For the first quarter-century following the end of World War II, American wages followed nearly an identical trajectory to that of worker productivity, and, in a handful of years during the 1950s, average hourly compensation even exceeded productivity. However, in the last 50 years or so, wages have stagnated, while American productivity has skyrocketed.
According to the Economic Policy Institute, as of 2018, productivity is approximately two-and-a-half times that of worker compensation. In fact, today’s real wages adjusted for inflation are roughly only 70 percent of what they were back in 1968. Consider, for example, that the federal minimum wage has remained at $7.25/hour since 2009.
And, although the minimum wage was only $1.60 in 1968, in today’s dollars, that $1.60/hour would be the equivalent of $10.15/hour. Moreover, as revealed in the latest data from the U.S. Bureau of Labor Statistics, if worker compensation had kept pace with American productivity over the past five decades, today’s federal minimum wage would actually be more than $20.00/hour.
Since the turn of the century, median wages in some industries – including professional, scientific, and technical services – have seen a noticeable increase. Yet in most employment sectors such as education, healthcare, civic and social services, hospitality and entertainment, and food services, the median wage has flatlined or in many cases witnessed a decrease. And, as real wages have languished, the cost of living has continued to climb sharply.
Affordable housing, healthcare and prescription drug costs, tuition at both public and private colleges, food, and other basic necessities are out of reach for tens of millions of American families. While, at the same time employer-provided benefits are on the decline. More often than not, those who are fortunate enough to receive such benefits are finding themselves paying significantly more for far less.
The recent deaths of George Floyd, Breonna Taylor, and Ahmaud Arbery (among so many others), coupled with the devastating psychological, emotional, and health-related toll that the COVID-19 pandemic is exacting upon our world – particularly among low-income households, populations of color, indigenous peoples, immigrant and refugee communities, the disabled, and the homeless – serve to demonstrate that many of our citizens are now more vulnerable than ever before.
Since 1964, Community Action Partnership of Ramsey & Washington Counties has provided direct services and programs to low-income residents of all backgrounds including historically underserved and marginalized communities. In that time, we have helped many chart a course out of poverty and toward financial stability. Still, we are called to do more than simply serve, we must also resolve to advocate for our fellow citizens.
And, a big part of that is to sponsor and support policies and practices designed to rectify and reverse the startling trends that have been described above. As distressing as the first half of 2020 has been, we cannot afford to forego the opportunity in front of us – the chance to create tangible and enduring change that will result in a healthier, more equitable, and just world.
