
Numbers back that up.
In 1979, a typical Iowan wage earner working 40 hours a week would have earned $32,385 (in inflation-adjusted 2014 dollars).
By 2014, that worker's salary had inched up to $33,238 — a gain of just $850 over 35 years.
“It’s pretty stark,” said Colin Gordon, a University of Iowa researcher and professor. “It’s not as if people are just not getting wage increases. What makes it stark is that the cost of things — particularly big-budget items like childcare, health care and higher education — has risen dramatically over the same period of time.”
Those wage troubles come even as productivity rates for Iowa companies have reached 35-year highs, according to data from the Bureau of Economic Analysis.
“One thing you have to remember about that flat line at the median wage is that workers in 2015, especially in Iowa, are older, better educated and better trained than workers were in 1979,” Gordon said.
Sluggish wages are particularly hard on the lowest earners, said Charles Bruner, executive director of the Child and Family Policy Center, a children’s issues advocacy group.
“If there’s wage stagnation for people making $80,000 a year even for three or four years, they’re still getting by,” he said. “If there’s wage stagnation for somebody making $25,000 with a young child, that really creates challenges as far as the family holding it together.”
Beck finally saw a raise at his current job. After an extended back-and-forth with the the factory and the staffing company that employs him, he received $2 more an hour.
It's a big jump, but he said that money should have been given to him in increments over the last few years, rather than one lump sum.
Wider income gaps
Languishing wages have fueled widening income inequality across the United States over time, said Lawrence Mishel, president of the union Economic Policy Institute, a national think tank that receives some funding from labor unions.
Between 2013 and 2014, national wages fell at nearly all income levels, EPI research shows. And real hourly wages for those with college degrees fell almost 6 percent between 2007 and 2014, the group's data show.
“The way wage stagnation takes place is that people start out lower in their first jobs, and they have less of an increase as they gain more experience,” he said. “You yourself will experience more wages over time. But when you turn 45, you will have lower wages than someone who turned 45 20 years ago.”
Though he has researched this issue his entire career, Mishel said it seems to finally be gaining national attention, evidenced by recent presidential debates.
Years of small or nonexistent wages leave workers feeling "like it's tougher today," said Steve Vonk, who represents workers at the Des Moines Bridgestone tire plant as president of the United Steelworkers Local 310L.
The plant's workers received pay raises in 2013 after going 11 years without a bump, Vonk said. Jobs there start at about $16.50 per hour.
Vonk said workers at Bridgestone experience ups and downs on their contracts, depending on the state of the agricultural economy. What once was considered great health care is getting shaved off each year with a 10 percent increase in premiums.
Then in September, the company announced it would cut Sunday shifts from the middle of September through the year’s end. That move meant employees would on average lose 14 percent of their wages, Vonk said.
“I think the people out here are like the people everywhere," he said. "It’s harder to get ahead nowadays.”
What's to blame?
Many experts attribute the broader problem of wage stagnation on the diminished role of labor unions and collective bargaining rights, as well as minimum wages that have failed to keep up with inflation.
Conservatives generally point to lackluster growth in the overall economy, and blame that on high taxes and too much government regulation. Also playing roles: increased automation, competition from immigrant workers and movement of jobs to lower-wage countries.
Mishel cites other factors: the loss of overtime rights, the exploitation of undocumented workers and the reclassification of workers as contractors who aren't eligible for benefits and other employee perks.
And there’s a conscious choice by employers to hold on to more profits, rather than share them with employees, he said.
As evidence, he pointed to data that show American business are topping record productivity levels.
“It tells me the fact that wages have been relatively stagnant is not because we have not been producing substantially more goods and services,” he said. “It’s not because somehow the economy is not producing.”
Some relief ahead?
There's some hope that falling unemployment may be one remedy to stagnant wages.
When employees have more job options, and the search for workers becomes more competitive, wages tend to go up.
There's evidence of that in the Des Moines metro, where the unemployment rate fell to 3.6 percent in September.
Research from staffing company Robert Half shows 2016 raises are in store for many employers in Des Moines, spanning jobs in IT, accounting, financial services and office administration.
The Palmer Group, another staffing company, released a survey of 200 central Iowa employers earlier this month that also predicted widespread raises for most workers.
“Across the board, we’re seeing an increase, yes,” said the company’s regional vice president Mike Gremmer. “Now, whether it’s keeping up with inflation, I don’t know."
Fear of being ‘stuck’
In today’s workplace, doing your job well doesn’t necessarily translate into raises; it often takes making job changes to get ahead, workers told the Register.
After graduating from college, Charmaine Bell, 25, was surprised by the relatively low pay she saw advertised in job listings – nothing like the “fantasyland” she had envisioned for her professional future.
Bell, who has a degree in business administration, started out at Wells Fargo in downtown Des Moines two years ago at about $13 an hour. On that wage, she was living paycheck to paycheck and struggling to care for her young son.
She’s since received substantial pay hikes, but only after hopping around to different positions and departments, she said.
Things are much better now, she said, including having her own place. But at her current wage, she said she can’t afford to purchase a home.
And there’s always a fear of getting stuck at a wage for a long period.
“If you never get that promotion that you’re looking for, if you never are able to move up, you can be stuck,” she said.
http://www.press-citizen.com/story/...ges-we-were-better-off-10-years-ago/75462110/
The 55-year-old factory worker in Fort Dodge used to routinely get pay bumps in his previous job at an office supply company. But then the owners retired and closed the business.
In his current manufacturing job, Beck until recently hadn't seen his $10-an-hour pay increase since he first started there almost six years ago, even while his costs have grown.
“Things are going up — groceries, everything is going up, up, up,” he said.
It's a familiar lament for many workers, both in Iowa and across the U.S., who have seen their earning power suffer as their costs rise faster than their wages. And it's been a rallying cry on the campaign trail for the Democratic presidential candidates who will debate at Drake University Saturday night.
How bad is it? After adjusting for inflation, an Iowan who earned the state’s median wage of $15.98 per hour last year had $1,200 less to spend than he or she would have a decade earlier.
All three major Democratic candidates have called for raising the minimum wage as one way to address the issue, while Republicans have emphasized lower taxes and less regulation.
Candidates in both parties almost universally agree that wage earners aren't sharing in America's economic recovery.
Numbers back that up.
In 1979, a typical Iowan wage earner working 40 hours a week would have earned $32,385 (in inflation-adjusted 2014 dollars).
By 2014, that worker's salary had inched up to $33,238 — a gain of just $850 over 35 years.
“It’s pretty stark,” said Colin Gordon, a University of Iowa researcher and professor. “It’s not as if people are just not getting wage increases. What makes it stark is that the cost of things — particularly big-budget items like childcare, health care and higher education — has risen dramatically over the same period of time.”
Those wage troubles come even as productivity rates for Iowa companies have reached 35-year highs, according to data from the Bureau of Economic Analysis.
“One thing you have to remember about that flat line at the median wage is that workers in 2015, especially in Iowa, are older, better educated and better trained than workers were in 1979,” Gordon said.
Sluggish wages are particularly hard on the lowest earners, said Charles Bruner, executive director of the Child and Family Policy Center, a children’s issues advocacy group.
“If there’s wage stagnation for people making $80,000 a year even for three or four years, they’re still getting by,” he said. “If there’s wage stagnation for somebody making $25,000 with a young child, that really creates challenges as far as the family holding it together.”
Beck finally saw a raise at his current job. After an extended back-and-forth with the the factory and the staffing company that employs him, he received $2 more an hour.
It's a big jump, but he said that money should have been given to him in increments over the last few years, rather than one lump sum.
Wider income gaps
Languishing wages have fueled widening income inequality across the United States over time, said Lawrence Mishel, president of the union Economic Policy Institute, a national think tank that receives some funding from labor unions.
Between 2013 and 2014, national wages fell at nearly all income levels, EPI research shows. And real hourly wages for those with college degrees fell almost 6 percent between 2007 and 2014, the group's data show.
“The way wage stagnation takes place is that people start out lower in their first jobs, and they have less of an increase as they gain more experience,” he said. “You yourself will experience more wages over time. But when you turn 45, you will have lower wages than someone who turned 45 20 years ago.”
Though he has researched this issue his entire career, Mishel said it seems to finally be gaining national attention, evidenced by recent presidential debates.
Years of small or nonexistent wages leave workers feeling "like it's tougher today," said Steve Vonk, who represents workers at the Des Moines Bridgestone tire plant as president of the United Steelworkers Local 310L.
The plant's workers received pay raises in 2013 after going 11 years without a bump, Vonk said. Jobs there start at about $16.50 per hour.
Vonk said workers at Bridgestone experience ups and downs on their contracts, depending on the state of the agricultural economy. What once was considered great health care is getting shaved off each year with a 10 percent increase in premiums.
Then in September, the company announced it would cut Sunday shifts from the middle of September through the year’s end. That move meant employees would on average lose 14 percent of their wages, Vonk said.
“I think the people out here are like the people everywhere," he said. "It’s harder to get ahead nowadays.”
What's to blame?
Many experts attribute the broader problem of wage stagnation on the diminished role of labor unions and collective bargaining rights, as well as minimum wages that have failed to keep up with inflation.
Conservatives generally point to lackluster growth in the overall economy, and blame that on high taxes and too much government regulation. Also playing roles: increased automation, competition from immigrant workers and movement of jobs to lower-wage countries.
Mishel cites other factors: the loss of overtime rights, the exploitation of undocumented workers and the reclassification of workers as contractors who aren't eligible for benefits and other employee perks.
And there’s a conscious choice by employers to hold on to more profits, rather than share them with employees, he said.
As evidence, he pointed to data that show American business are topping record productivity levels.
“It tells me the fact that wages have been relatively stagnant is not because we have not been producing substantially more goods and services,” he said. “It’s not because somehow the economy is not producing.”
Some relief ahead?
There's some hope that falling unemployment may be one remedy to stagnant wages.
When employees have more job options, and the search for workers becomes more competitive, wages tend to go up.
There's evidence of that in the Des Moines metro, where the unemployment rate fell to 3.6 percent in September.
Research from staffing company Robert Half shows 2016 raises are in store for many employers in Des Moines, spanning jobs in IT, accounting, financial services and office administration.
The Palmer Group, another staffing company, released a survey of 200 central Iowa employers earlier this month that also predicted widespread raises for most workers.
“Across the board, we’re seeing an increase, yes,” said the company’s regional vice president Mike Gremmer. “Now, whether it’s keeping up with inflation, I don’t know."
Fear of being ‘stuck’
In today’s workplace, doing your job well doesn’t necessarily translate into raises; it often takes making job changes to get ahead, workers told the Register.
After graduating from college, Charmaine Bell, 25, was surprised by the relatively low pay she saw advertised in job listings – nothing like the “fantasyland” she had envisioned for her professional future.
Bell, who has a degree in business administration, started out at Wells Fargo in downtown Des Moines two years ago at about $13 an hour. On that wage, she was living paycheck to paycheck and struggling to care for her young son.
She’s since received substantial pay hikes, but only after hopping around to different positions and departments, she said.
Things are much better now, she said, including having her own place. But at her current wage, she said she can’t afford to purchase a home.
And there’s always a fear of getting stuck at a wage for a long period.
“If you never get that promotion that you’re looking for, if you never are able to move up, you can be stuck,” she said.
http://www.press-citizen.com/story/...ges-we-were-better-off-10-years-ago/75462110/
