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Falling wage growth adds gloom to jobs picture, labor group says

May 04, 2012|By Jim Puzzanghera
  • Workers take part in a May Day demonstration in Detroit this week. Adusted for inflation, average hourly wages for private-sector workers in the U.S. in March were 0.6% lower than a year earlier, the National Employment Law Project said.
Workers take part in a May Day demonstration in Detroit this week. Adusted… (John T. Greilick / Detroit…)

WASHINGTON -- Declining wage growth is adding to the discouraging employment picture, leaving cash-strapped workers unable to help boost the recovery, the National Employment Law Project said.

One big way lawmakers could help is to raise the minimum wage and index it to inflation, the worker advocacy group said.

“Increasingly, Americans are finding that low-wage jobs are their only option,” said Christine Owens, NELP's executive director.

Average hourly wages for all private-sector workers increased in March at a 2.1% annualized growth rate, well below the 3.3% growth rate when the Great Recession began in December 2007, according to a report from the group.

But when adjusted for inflation, real hourly wages fell 0.6% for all private-sector workers in the year ending in March, the group said. The drop was a steeper 1% for nonsupervisory and production workers.

"In other words, in real terms, workers are earning less now than a year ago," the report said.

Friday's tepid jobs report -- 115,000 net new jobs added in April -- highlights the difficulty average Americans are having to make ends meet, Owens said.

“The economy needs a boost, with more investment to create jobs and higher wages for workers to stimulate greater demand,” she said.

The report was completed before Friday's job numbers were released. But slow wage growth continued in April, according to the Bureau of Labor Statistics.

Average hourly earnings rose by just 1 cent in April to $23.38. 

NELP urged Congress to pass legislation introduced by Sen. Tom Harkin (D-Iowa) that would raise the federal minimum wage to $9.80 by 2014 from $7.25. The bill also would index the minimum wage to inflation.

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