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Latest Prosperity Watch report shows workers' wages tanking

Jeremy Sprinkle
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Despite productivity gains, wages actually in decline

Issue No. 14 of Prosperity Watch is out, and the data paints a bleak picture about the state of North Carolina's economic recovery. The report from the NC Justice Center, is full of need-to-know information including several charts that put it all in perspective.

This chart in particular caught our attention:

Prosperity Watch 14 chart of productivity and wages
The chart shows that hard work is not paying off for North Carolina’s workers. During the recovery from previous recessions, workers who kept their jobs during the recession worked harder and were rewarded for their productivity with higher wages.  These wage increases would have been greater had the bargaining power of workers been stronger during previous recoveries, but at least workers back then didn't earn less than what they made before the recession hit. Sadly, as the above chart makes clear, increased productivity is no longer tied to higher wages for workers. Despite being more productive, North Carolina wage earners are earning almost 5% less than before the recession. This new economic reality has turned convention on its head, says the NC Justice Center:
An important ideal embedded within American economic culture is the notion that hard work always pays off: that as a worker improves his efficiency, he increases the economic output of his employer while reducing his employer’s costs and expanding its profits. [...] Unfortunately, this general principle has not translated into reality for North Carolina’s workers over the past two decades, as wage gains have fallen significantly behind productivity gains in the last three economic expansions—the recoveries from the 1991 recession, the 2001 recession, and the most recent and brutal downtown, the Great Recession of 2007. As indicated by the chart, output per worker (measured by the state’s share of real Gross Domestic Product) has increased dramatically between the formal end of each recession (the so-called “trough” of the business cycle) and 30 months into the recovery, but inflation-adjusted wages (in 2011 dollars) have either stagnated or fallen over the same period, suggesting that workers are not being rewarded for their more efficient work and increased output.
Why is this happening? Why are North Carolina wage earners more productive after the Great Recession began and being paid almost 5% less? Because corporate CEO's no longer treat their workers like human beings who have earned their share of the profits they make for the company:
This suggests that employers are treating their workers differently than in past recoveries—choosing to keep the savings generated by productivity gains in cash reserves, or as profits distributed to shareholders— instead of rewarding hard work with higher wages, or investing in capital improvements that could reap additional productivity and wage gains for the future.
In fact, corporate profits have gone parabolic. Check this out:

Corporations have NEVER been more profitable than they are today.

Let's recap:

1. North Carolina workers are working harder after the Great Recession and getting paid less for it. 2. Meanwhile, the corporations they work for are more profitable than EVER. How is that possible? How can workers be working harder than ever to make their employers more wealthy than ever - wealthy enough to make Solomon blush, if you will - and making less money? This is why:  

The fate of unions is the fate of the middle class. Period.

It's simple. Only organized workers are capable of stopping organized greed. When you take away our bargaining power, you take away our path to the middle class. When there is no equal and opposing force to demand that insane profits translate into higher wages for workers, every worker - union and non-union members alike - pays the price. These workers working harder for less than ever - they don't suffer alone. Workers' families suffer when wages decline. Local businesses suffer when workers can't afford to buy their goods and services. Local governments suffer as local economies shrink and the tax base shrinks along with it. But it doesn't have to be this way. If you value work and condemn greed, if you've had enough of sorry statistics like those displayed in these charts, stand up with each other. Demand, together, that our elected leaders chart a different course and make different choices. And if they would stand by the status quo, vote them out! For more information and for other charts showing how our jobs deficit continues to grow - not shrink, how North Carolina lags the country in economic mobility, how the manufacturing crisis is devastating our metro areas, and how North Carolina employment lags behind past recessions, click here to read the latest Prosperity Watch report in full.