Tuesday, July 21, 2015

Senator Sanders' message to American is spot on.

The graph is from the new study, but, it clearly illustrates There has been a LOSS in labor's wages over a seven year span in 80 percent of the population.

July 21, 2015
By Teresa Tritch

...The new paper (click here) takes a detailed look at compensation from 2007 to 2014. The main findings:

  • For the bottom 80 percent of civilian workers, real hourly compensation fell or stagnated over the period.
  • The median worker’s wages fell by 4 percent over the period, while compensation fell by nearly 2 percent.
  • For lower income workers, compensation fell by more than wages; from the median to the 80th percentile, wages fell faster than compensation. Either way, the result is lost economic ground for the vast majority of Americans amid widening inequality.

Even among the top 20 percent of workers, only those at the highest reaches of the income scale show consistently healthy gains in wages and compensation....

Comparing the two charts for the eighty percent of civilian workers (-3 wages + 1.5 compensation) and private industry, the government civilian workers fared overall about the same private industry (-2.5 wages + 1 compensation ). The real comparison belongs in the lower percentages of workers. They didn't do well.

This is the study (click here).  

The compensation is sometimes invisible to workers though. They may or may not be able to benefit from those measures of compensation.

The middle class in the USA supports the economy. The higher incomes don't really contribute to the economy in significant ways. They might purchase boats that can be claimed as a second residence, but, those are specialty economies and are a far smaller percentage of the USA economy. 

The middle class is where so many bankruptcies occur because of medical costs. The investment into health care insurance will remove the middle class ability to purchase and keep a house that is mortgaged. The medical insurance laws support the growth of long term wealth and should be maintained. If the health care costs are being supported by the employer that is important.  Where these benefits are converted into a portion of the employees pay, that will impact the over all economy if it is done in large measure. The benefits (compensation) an employer states are a portion of the employees wages will effect their tax burden and may exclude some from other tax deductions such as child care or Earned Income Credit. 

Employer compensation should not be viewed as wages. The compensation is a difficult picture when considered wages, because it would then be subject to overtime and that gets difficult for those that do the payroll and income tax reporting.

Additionally, if any union shops are burdened with reporting compensation as income that increases the burden of the members to the one percent or so they pay in wages. It gets very messy and simply is not a good idea.