Saturday, October 22, 2011

50% of All Workers Made Less Than $26,000 in 2010

By Derek Thompson, The Atlantic

21 October 11
Derek Thompson, in The Atlantic, writes about American wages in 2010 based on payroll taxes reported to the Social Security Administration. David Cay Johnston picks out the most important takeaways, including:
1) Half of all workers made less than $26,364, the median wage in 2010. That means the typical wage is at its lowest level since 1999, after adjusting for inflation.
2) The number of millionaires increased by about 20 percent. [NOTE: According to economist Robert Reich: there are over 3.2 million millionaires in America and over 400 billionaires]
3) The size of the missing workforce is 10 million. The number of working people fell by 5.2 million since 2007. But that's not the entire job deficit, because, based on population growth estimates, 4.5 million more would have joined the workforce between 2007 and 2011. Add it up, and you get a 10-million-worker gap.
The Atlantic article links to another site, Pay Scale Index, which provides the following information updated as of October 6, 2011. 

The PayScale Index (US): Trends in Compensation

2007-2010: During 2007 and 2008, national wages increased over 5 percent. As the recession worsened, at the end of 2008, wages dropped dramatically, settling on a new, lower plateau in Q2 2009 and remaining flat through 2010. 
2011: National wage levels in the US in 2011 continued the basically flat trend of 2010 through the first half of the year. Q3 showed a weak 0.4 percent year-over-year increase in pay for all US workers, but the 0.5 percent bump from Q2 was the strongest quarter-over-quarter increase since 2008. If this positive quarter-over-quarter trend continues, wages will rise at a 2 percent annual rate in the coming year, bringing wage increases closer to the approximately 3 percent annual rates typical before the recession. 
National (US) Year-Over-Year Percentage Change in Pay
Annual Trends in Compensation for National (US)
The PayScale Index (US) follows the change in wages of employed US workers, revealing trends in compensation for jobs over time. It specifically measures the quarterly change in the total cash compensation of full-time private industry employees nationally, with additional detail on the 20 largest metropolitan areas, 15 industries, 19 job categories and three company sizes.
Here is the same chart for our friends in Canada:

2007-2011: Before the recession hit in late 2008, wages were growing in Canada at a healthy rate of 3 to 4 percent year-over-year in 2007 and 2008. When wages finally tumbled in 2009, they did so for a brief three quarters, and only fell about 1 percent. As the recession began to ease up at the end of 2009, earnings for Canadian workers recovered swiftly. Incomes for Canadians showed significant improvement throughout 2010, a significantly better story than in the United States. 
Annual Trends in Compensation for National (CA)

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