November 22, 2005 |
Posted By Diane Pfadenhauer |
Decreasing "Real" Wages
According to this article in the Christian Science Monitor, American workers, after inflation, earns 2.3% LESS than they did a year ago. Some of the reasons for wage stagnation, according to the article, can be attributed to:
- The downward pressure of global competition.
- The cost of benefits. Some employers have stopped offering health insurance, but those that do are spending more, and thus boosting overall compensation even though hourly wages aren't rising.
- Price-sensitive consumers. As energy costs rose, many companies didn't feel able to pass those costs along to customers. So they have to pay their oil bills by cutting costs elsewhere. Pay hikes get smaller.
- Government policies. Some researchers say a failure to crack down on illegal immigration - whether at the border or in the workplace - has depressed wages for the less skilled.
- Weak bargaining power. The decline of union membership in the private workforce has had a significant dampening effect on wages, some economists say.
As if it isn't hard enough to keep employees motivated, happy and committed. I noted here the impact that home heating costs will have on the average worker. Perhaps it's time to be thinking about other non-monetary ways to keep employees engaged.
