Nightwatch
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- Jun 8, 2004
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Average workers lose ground in wages as benefit costs cut into compensation
August 8, 2004 12:00 AM EDT
Aug. 8--Bill Zurheide, a former textile-industry worker, isn't better off than he was four years ago.
Zurheide, 53, of Fenton, used to make $60,000 a year at Western Textile Cos. of Kirkwood, not including his health-care package and company contributions to his 401(k) plan. He lost his job about four years ago. He has yet to find comparable pay and benefits.
But you don't have to be a former textile worker to know what it's like to be losing ground in the U.S. economy. The average worker in the St. Louis area is punching the clock in an economy that's producing a slightly higher wage, but it doesn't mean a fatter paycheck because surging health-care costs are zapping those gains.
In the last year, worker-benefit costs nationwide have grown 4.7 percent faster than wages, the highest differential on record, according to economists at the Economic Policy Institute, a liberal think tank in Washington. The culprit is escalating health-care costs, a burden that is being shifted to workers by employers.
Bill Coleman, senior vice president of compensation at Salary.com, said the diverging trend of slower wage growth and rising benefit costs means average workers give only "a resounding OK" when assessing their future prospects.
"2003 was the lowest average salary increase in the last 25 to 30 years," Coleman said.
The good news in metropolitan St. Louis is that some of the area's waning occupations -- such as telephone operators, order clerks, home-entertainment equipment installers and insurance-claim processors -- are being overtaken by professions that pay more, according to the Missouri Economic Research and Information Center.
For example, the state estimates that there will be 470 telephone operators in the metro area in 2010. That's a 50 percent reduction over 2000 employment numbers for a job with an average wage of $30,380 a year.
In contrast, there will be nearly 10,000 computer-support specialists in 2010, a 62 percent increase over 2000, according to state estimates. That emerging occupation -- one of the fastest growing in the area -- has an average wage of $42,230 a year.
The average wage in the area last year was $39,475 for private-sector workers. Most of the area's fastest-growing occupations -- computer-support workers, database administrators, desktop publishers and network administrators -- pay well above the area's average annual salary.
The state also estimates there will be only 6,080 fast-food cooks in metro St. Louis in 2010, or 20 fewer than in 2000. That's good news, too, because those jobs pay only $15,730 a year.
Debate has raged over the quality of the 1.4 million jobs created in the economic recovery.
For example, though Zurheide received a severance package from Western Textile, a family-owned business that was sold, his brief stint with a commercial awning company didn't work out when business grew sluggish.
"It's a little tough to find a job, but manufacturing and textiles aren't relevant anymore," Zurheide said.
Workers in metropolitan St. Louis, which includes the Metro East area, averaged $18.56 an hour in June 2003, or 2.77 percent more than the year-ago period. That's according to recent data made available from a national compensation survey conducted by the Labor Department's Bureau of Labor Statistics.
The average wage for blue-collar workers, which represent 27 percent of the metro work force, rose 2.19 percent to $17.72 an hour. White-collar workers accounted for 54 percent of the work force and averaged $21.45 an hour, or less than 1 percent more than the year-ago period.
The remaining 21 percent worked in service occupations and averaged $10.60 an hour, or 1.7 percent more than in June 2002.
David Doorn, an economist at the Bureau of Labor Statistics, said the compensation survey provides a good snapshot of worker pay. He said the agency's employment-cost index is better for tracking longer-term wage trends.
Over the last two quarters, the 12-month growth rate of the wage and salary component of the index was 2.5 percent, the slowest recorded for data that dates to the early 1980s, the Economic Policy Institute said last week.
"This component for the ECI has not fallen short of inflation since 1995," the institute's economic team said. "Thus, many workers are losing ground right now because they depend exclusively on wages to meet their needs. The increasing cost of benefits dampens employers' willingness to hire, prolonging the slack labor-market conditions that have led to the slowing of wage growth."
This is an about-face for workers because over the last decade, wage growth has generally outpaced inflation.
The slowdown in the growth of gross domestic product also means a more difficult job market. Even if new jobs are created, they tend to pay less and have fewer benefits than when growth is strong, said Peter Morici, a professor at the University of Maryland's Robert H. Smith School of Business.
"In (the Midwest), the poor GDP numbers we have been getting are reflected in the tougher manufacturing environment," Morici said. "Slow growth translates into slow-growing paychecks."
Zurheide has tried to land a job in the railroad industry, but nothing has materialized.
Mark R. Rank, a Washington University professor who studies social welfare, said the current generation of American workers runs the risk of becoming the first one that won't be better off than the previous generation.
"This generation of workers aren't getting ahead," Rank said. One of his recent studies showed that nearly two-thirds of Americans ages 20 to 65 will at some point turn to a public-assistance program.
Zurheide's safety net was his skill as a handyman. He charges $45 an hour as a home remodeler.
"I'm probably taking a 25 percent hit overall to my (previous) pay," Zurheide said. "But I'm pretty lucky that I can remodel kitchens and bathrooms."
August 8, 2004 12:00 AM EDT
Aug. 8--Bill Zurheide, a former textile-industry worker, isn't better off than he was four years ago.
Zurheide, 53, of Fenton, used to make $60,000 a year at Western Textile Cos. of Kirkwood, not including his health-care package and company contributions to his 401(k) plan. He lost his job about four years ago. He has yet to find comparable pay and benefits.
But you don't have to be a former textile worker to know what it's like to be losing ground in the U.S. economy. The average worker in the St. Louis area is punching the clock in an economy that's producing a slightly higher wage, but it doesn't mean a fatter paycheck because surging health-care costs are zapping those gains.
In the last year, worker-benefit costs nationwide have grown 4.7 percent faster than wages, the highest differential on record, according to economists at the Economic Policy Institute, a liberal think tank in Washington. The culprit is escalating health-care costs, a burden that is being shifted to workers by employers.
Bill Coleman, senior vice president of compensation at Salary.com, said the diverging trend of slower wage growth and rising benefit costs means average workers give only "a resounding OK" when assessing their future prospects.
"2003 was the lowest average salary increase in the last 25 to 30 years," Coleman said.
The good news in metropolitan St. Louis is that some of the area's waning occupations -- such as telephone operators, order clerks, home-entertainment equipment installers and insurance-claim processors -- are being overtaken by professions that pay more, according to the Missouri Economic Research and Information Center.
For example, the state estimates that there will be 470 telephone operators in the metro area in 2010. That's a 50 percent reduction over 2000 employment numbers for a job with an average wage of $30,380 a year.
In contrast, there will be nearly 10,000 computer-support specialists in 2010, a 62 percent increase over 2000, according to state estimates. That emerging occupation -- one of the fastest growing in the area -- has an average wage of $42,230 a year.
The average wage in the area last year was $39,475 for private-sector workers. Most of the area's fastest-growing occupations -- computer-support workers, database administrators, desktop publishers and network administrators -- pay well above the area's average annual salary.
The state also estimates there will be only 6,080 fast-food cooks in metro St. Louis in 2010, or 20 fewer than in 2000. That's good news, too, because those jobs pay only $15,730 a year.
Debate has raged over the quality of the 1.4 million jobs created in the economic recovery.
For example, though Zurheide received a severance package from Western Textile, a family-owned business that was sold, his brief stint with a commercial awning company didn't work out when business grew sluggish.
"It's a little tough to find a job, but manufacturing and textiles aren't relevant anymore," Zurheide said.
Workers in metropolitan St. Louis, which includes the Metro East area, averaged $18.56 an hour in June 2003, or 2.77 percent more than the year-ago period. That's according to recent data made available from a national compensation survey conducted by the Labor Department's Bureau of Labor Statistics.
The average wage for blue-collar workers, which represent 27 percent of the metro work force, rose 2.19 percent to $17.72 an hour. White-collar workers accounted for 54 percent of the work force and averaged $21.45 an hour, or less than 1 percent more than the year-ago period.
The remaining 21 percent worked in service occupations and averaged $10.60 an hour, or 1.7 percent more than in June 2002.
David Doorn, an economist at the Bureau of Labor Statistics, said the compensation survey provides a good snapshot of worker pay. He said the agency's employment-cost index is better for tracking longer-term wage trends.
Over the last two quarters, the 12-month growth rate of the wage and salary component of the index was 2.5 percent, the slowest recorded for data that dates to the early 1980s, the Economic Policy Institute said last week.
"This component for the ECI has not fallen short of inflation since 1995," the institute's economic team said. "Thus, many workers are losing ground right now because they depend exclusively on wages to meet their needs. The increasing cost of benefits dampens employers' willingness to hire, prolonging the slack labor-market conditions that have led to the slowing of wage growth."
This is an about-face for workers because over the last decade, wage growth has generally outpaced inflation.
The slowdown in the growth of gross domestic product also means a more difficult job market. Even if new jobs are created, they tend to pay less and have fewer benefits than when growth is strong, said Peter Morici, a professor at the University of Maryland's Robert H. Smith School of Business.
"In (the Midwest), the poor GDP numbers we have been getting are reflected in the tougher manufacturing environment," Morici said. "Slow growth translates into slow-growing paychecks."
Zurheide has tried to land a job in the railroad industry, but nothing has materialized.
Mark R. Rank, a Washington University professor who studies social welfare, said the current generation of American workers runs the risk of becoming the first one that won't be better off than the previous generation.
"This generation of workers aren't getting ahead," Rank said. One of his recent studies showed that nearly two-thirds of Americans ages 20 to 65 will at some point turn to a public-assistance program.
Zurheide's safety net was his skill as a handyman. He charges $45 an hour as a home remodeler.
"I'm probably taking a 25 percent hit overall to my (previous) pay," Zurheide said. "But I'm pretty lucky that I can remodel kitchens and bathrooms."
