Magazine article Workforce Management

Squeezed and Stuck

Magazine article Workforce Management

Squeezed and Stuck

Article excerpt

Morale will fall as employees and their frontline supervisors increasingly feel the effects of declining real wages and low labor mobility.

DATA BANK

INFLATION HAS gutted wages over the past year, turning a 2.8 percent increase in weekly earnings from June 2007 to June 2008 into a 2.4 percent decline in real wages. Salary-budget increases that averaged 3 percent for 2008 have evaporated, leaving employees with substantially less purchasing power than a year ago. Rapidly declining 401 (k) account balances reflect a huge wave of wealth destruction.

All forecasts indicate that employees will continue to see a decline in their standard of living and their savings through the end of the year. Labor markets are too soft to allow most workers to shift into higher-paying positions. Nationwide, online helpwanted advertising-a leading indicator of employment growth-is down 11.2 percent from a year ago.

With wages falling, savings depleted and credit unavailable to many, most workers will find it difficult or impossible to relocate to areas of the country that offer lower living costs and greater job growth. …

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