Wage Stagnation Research Articles

The Economic Collapse

In the fall of 2008, a little more than a year after the Bank for International Settlements (a Switzerland-based organization that fosters cooperation between central banks) warned that "years of loose monetary policy have fuelled a giant credit bubble, leaving us vulnerable to another 1930s slump," the combustive concoction of free market fundamentalism, corporate-dominated globalization, stagnant wages, growing inequality, greed, excessive leverage, and financial innovations such as securitization finally exploded.

"Nobody's a Bum All Their Life": Teaching Class Through William Kennedy's <i>Ironweed</i>

"Nobody's a Bum All Their Life" Teaching Class Through William Kennedy's Ironweed Christopher Craig (bio) When Francis Phelan returns to Albany, New York, in 1938, after twenty-two years on the bum, he finds work in Saint Agnes Cemetery. Riding in the back of a rattling old truck, looking out at the monuments, cenotaphs, and grave stones, he observes that "the dead, even more than the living, settle down in neighborhoods" (1). Divided by symbols of material wealth, the cemetery reflects the socio-economic status of the dead and maintains eternally their place in society. But as Francis also suggests, class-based boundaries among the living are unstable. He should know. Once a member of Albany's solid working class and a revered professional baseball player, Francis now belongs to the maligned underclass, the class of alleged bums, hobos, and ne'er-do-wells. His fall from social respectability reveals the underbelly of the American Dream and marks Ironweedas a novel committed to interrogating class struggle in America. Through Francis's story, the novel imagines how class warfare has marginalized a community of talented people and limited the possibilities of its members. When, standing over the dying Alaskan prostitute, Sandra, whose body has been ravished by poverty, booze, and angry men, and remarking to Rudy that "Nobody's a bum all their life," Francis speaks to how these possibilities have been crushed by conditions of cultural hegemony, unscrupulous labor practices, and police brutality. Most of the students who read William Kennedy's Ironweedin my sophomore level Political Novel course at Emmanuel College, however, privileged Francis' personal story over the class-based commentary the novel makes through it. In fact, given the novel's poetic exploration of the human condition, many of them expressed skepticism that Ironweedqualified as a political novel. As members of the white middle-class (for the most part), who have been educated in adequately funded public and private high schools, they had come to know the political novel through Sinclair, Orwell, and Huxley. 1Stories that focused on personal tragedy, such as Ironweed, reflected the great classical ideas found in the Greeks and Shakespeare. These ideas transcended politics as they explored the universal qualities of humanity. To characterize the novel as political, my students said, would deny it the very features that made it worth reading. That my students placed Ironweedwithin the humanist tradition spoke to some of the challenges of teaching the novel. I had chosen it for two primary reasons: its plot offers a subtle account of class warfare during the early part of the twentieth century and it reflects some of the historical conditions under which Kennedy wrote it. But the latter characteristics of the novel can complicate the former. Ironweedis a postwar protest novel that at once embraces and breaks from the aesthetic traditions of its prewar predecessors. Like other socially conscious novels of the late postwar period, Ironweedsometimes struggles against its own political priorities. Kennedy, for example, renders the effects of violent street life on Francis and Helen through their psychological experiences. This approach stresses the interior costs of homelessness. But it also reveals a postwar anxiety about the limitations of social realism. Kennedy seems deeply suspicious of the alleged sentimental naiveté of protest writers like John Steinbeck. The ambiguities and contradictions of the internal moral lives of Kennedy's characters reflect a complicated and varied [End Page 29]relationship to the devastating forces of capitalism. This representation can pull readers away from the novel's larger concerns about capitalist exploitation and situate them within the experience of the individual. As a result, to those trained to read from a humanist perspective, like most of my students, Francis and Helen appear to suffer under circumstances brought on mostly by their own doing. However, a brief examination of the history the novel covers as well as the history it contains not only reveals the source of Ironweed'shumanist seductions but also demonstrates how the novel is itself the site of class struggle. Written during the late 1970s and early 1980s— a time of stagnant wages, high unemployment, a debilitating oil crisis, and failed and...

Can American Studies Do Economics?

The international financial crisis that surfaced in August 2007 has done the impossible convinced large portions of the U.S. public and the media that U.S. economic policy has major flaws. It is now a little easier than it was in 2006 or 1996 to find mainstream criticism of Wall Streets impact on the economy, of wage stagnation and job insecurity, of very high levels of economic inequality, and of glaring racial disparities in measures such as family assets and mortgage defaults. At the same time, the critics do not generally believe that flawed U.S. economic policies indicate a flawed U.S. economic model. Most of them attribute various crises to excessive Bush II pandering to its favored special interests big pharmaceutical companies, military contractors, oil corporations, the wealthiest 1 percent, among others. Tax cuts for the rich, installment of the Medicare prescription plan, inadequate support for renewable energy research these are discrete policy mistakes that could, in most accounts, be redressed by Democratic-party-style reforms on topics where polls indicate that solid majorities are fed up with Republican positions. Little of the commentary is suggesting the need for a structural redesign of American capitalism, or is criticizing capitalism as such. Even Naomi Kleins The Shock Doctrine, the most widely circulated recent left-wing critique of U.S. economic policy, attacks extreme capitalism rather than capitalism itself.

Poverty in New York City, 1969-99: The Influence of Demographic Change, Income Growth, and Income Inequality

The four-year rise in the U.S. poverty rate that began with the 2001 recession and the aftermath of Hurricane Katrina has sparked renewed interest in poverty among researchers and policymakers. Policies for addressing poverty are influenced by perceptions of its causes. Accordingly, this article evaluates the impact of several purported causes of poverty in New York City. Using decennial census data for 1970-2000, the authors employ simulations and a decomposition framework to investigate the relationship between poverty and key demographic and economic changes in the city. They find that two demographic changes - the growing percentage of the city's black and Hispanic populations and the increasing share of residents living in female-headed families - are clearly associated with the city's rise in poverty from 1969 to 1979 and the continued high poverty rate from 1979 to 1999. However, when these demographic changes are placed in the context of income growth and expanding income inequality, the study finds that the rise in income inequality plays a larger role in the 1979-99 persistence of poverty than do demographic changes. The authors also explore the influence of changes in earnings inequality on income inequality and poverty. They find a considerable increase in poverty and an expansion of earnings inequality within a key element of the city's population: persons living in full-year working families. The rise in earnings inequality can be traced to the stagnation of wages at the low end of the earnings distribution.

An Age of Transition: The United States, China, Peak Oil, and the Demise of Neoliberalism

Until recently, the global capitalist economy has enjoyed a period of comparative tranquility and grown at a relatively rapid pace since the global economic crisis of 2001-02. During this period of global economic expansion there have been several important economic and political developments. First, the United States—the declining hegemonic power but still the leading driving force of the global capitalist economy—has been characterized by growing internal and external financial imbalances. The U.S. economy has experienced a period of debt-financed, consumption-led "expansion" with stagnant wages and employment, and has been running large and rising current account deficits (the current account deficit is a broad measure of the trade deficit). Second, China has become a major player in the global capitalist economy and has been playing an increasingly important role in sustaining global economic growth. Third, global capitalist accumulation is imposing growing pressure on the world's natural resources and environment. There is increasingly convincing evidence that the global oil production will reach its peak and start to decline in a few years. Fourth, the U.S. imperialist adventure in the Middle East has suffered devastating setbacks and there has been growing resistance to neoliberalism and U.S. imperialism throughout the world.This article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

Proteggere Zeus da Chrónos: il futuro del lavoro nell’Italia contemporanea

One of the most striking features of the economic development in the past three decades is the decline in the share of national income that accrues to labour in all advanced economies (China included), but especially in Europe and Japan. This evolution has been most marked in Italy, possibly worsened by a stagnation of real wages and a progressive reduction of total factor and worker productivity, as compared with EU countries. In the last years productivity gains in Italy were indeed negative. The main purpose of this paper is to identify the main sources of variation of these phenomena, with a focus on Italy.The most important causes of the reduction of labour income share are the information and communications technology (ICT), the globalisation processes (labour globalisation, trade, offshoring and immigration), and labour policies brought about by national governments. An IMF study (2007) estimated that the causal role of ICT on the reduction of labour share in advanced countries was the most important, followed by globalisation and labour national policies. The negative impact of government policies on labour share was evident in many European continental countries, but not in Anglo-Saxon ones. Using published and unpublished data from this study some inter-countries and inter-sectorial differences are assessed and some features of the Italian situation specified.Labour in Italy, especially wage labour, was and is burdened by some long lasting heritages: persisting deficits of the pension system, dating from the 1960s onwards (annually some 4% of GNP); an historical tradition of low adult literacy and numeracy (recently reported by Ials studies); a barely effective and efficient secondary school, unable to modify that historical tradition (Oecd and Pisa studies).For many reasons, Italian governments were and are unable to effectively answer these problems. First, for their institutional weakness; second, because of the power of distributional coalitions (unions, professional lobbies), able to influence the legislative process and to assure peculiar benefits and privileges to their members; third for the lack of long term policies. The aggregate results of these processes not only are a deeper decline of the income labour share, as compared with other advanced countries, but also a progressive deterioration of associated life in many Italian regions.The future of labour in Italy is finally undermined by a progressive intergenerational iniquity, also shared — to tell the truth — by other European countries. The percentage of poor is now greater in younger age cohorts (0-18) as in the oldest ones (65 +). This result was fed by a series of government decisions and laws. Recently, the reduction of the pension age underwritten by Italian government and the unions in July 2007. In the next decades this process could damage the formation of the human capital and therefore the future of work in Italy. As in the old Greek myth of Zeus and Krónos, younger generations should be supported and promoted, while the appetites of older ones limited and regulated – at least by a far-sighted political leadership. Some proposals designed to attain this objective are discussed.

Contradictions of Economic Growth in the Neoliberal Era: Accumulation and Crisis in the Contemporary U.S. Economy

In the neoliberal form of capitalism, economic expansion tends to be accompanied by rising profits and stagnant wages, creating a potential problem of overproduction. This obstacle to expansion has been overcome in the U.S. economy in the neoliberal era through rising household debt and the emergence of asset bubbles. However, certain trends in the U.S. economy suggest that the past methods of promoting expansion and averting severe crises in the neoliberal era may be becoming nonviable. JEL classification: E32, N12, E11

Can European Manufacturing Companies Compete?: Industrial Competitiveness, Employment and Growth in Europe

The public debate in Europe is turning against business because outsourcing and off-shoring are perceived to destroy jobs, and corporate profitability is seen as inconsistent with a wage stagnation of salaried employees. Managers in Europe feel surrounded by hostile regulation, protected product and labor markets, and pushy unions. On the other hand, companies also use the playing field for their advantage, for example, by benefiting from rigid product markets reducing competition, and by asking governments for bail-outs. Companies in other parts of the world have their own problems. European companies can be competitive on the world stage, and many are. The answer to competitiveness does not lie in complaining about the environment, but in management’s responsibility: articulating a clear strategic orientation toward value, mobilizing the workforce to not only execute strategy but contribute to it, and in using globalization as an opportunity offering additional degrees of freedom rather than a threat. Firms in Europe are not sufficiently strong in positioning themselves and executing their strategies, and they are losing the public debate because they are too timid to take a stand in explaining the need, the risks as well as the opportunities from globalization to the public.

Wage Stagnation, Growing Insecurity, and the Future of the U.S. Working Class

The most important promises used to justify capitalism are that your children will have a better life than you do, and in President Kennedy's famous words, "a rising tide lifts all boats," meaning everyone benefits from the accumulation of capital. These promises ring hollow in a period in which the relative position of the working people of the United States is declining and its ruling class is able to appropriate an increasing share of the national income. This pattern of accumulation and appropriation has become evident to many Americans and this awareness is beginning to affect political consciousnessThis article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

Neoliberalism and Social Security

The stagnant wages, worsening distribution of income, and slower economic growth that have resulted from neoliberalism have weakened Social Security’s future viability. Moreover, the prediction of a future “crisis” for Social Security is based on the assumption of continued antiworker neoliberal policies, and neoliberal policy proposals to “save” Social Security have provided a rationale for redistributing tax burdens away from the rich and further promoting the neoliberal agenda.

Shortchanged: life and debt in the fringe economy

takes an uncompromising look at the corporate vultures that prey on America's working class. Made up of pawnshops, payday lenders, check cashers, credit card companies and the like, the fringe economy entices vulnerable consumers into an economic netherworld of high interest rates and ever-increasing debt. The book examines the factors behind the fringe economy's rise -- stagnant wages, rising numbers of working poor, and the 12 million U. S. households without bank accounts -- and investigates the sleazy practices -- instant credit, cash-for-your-title loans, predatory mortgage lending, E-Z home equity loans -- that result in phenomenal growth for the industry and a nightmare for the consumer. Powerful analysis is combined with moving personal stories of the mothers, fathers, and families whose lives have been put on the line for the perpetuation of this economy. Ruthless, compelling, outrageous, and often enraging, Shortchanged puts the spotlight on the shady side of America's economic underbelly.

"Untold Difficulties:" The Indigenous Press and the Economic Effects of the First World War on Africans in the Gold Coast, 1914-1918

During the First World War, the British colonial government in the Gold Coast vigorously sought to maximize both human and natural resources in support of the imperial war effort. Consequently, the people of the Gold Coast, like most colonized Africans, suffered from, the wartime policies as well as the direct effects of the war.' The Gold Coast had experienced relative economic prosperity before the outbreak of the war. Exports included cocoa, palm oil, rubber, kola, timber, and minerals.1 Ports, railways, and roads -were developed to exploit these and other commodities. In sum, the Gold Coast, despite the uncertainty of the colonial situation, was following a pathway towards prosperity, exemplified by economic boom and rapid urbanization. Also educational developments had paved the way for social change and social mobility.3 Unfortunately, the harsh wartime economic effects halted the wheels of prosperity: overall, the inhabitants of the Gold Coast experienced untold difficulties adjusting to wartime hardships and dislocation.4Two indigenous newspapers, The Gold Coast Leader and The Gold Coast Nation, which were published in the provincial capital of the Central Province, Cape Coast, became a hub of African intellectual activism and anticolonial protest politics. Patronized by the African intelligentsia, the indigenous press provided vigorous anticolonial commentaries on the prevailing conditions in the Gold Coast.5 Three areas of anticolonial criticism emerged in the press: opposition to Governor Hugh Clifford's vigorous implementation of indirect rule during wartime, colonial labor and military recruitment exercises, and the economic effects of the war. Several studies have examined indirect rule in the wartime, but they deal more with the political economy of indirect rule than the effects of indirect rule on the African population.6 A recent study has filled this gap by using African sources, specifically newspapers, to give voice to African perspectives on indirect rule.7 The subject of wartime colonial labor and military recruitment has attracted extensive study, though the sources used are mainly official reports, and consequently, the extant literature deals more with colonial policies than African agency and responses in wartime. Even in cases where the economic impact of the war is examined, there is still a reliance on official sources that emphasize government expenditures and income.9Through the prism of the indigenous press, the present study shifts the focus from government expenditure and income to the impact of the war on the population of the Gold Coast and African perspectives on the effects of the war on economy and society. Both indigenous newspapers took keen interest in the effects of the wartime economy on the people of the Gold Coast. Economic issues addressed by both newspapers in the course of the war were slackening cocoa prices; lack of shipping facilities and space; fall in revenue; stagnation of wages and salaries; scarcity of staple foods and imported commodities, especially from 1916 onwards; and the demographic effects of the worldwide influenza epidemic of 1917-1919. Increased taxation, freight rates, and customs duties equally attracted critical commentary in the press.10 In discussing these topical issues I show that the African intelligentsia, the opinion leaders in the colonial setting, effectively used the press as a composite political platform to articulate wartime economic problems that affected the African population. Due to the organic connection that existed between the indigenous press and the African intelligentsia, I have used both interchangeably to give voice to the extent and form of anticolonial protest and political action during the war.The first section of the study provides a synoptic view of the colonial government's perceptions of the wartime economy, while the second part briefly reviews the literature on the economic effects of the war. The third portion deals with the history of the two indigenous newspapers that served as the African intelligentsia's political platform for the articulation of the wartime economic problems. …

Hospital Speedups and the Fiction of a Nursing Shortage

In recent years, hospital managers and public policy makers alike have focused considerable energy on the prospect of an imminent national shortage of hospital nurses. In response, officials have urged both increased funding for nursing schools and increased importation of foreign nurses from the Philippines and other developing countries. The study below documents that this policy direction is fundamentally misguided. There is no shortage of nurses in the United States. The number of licensed registered nurses in the country who are choos ing not to work in the hospital industry due to stagnant wages and deteriorating working conditions is larger than the entire size of the imagined "shortage." Thus, there is no shortage of qualified person nel—there is simply a shortage of nurses willing to work under the current conditions created by hospital managers. Extensive survey data among both currently working nurses and those who have left the profession indicate a very strong consensus regarding the causes and potential solutions to this problem. Nurses will return to hospital work if the wages are improved and, above all, if nurse-to-patient ratios are restored to a level at which RNs believe they can provide profes sional care. If conditions are improved, enough nurses will be drawn back into the hospital industry to solve the alleged shortage. If, on the other hand, conditions remain stagnant or deteriorate further, new graduates of nursing schools will continue to abandon the profession in large numbers, and no increase in new graduates will suffice to keep hospitals adequately staffed. In a final section of the paper, a survey of magnet hospitals indicates that the industry can afford to implement improved staffing levels while remaining economically competitive.

Pete Grimwood—Oil Cargo Seafaring and Longshoring

Pete Grimwood was a 50-year-old tankerman and a member of the Inland Boatmen's Union (IBU) San Francisco Bay Region since the early 1980s. Like so many other tankermen—the workers who load and unload petroleum products on barges and ships—he died of cancer from exposure to the noxious fumes at work. The employers continue to get away with not paying for safety equipment and with not being held liable for the workers' early deaths. Grimwood's story reflects the grim reality of tankermen—the long hours of hard physical work with severe physical, chemical, and biological hazards, decades of stagnant wages and insufficient health care, working for employers who don't care about worker health and safety. His story is also one of human and union struggle for dignity, for better working conditions, and for a better life. This interview was conducted by fellow IBU tankerman Jeff Quam-Wickham on Dec. 22–23, 1999, just two weeks before Grimwood's death on Jan. 8, 2000. Although his body was wracked by chemotherapy, his optimism, courage, and jocular character still shone through.

Contours of descent: U.S. economic fractures and the landscape of global austerity

In the past twenty-five years the free-market neoliberal model has been hailed as a panacea for economic ills in both the advanced economies and the developing world. Pollin dissects this model as it has been implemented in the U.S. during the Clinton and Bush administrations under Greenspan's Chairmanship of the Federal Reserve, and in developing countries under the auspices of the IMF. Clinton's Third Way Policies were hailed as combining a pro-business stance with social responsibility. This approach seemed to be vindicated by the extraordinary fall in both inflation and unemployment. In fact, the apparent successes of the Clinton years were based on anti-labor policies, the stagnation of real wages, deregulation of financial markets, and an historically unprecedented stock market boom. Even before 9/11 there were indications that the Clinton bubble would collapse into recession. Bush's response was to give big tax breaks to the rich, introduce more anti-labor measures, and cut social spending at both the federal and state levels. Both Clinton and Bush have applied free-market policies only selectively within the U.S. itself, when such policies have most benefited the interests of business. At the same time, through the IMF, the U.S. has compelled developing countries to slash public spending, deregulate financial markets and dismantle trade barriers virtually across the board. Argentina's embrace of this policy package culminated in financial ruin. Throughout Asia and Africa, sweatshops and poverty are the testaments to a bankrupt economic model. Pollin concludes by exploring concrete proposals that would promote full employment, economic growth and increased equality in the U.S. and throughout the less developed countries, drawing on the spreading movements for living wages, the Tobin Tax on financial speculation, and more generally workable alternative to neoliberal globalization.

Technical progress and real wage stagnation: theory and evidence from the U.S. steel industry*

Over the past twenty years real wages have stagnated despite substantial technical progress. This runs contrary to the widespread belief that technological change increases real wages. This paper presents a theoretical model showing that technical progress could reduce wages. This hypothesis is then tested using data from the U.S. steel industry.

Employment, Motherhood, and School Continuation Decisions of Young White, Black, and Hispanic Women

We examine the empirical relationship between early employment activity and school continuation decisions for young American women using a dynamic, sequential discrete‐choice framework that estimates schooling, labor supply, and birth decisions jointly, controlling for unobserved heterogeneity and the endogeneity of these life cycle decisions. That the rate of school withdrawal increases as work intensity rises helps explain the higher departure rates of Hispanic girls from secondary school and the premature departure of young black women from college. The disturbing implication is that youth employment induces long‐run wage stagnation for early school leavers and potentially increases race and ethnic inequities.

Nursing shortage redux: turning the corner on an enduring problem.

Projections of a substantial nursing workforce imbalance in the coming decade have galvanized policymakers, providers, private foundations, nurses, and others to proffer aggressive and sustainable strategies to ameliorate the looming shortage. The solutions are largely ones that seek to increase supply. Analysis of the 1992-2000 National Sample Surveys of Registered Nurses shows that increasing losses from the active workforce, stagnant wages, and low levels of job satisfaction pose major impediments to bolstering supply. Strategies focused on working conditions and retention should occupy a central position in any nursing workforce revitalization plan.

The Social Security reform debate: effects of financial and labor market institutions

Social Security is a defined benefit (DB) pension plan. Proposals for "reforming" Social Security suggest replacing it with a defined contribution (DC) savings plan. This paper compares the financial and non-financial aspects of DB pensions and DC savings plans, and discusses how changing financial and labor markets affect the interpretation of these plans. Recent wage stagnation has strengthened the arguments for "reform," but a return to the more historical pattern of wage growth would undermine the arguments for reform.

The Social Security reform debate: effects of financial and labor market institutions

Social Security is a defined benefit (DB) pension plan. Proposals for “reforming” Social Security suggest replacing it with a defined contribution (DC) savings plan. This paper compares the financial and non-financial aspects of DB pensions and DC savings plans, and discusses how changing financial and labor markets affect the interpretation of these plans. Recent wage stagnation has strengthened the arguments for “reform,” but a return to the more historical pattern of wage growth would undermine the arguments for reform.