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April 11, 2005

Workers Screwed, Corporate Profits Soar

The LAT fronts "Wages Lagging Behind Prices: Inflation has outpaced the rise in salaries for the first time in 14 years. And workers are paying a bigger share of the cost of their healthcare." by Nicholas Riccardi.

As worker productivity increases, they're getting smaller raises (or none at all) while having to fork over more money for gas, healthcare, and other necessities.

For the first time in 14 years, the American workforce has in effect gotten an across-the-board pay cut. ...

This is the first time that salaries have increased more slowly than prices since the 1990-91 recession. Though salary growth has been relatively sluggish since the 2001 downturn, inflation also had stayed relatively subdued until last year, when the consumer price index rose 2.7%. But wages rose only 2.5%. ...

Meanwhile, corporate profits hit record highs as companies got more productivity out of workers while keeping pay increases down. ...

"Healthcare has eroded the wage base," said Janemarie Mulvey, chief economist with the Employment Policy Foundation, a business-funded think tank in Washington.

"In the long run, we can't continue like this. If healthcare keeps crowding out wages forever, something's got to give."

The squeeze is especially intense on the 47% of the workforce whose employers don't directly provide their health insurance. For lower-income workers, who are more likely to be uninsured, the falling value of their wages is even more serious because they're more likely to live paycheck to paycheck. And rising food and energy prices take a proportionately higher toll on the poor than on the rich.

The poor are getting poorer, the rich are getting richer. This is not class warfare propaganda. This is the truth, in black and white, on the front page of the Los Angeles Times.

Posted by cj at April 11, 2005 10:26 AM

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