(Mirror Daily, United States) – Maybe you have noticed that a strange phenomenon has been affecting you, your loved ones, and basically, everyone around you that earns a wage. Salaries are disappearing overnight without us even being aware of where our hard-earned money has gone to.
Economists noted that the phenomenon is not imagined and it has a simple, rational explanation: our paychecks have failed to keep pace with inflation and cost of goods and services since businesses are stubbornly refusing to share a larger slice of their earnings with the people that help them stay profitable – the employees.
The Brookings Institution reports that the problem is not recent. It goes back a long way. Over the last 45 years, U.S. wages have increased by just 10% after being adjusted for inflation. This means that the average wage has grown just 0.2% per year.
What’s more, the Bureau of Labor Statistics found that Americans’ inflation-adjusted hourly earnings have not changed over the last four decades.
Paychecks Eroded by Stagnant Wages
Some factors have contributed to the situation such as shipping jobs overseas, globalization, the Great Recession, and high inflation. But the underlying problem is that the price of labor has stagnated.
On top of that, even though corporations’ profits have skyrocketed in recent decades as prices are getting higher and markets are easily accessible due to globalization, the sudden surge in revenue has not helped improving employees’ lives one bit.
The Economic Policy Institute confirmed that the average employee’s wage and benefits in the private sector have been on a declining trend since the late 1970s.
In addition, there is also the issue of income gap which is getting wider each passing year. While the top-earners’ incomes have skyrocketed, the opposite is true for low- and middle-income earners who are now struggling to make ends meet.
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