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Sunday, September 03, 2006

A Mystery

Nobody knows how many workers have accepted lower pay and benefits to keep their jobs:

Here, Take Back Some of My Pay, It’s Too Much, by Louis Uchitelle, NY Times: A number is missing. No one knows how many American workers have agreed to accept, however reluctantly, a cut in their wages or benefits or both in recent years.

The government tracks unemployment, job creation, layoffs, hours worked, average hourly pay and various other aspects of employment. But it doesn’t add up the number of people who have forfeited big chunks of their pay and benefits, and neither do unions or academic researchers.

That was true of layoffs until the early 1980’s, when the Rust Belt experience, and the devastating loss of blue-collar factory jobs, became a political issue. Congress, in response, asked the Bureau of Labor Statistics to count the layoffs in national surveys. ...

Keeping a job, but losing 15 or 20 percent of a salary and most of a pension, is a painful experience — and certainly not good for consumer spending. Still, there has not been enough political pressure for an accurate count of those affected. That is partly because many workers and unions have agreed to the concessions to preserve jobs.

Is there a ballpark number? Piecing together union data shows that it is probably above two million people in this decade alone. But no one knows. ... “None of our earnings surveys show these concessions,” said Thomas L. Nardone, an assistant commissioner at the Bureau of Labor Statistics. “We just don’t track that number.”

That would be useful to know. This is one of a series of short articles:

[F]ive New York Times reporters each set out to find one statistic, often overlooked, that said something important about the economic health of the American worker

Here's another entry on debt accumulation in recent years:

Borrowers We Be By, by Steven Greenhouse, NY Times: With their raises often lower than the inflation rate, millions of Americans have embraced the same strategy to maintain their living standards — borrowing and then borrowing some more.

As a result, debt payments now consume 19.4 percent of the income of the average American family, and 23 percent of the families in the bottom two-fifths of families by income devote at least 40 percent of their income to debt payments. With debt burdens so high, some economists fear a new wave of foreclosure and personal bankruptcies now that interest rates have climbed. ...

Household debt rose to 132 percent of disposable income last year, partly because many Americans have pushed their credit card debt to the max and because many, including many high-income Americans, have piled on the mortgage debt. Last year, for the first time since the Depression, the personal savings rate for the nation fell below zero, meaning that Americans are spending more than they are earning (and are saving no money on a net basis).

“There are really two types of households out there,” Mr. Zandi said. “High-income households have balance sheets about as good as I’ve ever seen, while lower-income households have balance sheets about as bad as I’ve ever seen them — complete tatters. These households are on the financial edge, and if there’s any slight disruption, like a car breaking down, it can be a real disaster for them financially.”

    Posted by on Sunday, September 3, 2006 at 03:06 AM in Economics, Saving, Unemployment | Permalink  TrackBack (0)  Comments (3)


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