US / Vast majority of wage earners are working harder and more

“The U.S. economy over the past decade has worked primarily to the advantage of a small sliver of winners” writes Lawrence Mishel of the Economic Policy Institute. (Excepts to follow) Meanwhile, the vast majority of workers have not fared well—a trend that stretches back to the late 1970s. Contrary to some political rhetoric of late, this is not due to lack of effort; the broad middle class has increased its productivity, upgraded its educational attainment, and worked more hours.

In other words, workers have been offering more to the economy and the labor market, and what they have received in return—particularly in the form of real hourly wages—has been very disappointing. This trend is particularly evident when considering that the majority of workers—especially those in the bottom 60 percent of the wage distribution—increased their work hours substantially between 1979 and 2007, the last year before the current recession. However, during this period (excluding a brief interlude of strong economic growth between 1995 and 2000), real (i.e., inflation-adjusted) hourly wages of the bottom 60 percent grew modestly—ranging from an actual decline for the bottom fifth to annual growth of about 0.25 percent for the middle fifth. This growth is far less than the increase in economy-wide productivity over that time.

Key findings include:

• The average worker worked 1,868 hours in 2007, an increase of 181 hours from the 1979 work year of 1,687 hours. This represents an increase of 10.7 percent—the equivalent of every worker working 4.5 additional weeks per year.

• Annual work hours grew more among women (20.3 percent) than among men (4.4 percent) from 1979 to 2007, primarily because women increased their weeks per year in the paid workforce.
• At 22.0 percent, the increase in annual hours between 1979 and 2007 was greater among workers in the lowest fifth of the wage distribution than among workers in the middle fifth (10.9 percent). It was also greater among middle-wage workers than among the top 5 percent of earners (7.6 percent).
• Real annual wages grew from 1979 to 2007, but for the bottom 60 percent of wage earners, this stemmed roughly as much from increased work hours as increased real hourly wages.
• Over 1979–2007, real hourly wages for middle-wage workers (those in the middle fifth of earners) grew 15.8 percent. Most of this wage growth occurred in the late 1990s boom (1995–2000). From 1979 to 1995 and from 2000 to 2007, the total real wage growth among this group was just 5.3 percent, equivalent to annual growth of about 0.25 percent.
• Over 1979–2007, real hourly wages for low-wage workers (those in the bottom fifth of earners) grew 7.7 percent, with most of this wage growth occurring in 1995–2000. From 1979 to 1995 and from 2000 to 2007, real wages among this group actually fell 3.2 percent.
• Over 1979–2007, the real hourly wages of the top 5 percent of earners grew by 30.2 percent—and by 14.8 percent if one excludes the 1995–2000 period.

Source:

via Vast majority of wage earners are working harder, and for not much more: Trends in U.S. work hours and wages over 1979–2007 | Economic Policy Institute.