In episode 2 of “Footnotes”, a series by Millennics, Host Jonathan J. Cianfaglione invites guest Cory Miller to walk us through the intricacies of wage stagnation.
Recall that “Footnotes” is part of Millennics’ regular programming, and offers a mid-week look at issues stemming from a previous Millennics episode that needs to be unpacked further, or something new entirely.
Host: Jonathan J. Cianfaglione (@jjcianfaglione via Twitter)
Guest: Cory Miller (@country_cookin via Twitter)
Presented by: LogicalPost.net
Support from: VIG & Associates
Music: “Ancient Sounds” by The Electric Sons
Footnotes EP2: Wage Stagnation, January 30, 2016
Wage stagnation is an issue that continues to drag our economy down. Particularly, it effects Millennials the most. Here is why: Over the course of decades, since the 70s, productivity and pay began to split. “This means that although Americans are working more productively than ever, the fruits of their labors have primarily accrued to those at the top and to corporate profits, especially in recent years.”
Further, many factors compound this problem. With the advent of student loans, coupled with spiraling tuition costs, the average undergraduate comes out of college with $28k in debt. At the sam time, wage stagnation has created a base pay that has not moved since the 2008 recession, where the average base pay is $28k-$35k. When these factors are combined, not much money is left over for the recent graduate, consequently decreases a person’s buying power.
Additionally, companies have contributed to the wage stagnation problem. Here, since the recession companies have been able to advance two elements that have hurt wages: (1) deferring pay raises indefinitely, and (2) requiring more experience and education, while offering less pay. Both elements stem from the recession. In the former, without a pay raise in a year with inflation, inflation works against the employee by lowering their buying power equal to the increase in inflation (i.e. 2% increase in inflation, without a pay raise, turns into a 2% decrease in buying power). In the latter, when the workforce is flooded, companies can require more experience and education for a job that previously required less. At the same time, the job does not compensate for the extra experience and education the employee brings to the table.