By Lydia DePillis
Houston Chronicle, Sept 3, 2016
... This tale of two businesses captures the state of the U.S. labor market, where after a long period of stagnation, wages overall are beginning to rise, but the benefits of an improving economy continue to be distributed unevenly. ... Overall, the U.S. labor market has improved significantly over the past five years, as employers added more than 12 million jobs and the unemployment rate plunged from 9 percent to less than 5 percent. But as with much of the recovery that followed the worst recession in 70 years, the relief in these headline figures has been tempered by worry in the details.
The good news: Across the country, median household wages, adjusted for inflation, have risen 9.3 percent to just over $57,000 a year since bottoming out in 2011, according to an analysis of census data by Sentier Research of Annapolis, Md. That's occurred especially at the bottom end of the income scale, as strong growth in low-skilled service jobs such as food service, hospitality and home care absorbed many who had been out of work, forcing employers to raise wages to attract better candidates. A spate of minimum wage hikes in select cities and states has pushed the floor up as well.
But workers are still climbing out of the large hole they fell into during the recession. Inflation-adjusted earnings remain 7.4 percent below their levels a decade ago, according to private data collected by the Seattle compensation analytics firm Payscale. ... And economists say that income growth may look strong in recent months only because inflation has been historically low. ...
The movement for higher wages isn't just political. It also extends to an emerging business philosophy and body of research that emphasizes the impact of higher wages on demand for goods and services, as workers spend their earnings in their communities.
Richard Martin, the CEO of a medical device manufacturer in Austin called OriGen Biomedical, pays an entry-level wage of $12 or $13 to his hourly workers - some of whom arrive unskilled from minimum wage jobs that pay $7.25 an hour. OriGen also trains them on the company's precise techniques, providing skills that can lead to higher wages.
"Henry Ford doubled people's pay to $5 a day, and what he found was that the improvement in the community was astounding - crime and vagrancy went down, and he created a new class of customers," Martin said. Plus, he says, paying decent wages cuts down on turnover, which can be expensive. "If you pay people nothing, they're always looking for a better opportunity." ...
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