Wages, Health Care and Retirement Security

The slow pace of job growth, and resulting slack in labor markets, has left America’s workers with little bargaining power. As a result, real wages have stagnated even as productivity and profits have surged. Since 2000, real wages are down for all new labor-market entrants, whether men or women, high school or college graduates.

Indeed, America’s workers are suffering what is now a generation-long stagnation of wages. Productivity has increased by 67 percent since 1979, while wages have grown less than 9 percent. Nearly all of the improvement of wages over the past quarter century occurred between 1995 and 2000.

The same lack of bargaining power has allowed employers to shift more of the risk and cost of family health care onto workers. Recent Census data show the number of Americans without health insurance has risen by nearly 7 million since 2000, and even workers with insurance are carrying more of the cost through rising co-pays and deductibles.

Employers, even strong employers with healthy pension plans, are freezing or abandoning their obligations in providing retirement security. As a result of the shift from real pensions to 401(k) and similar savings plans, economists estimate that older Americans (55-65) have a lower net worth today than their parents’ generation, despite the enormous increase in national wealth over the past generation.

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