Paychecks Lag as Profits Soar, and Prices Erode Wage Gains

The following article by Patricia Cohen was posted on the New York Times website July 13, 2018:

Job seekers at a career fair in Los Angeles on March 8. Employers complain of labor shortages, but many are reluctant to pay higher wages. Credit: Patrick T. Fallon, Bloomberg

Corporate profits have rarely swept up a bigger share of the nation’s wealth, and workers have rarely shared a smaller one.

The lopsided split is especially pronounced given how low the official unemployment rate has sunk. Throughout the recession and much of its aftermath, when many Americans were grateful to receive a paycheck instead of a pink slip, jobs and raises were in short supply. Now, complaints of labor shortages are as common as tweets. For the first time in a long while, workers have some leverage to push for more.

Yet many are far from making up all the lost ground. Hourly earnings have moved forward at a crawl, with higher prices giving workers less buying power than they had last summer. Last-minute scheduling, no-poachingand noncompete clauses, and the use of independent contractors are popular tactics that put workers at a disadvantage. Threats to move operations overseas, where labor is cheaper, continue to loom.

View the complete article on the New York Times website here.