Pew Report: Today’s men worse off than their dads

The Wall Street Journal reported on May 25 the results of a Pew Charitable Trusts study that wages for 30-something males today are lower than their fathers’ wages (adjusted for inflation) at the same age. The Heritage Foundation, American Enterprise Institute and the Urban Institute also participated in the study. The study said nothing about women and their mothers’ wages, although that would make an interesting statistic. (Read the WSJ article if you subscribe online.)

Greg Ip wrote, “American men in their 30s today are worse off than their fathers’ generation, a reversal from just a decade ago, when sons generally were better off than their fathers, a new study finds. The study, the first in a series on economic mobility undertaken by several prominent think tanks, also says the typical American family’s income has lagged far behind productivity growth since 2000, a departure from most of the post-World War II period.”

“The report also found that between 1947 and 1974, productivity, or output per hour, and median family income, adjusted for inflation, both roughly doubled,” Ip reported. “Between 1974 and 2000, productivity rose 56% while income rose 29%. Between 2000 and 2005, productivity rose 16% while median income fell 2%, challenging ‘the notion that a rising tide will lift all boats,’ the report says.”

Pew and company got that right! Remember September, 2006, when another study found that American workers’ productivity surge of the previous several years had flattened? I said then in a posting (“U.S. Worker Productivity Down in Spring - That’s Fair”) that there’s only so much blood you can get from a turnip. Now it turns out the turnips have also been malnourished while being overworked, so this report has no surprises.

Isabel Sawhill of the Brookings Institution said she “isn’t sure why men’s wages have stagnated. ‘It seems there’s been some slowdown in economic growth, it’s possible that the movement of women into the labor force has affected male earnings, and it’s possible that men are not working as hard as they used to.’” I have to wonder what wage-affecting forces could make women’s presence in the labor force drive down men’s earnings. Women still make less than men in the same jobs, with all other wage-affecting factors being equal. And I haven’t noticed any men working less hard than they used to. On a purely anecdotal basis, I’d say men and women in white-collar jobs are working more hours for the same or less money than before 2000. The Pew study covers “wages,” so I must assume it analyzed the stats for only hourly-waged jobs, but most of my friends working at those jobs are getting fewer over-time hours as less-skilled workers are brought in to work the base-pay 40 hours.

Not, as the Seinfeld crowd used to say, that there’s anything wrong with that. More people having jobs is a good thing. It’s good business practice to spread the labor out over the number of employees it takes to get the project done in 40-hour weeks. Tired workers make more mistakes. One thing that’s happening, though, is that the lower wages (relative to the increasing cost of living) for those base-pay 40 hours is forcing people to work another 20 or so hours also for base-pay somewhere else. That doesn’t people “not working as hard as they used to.” I think it’s more like “people working longer than they used to just to get by nearly as well as they used to, but having less time to enjoy the fruits of their labors.”

To give Ms. Sawhill her due, she did identify “several factors [that] could explain the divergence: a growing share of income going to the highest-paid workers, or to profits; an increased share of labor compensation going toward benefits such as health care; or a decline in the number of wage earners in the typical family.” In my unscientific experience of reading the many stories contributed to United Professionals, Ms. Sawhill is right on all three counts, and in the most ugly ways.

The 2006 reports on the disproportionate salary-plus-benefits-plus-bonuses packages of corporate officers regardless of their performance bear out Ms. Sawhill’s first factor, as did the reports of corporate profits in the petroleum and insurance industries. On her second point, yes, health care and health insurance are eroding take-home pay, whether those costs become part of the benefits package or out of the employee’s pocket in before-tax (medical flexible spending account) or after-tax payments directly to health care providers. Most sadly, the number of wage earners in families is declining largely against the will of those wage earners. People can’t find the jobs they’re best suited to do, particularly in the white-collar workplace.

I included the white-collar considerations above because this is, after all, United Professionals. But there’s another entirely personal reason in the phenomena I’m seeing in my own high-tech work-life. I see computer programmers being pushed to work longer hours to output more code, and then receive bad performance reviews because of the number of defects in that code. I see other programmers, whose business-software development and support jobs have been outsourced, refocus their programming skills on CAD (computer-assisted design) tools because many of those jobs have to be co-located with the “shop floor” where the designs are executed (for furniture, architectural models, and the like) . For now, “Made in America” still matters in the design and building of some products.

The challenge–for business leaders, for educational institutions and the agencies that fund them–is to produce a workforce, reward that workforce, and market their products to a world where “Made in America” is once again a value proposition.

Tags: underpaid, wages, war-on-workers

This entry was posted on Monday, May 28th, 2007 at 7:07 am and is filed under Directors Blog. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.