PITTSBURGH—If the Labor Day parade committee chose a theme color for this year’s event, marchers might be wearing black to represent the years of lost ground in wages for workers at nearly every income level.
It also would reflect the gloomy national mood among workers, according to a report issued this week from Rutgers University in New Brunswick, N.J., titled, “Unhappy, worried and pessimistic: Americans in the aftermath of the Great Recession.”
Rutgers researchers found more than a third of workers report their finances have been permanently injured by the recession, with 16 percent of Americans, or 38 million people, reporting they were financially devastated and expect that damage to be permanent.
“The typical American worker lives a precarious and doleful existence — unhappy, poorly paid and fearful about losing his or her job, according to the opinions of fellow Americans who responded to this survey,” the team at Rutgers found.
Seventy percent of respondents described typical American workers as not secure in their jobs and 68 percent said workers were highly stressed.
There are good reasons for that.
Another report by the Economic Policy Institute, a Washington, D.C-based policy research group, issued in time for the Labor Day holiday found American workers haven’t had a pay raise in 35 years. A look at wages since 1947 found that, from 1947 to 1979, annual family incomes grew across the board between 2.2 percent and 2.5 percent.
Then, from 1979 to 2007, those in the bottom fifth of household income saw no change, adjusted for inflation. The second, third and fourth-fifths saw their income grow at less than 1 percent a year.
Meanwhile, those in the top fifth saw an increase of 1.5 percent, or more than twice that of people in the middle. Those at the top 5 percent experienced growth of more than 2 percent a year during that time.
But, from 2007 to 2012, every group lost income, except the top 5 percent, which experienced a slight increase. The poorest Americans lost ground at a rate of 2.7 percent a year, with almost everyone else losing a slower rate.
Carl Van Horn, one of the authors of the Rutgers study, said the two independently produced reports reinforce each other. “One is the economic reality as portrayed by wages and the other is how people feel,” he said.
While most Americans are satisfied with their own jobs, they are also afraid of what is coming down the pike.
“They’re really afraid they are going to be the next person with a pink slip,” he said.
The reality is “there were lots of problems before the Great Recession and the Great Recession made everything worse,” Van Horn said. “The recovery has been slow and uneven, and it has not brought about anything close to prosperity so it did not allay any of the fears people had.”
It’s not an exaggeration to say people were traumatized by the Great Recession and its aftermath.
The team from Rutgers found 80 percent of Americans know someone who lost a job between 2008 and 2012, with 11 percent saying a member of their household lost a job. Still another quarter of the population reported a member of their extended family was laid off.
“The last 15 years have really not been very good for the American worker,” Van Horn said.
The situation is not much different in Pennsylvania.
In its annual report on wages and job growth, the Keystone Research Center in Harrisburg, which is affiliated with the Economic Policy Institute, found that when adjusted for inflation, hourly wages in the Keystone state last year were below those in 2010 for the lower 80 percent of workers. That translates to buying power reductions of $750 to $1,150 a year for a full-time worker.
The center also found that, from 2010 to 2012, the top 1 percent of Pennsylvanians brought home more than 100 percent of the state’s increase in income, with the average income of the top earners growing by $150,000 or a 6 percent. In that same two-year period, the average income of 99 percent of the population declined 9 percent.
Also, while the Pennsylvania unemployment rate in July was 5.7 percent, the state underemployment rate — which includes discouraged workers who have given up and people working part-time because full-time work is not available — is at 12.5 percent.
Nationally, the underemployment rate, which has also been called “the real unemployment rate,” is 12.2 percent, as compared to the official 6.2 percent unemployment rate in July.
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Pennsylvania has 20,000 fewer jobs than in December 2007. With the 3.7 percent population growth the state has experienced, it needs 237,000 more jobs to maintain its employment-to-population ratio.
Mark Price, a labor economist with the Keystone Research Center and one of the authors of the report, said it would take three years of adding 9,000 jobs a month to reach the employment levels that existed before the recession. So far, in 2014 the state has been adding an average of just under 5,000 jobs a month.
“Looking at this data, there’s very little to be positive about,” Price said. “Wages are declining in Pennsylvania and job growth remains very weak.
“The recession ended long ago and we are on a very long and slow road toward recovery. And recovery remains very far away.”
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